Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | Commitments and Contingencies Operating Leases For some of our offices and data centers, we have entered into non-cancellable operating lease agreements with various expiration dates through 2036. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments. Total operating lease costs were $43 million and $85 million for the three and six months ended June 30, 2026, respectively, and $36 million and $72 million for the three and six months ended June 30, 2025, respectively. For the six months ended June 30, 2026 and 2025, total cash paid for amounts included in the measurement of operating lease liabilities was $72 million and $53 million, respectively. Operating lease liabilities arising from obtaining operating right-of-use assets totaled $100 million and $173 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the weighted-average remaining lease term is approximately seven years, and the weighted-average discount rate is 4%. Maturities of operating lease liabilities as of June 30, 2026 are presented in the table below (in millions):
In addition to the amounts above, as of June 30, 2026, we have leases, primarily for offices, that have not yet commenced with minimum undiscounted cash flows of $328 million. These leases are expected to commence between 2026 and 2027 with lease terms of to sixteen years. Other Commitments Other contractual commitments primarily consist of data center and IT operations, cloud services and sales and marketing activities related to our daily business operations. There were no material contractual obligations that were entered into during the six months ended June 30, 2026 that were outside the ordinary course of business. We have entered into various non-cancellable agreements with cloud service providers, and as of June 30, 2026, we have remaining payments under these agreements of approximately $324 million for the remainder of fiscal 2026, $401 million in fiscal 2027, $573 million in fiscal 2028, $704 million in fiscal 2029 and $2.9 billion in 2030. Payment schedules vary from the timing of actual service consumption. In addition, we have entered into a non-cancellable agreement with an information technology equipment provider, under which we have remaining payments of approximately $1.4 billion due by fiscal 2028. In addition to the amounts above, our Senior Notes have an aggregate principal amount of $5.5 billion, with maturities ranging from May 2028 through May 2056. We also have $2.1 billion of commercial paper outstanding as of June 30, 2026, which has a weighted-average remaining term of 81 days. Refer to Note 11 “Debt” for further information. Further, $180 million of unrecognized tax benefits have been recorded as liabilities as of June 30, 2026. Legal Proceedings We are party to certain litigation and other legal proceedings. While legal proceedings are inherently unpredictable and subject to uncertainties, we do not believe the ultimate resolution of any such proceedings is likely to result in a material loss. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. Other As previously disclosed, through its internal processes, the Company received a complaint that raised potential compliance issues related to one of its government contracts. The Company initiated an internal investigation, with the assistance of outside legal counsel, into the validity of these claims that concern the hiring of the Chief Information Officer of the U.S. Army as the Company’s Head of Global Public Sector in March 2023. As a result of the investigation, the Company’s board of directors determined that the Company’s President and Chief Operating Officer and the hired individual violated Company policy regarding a possible conflict relating to such individual’s hiring. On July 24, 2024, the Company and its President and Chief Operating Officer came to a mutual agreement that he would resign from all positions with the Company, effective immediately. The other individual also has departed the Company. The Company has informed the Department of Justice, the Department of Defense Office of Inspector General and the Army Suspension and Debarment Office of the investigation and is continuing to cooperate with the Department of Justice, which has commenced its own investigation and required the Company to deliver certain documents in connection with these matters. The Company cannot predict the timing, outcome or possible impact of the investigation. Indemnification Provisions Our agreements include provisions indemnifying customers against intellectual property and other third-party claims. In addition, we have entered into indemnification agreements with our directors, executive officers and certain other officers that will require us, among other things, to indemnify them against certain liabilities that may arise as a result of their affiliation with us. We have not incurred any material costs as a result of such indemnification obligations and have not recorded any material liabilities related to such obligations in the condensed consolidated financial statements
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