Income Taxes (Tables)

12 Months Ended

Jan. 31, 2026

Schedule of Components of Income Tax Expense (Benefit)

The components of the provision for income taxes are as follows (in thousands):


	Fiscal Year Ended January 31,
	2026		2025		2024
Current:
Federal	$	—	$	—	$	—
State and local	48		12		65
Foreign	5,677		3,584		2,380
Total current	5,725		3,596		2,445
Deferred:
Federal	$	(1,640)	$	—	$	—
State and local	(1,312)		—		—
Foreign	(148)		(151)		(488)
Total deferred	(3,100)		(151)		(488)
Provision for income taxes	$	2,625	$	3,445	$	1,957

Schedule of Income before Income Tax, Domestic and Foreign

The components of loss before income taxes are as follows (in thousands):


	Fiscal Year Ended January 31,
	2026		2025		2024
United States	$	(140,469)	$	(108,413)	$	(130,927)
Foreign	12,308		7,811		2,455
Loss before provision for income taxes	$	(128,161)	$	(100,602)	$	(128,472)

Schedule of Effective Income Tax Rate Reconciliation

We adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a prospective basis beginning with the year ended January 31, 2026. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to our actual global effective amount and rate for the year ended January 31, 2026 (in thousands, except rates):


	Fiscal Year Ended January 31, 2026
	Amount		Percent
Statutory income tax expense	$	(26,914)	21.0	%
State and local income taxes, net of federal income tax effect (1)	(1,264)		1.0	%
Foreign tax effects
Canada
Canada - share-based payment disallowance	1,637		(1.3)	%
Other adjustments	182		(0.1)	%
Other foreign jurisdictions	1,124		(0.9)	%
Effects of cross-border tax laws:
Global intangible low-taxed income (GILTI)	1,619		(1.3)	%
Other	255		(0.2)	%
Tax credits:
Research and development credit	(3,870)		3.0	%
Changes in valuation allowances	10,942		(8.5)	%
Nontaxable or nondeductible items:
Executive compensation limitation	8,843		(6.9)	%
Stock-based compensation	5,143		(3.9)	%
Nondeductible transaction costs	1,267		(1.0)	%
Other	940		(0.7)	%
Changes in unrecognized tax benefits	1,994		(1.6)	%
Other adjustments	727		(0.6)	%
Effective tax	$	2,625	(2.0)	%

(1) The jurisdictions that contribute to the majority of the tax effect in this category are New York and California.

The following table presents the required disclosures prior to our adoption of ASU 2023-09. A reconciliation of the provision for income taxes to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:


	Fiscal Year Ended January 31,
	2025		2024
Statutory income tax expense	21.0	%	21.0	%
Foreign tax rate differential	(0.2)	%	—	%
State taxes	—	%	(0.1)	%
Permanent items	(2.0)	%	(0.2)	%
Change in valuation allowance	(25.2)	%	(28.9)	%
Stock-based compensation	5.7	%	5.1	%
Non-deductible compensation	(5.3)	%	(2.5)	%
Tax credits	8.6	%	4.1	%
Changes in unrecognized tax benefits	(6.0)	%	—	%
Effective tax rate	(3.4)	%	(1.5)	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below (in thousands). The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.


	January 31,
	2026		2025
Deferred tax assets:
Loss carryforwards	$	143,421	$	109,064
Compensation and benefits	25,704		20,285
Operating lease liabilities	20,361		21,853
Tax credits	17,022		14,402
Capitalized costs	23,368		33,178
Other	4,896		5,682
Deferred tax assets	234,772		204,464
Less: valuation allowance	(175,122)		(164,228)
Deferred tax asset, net of valuation allowance	$	59,650	$	40,236
Deferred tax liabilities:
Deferred contract costs	$	(24,405)	$	(18,627)
Property, equipment and software	(1,971)		(2,139)
Operating lease right-of-use assets	(17,802)		(19,052)
Intangible assets	(15,134)		(749)
Other	(463)		—
Deferred tax liabilities	(59,775)		(40,567)
Net deferred tax assets/(liabilities)	$	(125)	$	(331)

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits, including penalties but excluding interest, is as follows (in thousands):


	Fiscal Year Ended January 31,
	2026		2025		2024
Balance at February 1	$	7,061	$	—	$	—
Additions for tax positions of prior years	244		4,521		—
Additions based on tax positions related to current year	1,982		2,540		—
Reductions for tax positions of prior years	—		—		—
Balance at January 31	$	9,287	$	7,061	$	—

Schedule of Income Taxes Paid, Net of Refunds

We adopted ASU 2023-09 on a prospective basis for the fiscal year ended January 31, 2026, and have included the following table as a result of our adoption, which presents income taxes paid (net of refunds received) for the fiscal year ended January 31, 2026 (in thousands):


	Fiscal Year Ended January 31, 2026
Federal taxes	$	—
State taxes	65
Foreign taxes:
Canada	2,555
Singapore	839
France	254
UK	(247)
Ireland	246
Brazil	153
Other	31
Total cash taxes paid	$	3,896

Below is a summary of income taxes paid for the fiscal years ended January 31, 2025 and 2024 (in thousands):


	Fiscal Year Ended January 31,
	2025		2024
Cash paid during the year for:
Income taxes, net of refunds	$	2,945	$	309

Braze, Inc. 10-K