XML 38 R23.htm IDEA: XBRL DOCUMENT
v3.24.1.1.u2

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes All of the Company’s income before income taxes was generated in the United States for the fiscal years ended March 31, 2024, 2023, and 2022. The Company’s provision for (benefit from) income taxes consisted of the following (in thousands):
| Fiscal Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Current provision: |  |  |  |  |
Federal | $ | 36,394 |  |  | $ | 3,515 |  |  | $ | 160 |
State | 9,819 |  |  | 3,498 |  |  | 309 |
Total | 46,213 |  |  | 7,013 |  |  | 469 |
Deferred provision (benefit): |  |  |  |  |
Federal | (5,088) |  |  | 11,834 |  |  | (34,852) |
State | (3,505) |  |  | 1,491 |  |  | (6,395) |
Total | (8,593) |  |  | 13,325 |  |  | (41,247) |
Total provision for (benefit from) income taxes | $ | 37,620 |  |  | $ | 20,338 |  |  | $ | (40,778) |
The following is a reconciliation of the income tax expense at the federal statutory tax rate to the Company’s provision for (benefit from) income taxes (in thousands):
| Fiscal Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Income taxes at statutory rate | $ | 38,893 |  |  | $ | 27,963 |  |  | $ | 23,941 |
State income taxes, net of federal benefit | 12,130 |  |  | 6,757 |  |  | 5,503 |
Research and development credits | (3,817) |  |  | (5,076) |  |  | (8,332) |
Stock-based compensation | (6,734) |  |  | (14,841) |  |  | (71,780) |
Change in valuation allowance | (4,060) |  |  | 504 |  |  | 1,878 |
Section 162(m) limitation | 3,410 |  |  | 4,782 |  |  | 7,260 |
Transferable federal tax credits | (1,920) |  |  | — |  |  | — |
Other | (282) |  |  | 249 |  |  | 752 |
Total provision for (benefit from) income taxes | $ | 37,620 |  |  | $ | 20,338 |  |  | $ | (40,778) |
Components of deferred tax assets and liabilities were as follows (in thousands):
| As of March 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Accruals and deferred revenue | $ | 4,372 |  |  | $ | 2,744 |
Net operating loss carryforwards | 1,160 |  |  | 1,733 |
Research & development credit carryforwards | 3,855 |  |  | 7,230 |
Operating lease liabilities | 3,683 |  |  | 3,968 |
Acquisition and other related expense | 273 |  |  | 298 |
Stock-based compensation expense | 7,048 |  |  | 6,492 |
Unrealized loss | 902 |  |  | 4,785 |
Capitalized research and development | 31,927 |  |  | 19,825 |
Gross deferred tax assets | 53,220 |  |  | 47,075 |
Less: valuation allowance | (1,175) |  |  | (5,236) |
Deferred tax assets, net of valuation allowance | 52,045 |  |  | 41,839 |
Deferred tax liabilities: |  |  |
Property and equipment | (2,879) |  |  | (2,734) |
Operating lease right-of-use assets | (3,122) |  |  | (3,506) |
Intangible assets | (976) |  |  | (692) |
Deferred tax liabilities | (6,977) |  |  | (6,932) |
Net deferred tax assets | $ | 45,068 |  |  | $ | 34,907 |
The Company monitors the realizability of deferred tax assets, taking into account all relevant factors at each reporting period. As of March 31, 2023, the Company had a valuation allowance of $5.2 million, which related to the California research and development tax credits, California alternative minimum tax credits, and capital loss carryforwards. As of March 31, 2024, based on the relevant weight of positive and negative evidence, including the amount of taxable income in recent years which is objective and verifiable, and consideration of expected future taxable earnings, the Company concluded that it is more likely than not that the California research and development credits were realizable, resulting in the release of the $4.1 million valuation allowance as of fiscal 2024. Of this valuation allowance which was released in fiscal 2024, $3.1 million related to deferred tax assets to be realized in the future years and the remainder benefited the Company during the year ended March 31, 2024. As of March 31, 2024, the Company’s valuation allowance was $1.2 million, which related to Arizona research and development credits, California alternative minimum tax credits, and capital loss carryforwards where it is not more likely than not that the deferred tax assets will be realized. Pursuant to provisions under the Inflation Reduction Act, the Company purchased $24.0 million of transferable federal tax credits during the year ended March 31, 2024, from various counterparties. Such transferable federal tax credits were purchased at negotiated discounts, resulting in an income tax benefit of $1.9 million recorded during the fiscal year ended March 31, 2024. In connection with the purchase, the Company paid $11.0 million during the fiscal year ended March 31, 2024, and the remaining amounts owed to counterparties for the purchased credits are recorded within accrued expenses and other current liabilities within the consolidated balance sheets as of March 31, 2024. As of March 31, 2024, the Company had net operating loss, or NOL, carryforwards for state tax purposes of $5.3 million. Portions of the NOL carryforwards will expire at various dates beginning in the tax year ending March 31, 2035. As of March 31, 2024, the Company had research and development tax credit carryforwards for state tax purposes of $7.7 million. The California state research and development tax credit carryforwards do not expire. The other state research and development tax credit carryforwards will expire at various dates beginning in the year ending March 31, 2032. Based on an assessment of the Company’s historical ownership changes through March 31, 2024, the Company does not anticipate a current limitation on the tax attributes. As of March 31, 2024 and 2023, the Company had unrecognized tax benefits, or UTBs, of $9.3 million and $7.9 million, respectively. If realized, $9.1 million would impact the effective tax rate while the remainder would reduce deferred tax assets subject to a full valuation allowance. The Company does not expect any material changes to its UTBs within the next 12 months. A reconciliation of the beginning and ending balances for gross UTBs is as follows (in thousands):
| Fiscal Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Beginning balance | $ | 7,913 |  |  | $ | 6,188 |  |  | $ | 3,162 |
Additions for tax positions related to the current year | 1,404 |  |  | 2,210 |  |  | 2,995 |
Additions for tax positions related to prior years | 112 |  |  | — |  |  | 36 |
Reductions for tax positions related to prior years | (119) |  |  | (472) |  |  | — |
Reductions related to a lapse of statute | (8) |  |  | (13) |  |  | (5) |
Ending balance | $ | 9,302 |  |  | $ | 7,913 |  |  | $ | 6,188 |
Interest and penalties were not material during the fiscal years ended March 31, 2024, 2023, and 2022. The Company files income tax returns in the U.S. federal and various state jurisdictions. With limited exceptions, all tax years for which the Company has filed a tax return remain subject to examination.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration