Income Taxes

9 Months Ended

Nov. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

(14) Income Taxes

The Company’s provision for income taxes consists of federal, foreign, and state taxes necessary to align the Company’s year-to-date tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments, as necessary.

For the three months ended November 30, 2024, the Company recorded an income tax benefit of $513, which includes a discrete income tax provision of $43 related to the finalization of the federal tax return filing and uncertain tax position interest expense accrual. The effective tax rate for the three months ended November 30, 2024 was an income tax benefit of 1.03% on pre-tax loss of $49,974. The effective tax rate for the three months ended November 30, 2024 differed from the U.S. statutory rate of 21% as a result of a number of factors, primarily related to no income tax benefit recorded on current year Australia, Denmark, and Japan pre-tax losses given the Company maintains a full valuation allowance, the impairment of non-deductible goodwill for which no tax benefit was provided, income taxed in foreign jurisdictions at varying tax rates, nondeductible permanent differences, research and development credits, and adjustments to the deferred tax liability related to indefinite lived intangibles.

For the three months ended November 30, 2023, the Company recorded an income tax provision of $97, which includes a discrete income tax benefit of $198 related primarily to the finalization of the federal tax return filing and reversal of uncertain tax position liabilities as a result of the lapse of the applicable statute of limitations. The effective tax rate for the three months ended November 30, 2023 was an income tax provision of 11.0% on pre-tax income of $880. The effective tax rate for the three months ended November 30, 2023 differs from the U.S. statutory rate of 21% as a result of a number of factors, primarily related to no income tax benefit recorded on current year U.S and Japanese pre-tax losses given the Company maintains a full valuation allowance, income taxed in foreign jurisdictions at varying tax rates, nondeductible permanent differences, research and development credits, and adjustments to our deferred tax liability related to indefinite lived intangibles.

For the nine months ended November 30, 2024, the Company recorded an income tax provision of $493, which includes a discrete income tax provision of $1,201 related primarily to increases in valuation allowance related to deferred tax assets in Canada and Australia. The effective tax rate for the nine months ended November 30, 2024 was an income tax expense of 0.9% on pre-tax loss of $57,353. The effective tax rate for the nine months ended November 30, 2024 differs from the U.S. statutory rate of 21% as a result of a number of factors, primarily related to no income tax benefit recorded on current year Australia, Denmark, and Japan pre-tax losses given the Company maintains a full valuation allowance, the impairment of non-deductible goodwill for which no tax benefit was provided, income taxed in foreign jurisdictions at varying tax rates, nondeductible permanent differences, research and development credits, adjustments to the deferred tax liability related to indefinite lived intangibles, and the discrete items discussed above.

For the nine months ended November 30, 2023, the Company recorded an income tax benefit of $54, which includes a discrete income tax benefit of $515 related primarily to the finalization of certain tax filings and the reversal of uncertain tax position liabilities as a result of the lapse of the applicable statute of limitations, offset by the remeasurement of state deferred taxes based on law changes enacted during the period. The effective tax rate for the nine months ended November 30, 2023 was an income tax benefit of 0.2% on pre-tax loss of $23,553. The effective tax rate for the nine months ended November 30, 2023 differs from the U.S. statutory rate of 21% as a result of a number of factors, primarily related to no income tax benefit recorded on current year U.S and Japanese pre-tax losses given the Company maintains a full valuation allowance, income taxed in foreign jurisdictions at varying tax rates, nondeductible permanent differences, research and development credits, and adjustments to our deferred tax liability related to indefinite lived intangibles.

At November 30, 2024 and February 29, 2024, the Company had an uncertain tax position liability balance of $719 and $809, respectively, including interest and penalties. The unrecognized tax benefits include amounts related to various U.S. federal, state, and local, and foreign tax issues.