Income Tax

9 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Tax

Note 13. Income Tax

The following summarizes the provision for income taxes (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2025		2024		2025		2024
Provision for income taxes	$	457	$	444	$	1,777	$	3,254

On a quarterly basis, the Company provides for income taxes based upon an estimated annual effective income tax rate. The Company's income tax expense during three and nine months ended March 31, 2025 and 2024, was primarily related to foreign taxes.

Starting in fiscal year 2019, certain income earned by controlling foreign corporations (“CFCs”) must be included in the gross income of the CFC’s U.S. shareholder. The income required to be included in gross income is referred to as global intangible low tax income (“GILTI”) and is defined under IRC Section 951A as the excess of the shareholder’s net CFC tested income over the net deemed tangible income return. The GILTI inclusion amount is expected to be fully absorbed by net operating losses carryforward and is not expected to cause the Company to be in a U.S. taxable income position for fiscal year 2025.

There is no material impact on the Company’s unaudited condensed consolidated financial statements for fiscal year 2025 relating to the change in U.S. tax law that requires capitalization and amortization of research and experimental expenditures incurred after July 1, 2022, which has been fully offset by pre-2018 net operating loss carryforwards. The Company will continue to evaluate the impact of this tax law change in future periods.

As of March 31, 2025, the Company’s gross unrecognized tax benefits were $22.0 million, of which $21.6 million would not affect income tax expense before consideration of any valuation allowance. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. Interest and penalties accrued on unrecognized tax benefits are recorded as a component of income tax expense.