Income Taxes

3 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

In determining its interim provision for income taxes, the Company used an estimated annual effective tax rate, which is based on expected income before taxes, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the period in which they occur and can be a source of variability in the effective tax rate from quarter to quarter.

The Company’s income tax provision includes the results of the Company’s U.S. operations and its various foreign operations including subsidiaries based in Canada, Jamaica, Nicaragua, Pakistan, Honduras, the Philippines, United Arab Emirates, and Saudi Arabia. Historically, the Company’s Bermuda-based companies have not been subject to income tax as there is no corporate income tax in Bermuda. On December 27, 2023, the Bermuda Corporate Income Tax Act 2023 ("CIT") was passed which provides for a 15% corporate tax rate beginning on or after January 1, 2025 for companies with revenue in excess of 750 million Euros. The Company's consolidated revenues do not meet this 750 million Euro threshold, and accordingly, we are not currently subject to the Bermuda CIT.

The Company recorded a provision for income taxes of $1.5 million and $2.0 million during the three months ended September 30, 2025 and 2024, respectively. The effective tax rate was 10.9% and 20.8% for the three months ended September 30, 2025 and 2024, respectively. The changes in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and discrete tax benefits from stock-based compensation compared to the prior year quarter.

The difference between the effective tax rate applicable to the Company and the 21% U.S. federal statutory rate in the three months ended September 30, 2025 was primarily due to "Tax Holidays" in certain countries in which we operate and the distribution of taxable income in countries with differing tax rates. We have been granted Tax Holidays as an incentive to attract foreign investment by the governments of Nicaragua, Pakistan, Honduras, Jamaica, and certain qualifying locations in the Philippines. Generally, a Tax Holiday is an agreement between us and a foreign government under which we receive certain tax benefits in that country.

The aggregate reduction in income tax expense due to the above Tax Holidays was $1.1 million and $1.4 million for the three months ended September 30, 2025 and 2024, respectively. The aggregate reduction in income tax expense per diluted share was $0.07 and $0.08 for the three months ended September 30, 2025 and 2024, respectively.

The One Big Beautiful Bill Act (Public Law no. 119-21, the "Act") was signed on July 4, 2025, which marks the date of enactment for the tax provisions included in the Act. After evaluating the Act, management has concluded that the Company is not materially impacted based on current guidance. The Company will continue to monitor any future guidance or interpretations that could affect this assessment.