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v3.25.3

Income Taxes (Tables) | 12 Months Ended
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Jul. 31, 2025
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,
|  | 2025 |  | 2024 |  | 2023
U.S. |  | $ | (135,111,000) |  |  | (65,374,000) |  |  | (21,327,000) |
Foreign |  | (20,271,000) |  |  | (34,906,000) |  |  | (9,520,000) |
|  | $ | (155,382,000) |  |  | (100,280,000) |  |  | (30,847,000) |
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,
|  | 2025 |  | 2024 |  | 2023
Federal – current |  | $ | 673,000 |  |  | 377,000 |  |  | (258,000) |
Federal – deferred |  | — |  |  | (2,345,000) |  |  | (4,623,000) |
State and local – current |  | 514,000 |  |  | 1,181,000 |  |  | 1,412,000 |
State and local – deferred |  | — |  |  | (834,000) |  |  | (815,000) |
Foreign – current |  | 433,000 |  |  | 1,137,000 |  |  | 958,000 |
Foreign – deferred |  | (1,700,000) |  |  | 189,000 |  |  | (622,000) |
Benefit from income taxes |  | $ | (80,000) |  |  | (295,000) |  |  | (3,948,000) |
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,
|  | 2025 |  | 2024 |  | 2023
|  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
Computed "expected" tax benefit |  | $ | (32,630,000) |  |  | 21.0 | % |  | (21,059,000) |  |  | 21.0 | % |  | (6,478,000) |  |  | 21.0 | %
Increase (reduction) in income taxes due to: |  |  |  |  |  |  |  |  |  |  |  |
State and local income taxes, net of valuation allowance and federal benefit |  | 406,000 |  |  | (0.2) |  |  | (127,000) |  |  | 0.1 |  |  | 440,000 |  |  | (1.4) |
Stock-based compensation |  | 1,017,000 |  |  | (0.6) |  |  | 1,891,000 |  |  | (1.9) |  |  | 692,000 |  |  | (2.2) |
Research and experimentation credits |  | (1,125,000) |  |  | 0.7 |  |  | (1,251,000) |  |  | 1.2 |  |  | (2,576,000) |  |  | 8.4 |
Foreign-derived intangible income deduction |  | — |  |  | — |  |  | 43,000 |  |  | — |  |  | (517,000) |  |  | 1.7 |
Revaluation of warrants and embedded derivatives |  | (8,085,000) |  |  | 5.2 |  |  | (897,000) |  |  | 0.9 |  |  | — |  |  | — |
Nondeductible executive compensation |  | 102,000 |  |  | (0.1) |  |  | — |  |  | — |  |  | 1,484,000 |  |  | (4.8) |
PST Divestiture |  | — |  |  | — |  |  | 1,384,000 |  |  | (1.4) |  |  | — |  |  | — |
Change in U.S. federal and foreign valuation allowances |  | 24,929,000 |  |  | (16.0) |  |  | 10,177,000 |  |  | (10.0) |  |  | 2,834,000 |  |  | (9.2) |
Foreign income tax rate differential |  | (804,000) |  |  | 0.5 |  |  | (389,000) |  |  | 0.4 |  |  | (269,000) |  |  | 0.9 |
Goodwill impairment |  | 15,975,000 |  |  | (10.3) |  |  | 9,549,000 |  |  | (9.5) |  |  | — |  |  | — |
Other, net |  | 135,000 |  |  | (0.1) |  |  | 384,000 |  |  | (0.5) |  |  | 442,000 |  |  | (1.6) |
Benefit from income taxes |  | $ | (80,000) |  |  | 0.1 | % |  | (295,000) |  |  | 0.3 | % |  | (3,948,000) |  |  | 12.8 | %
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, 2025 and 2024 are presented below:
|  | 2025 |  | 2024
Deferred tax assets: |  |  |  |
Inventory and warranty reserves |  | $ | 7,026,000 |  |  | 4,685,000 |
Compensation and commissions |  | 4,414,000 |  |  | 3,401,000 |
Federal, state and foreign research and experimentation credits |  | 18,134,000 |  |  | 17,559,000 |
Capitalized U.S. research and experimental expenditures |  | 11,188,000 |  |  | 12,177,000 |
Stock-based compensation |  | 1,505,000 |  |  | 2,409,000 |
Foreign scientific research and experimental development expenditures |  | 2,006,000 |  |  | 1,720,000 |
Federal, state and foreign net operating losses |  | 24,373,000 |  |  | 18,289,000 |
Federal and state capital losses |  | 14,473,000 |  |  | 14,473,000 |
Lease liabilities |  | 8,455,000 |  |  | 8,999,000 |
Deferred revenue, non-current |  | 3,390,000 |  |  | 4,664,000 |
Interest expense limitation |  | 13,411,000 |  |  | 3,423,000 |
Other |  | 7,054,000 |  |  | 1,278,000 |
Less: valuation allowance |  | (70,973,000) |  |  | (44,888,000) |
Total deferred tax assets, net |  | 44,456,000 |  |  | 48,189,000 |
Deferred tax liabilities: |  |  |  |
Plant and equipment |  | (3,379,000) |  |  | (4,781,000) |
Lease right-of-use assets |  | (6,757,000) |  |  | (7,116,000) |
Intangibles |  | (38,752,000) |  |  | (42,563,000) |
Total deferred tax liabilities |  | (48,888,000) |  |  | (54,460,000) |
Net deferred tax liabilities |  | $ | (4,432,000) |  |  | (6,271,000) |
Summary of unrecognized tax benefits | The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2025, 2024 and 2023 (excluding interest):
|  | 2025 |  | 2024 |  | 2023
Balance at beginning of period |  | $ | 8,381,000 |  |  | 8,956,000 |  |  | 9,675,000 |
Increase related to current period |  | 89,000 |  |  | 181,000 |  |  | 681,000 |
Increase related to prior periods |  | 8,000 |  |  | 130,000 |  |  | 51,000 |
Expiration of statute of limitations |  | (569,000) |  |  | (622,000) |  |  | (1,406,000) |
Decrease related to prior periods |  | (65,000) |  |  | (264,000) |  |  | (45,000) |
Balance at end of period |  | $ | 7,844,000 |  |  | 8,381,000 |  |  | 8,956,000 |

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