Income Taxes

3 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

The following table compares our income tax provision and effective tax rates for the three months ended June 30, 2025 and 2024:

	Three months ended June 30,
(Dollars in thousands)	2025			2024
Income tax benefit	$	(41	)	$	(6,734	)
Effective tax rate	nm			nm

nm - not meaningful

For the three months ended June 30, 2025 and 2024, income tax benefit was primarily driven by the impact of discrete excess tax benefits associated with Share-Based Compensation.

Our India subsidiary operates in a “Special Economic Zone (SEZ)”. One of the benefits associated with the SEZ is that the India subsidiary is not subject to regular India income taxes during its first five years of operations, which included fiscal 2018 through fiscal 2022. The India subsidiary is subject to 50% of regular India income taxes during its second five years of operations, which includes fiscal 2023 through fiscal 2027.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a stimulus bill which was in response to economic consequences of the COVID-19 pandemic. The CARES Act provided an employee retention credit, which is a refundable tax credit against certain employment taxes. During the three months ended June 30, 2025, we recorded $0.2 million of employee retention credits received in cash as other charges, net, in the condensed consolidated statements of operations.

We have recorded and maintain valuation allowances offsetting the Company’s deferred tax assets in certain U.S. States and foreign jurisdictions. The ultimate realization of deferred tax assets depends on various factors including the generation of future taxable income in the periods in which the underlying temporary differences are deductible. We maintain valuation allowances for deferred tax assets until we have sufficient evidence to support the reversal of all or some portion of the allowances.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses. We are evaluating the full effects of the legislation on our estimated annual effective tax rate and cash tax. As the legislation became law after the close of our first quarter, the impacts are not included in our operating results for the three months ended June 30, 2025.