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INCOME TAXES
 6 Months Ended
Feb. 28, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
We are subject to taxation in the United States ("U.S.") and various state, local and foreign jurisdictions in which we conduct our business. Income tax expense is based on taxable income determined in accordance with current enacted laws and tax rates.
Deferred income taxes are recorded for the temporary differences between the financial statement carrying amounts and the tax basis of our assets and liabilities using currently enacted tax rates.
Provision for Income Taxes and Effective Tax Rate
The provision for income taxes and the effective tax rate are as follows:
Three Months EndedSix Months Ended
February 28,February 28,
(in thousands)2026202520262025
Income before income taxes$161,111 $172,320 $351,224 $352,059 
Provision for income taxes$28,055 $27,460 $65,588 $57,177 
Effective tax rate17.4 %15.9 %18.7 %16.2 %
Our provision for income taxes for interim periods is calculated by applying an estimate of our annual effective tax rate to our quarter and year-to-date results, adjusted for discrete items recorded in the period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pretax income (or loss) for the year, projections of the proportion of pretax income (or loss) attributable to, and subject to tax in, foreign jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets, then adjusted for any discrete items. On a quarterly basis, we update the estimate of our annual effective tax rate as new events occur, assumptions change, or additional information is obtained.
Our effective tax rate for the three months ended February 28, 2026 and February 28, 2025 was 17.4% and 15.9%, respectively. The increase was primarily due to the limitation on the deductibility of executive compensation and lower excess tax benefits from stock-based compensation, partially offset by a favorable resolution of uncertain tax positions in the U.S.
Our effective tax rate for the six months ended February 28, 2026 and February 28, 2025 was 18.7% and 16.2%, respectively. The increase was primarily due to a stock-based compensation tax shortfall for the six months ended February 28, 2026, compared to an excess tax benefit for the prior year period.
For the periods presented, our effective tax rates were lower than the applicable U.S. corporate income tax rate ("U.S. tax rate") primarily due to the U.S. tax impact of foreign earnings, research and development ("R&D") tax credits, and a foreign derived intangible income ("FDII") tax deduction, partially offset by the impact of state income taxes. In addition, our effective tax rate was lower than the U.S. tax rate for the three months ended February 28, 2026 due to a favorable resolution of uncertain tax positions in the U.S., and for the three and six months ended February 28, 2025 due to excess tax benefits from stock-based compensation.

Base Erosion and Profit Shifting Pillar Two
The Organization for Economic Co-operation and Development released Base Erosion and Profit Shifting Pillar Two rules (“Pillar Two”) to introduce a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds. Certain aspects of Pillar Two are effective for tax years beginning on or after January 1, 2024. Although the U.S. has not yet enacted legislation to adopt Pillar Two, certain countries in which we operate have already adopted, or are in the process of adopting, legislation to implement Pillar Two. We have determined that Pillar Two would not have a material impact to our Consolidated Financial Statements, related disclosures, or effective tax rate. However, as the Pillar Two rules continue to evolve, we are closely monitoring legislative developments globally to evaluate potential impacts on our financial statements, as more countries adopt and implement these regulations.
One Big Beautiful Bill Act
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law. The legislation includes a broad range of tax reform provisions affecting businesses including, but not limited to, the expansion of bonus depreciation, immediate expensing of domestic R&D costs, and revisions to the U.S. taxation of profits derived from international operations. The legislation has multiple effective dates, with certain provisions taking effect in fiscal 2025 and others phased in through fiscal 2027. The Act did not have a material impact on our Consolidated Financial Statements as of and for the three and six months ended February 28, 2026.