INCOME TAXES

9 Months Ended

Apr. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company operates in multiple taxing jurisdictions, both within and outside of the United States. For the nine months ended April 30, 2024, the Company was profitable in certain jurisdictions, resulting in an income tax expense using enacted rates in those jurisdictions. As of both April 30, 2024 and July 31, 2023, the total amount of the liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $0.4 million.

Deferred Income Taxes

As of April 30, 2024, the Company reassessed the need for a valuation allowance against its deferred tax assets. After considering historical and projected future taxable income and existing taxable temporary differences, the Company determined that it is more likely than not that the deferred tax assets will be realized. As a result, the Company released substantially all of its valuation allowance except the valuation allowance relating to approximately $31.0 million of NOLs that will expire as of July 31, 2024, and approximately $0.9 million of state NOLs that the Company anticipates will expire unutilized. This release of the valuation allowance resulted in a one-time non-cash income tax benefit of $71.5 million for the quarter ended April 30, 2024.

Uncertain Tax Positions

In accordance with the Company's accounting policy, interest related to unrecognized tax benefits is included in the income tax expense line of the condensed consolidated statements of operations. As of both April 30, 2024 and July 31, 2023, the liabilities for interest expense related to uncertain tax positions was less than $0.1 million. The Company expects $0.3 million of unrecognized tax benefits and related interest to reverse in the next twelve months.

Management's judgment is required in determining our provision for income taxes, including any valuation allowance recorded against the Company’s deferred tax assets due to uncertainties related to our ability to utilize these assets. The valuation allowance is based on our estimates of taxable income and the period over which the Company’s deferred tax assets will be recoverable. The evolution of facts and circumstances in future periods may result in adjustments to our valuation allowance, which could materially impact our financial position and results of operation.

The Company is subject to U.S. federal income tax and various state, local and international income taxes in numerous jurisdictions. The federal and state tax returns are generally subject to tax examinations for the tax years ended July 31, 2020 through July 31, 2023. To the extent the Company has tax attribute carryforwards, the tax year in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. In addition, a number of tax years remain subject to examination by the appropriate government agencies for certain countries in the Europe and Asia regions. In Europe, the Company's 2015 through 2022 tax years remain subject to examination in most locations, while the Company's 2010 through 2021 tax years remain subject to examination in most Asia locations.