INCOME TAXES

3 Months Ended

Oct. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company's tax provision represents the income tax expense or benefit of its consolidated subsidiaries that are taxable entities. The income tax provision fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. The Company recorded income tax provisions of $0.8 million and $0.7 million for the three months ended October 31, 2024 and 2023, respectively. Provisions have been made for federal, state, local, and foreign income taxes on the results of operations generated by our consolidated subsidiaries that are taxable entities. Significant differences between the statutory rate and the effective tax rate include changes in deferred tax valuation allowances, the impact of international tax provisions and withholding taxes, and other permanent differences. The Company’s consolidated subsidiaries have recorded deferred tax valuation allowances to the extent that they believe it is more likely than not that the benefits of certain deferred tax assets will not be realized in future periods.

The Company operates in multiple taxing jurisdictions, both within and outside of the United States. For the three months ended October 31, 2024, the Company was profitable in certain jurisdictions, resulting in an income tax expense using enacted rates in those jurisdictions. As of both October 31, 2024 and July 31, 2024, the total amount of the liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $0.1 million.

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 October 31, 2024 and July 31, 2024, the total amount of the liability for uncertain tax positions, including interest, related to federal, state and foreign taxes was approximately $0.1 million. The Company expects $0.1 million of unrecognized tax benefits and related interest to reverse in the next twelve months. 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, 2021

through July 31, 2024. 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 2019 through 2024 tax years remain subject to examination in most locations, while the Company's 2018 through 2024 tax years remain subject to examination in most Asia locations.