Income Taxes

12 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 — Income Taxes

The components of income (loss) before income taxes by jurisdiction were as follows:

	Fiscal Years Ended
	March 31,  2026			March 31,  2025			March 31,  2024
	(In thousands)
United States	$	(161,596	)	$	(329,591	)	$	(859,006	)
Foreign		266,397			(215,703	)		(334,940	)
	$	104,801		$	(545,294	)	$	(1,193,946	)

The (provision for) benefit from income taxes included the following:

	Fiscal Years Ended
	March 31,  2026			March 31,  2025			March 31,  2024
	(In thousands)
Current tax (provision) benefit:
Federal	$	(6,499	)	$	(28,247	)	$	(12,128	)
State		(7,050	)		(2,661	)		(1,010	)
Foreign		(56,735	)		(117,042	)		(27,028	)
		(70,284	)		(147,950	)		(40,166	)
Deferred tax (provision) benefit:
Federal		(28,380	)		16,770			74,404
State		(937	)		(102	)		5,166
Foreign		(16,622	)		132,223			100,070
		(45,939	)		148,891			179,640
Total (provision for) benefit from income taxes	$	(116,223	)	$	941		$	139,474

Significant components of the Company’s net deferred tax assets were as follows:

	As of
	March 31,  2026			March 31,  2025
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	388,035		$	252,589
Tax credit carryforwards		178,366			159,806
Capitalized research and development costs		65,417			136,191
Operating lease liabilities		99,134			99,877
Interest carryforwards		34,260			105,182
Other		182,575			198,071
Valuation allowance		(434,983	)		(430,501	)
Total deferred tax assets		512,804			521,215
Deferred tax liabilities:
Intangible assets		(533,515	)		(576,599	)
Property, equipment and satellites		(776,440	)		(689,880	)
Operating lease assets		(91,280	)		(88,083	)
Other		(59,720	)		(75,918	)
Total deferred tax liabilities		(1,460,955	)		(1,430,480	)
Net deferred tax assets (liabilities)	$	(948,151	)	$	(909,265	)

A reconciliation of the benefit from (provision for) income taxes to the amount computed by applying the statutory federal income tax rate to income (loss) before income taxes for the fiscal year ended March 31, 2026 is as follows:

	Fiscal Year Ended
	March 31, 2026
	Dollar			Percentage
	(In thousands)
U.S. federal statutory tax rate	$	(22,008	)		21	%
State and local income taxes, net of federal income tax effect (1)		(6,532	)	6
Foreign tax effects
United Kingdom
Statutory tax rate difference between United Kingdom and United States		(5,053	)		5
Interest on overpaid taxes, net of income tax effect		5,146			(5	)
Other		5,635			(5	)
Canada
Statutory tax rate difference between Canada and United States		10,226			(10	)
Local provincial income taxes		(20,332	)		19
Capital gain partial exemption on sale of Navarino UK		12,605			(12	)
Tax audit adjustments		(5,619	)		5
Withholding taxes		(8,993	)		9
Other		(3,050	)		3
Other foreign jurisdictions		(20,969	)		20
Effect of changes in tax laws or rates enacted in the current period		(10,061	)		10
Effect of cross-border tax laws
Global intangible low-taxed income (GILTI)		(43,061	)		41
Subpart F income		(45,418	)		43
Inclusion of foreign disregarded entities		(3,451	)		3
Other		1,324			(1	)
Tax credits
Research and development tax credits		10,558			(10	)
Changes in valuation allowances		48,628			(46	)
Nontaxable or nondeductible Items
Non-deductible compensation		(3,594	)		3
Other		(8,507	)		8
Changes in prior period worldwide unrecognized tax benefits		3,029			(3	)
Other adjustments
Unremitted subsidiary gains		(4,380	)		4
Other		(2,346	)		2
Total	$	(116,223	)		111	%

(1) State taxes in Virginia and Maryland made up the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the benefit from (provision for) income taxes to the amount computed by applying the statutory federal income tax rate to income (loss) before income taxes for the fiscal years ended March 31, 2025 and 2024 is as follows:

	Fiscal Years Ended
	March 31,  2025			March 31,  2024
	(In thousands)
Tax (provision) benefit at federal statutory rate	$	114,512		$	250,728
State tax provision, net of federal benefit		8,908			28,621
Tax credits		16,004			28,574
Change in federal valuation allowances		(49,566	)		(105,968	)
Change in state valuation allowances		(10,880	)		(27,251	)
Non-deductible compensation		(2,459	)		(5,240	)
Non-deductible transaction costs		(40	)		(18,911	)
Non-deductible meals and entertainment		(1,112	)		(1,077	)
Stock-based compensation		(12,932	)		(12,182	)
Change in state effective tax rate		(452	)		292
Base Erosion and Anti-Abuse Tax (BEAT)		(30,448	)	—
Foreign effective tax rate differential, net of valuation allowance		(9,185	)		6,199
Unremitted subsidiary gains		(7,043	)		(1,586	)
Withholding taxes		(6,852	)		(4,981	)
Other		(7,514	)		2,256
Total (provision for) benefit from income taxes	$	941		$	139,474

As of March 31, 2026, the Company had federal and state R&D tax credit carryforwards of $157.3 million and $217.6 million, respectively, which begin to expire in fiscal year 2040 and fiscal year 2027, respectively. As of March 31, 2026, the Company had federal and state net operating loss carryforwards of $1,296.2 million and $673.0 million, respectively, which begin to expire in fiscal year 2029 and fiscal year 2027, respectively. However, the majority of the federal net operating loss carryforwards do not expire.

As of March 31, 2026, the Company's deferred tax assets for net operating loss carryforwards included $64.2 million of UK capital loss carryforwards, which can only be offset against future UK capital gains. A full valuation allowance has been established against the capital loss carryforwards, as no capital gains are expected. With limited exceptions, the Company's foreign net operating loss and interest carryforwards do not expire. However, certain transactions or material changes to the Company's global financing arrangements could limit the Company's right to use its foreign deferred tax assets and make netting against deferred tax liabilities inappropriate, resulting in an increase to the valuation allowance and income tax expense.

In accordance with ASC 740, net deferred tax assets are reduced by a valuation allowance if, based on all the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of existing deferred tax assets ultimately depends on future profitability and the existence of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under tax law. In the event that the Company’s estimate of taxable income is less than that required to utilize the full amount of any deferred tax asset, a valuation allowance is established, which would cause a decrease to income in the period such determination is made. A valuation allowance of $435.0 million at March 31, 2026 and $430.5 million at March 31, 2025 has been established relating to carryforwards of federal, state and foreign net operating losses, federal and state R&D tax credits, and foreign tax credits, and to other federal and state net deferred tax assets for cumulative timing differences that, based on management’s estimate of future taxable income attributable to such jurisdictions and generation of additional research credits, are considered more likely than not to expire unused.

In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes a broad range of material business tax reforms, such as 100% bonus depreciation, expensing of U.S.-based research and development, modification of the interest expense limitation, and modification of various U.S. international tax provisions. For fiscal year 2026, the tax law changes resulted in approximately $10.7 million of incremental non-cash tax expense to increase the Company’s U.S. valuation allowance due to material changes in the Company’s mix of gross deferred tax assets and liabilities. Additionally, the tax law changes decreased cash paid for income taxes in fiscal year 2026 associated with the Company's majority-owned subsidiary primarily due to the accelerated amortization of research and development expenses that were previously capitalized for tax purposes.

During the fourth quarter of fiscal year 2025, the Company released $10.3 million of valuation allowance previously recorded against U.S. deferred tax assets. The Company evaluated both the positive and negative evidence and released valuation allowance equal to the expected benefit from the deferred tax liabilities recorded for legacy Inmarsat U.S. entities in connection with a tax planning strategy to file a consolidated U.S. federal tax return.

During the second quarter of fiscal year 2024, in evaluating the Company’s ability to realize its U.S. net deferred tax assets, the Company considered all available positive and negative evidence, including but not limited to operating results, forecasted ranges of future taxable income, and its recent satellite anomalies. ASC 740 places more weight on the objectively verifiable evidence of current pre-tax losses and recent events than forecasts of future profitability. Therefore, the Company determined it is more likely than not that its U.S. net deferred tax assets will not be realized, excluding its deferred tax assets and liabilities related to the separate U.S. tax return filings of TrellisWare and the legacy Inmarsat entities. As a result, the Company’s tax benefit for fiscal year 2024 was reduced by a valuation allowance recorded against such U.S. deferred tax assets.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	As of
	March 31,  2026			March 31,  2025			March 31,  2024
	(In thousands)
Balance, beginning of fiscal year	$	188,186		$	185,595		$	129,738
Increase related to prior year tax positions		1,200			1,571			2,728
Decrease related to prior year tax positions		(265	)		(253	)		(190	)
Increase related to current year tax positions		49,117			14,017			15,608
Increase related to business combinations	—			—				54,193
Expiration of the statute of limitations for the assessment of taxes		(11,054	)		(12,744	)		(16,482	)
Balance, end of fiscal year	$	227,184		$	188,186		$	185,595

Of the total unrecognized tax benefits at March 31, 2026, $13.6 million would reduce the Company’s annual effective tax rate if recognized, based on the Company's valuation allowance position at March 31, 2026.

The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense. As of March 31, 2026 and 2025, the Company had accrued interest expense and penalties of approximately $9.0 million and $14.4 million, respectively. The Company recognized a tax benefit of $5.5 million for fiscal year 2026 and an insignificant amount for each of fiscal years 2025 and 2024 for reductions of interest expense and penalties in income tax expense. In addition, as of March 31, 2026 and 2025, the Company had accrued interest income of approximately $7.1 million and an insignificant amount, respectively. The Company recognized a tax benefit of $4.6 million for fiscal year 2026 and an insignificant amount for each of fiscal years 2025 and 2024 for interest income in income tax expense.

The Company is subject to periodic audits by domestic and foreign tax authorities. By statute, the Company’s U.S. federal and state income tax returns are subject to examination by the tax authorities for fiscal years 2023 and thereafter. Additionally, net operating loss and R&D tax credit carryovers that were generated in prior years may also be subject to examination. The Company’s U.S. federal income tax return for fiscal year 2024 is currently under examination by the Internal Revenue Service. Calendar years 2014 and thereafter remain open in Norway for certain entities currently under examination. Calendar years 2018 and thereafter remain open in Canada for certain entities currently under examination. With few exceptions, fiscal years 2022 and thereafter remain open by statute to examination by other foreign tax authorities. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and its accruals for tax liabilities are adequate based on an assessment of many factors, including experience and interpretations.

The income taxes paid, net of refunds received, for the fiscal year ended March 31, 2026 was as follows:

	Fiscal Year Ended
	March 31, 2026
	(In thousands)
Federal	$	10,103
State		1,472
Foreign
United Kingdom		49,443
Brazil		5,928
Other foreign jurisdictions		13,755
Total cash paid for income taxes, net	$	80,701