Income Taxes

12 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10: INCOME TAXES

The following table presents the components of our income before income taxes, including inter-segment amounts:

	Fiscal Year Ended September 30,
(in thousands)	2025		2024		2023
Domestic*	$	106,379	$	82,703	$	26,209
Foreign	40,394		32,905		25,424
Total	$	146,773	$	115,608	$	51,633

*    Includes the majority of our corporate administrative costs. See Note 13: Segment Information for information pertaining to segment contribution.

The following table presents the significant components of the income tax provision:

	Fiscal Year Ended September 30,
(in thousands)	2025		2024		2023
Current:
Federal	$	25,530	$	20,176	$	18,753
State and foreign	14,714		10,983		7,219
Total	40,244		31,159		25,972
Deferred:
Federal	(1,947)		(1,719)		(11,182)
State and foreign	(1,137)		3,073		(1,620)
Total	(3,084)		1,354		(12,802)
Total income tax expense	$	37,160	$	32,513	$	13,170

The following table presents a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes:

	Fiscal Year Ended September 30,
(in thousands)	2025			2024			2023
Income tax expense (benefit) at the federal statutory rate	$	30,833		$	24,278		$	10,843
State taxes, net of federal benefit	2,857			3,421			1,814
Mexico inflation adjustment	(1,518)			(2,154)			(1,787)
Non-deductible items	3,694			4,169			2,655
Foreign rate differential	2,081			2,098			2,381
Change in valuation allowance	(365)			(411)			311
Stock compensation	(527)			(202)			(62)
Uncertain tax positions	259			(198)			(174)
Foreign withholding tax	—			998			—
Deferred tax true-up	—			587			(165)
Dividends received deduction	(2,614)			(742)			(754)
Non-deductible loss on debt restructuring	—			—			1,710
U.S. GAAP/statutory book adjustments	760			(239)			(1,143)
Other	1,700			908			(2,459)
Total income tax expense	$	37,160		$	32,513		$	13,170
Effective tax rate	25		%	28		%	26		%

The following table shows significant components of our deferred tax assets and liabilities:

	September 30,
(in thousands)	2025		2024
Deferred tax assets:
Cash Converters	$	19,108	$	20,051
Tax over book inventory	10,646		8,595
Accrued liabilities	11,092		7,958
Pawn service charges receivable	3,705		3,182
Stock compensation	2,334		1,718
Foreign tax credit	942		1,696
State and foreign net operating loss carryforwards	12,715		13,030
Book over tax depreciation	6,444		7,052
Operating lease liabilities	15,929		52,444
Other	7,433		6,510
Total deferred tax assets before valuation allowance	90,348		122,236
Valuation allowance	(15,231)		(15,685)
Total deferred tax assets, net	75,117		106,551
Deferred tax liabilities:
Tax over book amortization	30,367		31,436
Right-of-use assets, net	15,806		49,747
Prepaid expenses	2,060		2,086
Total deferred tax liabilities	48,233		83,269
Net deferred tax asset	$	26,884	$	23,282

As of September 30, 2025, we had state net operating loss carryforwards of approximately $3.4 million, which begin to expire in 2034 if not utilized. We also had foreign net operating loss carryforwards of $46.2 million, which will begin to expire in 2026 if not utilized. Additionally, we have a $0.9 million foreign tax credit that will expire in 2026 if not utilized.

Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. The Company has elected to account for the tax on GILTI as a period cost and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. As of September 30, 2025, tax in the amount of $0.5 million has been accrued for estimated tax on GILTI that will be due. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. Our valuation allowance has been established to offset certain state and foreign net operating loss carryforwards and foreign tax credit carryforwards that are not more likely than not to be utilized prior to expiration. The valuation allowance decreased by $0.5 million in fiscal 2025, primarily due to the release of valuation allowance associated with net operating losses and foreign tax credit carryforwards no longer available for use. We believe our results from future operations will generate sufficient taxable income in the appropriate jurisdictions such that it is more likely than not that the remaining deferred tax assets will be realized.

Deferred taxes are not provided for undistributed earnings of foreign subsidiaries of approximately $133.6 million which are intended to be reinvested outside of the U.S. Accordingly, no provision for foreign withholding taxes associated with a distribution of those earnings has been made. We estimate that, upon distribution of our share of these earnings, we would be subject to withholding taxes of approximately $6.7 million as of September 30, 2025. We provided deferred income taxes on all undistributed earnings from Cash Converters. After extensive search for multi-store acquisitions in Guatemala, in the fourth quarter of fiscal 2024, we altered our Guatemala growth strategy to a focus on organic growth of existing stores, de novo stores and potential small-scale acquisitions. As a result, we provided for applicable foreign withholding taxes on $20 million of undistributed foreign earnings and recorded a liability of $1.0 million.

The following table presents a roll-forward of unrecognized tax benefits:

	Fiscal Year Ended September 30,
(in thousands)	2025		2024		2023
Beginning balance	$	2,801	$	3,293	$	3,568
Increase for tax positions taken during a prior period	625		223		396
Decrease for tax positions taken during a prior period	(47)		(337)		(259)
Decrease for tax positions as a result of the lapse of the statute of limitations	(404)		(378)		(412)
Ending balance	$	2,975	$	2,801	$	3,293

All of the above unrecognized tax benefits, if recognized, would impact our effective tax rate for the respective period of each ending balance. The statute of limitations will expire within the next twelve months with respect to approximately $0.4 million of foreign uncertain tax positions.

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During 2025, we recognized income tax expense of $0.8 million offset by the reversal of previously accrued interest and penalties of $0.3 million due to the lapse of the statute of limitations on the associated tax position and income tax expense of $0.5 million during 2024 and an income tax benefit of $0.2 million during 2023, related to interest and penalties. The total amount of accrued interest and penalties was $1.2 million, $0.8 million and $0.7 million in 2025, 2024 and 2023, respectively.

We are subject to U.S., Mexico, Canada, Guatemala, Honduras, El Salvador, United Kingdom, and the Netherlands income taxes as well as income taxes levied by various state and local jurisdictions. With few exceptions, we are no longer subject to examinations by tax authorities for years before the tax year ended September 30, 2019. We believe that adequate provisions have been made for any adjustments that may result from tax examinations.