Income Taxes (Tables)

12 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income before Income Tax

Income from continuing operations before income taxes, classified by source of income, was as follows (in thousands):

	Year Ended June 30,
	2024		2023		2022
Domestic	$	89,752	$	51,422	$	(112,151)
Foreign		74,185		60,613		60,657
Total	$	163,937	$	112,035	$	(51,494)

Income Tax Provisions (Benefits)

The components of the provision for (benefit from) income taxes were as follows (in thousands):

	Year Ended June 30,
	2024		2023		2022
Current tax provision (benefit):
U.S. federal	$	11,243	$	13,761	$	(6,767)
State and local		3,489		824		4,154
Foreign		419		614		725
Total current		15,151		15,199		(1,888)
Deferred tax provision (benefit):
U.S. federal		4,870		(1,099)		(6,425)
State and local		2,745		(4,347)		(6,597)
Foreign		3,458		530		(629)
Total deferred		11,073		(4,916)		(13,651)
Provision for (benefit from) income taxes	$	26,224	$	10,283	$	(15,539)

Income Tax Provisions Computed using Statutory U.S. Federal Rate

The effective tax rate differs from the statutory tax rates as follows (in thousands):

	Year Ended June 30,
	2024				2023				2022
Income tax at statutory rate	$	34,427	21.0	%	$	23,527	21.0	%	$	(10,814)	21.0	%
Lower rates on foreign operations		(11,419)	(7.0)	%		(11,668)	(10.4)	%		(12,879)	25.0	%
State income taxes		4,557	2.8	%		2,719	2.4	%		(661)	1.3	%
Loss on investment in subsidiary		—	—	%		—	—	%		(1,669)	3.2	%
Deferred tax benefit from acquisitions and divestitures		—	—	%		—	—	%		(1,153)	2.2	%
Research and development tax credits		(1,589)	(1.0)	%		(1,862)	(1.7)	%		—	—	%
Change in valuation allowance		(621)	(0.4)	%		(9,769)	(8.7)	%		5,406	(10.5)	%
Reduction in state loss carryforwards		—	—	%		2,340	2.1	%		(5,882)	11.4	%
Permanent non-deductible items		2,293	1.4	%		1,630	1.5	%		2,788	(5.4)	%
Foreign tax provisions under GILTI		4,908	3.0	%		3,569	3.2	%		8,581	(16.7)	%
Change in unrecognized tax benefits		(6,849)	(4.2)	%		791	0.7	%		56	(0.1)	%
Other		517	0.3	%		(994)	(0.9)	%		688	(1.3)	%
Provision for (benefit from) income taxes	$	26,224	16.0	%	$	10,283	9.2	%	$	(15,539)	30.2	%

Deferred Tax Assets (Liabilities)

The components of the deferred income tax assets and liabilities were as follows (in thousands):

	June 30,
	2024		2023
Employee benefits	$	15,866	$	11,719
Stock-based compensation		7,664		7,310
Receivable reserve		9,028		6,246
Capitalized research and experimental costs		9,322		8,075
Operating lease liabilities		42,526		41,235
Other reserves		12,439		6,246
Loss and credit carryforwards, net		15,426		19,259
Less: valuation allowance		—		(621)
Gross deferred tax assets		112,271		99,469
Depreciation		(8,298)		(5,643)
Deferred taxes on unremitted foreign earnings		(210)		(428)
Amortization of intangible assets		(50,035)		(31,294)
Operating lease assets		(34,166)		(31,478)
Gross deferred tax liability		(92,709)		(68,843)
Net deferred tax asset	$	19,562	$	30,626

Net Operating Loss and Credit Carryforwards

Adtalem has the following tax net operating loss (tax effected), interest (tax effected), and credit carryforwards as of June 30, 2024 (in thousands):

	June 30,		Years of Expiration
	2024		Beginning	Ending
U.S. interest expense carryforwards	$	506	no expiration
U.S. credit carryforwards		672	2027	2030
State net operating loss carryforwards		9,053	2025	2043
State interest expense carryforwards		592	no expiration
State credit carryforwards		130	no expiration
Foreign net operating loss carryforwards		4,473	2030	2033
Total loss and credit carryforwards, net	$	15,426

Changes in Valuation Allowance

The changes in our valuation allowances were as follows (in thousands):

	Year Ended June 30,
	2024		2023		2022
Balance at beginning of period	$	621	$	10,390	$	4,985
Charged to costs and expenses		—		(2,677)		5,522
Deductions		(621)		(7,092)		(117)
Balance at end of period	$	—	$	621	$	10,390

Changes in Unrecognized Tax Benefits

The changes in our unrecognized tax benefits were as follows (in thousands):

	Year Ended June 30,
	2024		2023		2022
Balance at beginning of period	$	13,128	$	11,645	$	9,836
Increases from positions taken during prior periods		953		1,299		1,074
Decreases from positions taken during prior periods		(1,248)		—		(1,737)
Increases from positions taken during the current period		554		665		2,845
Reductions due to lapse of statute		(6,664)		(481)		(373)
Balance at end of period	$	6,723	$	13,128	$	11,645