Income Taxes

3 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company’s provision for income taxes during the interim periods is determined using an estimate of the Company’s annual effective tax rate, which is adjusted for certain discrete tax items during the interim periods. For the three months ended September 30, 2025 and 2024, the Company's income tax provision was $0.1 million and $1.3 million, respectively.

The Company’s effective tax rate differs from the federal statutory rate primarily due to valuation allowance positions in its federal, state and foreign jurisdictions. The income tax expense during the three months ended September 30, 2025 pertained mainly to an estimated cash tax liability and an increase in the net deferred tax liability.

The Company has subsidiaries in the U.S., Canada, and Australia and may be subject to income tax audits in those jurisdictions. The Company records liabilities related to uncertain tax positions, which provide adequate reserves for income tax uncertainties in all open tax years. Due to the Company’s history of tax losses, all years remain open to tax audit. The Company’s management evaluates the realizability of the Company’s deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on the Company’s ability to generate sufficient future taxable income during the foreseeable future.

On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act of 2025 (OBBBA) was enacted in the U.S. Key tax components of the OBBBA include making permanent certain provisions of the Tax Cuts and Jobs Act and full expensing of domestic research and experimental expenditures. The Company currently expects an immaterial beneficial cash flow impact in fiscal year 2026 from repeal of Section 174. The Company will continue to monitor and assess the impact of OBBBA on the consolidated financial statements.

The Company regularly evaluates the realizability of its deferred tax assets (DTAs) by assessing all available evidence, both positive and negative, to determine whether it is more likely than not that some or all of the DTAs will not be realized. The Company considers its historical earnings, volatility in actual earnings, impact of permanent book to tax difference, the timing of reversal of existing temporary differences, and future profitability to assess its valuation allowance. As of September 30, 2025, substantially all of the Company's U.S. and foreign DTAs, net of deferred tax liabilities, were subject to a valuation allowance. If sufficient positive evidence emerges, some or all of the valuation allowance could be released. Such a release would result in a non-cash income tax benefit in the period of release and the recognition of additional DTAs in the accompanying condensed consolidated statements of operations and balance sheets, respectively. There is a reasonable possibility that, within the next twelve months, sufficient positive evidence may become available to conclude that all or a significant portion of the valuation allowance against U.S. net DTAs is no longer required.