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Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The components of income (loss) before provision for income taxes were as follows during the periods presented (in thousands):
Year ended
June 30,
202520242023
Domestic$(43,567)$5,312 $(199,452)
Foreign73,977 (31,631)(23,465)
Total income (loss) before provision for income taxes$30,410 $(26,319)$(222,917)
The components of provision for income taxes were as follows during the periods presented (in thousands):
Year ended
June 30,
202520242023
Current:
Federal$3,850 $1,650 $572 
State2,758 1,251 1,583 
Foreign80 19 14 
Total current6,688 2,920 2,169 
Deferred:
Federal(32)(262)(995)
State(45)(99)(366)
Total deferred(77)(361)(1,361)
Provision for income taxes$6,611 $2,559 $808 
The items accounting for the difference between the income taxes computed at the federal statutory rate and the provision for income taxes consisted of the following during the periods presented (in thousands):
Year ended
June 30,
202520242023
Expected provision (benefit) at U.S. federal statutory rate$6,386 $(5,528)$(46,813)
State income taxes, net of federal benefit7,325 9,134 8,087 
Stock-based compensation (1)
19,204 24,300 4,253 
Research and development tax credits(23,383)(24,039)(19,974)
Change in valuation allowance (2)
10,939 4,943 48,321 
Restructuring— (13,769)— 
Foreign rate differential(15,455)6,658 4,942 
Other1,595 860 1,992 
Provision for income taxes$6,611 $2,559 $808 
(1) The rate impact during the year ended June 30, 2025, 2024 and 2023 relates to the impact of non-deductible stock compensation and shortfalls related to tax deductions being smaller than the associated stock compensation expense.
(2) The rate impact during the year ended June 30, 2025, 2024 and 2023 pertains to an increase in valuation allowance due to the increase in net deferred tax assets, capitalized R&D expense and tax credits generated during the year.
The components of deferred tax assets and liabilities were as follows as of the dates presented (in thousands):
June 30,
20252024
Deferred tax assets:
Accruals and reserves$17,888 $13,966 
Capitalized research and development160,755 120,882 
Deferred revenue28 1,084 
Stock-based compensation19,532 17,093 
Net operating and other loss carryforwards280,004 360,592 
Research and development credits99,626 85,910 
Accrued rewards154 40 
Operating lease liabilities17,874 19,139 
Other3,660 598 
Total deferred tax assets before valuation allowance
599,521 619,304 
Valuation allowance(503,692)(494,424)
Deferred tax assets$95,829 $124,880 
Deferred tax liabilities:
Deferred contract costs$(6,603)$(5,868)
Property and equipment(22,253)(15,853)
Intangible assets(53,280)(68,218)
Operating right of use assets(14,066)(14,992)
Other reserve— (20,399)
Total deferred tax liabilities(96,202)(125,330)
Net deferred tax liabilities$(373)$(450)
Accounting Standards Codification 740 requires that the tax benefit of net operating losses, temporary differences, and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability
to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The change in valuation allowance was approximately $9.3 million, $15.0 million, and $95.3 million during the years ended June 30, 2025, 2024, and 2023, respectively. The increase in the June 30, 2025 valuation allowance is primarily from the application of the Tax Cuts and Jobs Act of 2017 effective fiscal year 2023 and thereafter, that requires companies to capitalize and amortize research and development expenses rather than deduct the costs as incurred, offset by a reduction in a deferred tax liabilities. The net deferred tax liability is included as other long-term liabilities in the accompanying consolidated balance sheets.
The Tax Cuts and Job Act subjects a U.S. company to tax on its Global Intangible Low Tax Income (GILTI). Under GAAP, the Company can make an accounting policy election to either treat taxes due on the GILTI inclusion as a current period expense or factor such amounts into the measurement of deferred taxes. The Company elected the period expense method.
The Company does not currently operate under any tax holiday in any country in which it operates.
The Company does not have foreign earnings available to distribute. As such, there is no unrecorded deferred tax liability associated with an outside basis of foreign subsidiaries.
As of June 30, 2025, the Company had NOL carryforwards of $944.3 million, $881.6 million, and $13.4 million for federal, state, and foreign tax purposes, respectively, that are available to reduce future taxable income. If not utilized, the state NOL carryforwards will begin to expire in 2025. As of June 30, 2025, the federal and foreign NOL carryforwards do not expire and will carry forward indefinitely until utilized. As of June 30, 2025, the Company had capital loss carryforwards of $74.3 million for foreign tax purposes. The foreign capital loss carryforwards do not expire and will carry forward indefinitely until utilized. As of June 30, 2025, the Company also had research and development tax credit carryforwards of $89.4 million and $66.2 million for federal and state tax purposes, respectively. If not utilized, the federal tax credits will expire at various dates beginning in 2041. The majority of the state tax credits do not expire and will carry forward indefinitely until utilized.
Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Code and other similar state provisions. The annual limitation may result in the expiration of NOLs and tax credits before utilization.
Below is the reconciliation of the unrecognized tax benefits related to federal and California research and development credits during the periods presented (in thousands):
Year e
ded June 30,
202520242023
Balance at the beginning of the year$35,128 $23,300 $16,724 
Add:
Tax positions related to the current year
10,622 9,134 6,642 
Purchase of intangible assets209 — — 
Tax positions related to the prior year
— 2,714 226 
Less:
Statute of limitations lapse— (20)(292)
Balance at the end of the year$45,959 $35,128 $23,300 
The Company had unrecognized tax benefits of $46.0 million and $35.1 million as of June 30, 2025 and 2024, respectively, all of which are offset by a full valuation allowance. If the unrecognized tax benefits as of June 30, 2025 were recognized, they would not have an impact to the effective tax rate due to the Company’s valuation allowance.
The amount of interest and penalties accrued as of each of June 30, 2025 and 2024 were not material.
The Company files income tax returns in the U.S. for U.S. federal, California, and various states and foreign jurisdictions. The Company’s U.S. federal, state, and foreign tax returns for all years remain subject to examination by taxing authorities as a result of unused tax attributes being carried forward. The Company records liabilities related to uncertain tax positions, which provide adequate reserves for income tax uncertainties in all open tax years. 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. The Company does not anticipate any material change on its unrecognized tax benefits over the next 12 months.
Subsequent to the Company’s fiscal year ended June 30, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025. The legislation includes tax related provisions that may impact the Company, including a repeal of Section 174 of the Internal Revenue Code relating to the capitalization and amortization of domestic research and experimental expenditures, applicable to the Company starting fiscal year ending June 30, 2026. The Company is in the process of evaluating the impacts of the OBBBA to its consolidated financial statements. A quantitative estimate of the OBBBA's effects cannot be reasonably determined at this time due to the complexity of the changes