The Company has a portion of its business denominated and transacted in foreign currencies, which subjects the Company to foreign exchange risk, and uses derivative instruments to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading or speculative purposes.

The Company may elect to designate certain derivatives to partially offset its business exposure to foreign exchange risk. However, the Company may choose not to hedge certain exposures for a variety of reasons including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates.

To protect revenue from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, option contracts, or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue, for up to 18 months.

The Company may also enter into derivative instruments that are not designated as accounting hedges to offset a portion of the foreign currency exchange gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.

The following table summarizes the effect of derivative instruments on the Company’s unaudited condensed consolidated balance sheets (in millions):


	Derivative Assets(1)

	Location	December 31, 2024		March 31, 2025
Derivatives designated as hedging instruments:
Foreign exchange contracts (current)	Prepaids and other current assets	$	90	$	20
Foreign exchange contracts (noncurrent)	Other assets, noncurrent	7		1
Total derivatives designated as hedging instruments		$	97	$	21

Derivatives not designated as hedging instruments:
Foreign exchange contracts (current)	Prepaids and other current assets	$	23	$	7


	Derivative Liabilities(1)

	Location	December 31, 2024		March 31, 2025
Derivatives designated as hedging instruments:
Foreign exchange contracts (current)	Accrued expenses, accounts payable, and other current liabilities	$	—	$	26
Foreign exchange contracts (noncurrent)	Other liabilities, noncurrent	—		5
Total derivatives designated as hedging instruments		$	—	$	31

Derivatives not designated as hedging instruments:
Foreign exchange contracts (current)	Accrued expenses, accounts payable, and other current liabilities	$	20	$	8

To limit credit risk, the Company generally enters into master netting arrangements with the respective counterparties to the Company’s derivative contracts, under which the Company is allowed to settle transactions with a single net amount payable by one party to the other. As of March 31, 2025, the potential effect of these rights of offset associated with the Company’s derivative contracts would be a reduction to both derivative assets and liabilities of $23 million, resulting in net derivative assets of $5 million and net derivative liabilities of $16 million.

Realized gains on derivative instruments designated as hedging instruments reclassified from AOCI to revenue in the unaudited condensed consolidated statements of operations were immaterial for three months ended March 31, 2024 and 2025.

The following table presents the impact of derivative instruments designated as cash flow hedges on AOCI, net of tax (in millions):


	Three Months Ended March 31,
	2024		2025
Derivatives designated as cash flow hedges:
Foreign exchange contracts(1)	$	50	$	(61)

As of December 31, 2024 and March 31, 2025, cumulative unrealized gains recorded in AOCI, net of tax, related to derivative instruments designated as hedging instruments were $80 million and $7 million, respectively.

The following table presents the impact of activity of derivative instruments not designated as hedging instruments on the unaudited condensed consolidated statements of operations (in millions):


	Realized Gain (Loss) on Derivatives				Unrealized Gain (Loss) on Derivatives
	Three Months Ended March 31,					Three Months Ended March 31,
	2024		2025				2024		2025
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	(21)	$	5			$	11	$	(3)

The total notional amount of outstanding derivatives not designated as hedging instruments was $2.1 billion and $1.6 billion as of December 31, 2024 and March 31, 2025, respectively.

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was $2.5 billion as of both December 31, 2024 and March 31, 2025.

As of March 31, 2025, approximately $16 million of deferred net gains on both outstanding and matured derivatives in AOCI were expected to be reclassified to revenue during the next 12 months concurrent with the underlying hedged transactions which will be recorded in revenue. Actual amounts ultimately reclassified to revenue are dependent on the exchange rates in effect when derivative contracts currently outstanding mature.