CrowdStrike Holdings, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading Special Note Regarding Forward-Looking Statements following the Table of Contents of this Quarterly Report on Form 10-Q. As discussed in Note 1 and Note 16 to the unaudited Condensed Consolidated Financial Statements included in this report, the Company revised its previously issued unaudited Condensed Consolidated Financial Statements as of and for the three months ended April 30, 2025 to correct for an immaterial error discovered during the fourth quarter of fiscal 2026. The revisions are intended to ensure comparability across all periods reflected herein. You should review the disclosure under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading Special Note Regarding Forward-Looking Statements following the Table of Contents of this Quarterly Report on Form 10-Q. As discussed in Note 1 and Note 17 to the unaudited Condensed Consolidated Financial Statements included in this report, the Company revised its previously issued unaudited Condensed Consolidated Financial Statements as of and for the three and six months ended July 31, 2025 to correct for an immaterial error discovered during the fourth quarter of fiscal 2026. The revisions are intended to ensure comparability across all periods reflected herein. You should review the disclosure under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

We have a land-and-expand sales strategy where customers start with any number of modules and easily add capabilities over time. Our AI security advantage begins with our platform breadth and single sensor visibility — delivering unified protection across endpoints, cloud workloads, identities, SaaS environments, browsers, and the prompt and agentic interaction layer. One sensor, one console, one platform covering all attack surfaces.

Current wording

We have a land-and-expand sales strategy where customers start with any number of modules and can easily add capabilities over time. Our AI security advantage begins with our platform breadth and single sensor visibility — delivering unified protection across endpoints, cloud workloads, identities, SaaS environments, browsers, and the prompt and agentic interaction layer. One sensor, one console, one platform covering attack surfaces.

Previous wording

ARR grew to $5.5 billion as of April 30, 2026, of which $255.8 million was net new ARR added for the three months ended April 30, 2026. ARR grew to $4.4 billion as of April 30, 2025, of which $193.8 million was net new ARR added for the three months ended April 30, 2025.

Current wording

ARR grew to $5.8 billion as of July 31, 2026, of which $332.8 million and $588.6 million was net new ARR added for the three and six months ended July 31, 2026, respectively. ARR grew to $4.7 billion as of July 31, 2025, of which $221.1 million and $414.8 million was net new ARR added for the three and six months ended July 31, 2025, respectively.

Previous wording

Our dollar-based net retention rate continued to be strong during the three months ended April 30, 2026. Our dollar-based net retention rate can fluctuate from period to period due to large customer contracts in a given period and incentives provided, which may reduce our dollar-based net retention rate in subsequent periods. In addition, if our customers are not able to fully utilize their product subscriptions (including in connection with our flexible subscription offering), we may experience increased contraction as such customers may elect to renew with shorter subscription periods, fewer cloud modules, fewer endpoints or smaller contract values, which may reduce our dollar-based net retention rate.

Current wording

Our dollar-based net retention rate improved sequentially as of July 31, 2026. Our dollar-based net retention rate can fluctuate from period to period due to large customer contracts in a given period and incentives provided, which may reduce our dollar-based net retention rate in subsequent periods. In addition, if our customers are not able to fully utilize their product subscriptions (including in connection with our flexible subscription offering), we may experience increased contraction as such customers may elect to renew with shorter subscription periods, fewer cloud modules, fewer endpoints or smaller contract values, which may reduce our dollar-based net retention rate.

Previous wording

Our operating expenses consist of sales and marketing, research and development, and general administrative expenses. For each of these categories of expense, employee-related expenses are the most significant component, which include salaries, employee bonuses, sales commissions, and employer payroll tax. Operating expenses also include an allocated portion of overhead costs for facilities and other administrative functions.

Current wording

Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. For each of these categories of expense, employee-related expenses are the most significant component, which include salaries, employee bonuses, sales commissions, and employer payroll tax. Operating expenses also include an allocated portion of overhead costs for facilities and other administrative functions.

Previous wording

Provision (Benefit) for Income Taxes. Provision (benefit) for income taxes consists of income tax benefits recognized in the current period resulting from the realization of deferred tax assets in connection with recent acquisitions, offset by state income taxes in the United States, foreign income taxes, and withholding taxes related to customer payments in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our U.S. federal and state and certain foreign deferred tax assets, including net operating loss carryforwards and tax credits, which we have determined are not realizable on a more-likely-than-not basis. We evaluate the need for a valuation allowance on a quarterly basis.

Current wording

Provision (Benefit) for Income Taxes. Provision (benefit) for income taxes consists of income tax benefits recognized in the current period resulting from the realization of deferred tax assets in connection with recent acquisitions and excess tax benefits related to stock-based awards, partially offset by income taxes on earnings in jurisdictions in which we conduct business. We maintain a full valuation allowance on our U.S. federal and state and certain foreign deferred tax assets, including net operating loss carryforwards and tax credits, which we have determined are not realizable on a more-likely-than-not basis. We evaluate the need for a valuation allowance on a quarterly basis.

Previous wording

Subscription revenue increased by $270.1 million, or 26%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025, which was primarily driven by a combination of the addition of new customers and the sale of additional sensors and modules to existing customers.

Current wording

Subscription revenue increased by $297.3 million, or 27%, for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, which was primarily driven by a combination of the addition of new customers and the sale of additional sensors and modules to existing customers.

Previous wording

Professional services revenue increased by $12.1 million, or 23%, for the three months ended April 30, 2026, compared to the three months ended April 30, 2025, which was primarily attributable to an increase in the number of professional service hours.

Current wording

Professional services revenue increased by $4.6 million, or 7%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025, which was primarily attributable to an increase in the number of professional service hours.

Previous wording

Total cost of revenue increased by $54.4 million, or 19%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. Subscription cost of revenue increased by $47.1 million, or 20%, for the three months ended April 30, 2026, compared to the three months ended April 30, 2025. The increase in subscription cost of revenue was primarily due to an increase in cloud hosting and related services costs of $10.9 million, an increase in depreciation of data center equipment of $9.7 million, an increase in employee-related expenses of $8.9 million driven by a 6% increase in average headcount, an increase in amortization of internal-use software of $6.0 million, an increase in allocated overhead costs of $4.5 million, and an increase in employee benefits of $2.1 million.

Current wording

Total cost of revenue increased by $65.5 million, or 21%, for the three months ended July 31, 2026 compared to the three months ended July 31, 2025. Subscription cost of revenue increased by $58.2 million, or 23%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The increase in subscription cost of revenue was primarily due to an increase in cloud hosting and related services costs of $13.9 million, an increase in depreciation of data center equipment of $10.4 million, an increase in employee-related expenses of $9.4 million driven by a 9% increase in average headcount, an increase in stock-based compensation expense of $6.9 million, an increase in allocated overhead costs of $5.6 million, an increase in employee benefits of $4.0 million, an increase in amortization of internal-use software of $3.8 million, and an increase in term-based software licenses of $1.6 million, partially offset by a decrease in charges related to the Strategic Plan of $3.6 million.

Previous wording

Subscription gross margin increased by one percentage point for the three months ended April 30, 2026, compared to the three months ended April 30, 2025. The increase in subscription gross margin was primarily attributable to hosting efficiencies.

Current wording

Subscription gross margin increased by one percentage point for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The increase in subscription gross margin was primarily attributable to hiring efficiencies.

Previous wording

Professional services gross margin increased by five percentage points for the three months ended April 30, 2026, compared to the three months ended April 30, 2025. The increase in professional services gross margin was primarily due to an increase in utilization, partially offset by an increase in consulting expense during the three months ended April 30, 2026.

Current wording

Professional services gross margin decreased by five percentage points for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The decrease in professional services gross margin was primarily driven by higher employee-related expenses due to no corresponding Strategic Plan impact, and an increase in stock-based compensation expense, partially offset by a decrease in consulting expenses during the three months ended July 31, 2026.

Previous wording

Research and development expenses increased by $77.4 million, or 23%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. This increase was primarily due to an increase in employee-related expenses of $33.3 million driven by a 13% increase in average headcount, an increase in stock-based compensation expense of $21.7 million, an increase in allocated overhead costs of $9.2 million, an increase in cloud hosting and related costs of $7.5 million, an increase in term-based software licenses of $3.9 million, an increase in employee benefits of $3.3 million, and an increase in depreciation of data center equipment of $1.6 million, partially offset by an increase in software capitalization of $4.2 million.

Current wording

Research and development expenses increased by $101.7 million, or 30%, for the three months ended July 31, 2026 compared to the three months ended July 31, 2025. This increase was primarily due to an increase in stock-based compensation expense of $48.5 million, an increase in employee-related expenses of $40.1 million driven by a 17% increase in average headcount, an increase in cloud hosting and related costs of $12.5 million, an increase in allocated overhead costs of $11.8 million, an increase in employee benefits of $5.7 million, an increase in term-based software licenses of $3.8 million, and an increase in depreciation of data center equipment of $1.4 million, partially offset by a decrease in charges related to the Strategic Plan of $16.7 million and an increase in software capitalization of $6.8 million.

Previous wording

The decrease in interest income for the three months ended April 30, 2026 compared to the three months ended April 30, 2025 was driven by lower market rates and a lower cash balance.

Current wording

The decrease in interest income for the three months ended July 31, 2026 compared to the three months ended July 31, 2025 was driven by lower market rates.

Previous wording

Total revenue increased by $282.2 million, or 26%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. Subscription revenue accounted for 95% of total revenue for each of the three months ended April 30, 2026 and April 30, 2025. Professional services revenue accounted for 5% of our total revenue for each of the three months ended April 30, 2026 and April 30, 2025.

Current wording

Total revenue increased by $584.1 million, or 26%, for the six months ended July 31, 2026 compared to the six months ended July 31, 2025. Subscription revenue accounted for 95% of total revenue for each of the six months ended July 31, 2026 and July 31, 2025. Professional services revenue accounted for 5% of our total revenue for each of the six months ended July 31, 2026 and July 31, 2025.

Previous wording

Sales and marketing expenses increased by $49.5 million, or 11%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. The increase in sales and marketing expenses was primarily due to an increase in employee-related expenses of $14.9 million driven by a 3% increase in average headcount, an increase in marketing programs of $8.3 million, an increase in allocated overhead costs of $6.1 million, an increase in stock-based compensation expense of $5.1 million, an increase in company event expenses of $5.1 million, an increase in travel expenses of $3.9 million, an increase in employee benefits of $3.6 million, an increase in cloud hosting and related costs of $0.9 million, and a decrease of $3.4 million in sales commission expense related to the change in estimated period of benefit, partially offset by an increase in capitalized sales commissions.

Current wording

Sales and marketing expenses increased by $112.9 million, or 13%, for the six months ended July 31, 2026 compared to the six months ended July 31, 2025. The increase in sales and marketing expenses was primarily due to an increase in employee-related expenses of $29.1 million driven by an 8% increase in average headcount, an increase in stock-based compensation expense of $27.8 million, an increase in allocated overhead costs of $16.2 million, an increase in marketing programs of $15.0 million, an increase in employee benefits of $9.5 million, an increase in travel expenses of $8.3 million, an increase in company event expenses of $5.9 million, and an increase in cloud hosting and related costs of $1.6 million, partially offset by an $8.7 million decrease in charges related to the Strategic Plan and a $3.1 million net decrease in sales commission expense resulting from the change in the estimated period of benefit, partially offset by an increase in capitalized sales commissions.

Previous wording

General and administrative expenses increased by $12.8 million, or 8%, for the three months ended April 30, 2026 compared to the three months ended April 30, 2025. The increase in general and administrative expenses was primarily due to an increase in stock-based compensation expense of $23.9 million, an increase in consulting expense of $13.1 million, and an increase in legal expense of $1.8 million unrelated to the July 19 Incident or related matters, partially offset by a decrease in expenses associated with the July 19 Incident and related matters of $20.5 million and a decrease in charges related to the Strategic Plan of $6.6 million.

Current wording

General and administrative expenses increased by $12.0 million, or 4%, for the six months ended July 31, 2026 compared to the six months ended July 31, 2025. The increase in general and administrative expenses was primarily due to an increase in stock-based compensation expense of $57.1 million, an increase in employee-related expenses of $5.7 million driven by a 10% increase in average headcount, an increase in legal expense of $3.6 million unrelated to the July 19 Incident or related matters, and an increase in allocated overhead costs of $2.7 million, partially offset by a decrease of $44.9 million in expenses associated with the July 19 Incident and related matters and a $12.7 million decrease in charges related to the Strategic Plan.

Previous wording

The increase in other income (expense), net for the three months ended April 30, 2026 compared to the three months ended April 30, 2025 was primarily due to an increase in net realized gains on our strategic investments of $36.4 million, an increase of $1.6 million attributable to no downward adjustments or impairment charges on our strategic investments in the current period, and an increase of $1.0 million attributable to lower net foreign currency transaction losses.

Current wording

The increase in other income (expense), net for the six months ended July 31, 2026 compared to the six months ended July 31, 2025 was primarily due to an increase in net realized gains on our strategic investments of $36.4 million, an increase of $1.6 million attributable to no downward adjustments or impairment charges on our strategic investments in the current period, and an increase of $3.4 million attributable to lower net foreign currency transaction losses.

Previous wording

The change of $28.0 million in income tax provision to an income tax benefit during the three months ended April 30, 2026 compared to the three months ended April 30, 2025 was primarily driven by income tax benefits recognized in the current period resulting from the realization of deferred tax assets in connection with recent acquisitions and the application of interim period tax accounting methodology with our return to profitability.

Current wording

The $35.4 million change from an income tax provision to an income tax benefit during the six months ended July 31, 2026 compared to the six months ended July 31, 2025 was primarily driven by income tax benefits recognized in the current period resulting from the realization of deferred tax assets in connection with recent acquisitions, excess tax benefits related to stock-based awards, and the application of interim period tax accounting methodology.

Previous wording

Our primary sources of liquidity as of April 30, 2026, consisted of: (i) $4.6 billion in cash and cash equivalents, which mainly consists of cash on hand and highly liquid investments in money market funds, U.S. Treasury bills, and time deposits, and (ii) cash we expect to generate from operations. It is not currently possible to reasonably estimate the amount of loss or range of possible loss that might result from adverse judgments, settlements, penalties, or other resolution of proceedings resulting from the July 19 Incident or related matters. However, despite such uncertainties, we expect that the combination of our existing cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.

Current wording

Our primary sources of liquidity as of July 31, 2026, consisted of: (i) $5.0 billion in cash and cash equivalents, which mainly consists of cash on hand and highly liquid investments in money market funds, U.S. Treasury bills, and time deposits, and (ii) cash we expect to generate from operations. It is not currently possible to reasonably estimate the amount of loss or range of possible loss that might result from adverse judgments, settlements, penalties, or other resolution of proceedings resulting from the July 19 Incident or related matters. However, despite such uncertainties, we expect that the combination of our existing cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.

Previous wording

We have a history of losses, and while we have achieved profitability in certain periods, including the first quarter of fiscal 2027 and fiscal 2024, our accumulated deficit was $1.3 billion as of April 30, 2026. We expect to continue to make investments, particularly in sales and marketing and research and development. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business.

Current wording

We have a history of losses, and while we have achieved profitability in certain periods, including the first and second quarters of fiscal 2027 and fiscal 2024, our accumulated deficit was $1.2 billion as of July 31, 2026. We expect to continue to make investments, particularly in sales and marketing and research and development. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business.

Previous wording

We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments. Therefore, a substantial source of our cash is from such prepayments, which are included on our condensed consolidated balance sheets as deferred revenue. Deferred revenue primarily consists of billed fees for our subscriptions, prior to satisfying the criteria for revenue recognition, which are subsequently recognized as revenue in accordance with our revenue recognition policy. As of April 30, 2026, we had deferred revenue of $4.7 billion, of which $3.4 billion was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Current wording

We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments. Therefore, a substantial source of our cash is from such prepayments, which are included on our condensed consolidated balance sheets as deferred revenue. Deferred revenue primarily consists of billed fees for our subscriptions, prior to satisfying the criteria for revenue recognition, which are subsequently recognized as revenue in accordance with our revenue recognition policy. As of July 31, 2026, we had deferred revenue of $4.8 billion, of which $3.5 billion was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Previous wording

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities. As of April 30, 2026, we did not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions, or foreign currency forward contracts.

Current wording

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities. As of July 31, 2026, we did not have any off-balance sheet guarantees or interest rate swap transactions. For a discussion of our derivative instruments, see Note 4 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Net cash provided by operating activities during the three months ended April 30, 2026 was $590.9 million, which resulted from net income of $46.0 million, adjusted for non-cash charges of $442.7 million and a net cash inflow of $102.3 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $297.7 million in stock-based compensation expense, $98.9 million of amortization of deferred contract acquisition costs, $75.5 million of depreciation and amortization, $12.4 million of amortization of intangible assets, $4.9 million of non-cash operating lease costs, and $0.5 million of non-cash interest expense, partially offset by $36.4 million of realized gains on strategic investments and $10.8 million of deferred income taxes. The net cash inflow from changes in operating assets and liabilities was primarily due to a decrease of $428.8 million in accounts receivable, partially offset by an increase of $92.7 million in deferred contract acquisition costs, an increase of $75.0 million in prepaid expenses and other assets, a decrease of $54.4 million in accounts payable, a decrease of $44.0 million in accrued expenses and other liabilities, a decrease of $36.7 million in deferred revenue, a decrease of $19.6 million in accrued payroll and benefits, and a decrease of $4.2 million in operating lease liabilities.

Current wording

Net cash provided by operating activities during the six months ended July 31, 2026 was $1.1 billion, which resulted from net income of $51.3 million, adjusted for non-cash charges of $1.0 billion and a net cash inflow of $37.1 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $674.6 million in stock-based compensation expense, $207.1 million of amortization of deferred contract acquisition costs, $157.6 million of depreciation and amortization, $25.7 million of amortization of intangible assets, $10.4 million of non-cash operating lease costs, and $0.9 million of non-cash interest expense, partially offset by $36.4 million of realized gains on strategic investments and $7.1 million of deferred income taxes. The net cash inflow from changes in operating assets and liabilities was primarily due to a $324.2 million decrease in accounts receivable, an $83.3 million increase in deferred revenue, a $28.4 million increase in accrued payroll and benefits, and an $11.9 million increase in accrued expenses and other liabilities, partially offset by a $298.4 million increase in deferred contract acquisition costs, a $95.4 million increase in prepaid expenses and other assets, a $9.1 million decrease in operating lease liabilities, and a $7.7 million decrease in accounts payable.

Previous wording

Net cash used in investing activities of $994.1 million during the three months ended April 30, 2026 was primarily due to business acquisitions, net of cash acquired, of $881.4 million, which was related to the Seraphic and SGNL acquisitions, purchases of property and equipment of $97.6 million, capitalized internal-use software and website development costs of $22.6 million, purchases of deferred compensation investments of $2.3 million, and purchases of strategic investments of $0.4 million, partially offset by proceeds from sales of strategic investments of $10.2 million.

Current wording

Net cash used in investing activities of $1.1 billion during the six months ended July 31, 2026 was primarily due to business acquisitions, net of cash acquired, of $881.4 million, which was related to the Seraphic and SGNL acquisitions, purchases of property and equipment of $222.0 million, capitalized internal-use software and website development costs of $49.1 million, purchases of deferred compensation investments of $4.3 million, purchases of strategic investments of $3.4 million, and purchases of intangible assets of $3.0 million, partially offset by proceeds from sales of strategic investments of $17.5 million.

Previous wording

Net cash used in financing activities of $195.9 million during the three months ended April 30, 2026 was primarily due to repurchases of common stock of $175.6 million and distributions to non-controlling interest holders of $21.0 million, partially offset by proceeds from the issuance of common stock upon exercise of stock options of $0.7 million.

Current wording

Net cash used in financing activities of $111.9 million during the six months ended July 31, 2026 was primarily due to repurchases of common stock of $175.6 million and distributions to non-controlling interest holders of $24.6 million, partially offset by proceeds from issuance of shares of common stock under the employee stock purchase plan of $86.6 million and proceeds from the issuance of shares of common stock upon exercise of stock options of $1.7 million.

Previous wording

Summarized financial information is presented below for the Obligor Group on a combined basis after elimination of intercompany transactions and balances within the Obligor Group and equity in the earnings from and investments in any non-guarantor subsidiary. The revenue amounts presented in the summarized financial information include substantially all of our condensed consolidated revenue, and there is no intercompany revenue from the non-guarantor subsidiaries. This summarized financial information has been prepared and presented pursuant to Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S. GAAP.

Current wording

Summarized financial information is presented below for the Obligor Group on a combined basis after elimination of intercompany transactions and balances within the Obligor Group and equity in the earnings from and investments in any non-guarantor subsidiary. The revenue amounts presented in the summarized financial information include substantially all of our condensed consolidated revenue, and there is no intercompany revenue from the non-guarantor subsidiaries. This summarized financial information has been prepared and presented pursuant to Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S. GAAP (in thousands):

Previous wording

During the three months ended April 30, 2026, there were no significant changes to our debt obligations related to the Senior Notes, as presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Current wording

During the six months ended July 31, 2026, there were no significant changes to our debt obligations related to the Senior Notes, as presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Previous wording

We have non-cancelable purchase commitments with various parties to purchase products and services entered in the normal course of business totaling $2.6 billion as of April 30, 2026, with remaining terms in excess of 12 months. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.

Current wording

We have non-cancelable purchase commitments with various parties to purchase products and services entered in the normal course of business totaling $4.1 billion as of July 31, 2026, with remaining terms in excess of 12 months. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.

Previous wording

Our commitments also consist of obligations under non-cancelable real estate arrangements on an undiscounted basis, of which $21.7 million is due in the next 12 months and $64.2 million is due thereafter.

Current wording

Our commitments also consist of obligations under non-cancelable real estate arrangements on an undiscounted basis, of which $22.8 million is due in the next 12 months and $59.9 million is due thereafter.

Previous wording

As of April 30, 2026, our unrecognized tax benefits included $50.7 million, which were classified as long-term liabilities due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits.

Current wording

As of July 31, 2026, our unrecognized tax benefits included $51.8 million, which were classified as long-term liabilities due to the inherent uncertainty with respect to the timing of future cash outflows associated with our unrecognized tax benefits.

Previous wording

As of April 30, 2026, we had non-cancelable unfunded commitments from our financing arrangements totaling approximately $34.8 million.

Current wording

As of July 31, 2026, we had non-cancelable unfunded commitments from our financing arrangements totaling approximately $69.7 million.

Previous wording

In February 2026, we completed an assessment of the estimated period of benefit of commissions earned upon the initial acquisition of a contract, or subsequent upsell, and determined that it should increase from four to five years. This change in estimate was effective beginning in fiscal year 2027. Based on the carrying value of the related deferred contract acquisition costs as of January 31, 2026, the effect of this change in estimate for the three months ended April 30, 2026 was a reduction in sales commission expense of $27.9 million. There have been no other significant changes in our critical accounting policies and estimates during the three months ended April 30, 2026, as compared to the critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on March 5, 2026.

Current wording

In February 2026, we completed an assessment of the estimated period of benefit of commissions earned upon the initial acquisition of a contract, or subsequent upsell, and determined that it should increase from four to five years. This change in estimate was effective beginning in fiscal 2027. Based on the carrying value of the related deferred contract acquisition costs as of January 31, 2026, the effect of this change in estimate for the three and six months ended July 31, 2026 was a reduction in sales commission expense of $25.5 million and $53.4 million, respectively. There have been no other significant changes in our critical accounting policies and estimates during the six months ended July 31, 2026, as compared to the critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on March 5, 2026.

Previous wording

We enter into both single and multi-year subscription contracts for our solutions. We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments. Until we have the contractual right to invoice, these contract amounts are classified as backlog. They are not recorded in deferred revenue or elsewhere in our condensed consolidated financial statements. As of April 30, 2026, we had backlog of approximately $4.0 billion. We expect backlog will change from period to period for several reasons, including the timing and duration of customer agreements, varying billing cycles of subscription agreements, and the timing and duration of customer renewals. Because revenue for any period is a function of revenue recognized from deferred revenue under contracts in existence at the beginning of the period, as well as contract renewals and new customer contracts during the period, backlog at the beginning of any period is not necessarily indicative of future revenue performance. We do not utilize backlog as a key management metric internally.

Current wording

We enter into both single and multi-year subscription contracts for our solutions. We generally invoice our subscription customers at the beginning of the subscription term, or in some instances, such as in multi-year arrangements, in installments. Until we have the contractual right to invoice, these contract amounts are classified as backlog. They are not recorded in deferred revenue or elsewhere in our condensed consolidated financial statements. As of July 31, 2026, we had backlog of approximately $5.9 billion. We expect backlog will change from period to period for several reasons, including the timing and duration of customer agreements, varying billing cycles of subscription agreements, and the timing and duration of customer renewals. Because revenue for any period is a function of revenue recognized from deferred revenue under contracts in existence at the beginning of the period, as well as contract renewals and new customer contracts during the period, backlog at the beginning of any period is not necessarily indicative of future revenue performance. We do not utilize backlog as a key management metric internally.

Previous wording

As of April 30, 2026, we had 11,157 full-time employees. We also engage temporary employees and consultants as needed to support our operations. None of our employees in the United States are represented by a labor union or subject to a collective bargaining agreement. In certain countries in which we operate, we are subject to local labor law requirements which may automatically make our employees subject to industry-wide collective bargaining agreements. We have not experienced any work stoppages, and we consider our relations with our employees to be good.

Current wording

As of July 31, 2026, we had 11,706 full-time employees. We also engage temporary employees and consultants as needed to support our operations. None of our employees in the United States are represented by a labor union or subject to a collective bargaining agreement. In certain countries in which we operate, we are subject to local labor law requirements which may automatically make our employees subject to industry-wide collective bargaining agreements. We have not experienced any work stoppages, and we consider our relations with our employees to be good.