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Income Taxes (Tables) | 12 Months Ended
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Jul. 31, 2024
Income Tax Disclosure [Abstract] |
Income before provision for income taxes | Loss before benefit from income taxes consists of the following:
|  | Fiscal Years Ended July 31,
|  | 2024 |  | 2023 |  | 2022
U.S. |  | $ | (65,374,000) |  |  | (21,327,000) |  |  | (31,772,000) |
Foreign |  | (34,906,000) |  |  | (9,520,000) |  |  | (5,303,000) |
|  | $ | (100,280,000) |  |  | (30,847,000) |  |  | (37,075,000) |
Provision for income taxes | The benefit from income taxes included in the accompanying Consolidated Statements of Operations consists of the following:
|  | Fiscal Years Ended July 31,
|  | 2024 |  | 2023 |  | 2022
Federal – current |  | $ | 377,000 |  |  | (258,000) |  |  | 287,000 |
Federal – deferred |  | (2,345,000) |  |  | (4,623,000) |  |  | (4,888,000) |
State and local – current |  | 1,181,000 |  |  | 1,412,000 |  |  | 348,000 |
State and local – deferred |  | (834,000) |  |  | (815,000) |  |  | (442,000) |
Foreign – current |  | 1,137,000 |  |  | 958,000 |  |  | 1,197,000 |
Foreign – deferred |  | 189,000 |  |  | (622,000) |  |  | (525,000) |
Benefit from income taxes |  | $ | (295,000) |  |  | (3,948,000) |  |  | (4,023,000) |
Provision for income taxes differed from amounts computed by applying the U.S. Federal income tax rate | The benefit from income taxes differed from the amounts computed by applying the U.S. Federal income tax rate as a result of the following:
|  | Fiscal Years Ended July 31,
|  | 2024 |  | 2023 |  | 2022
|  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
Computed "expected" tax benefit |  | $ | (21,059,000) |  |  | 21.0 | % |  | (6,478,000) |  |  | 21.0 | % |  | (7,786,000) |  |  | 21.0 | %
Increase (reduction) in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State and local income taxes, net of federal benefit |  | (127,000) |  |  | 0.1 |  |  | 440,000 |  |  | (1.4) |  |  | 227,000 |  |  | (0.6) |
Stock-based compensation |  | 1,891,000 |  |  | (1.9) |  |  | 692,000 |  |  | (2.2) |  |  | 1,049,000 |  |  | (2.8) |
Research and experimentation credits |  | (1,251,000) |  |  | 1.2 |  |  | (2,576,000) |  |  | 8.4 |  |  | (1,484,000) |  |  | 4.0 |
Foreign-derived intangible income deduction |  | 43,000 |  |  | — |  |  | (517,000) |  |  | 1.7 |  |  | — |  |  | — |
Revaluation of convertible preferred stock option liability |  | — |  |  | — |  |  | — |  |  | — |  |  | (211,000) |  |  | 0.6 |
Revaluation of warrants |  | (897,000) |  |  | 0.9 |  |  | — |  |  | — |  |  | — |  |  | — |
Nondeductible executive compensation |  | — |  |  | — |  |  | 1,484,000 |  |  | (4.8) |  |  | 2,801,000 |  |  | (7.6) |
PST Divestiture |  | 1,384,000 |  |  | (1.4) |  |  | — |  |  | — |  |  | — |  |  | — |
Change in valuation allowance |  | 10,177,000 |  |  | (10.0) |  |  | 2,834,000 |  |  | (9.2) |  |  | 2,009,000 |  |  | (5.4) |
Remeasurement of deferred taxes |  | — |  |  | — |  |  | — |  |  | — |  |  | (396,000) |  |  | 1.1 |
Foreign income taxes |  | (389,000) |  |  | 0.4 |  |  | (269,000) |  |  | 0.9 |  |  | (478,000) |  |  | 1.3 |
Goodwill impairment |  | 9,549,000 |  |  | (9.5) |  |  | — |  |  | — |  |  | — |  |  | — |
Other, net |  | 384,000 |  |  | (0.5) |  |  | 442,000 |  |  | (1.6) |  |  | 246,000 |  |  | (0.7) |
Benefit from income taxes |  | $ | (295,000) |  |  | 0.3 | % |  | (3,948,000) |  |  | 12.8 | % |  | (4,023,000) |  |  | 10.9 | %
Tax effects of temporary differences | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at July 31, 2024 and 2023 are presented below:
|  | 2024 |  | 2023
Deferred tax assets: |  |  |  |
Inventory and warranty reserves |  | $ | 4,685,000 |  |  | 6,147,000 |
Compensation and commissions |  | 3,401,000 |  |  | 3,221,000 |
Federal, state and foreign research and experimentation credits |  | 17,559,000 |  |  | 19,308,000 |
Capitalized U.S. research and experimental expenditures |  | 12,177,000 |  |  | 8,784,000 |
Stock-based compensation |  | 2,409,000 |  |  | 4,774,000 |
Foreign scientific research and experimental development expenditures |  | 1,720,000 |  |  | 2,118,000 |
Federal, state and foreign net operating losses |  | 18,289,000 |  |  | 13,011,000 |
Federal and state capital losses |  | 14,473,000 |  |  | 15,582,000 |
Lease liabilities |  | 8,999,000 |  |  | 11,986,000 |
Deferred revenue, non-current |  | 4,664,000 |  |  | 4,463,000 |
163(j) Interest Expense Limitation |  | 3,423,000 |  |  | 549,000 |
Other |  | 1,278,000 |  |  | 1,868,000 |
Less: valuation allowance |  | (44,888,000) |  |  | (34,478,000) |
Total deferred tax assets |  | 48,189,000 |  |  | 57,333,000 |
Deferred tax liabilities: |  |  |  |
Plant and equipment |  | (4,781,000) |  |  | (4,883,000) |
Lease right-of-use assets |  | (7,116,000) |  |  | (10,510,000) |
Intangibles |  | (42,563,000) |  |  | (50,843,000) |
Total deferred tax liabilities |  | (54,460,000) |  |  | (66,236,000) |
Net deferred tax liabilities |  | $ | (6,271,000) |  |  | (8,903,000) |
Summary of unrecognized tax benefits | The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2024, 2023 and 2022 (excluding interest):
|  | 2024 |  | 2023 |  | 2022
Balance at beginning of period |  | $ | 8,956,000 |  |  | 9,675,000 |  |  | 9,009,000 |
Increase related to current period |  | 181,000 |  |  | 681,000 |  |  | 598,000 |
Increase related to prior periods |  | 130,000 |  |  | 51,000 |  |  | 153,000 |
Expiration of statute of limitations |  | (622,000) |  |  | (1,406,000) |  |  | (83,000) |
Decrease related to prior periods |  | (264,000) |  |  | (45,000) |  |  | (2,000) |
Balance at end of period |  | $ | 8,381,000 |  |  | 8,956,000 |  |  | 9,675,000 |

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