PROVISION FOR INCOME TAXES

3 Months Ended

Apr. 30, 2026

PROVISION FOR INCOME TAXES

PROVISION FOR INCOME TAXES

NOTE 11 – PROVISION FOR INCOME TAXES

The Company’s effective income tax rate (“ETR”) for the three months ended April 30, 2026 and 2025 was 14.3% and 24.3%, respectively. The Company’s ETR for the three months ended April 30, 2026 differed from the U.S. federal statutory rate of 21% primarily due to stock-based compensation windfall. The Company’s ETR for the three months ended April 30, 2025 differed from the U.S. federal statutory rate primarily due to the unfavorable effects of state income taxes.

For the three months ended April 30, 2026 and 2025, the amount of cash paid for income taxes, net of refunds received, was insignificant.

Solar Energy Projects

The Company holds equity investments in Solar Tax Credit (“STC”) investments. Primarily, the STC investments are structured as limited liability companies that invest in solar energy projects that are eligible to receive energy tax credits. As of April 30, 2026 and January 31, 2026, the investment accounts balances were $1.5 million and $1.7 million, respectively, which are included in other assets in the condensed consolidated balance sheets. As of April 30, 2026, we had no remaining cash investment commitments related to the STC investments. These investments are expected to provide positive overall returns over their expected lives.

The Company has STC investments that qualify for the proportional amortization method (“PAM”). For these investments, the Company recognized income tax credits and other income tax benefits of less than $0.1 million and $0.8 million during the three months ended April 30, 2026 and 2025, respectively. For the three months ended April 30, 2026 and 2025, the Company recorded amortization related to STC investments of less than $0.1 million and $0.7 million, respectively. The amount of non-income tax related activity and other returns related to the STC investments that qualify for PAM were not material for the three months ended April 30, 2026 and 2025.

For the three months ended April 30, 2026 and 2025, the Company’s share of activity from its STC investments that do not qualify for PAM was not material.