Income Taxes

3 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 13. Income Taxes

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

	Three Months Ended December 31,
	2024			2023
Domestic	$	(11,825	)	$	65,636
Foreign		(6,792	)		(7,438	)
(Loss) income before income taxes	$	(18,617	)	$	58,198

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

	Three Months Ended December 31,
	2024			2023
Domestic	$	1,291		$	29,078
Foreign		4,380			5,263
Provision for income taxes	$	5,671		$	34,341
Effective income tax rate		(30.5	)%		59.0	%

The effective tax rates for the periods presented are based upon estimated income for the fiscal year and the statutory tax rates enacted in the jurisdictions in which we operate. For all periods presented, the effective tax rate differs from the 21.0% statutory U.S. tax rate due to the impact of the nondeductible stock-based compensation and our mix of jurisdictional earnings and related differences in foreign statutory tax rates.

Our effective tax rate for the three months ended December 31, 2024 was negative 30.5% compared to 59.0% for the three months ended December 31, 2023. Consequently, our provision for income taxes for the three months ended December 31, 2024 was $5.7 million, a net change of $28.6 million from a provision for income taxes of $34.3 million for the three months ended December 31, 2023. This difference was attributable to the one-time acceleration of legacy deferred revenue in the three months ended December 31, 2023.

Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, limitations of availability of net operating loss carryforwards, and other matters in making this assessment.