Income Taxes

9 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted by the U.S. government. The Tax Act has impacted the U.S. statutory Federal tax rate that the Company will use going forward, which has been reduced to 21% from 35%. The Tax Act also introduced a modified territorial tax system and a minimum tax on certain foreign earnings for tax years beginning after December 31, 2017.

The Company recorded an income tax provision of $5,357 and $2,209 on income from operations before income taxes of $19,466 and $5,905 for the three months ended March 31, 2019 and 2018, respectively. The Company recorded an income tax provision of $12,969 and an income tax benefit of $4,837 on income from operations before income taxes of $46,940 and $25,945 for the nine months ended March 31, 2019 and 2018, respectively.

During the three months ended March 31, 2019 and 2018, the Company recognized a discrete tax benefit of $143 and $96, respectively, related to excess tax benefits on stock-based compensation. The effective tax rate for the three months ended March 31, 2019 and 2018 differed from the Federal statutory rate primarily due to Federal research and development credits, excess tax benefits related to stock compensation, a modified territorial tax system and a minimum tax on certain foreign earnings, and state taxes.

During the nine months ended March 31, 2019 and 2018, the Company recognized a discrete tax benefit of $1,858 and $7,675, respectively, related to excess tax benefits on stock-based compensation. The effective tax rate for the nine months ended March 31, 2019 and 2018 differed from the Federal statutory rate primarily due to Federal research and development credits, excess tax benefits related to stock compensation, a modified territorial tax system and a minimum tax on certain foreign earnings, and state taxes.

On August 21, 2018, the Internal Revenue Service ("IRS") provided initial guidance on amendments made to the limitation on executive compensation by the Tax Act. During the three months ended September 30, 2018, the Company recorded an adjustment to its unrecognized tax positions of $1,711 as a result of this guidance. During the three months ended March 31, 2019, there were no material changes made to the Company’s unrecognized tax positions.