Income Taxes

6 Months Ended

Oct. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our consolidated interim effective tax rate is based on our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions where we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the fiscal quarter in which the related event or a change in judgment occurs. The effective tax rate on ordinary income for the full fiscal year is expected to be 21.1%, which is greater than the U.S. federal statutory rate of 21.0%, due to the impact of state taxes and the tax effects of foreign operations, mostly offset by the beneficial impact of the foreign-derived intangible income deduction.

The effective tax rate of 21.2% for the six months ended October 31, 2025, was higher than the expected tax rate of 21.1% on ordinary income for the full fiscal year ending April 30, 2026, primarily due to the unfavorable impact of prior fiscal year true-ups, partially offset by the beneficial impact of tax rate changes in the current period. The effective tax rate of 21.2% for the six months ended October 31, 2025, was higher than the effective tax rate of 20.1% for the same period last year. The increase in our effective tax rate was driven primarily by the unfavorable year-over-year impact of prior fiscal year true-ups, which was partially offset by lower state taxes and the absence of valuation allowance increases in the current period compared to the prior period.

The OECD (Organization for Economic Co-operation and Development) 15% global minimum tax under the Pillar Two Model Rules, which is now effective in countries with enacted legislation, did not materially impact our financial results in the six months ended October 31, 2025. We will continue to evaluate the impact in future periods as previously-enacting countries issue related guidance and additional countries consider adoption of the global minimum tax rules.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the United States, which encompasses a broad range of tax reform provisions. We do not expect this to have a material impact on our estimated annual effective tax rate for the fiscal year ending April 30, 2026.