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Income Taxes | 12 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of income before provision for income taxes are as follows (dollars in thousands):
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
Domestic | $ | 534,394 |  |  | $ | 480,145 |  |  | $ | 447,975 |
Foreign | 70,947 |  |  | 64,504 |  |  | 35,664 |
Income before income taxes | $ | 605,341 |  |  | $ | 544,649 |  |  | $ | 483,639 |
The components of income tax expense are as follows (dollars in thousands):
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
Federal | $ | 82,647 |  |  | $ | 130,621 |  |  | $ | 184,040 |
State and local | 32,174 |  |  | 26,268 |  |  | 49,824 |
Foreign | 17,750 |  |  | 17,599 |  |  | 11,053 |
Total current | 132,571 |  |  | 174,488 |  |  | 244,917 |
Deferred: |  |  |  |  |
Federal | (18,829) |  |  | (42,322) |  |  | (109,894) |
State and local | (6,167) |  |  | (6,827) |  |  | (36,717) |
Foreign | (2,064) |  |  | (614) |  |  | 598 |
Total deferred | (27,060) |  |  | (49,763) |  |  | (146,013) |
Total income tax expense | $ | 105,511 |  |  | $ | 124,725 |  |  | $ | 98,904 |
Income tax expense differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21.0% as a result of the following (dollars in thousands):
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
Expected tax expense computed at federal statutory rate | $ | 127,122 |  |  | $ | 114,376 |  |  | $ | 101,564 |
State and local taxes, net of federal benefit | 20,362 |  |  | 16,508 |  |  | 15,900 |
R&D tax credit, net | (14,073) |  |  | (12,604) |  |  | (14,205) |
Stock-based compensation | (6,221) |  |  | (2,385) |  |  | (930) |
Nonincludible and nondeductible items, net | 3,426 |  |  | 4,368 |  |  | 1,105 |
Remeasurement of deferred taxes | — |  |  | (1,150) |  |  | (5,546) |
Changes in unrecognized tax benefits | (23,161) |  |  | — |  |  | — |
Other | (1,944) |  |  | 5,612 |  |  | 1,016 |
Total income tax expense | $ | 105,511 |  |  | $ | 124,725 |  |  | $ | 98,904 |
Effective income tax rate | 17.4 | % |  | 22.9 | % |  | 20.4 | %
The effective tax rate for fiscal 2025 benefited from a reduction in unrecognized tax benefits following resolution of a federal income tax audit. The effective tax rate for fiscal 2024 benefited from research and development tax credits partially offset by state income taxes. The effective tax rate for fiscal 2023 benefited from research and development tax credits and the remeasurement of state deferred taxes. The tax effects of temporary differences that give rise to deferred taxes are presented below (dollars in thousands):
| June 30,
| 2025 |  | 2024
Deferred tax assets: |  |  |
Operating lease liabilities | $ | 110,068 |  |  | $ | 97,911 |
Reserves and accruals | 18,782 |  |  | 22,172 |
Capitalized research and development | 211,035 |  |  | 170,086 |
Credits and net operating loss carryovers | 11,191 |  |  | 9,407 |
Deferred compensation and post-retirement obligations | 34,650 |  |  | 34,315 |
Stock-based compensation | 13,076 |  |  | 12,362 |
Valuation allowance | (4,781) |  |  | (2,887) |
Total deferred tax assets | $ | 394,021 |  |  | $ | 343,366 |
Deferred tax liabilities: |  |  |
Goodwill and other intangible assets | $ | (384,600) |  |  | $ | (357,150) |
Property, plant, and equipment | (26,091) |  |  | (27,578) |
Operating lease right-of-use assets | (82,747) |  |  | (74,769) |
Deferred revenue | (21,967) |  |  | (23,591) |
Prepaid expenses | (11,209) |  |  | (12,084) |
Interest rate swaps | (2,063) |  |  | (8,322) |
Other | (7,062) |  |  | (9,680) |
Total deferred tax liabilities | $ | (535,739) |  |  | $ | (513,174) |
Net deferred tax liability | $ | (141,718) |  |  | $ | (169,808) |
During fiscal 2023, a provision of the TCJA took effect that eliminated the option to deduct domestic research and development costs in the year incurred and instead requires taxpayers to capitalize and amortize such costs over five years. This provision decreased fiscal 2025 and 2024 cash flows from operations by $47.4 million and $73.9 million, respectively, and increased net deferred tax assets by a similar amount. On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (OBBBA). The OBBBA, among other things, enacted a provision that allows immediate deduction of domestic research and development costs in the year incurred. The Company’s cash tax payments will benefit materially from this provision in fiscal 2026. We will continue to evaluate the OBBBA but do not expect other tax provisions to have a material impact on the Company’s effective tax rate or its results of operations, financial position, and cash flows. The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment. In the fourth quarter of fiscal 2025, Internal Revenue Service (IRS) concluded examinations of federal income tax audit for fiscal 2017 through 2021. Based on the IRS audit results, approximately $55.3 million of federal income tax receivables have been classified as short term as of June 30, 2025. The Company is currently under examination for fiscal 2019-2020 in one state jurisdiction and fiscal 2022-2023 in another state. The Company does not expect the resolution of either state examination to have a material impact on its results of operations, financial position, and cash flows. U.S. income taxes have not been provided for undistributed earnings of foreign subsidiaries that have been permanently reinvested outside the U.S. As of June 30, 2025, the estimated deferred tax liability associated with these undistributed earnings is approximately $2.9 million. Changes in the Company’s liability for unrecognized tax benefits is shown in the table below (dollars in thousands):
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
Beginning of year | $ | 73,044 |  |  | $ | 153,860 |  |  | $ | 42,810 |
Additions based on prior year tax positions | — |  |  | 3,592 |  |  | 3,829 |
Additions based on current year tax positions | 6,974 |  |  | 11,703 |  |  | 107,221 |
Reductions based on prior year tax positions | (15,183) |  |  | (96,111) |  |  | — |
Settlement with taxing authorities | (34,150) |  |  | — |  |  | — |
Lapse of statute of limitations | (522) |  |  | — |  |  | — |
End of year | $ | 30,163 |  |  | $ | 73,044 |  |  | $ | 153,860 |
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | $ | 30,163 |  |  | $ | 73,044 |  |  | $ | 56,944 |
The Company’s total liability for unrecognized tax benefits as of June 30, 2025, 2024 and 2023 was approximately $30.2 million, $73.0 million and $153.9 million, respectively. During fiscal 2025, the Company reduced its unrecognized tax benefits following resolution of the federal income tax audit. During fiscal 2024, the Company reduced its unrecognized tax benefit, primarily due to completing a detailed analysis of capitalized research and development costs which considered recent guidance issued by the IRS. The Company recognizes net interest and penalties as a component of income tax expense. Over the next 12 months, the Company does not expect a significant increase or decrease in the unrecognized tax benefits recorded at June 30, 2025. As of June 30, 2025, the entire balance of unrecognized tax benefits is included in deferred taxes and other long-term liabilities. The Organisation for Economic Co-operation and Development has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2). While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. The Company does not expect Pillar 2 to have a material impact on its effective tax rate or its results of operation, financial position, and cash flows.

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