Income Taxes

9 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The Company’s provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision. The Company recorded a benefit from income taxes of $0.6 million and provision for income taxes of $0.4 million for the three and nine months ended March 31, 2024, and a benefit from income taxes of $1.1 million and $3.1 million for the three and nine months ended March 31, 2023. The tax benefit for the third quarter of 2024 was primarily related to the foreign operations and the tax amortization of goodwill. The tax benefit in the third quarter of 2023 was related to losses of the Company and the foreign operations.

The Company performed an assessment on the likelihood of realizing the benefits of its deferred tax assets. As of March 31, 2024, the Company has concluded that it is not more likely than not that the Company would be able to utilize the majority of the deferred tax assets based on available evidence primarily related to historic losses and projected income. However, if there are favorable changes to actual operating results or to projections of future income, the Company may determine that it is more likely than not that such deferred tax assets may be realizable and record a material non-cash income tax benefit.

Additionally, in the event that the Company experiences an ownership change within the meaning of Section 382 of the Internal Revenue Code (“IRC”), the Company’s ability to utilize net operating losses, tax credits and other tax attributes may be limited.