Company: ZM
Filing Date: 2025-11-25
Form Type: 10-Q
Source: 0001585521-25-000202
Chunk: 302

Company: Zoom Communications, Inc.
Filing Date: 2025-11-25
Form: 10-Q
Item: Part I, Item 8
Chunk 302
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108,151)(131,495)Total stock-based compensation expense recorded to net income$150,359 $196,716 $467,399 $576,875 

8.    Income Taxes

We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date ordinary income and adjust the provision for discrete tax items recorded in the period. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision.The following table provides details of the provision for income taxes:Three Months Ended October 31,Nine Months Ended October 31,2025202420252024(in thousands, except percentages)Income before provision for income taxes$794,709 $280,412 $1,558,636 $865,265 Provision for income taxes181,836 73,362 332,568 222,892 Effective tax rate22.9 %26.2 %21.3 %25.8 %The year-over-year change in effective tax rate for the three and nine months ended October 31, 2025 was primarily driven by changes in income before taxes and changes in tax shortfalls and tax benefits related to stock-based compensation. For both the three and nine months ended October 31, 2025 and October 31, 2024, the effective tax rate differed from the U.S. federal statutory rate due primarily to the foreign-derived intangible income deduction, tax benefits related to stock-based compensation, and research credits offset by tax shortfalls on stock-based compensation, state income taxes, and other compensation-related permanent differences.

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9.    Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share for the periods presented:Three Months Ended October 31,Nine Months Ended October 31,2025202420252024Class AClass BClass AClass BClass AClass BClass AClass B(in thousands, except share and per share data)Numerator:Net income, basic$547,285 $65,588 $176,222 $30,828 $1,077,946 $148,122 $544,814 $97,559 Reallocation of net income(1,824)1,824 (1,076)1,076 (3,551)3,551 (3,746)3,746 Net income, diluted$545,