Income Taxes

6 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are indefinitely reinvested.

The Company recorded income tax benefit of $0.4 million and income tax expense of $0.5 million for the three months ended September 30, 2022 and 2021, respectively. The Company recorded income tax benefit of $0.1 million and income tax expense of $0.1 million for the six months ended September 30, 2022 and 2021, respectively. The income tax benefit for the three and six months ended September 30, 2022 is primarily related to tax benefit from foreign R&D credits, partially offset by foreign and U.S. state taxes. The income tax expense for the six months ended September 30, 2021 is impacted by a partial release of valuation allowance from the acquisition of CodeStream.

Based on the available evidence during the three and six months ended September 30, 2022, the Company believes it is not more-likely-than-not to realize tax benefits of U.S. and Japan losses incurred during the three and six months ended September 30, 2022. The primary difference between the effective tax rate and the statutory tax rate relates to the valuation allowance on the U.S. and Japan losses and foreign tax rate differences.