v3.26.1
Income Taxes
 12 Months Ended
Jan. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
(16)
Income Taxes

The components of the loss before income taxes are as follows:

 

 

Year Ended January 31,

 

(in thousands)

 

2026

 

 

2025

 

 

2024

 

Domestic

 

$

(247,748

)

 

$

(123,996

)

 

$

(146,582

)

Foreign

 

 

5,543

 

 

 

3,260

 

 

 

6,888

 

Total loss before income taxes

 

$

(242,205

)

 

$

(120,736

)

 

$

(139,694

)

 

The provision for (benefit from) income taxes consists of the following:

 

 

Year Ended January 31,

 

(in thousands)

 

2026

 

 

2025

 

 

2024

 

Current

 

 

 

 

 

 

 

 

 

Federal

 

$

37

 

 

$

—

 

 

$

—

 

State

 

 

43

 

 

 

54

 

 

 

36

 

Foreign

 

 

4,519

 

 

 

2,308

 

 

 

631

 

Total current tax provision

 

 

4,599

 

 

 

2,362

 

 

 

667

 

Deferred

 

 

 

 

 

 

 

 

 

Federal

 

 

197

 

 

 

(642

)

 

 

57

 

State

 

 

(144

)

 

 

715

 

 

 

77

 

Foreign

 

 

3

 

 

 

25

 

 

 

14

 

Total deferred tax benefit

 

 

56

 

 

 

98

 

 

 

148

 

Income tax provision

 

$

4,655

 

 

$

2,460

 

 

$

815

 

 

On July 4, 2025, the One Big Beautiful Bill Act was enacted. The Company has evaluated the provisions in the Act and determined that there was immaterial impact to the Company's current year effective tax rate and its consolidated financial statements.

 

A reconciliation of the statutory federal income tax rate with the effective tax rate after the adoption of ASU 2023-09 is as follows:

 

 

Year ended January 31, 2026

 

(in thousands)

 

Amounts

 

 

Percent

 

U.S. Federal Statutory Rate

 

$

(50,863

)

 

 

21.0

%

Domestic Federal

 

 

 

 

 

 

Research credits

 

 

(9,785

)

 

 

4.0

%

Nontaxable and nondeductible items, net

 

 

 

 

 

 

Stock-based compensation

 

 

(33,404

)

 

 

13.8

%

Revaluation gain/loss

 

 

33,992

 

 

 

(14.0

)%

Excess officers compensation

 

 

7,523

 

 

 

(3.1

)%

Other adjustments

 

 

207

 

 

 

(0.1

)%

Cross-border tax laws

 

 

37

 

 

 

—

 

Other reconciling items

 

 

(841

)

 

 

0.4

%

Change in Valuation Allowance

 

 

52,529

 

 

 

(21.7

)%

Changes in Unrecognized Tax Benefits

 

 

3,326

 

 

 

(1.4

)%

State taxes, net of federal benefit(1)

 

 

(950

)

 

 

0.4

%

Foreign tax effects

 

 

 

 

 

 

Other foreign jurisdictions

 

 

2,884

 

 

 

(1.2

)%

Total Tax Provision

 

 

4,655

 

 

 

(1.9

)%

 

(1) State tax benefits in California made up the majority (greater than 50%) of the tax effect in this category.

 

A reconciliation between the U.S. federal statutory income tax and the Company’s effective tax rates as a percentage of loss before income taxes prior to the adoption of ASU 2023-09 is as follows:

 

 

Year Ended January 31,

 

 

2025

 

 

2024

 

Provision computed at federal statutory rate

 

 

21.0

%

 

 

21.0

%

States taxes, net of federal benefit

 

 

3.1

%

 

 

3.9

%

Foreign rate differential

 

 

(2.2

)%

 

 

0.1

%

Revaluation gain/loss

 

 

(3.2

)%

 

 

2.1

%

Stock-based compensation

 

 

(4.2

)%

 

 

(4.7

)%

Tax credits

 

 

4.9

%

 

 

4.3

%

Change in valuation allowance

 

 

(21.0

)%

 

 

(26.3

)%

Other

 

 

(0.4

)%

 

 

(1.0

)%

Effective tax rate

 

 

(2.0

)%

 

 

(0.6

)%

 

 

The components of the Company’s deferred tax assets and liabilities are as follows:

 

 

January 31,

 

(in thousands)

 

2026

 

 

2025

 

 

2024

 

Deferred tax assets

 

 

 

 

 

 

 

 

 

Net operating loss carryforwards

 

$

240,682

 

 

$

142,757

 

 

$

138,968

 

Tax Credit carryforwards

 

 

49,538

 

 

 

38,107

 

 

 

32,540

 

Stock-based compensation

 

 

18,296

 

 

 

18,207

 

 

 

18,984

 

Capitalized research expenses

 

 

20,810

 

 

 

67,048

 

 

 

48,527

 

Property and Equipment

 

 

16,255

 

 

 

19,214

 

 

 

11,759

 

Excess interest expense

 

 

—

 

 

 

1,542

 

 

 

3,776

 

Operating lease liability

 

 

3,374

 

 

 

4,724

 

 

 

5,525

 

Other

 

 

9,089

 

 

 

5,679

 

 

 

6,580

 

Total deferred tax assets

 

 

358,044

 

 

 

297,278

 

 

 

266,659

 

Valuation allowance

 

 

(345,795

)

 

 

(284,882

)

 

 

(254,929

)

Total deferred tax assets

 

 

12,249

 

 

 

12,396

 

 

 

11,730

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

(3,120

)

 

 

(4,253

)

 

 

(4,886

)

Intangible assets

 

 

(9,588

)

 

 

(8,546

)

 

 

(7,150

)

Total deferred tax liabilities

 

 

(12,708

)

 

 

(12,799

)

 

 

(12,036

)

Net deferred tax assets (liabilities)

 

$

(459

)

 

$

(403

)

 

$

(306

)

 

As of January 31, 2026, the Company had a net deferred tax liability of $0.5 million. The Company had deferred tax assets of $358.0 million and $297.3 million before valuation allowances as of January 31, 2026 and 2025, respectively. The Company assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of its deferred tax assets will not be realized. The Company evaluates all available positive and negative evidence such as past operating results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies. Management believes that it is more likely than not that the majority of U.S. and foreign deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against its deferred tax assets in these jurisdictions.

The net change in the total valuation allowance is as follows:

 

 

Year Ended January 31,

 

(in thousands)

 

2026

 

 

2025

 

 

2024

 

Valuation allowance, beginning of year

 

$

284,882

 

 

$

254,929

 

 

$

211,813

 

Change in valuation allowance

 

 

60,913

 

 

 

29,953

 

 

 

43,116

 

Valuation allowance, end of year

 

$

345,795

 

 

$

284,882

 

 

$

254,929

 

 

The Company considers the undistributed earnings of its foreign subsidiaries permanently reinvested in foreign operations and has not provided for U.S. income taxes on such earnings. As of January 31, 2026, the Company’s unremitted earnings from its foreign subsidiaries were $31.0 million and the corresponding unrecognized deferred U.S. income tax liability is not material.

The Company is subject to income taxes in the United States and various foreign jurisdictions. As of January 31, 2026, the Company had approximately $967.3 million of federal net operating loss (“NOL”) carryforward, of which $259.2 million will expire at various dates through 2038 and $708.1 million has an indefinite carryforward. Additionally, the Company had state and foreign NOL carryforwards of $603.6 million and $2.1 million, respectively. The state and foreign NOL carryforwards might be available to offset future taxable income, which will expire in varying amounts beginning in 2026. An insignificant amount of NOL and credits carryforwards may be subject to annual limitations under Internal Revenue Code Section 382.

As of January 31, 2026, the Company had approximately $41.9 million of federal and $24.4 million of California research and development credit carryforwards available to reduce future taxable liability. The federal credit carryforwards will expire beginning in 2032 and California credits can be carried forward indefinitely.

The Company’s unrecognized tax benefits are as follows:

 

 

Year Ended January 31,

 

(in thousands)

 

2026

 

 

2025

 

 

2024

 

Beginning of year

 

$

10,207

 

 

$

8,717

 

 

$

6,900

 

Additions based on tax positions related to the current year

 

 

3,036

 

 

 

1,490

 

 

 

1,616

 

Additions for tax positions of prior years

 

 

529

 

 

 

—

 

 

 

201

 

Reductions for tax positions of prior years

 

 

(16

)

 

 

—

 

 

 

—

 

End of year

 

$

13,756

 

 

$

10,207

 

 

$

8,717

 

 

As of January 31, 2026, the Company’s estimated gross unrecognized tax benefits were $13.8 million, none of which, if recognized, would affect the effective tax rate. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes. The Company accrued $0.3 million for interest as of January 31, 2026 and no such expenses were incurred in the prior years presented.

The Company does not anticipate the total amounts of unrecognized tax benefits to significantly increase or decrease in the next twelve months.

The amounts of income taxes paid by the Company were as follows:

(in thousands)

 

Year ended January 31, 2026

 

Austria

 

$

232

 

Columbia

 

 

928

 

Germany

 

 

808

 

Slovenia

 

 

933

 

Other

 

 

502

 

Total income taxes, net of tax refunds

 

$

3,403

 

The amount of income taxes paid (received) by the Company during the fiscal years ended January 31, 2025 and 2024, was $1.8 million and $(0.2) million, respectively.

The Company files U.S. federal, various state and foreign income tax returns. The Company is not currently under audit by any taxing authorities. All tax years remain open to examination by taxing jurisdictions to which the Company is subject.