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Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s income (loss) before income tax consisted of the following:
| Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Domestic income (loss) before income tax | $ | 127,311 |  |  | $ | (102,560) |  |  | $ | 471,247 |
Foreign income before income tax | 68,085 |  |  | 61,106 |  |  | 41,334 |
Total income (loss) before income tax | $ | 195,396 |  |  | $ | (41,454) |  |  | $ | 512,581 |
The following table presents the components of the Company’s provision for income taxes:
| Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 7,395 |  |  | $ | 6,933 |  |  | $ | 13,340 |
State and local | 1,650 |  |  | 1,726 |  |  | 2,714 |
Foreign | 9,349 |  |  | 7,653 |  |  | 6,383 |
Total current income tax expense | 18,394 |  |  | 16,312 |  |  | 22,437 |
Deferred: |  |  |  |  |
Federal | 8,815 |  |  | (10,570) |  |  | 4,897 |
State and local | 295 |  |  | (1,921) |  |  | 966 |
Foreign | 72 |  |  | — |  |  | — |
Total deferred income tax expense (benefit) | 9,182 |  |  | (12,491) |  |  | 5,863 |
Total income tax expense | $ | 27,576 |  |  | $ | 3,821 |  |  | $ | 28,300 |
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows:
| Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Federal tax at statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local income tax | 1.1 |  |  | 0.8 |  |  | 0.8 |
Income passed through to limited partners | (11.8) |  |  | (13.6) |  |  | (11.9) |
Foreign income tax | 4.8 |  |  | (18.5) |  |  | 1.2 |
Valuation allowance | (0.3) |  |  | 4.7 |  |  | (5.3) |
Return to provision | (0.3) |  |  | (3.7) |  |  | (0.1) |
Other | (0.4) |  |  | 0.1 |  |  | (0.2) |
Effective tax rate | 14.1 | % |  | (9.2) | % |  | 5.5 | %
The Company’s effective tax rate is dependent on many factors, including the estimated amount of income subject to tax. Consequently, the effective tax rate can vary from period to period. The Company’s overall effective tax rate in each of the periods above is less than the statutory rate primarily because a portion of income is allocated to non-controlling interests, as the tax liability on such income is borne by the holders of such non-controlling interests. The following table presents the components of the Company’s deferred income tax assets and liabilities:
| As of March 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Investment in the Partnership | $ | 195,426 |  |  | $ | 54,941 |
Other | 2,682 |  |  | 1,769 |
Total deferred tax assets before valuation allowance | 198,108 |  |  | 56,710 |
Valuation allowance | (13,596) |  |  | (12,352) |
Total net deferred tax assets | 184,512 |  |  | 44,358 |
Deferred tax liabilities: |  |  |
Total deferred tax liabilities | 158 |  |  | 353 |
Net deferred tax assets | $ | 184,354 |  |  | $ | 44,005 |
In accordance with the Transaction Agreements outlined in note 14, the Company remeasured non-controlling interests in subsidiaries to the redemption value. This adjustment had a significant impact on the Company’s share of the Partnership’s book equity, resulting in an increase in deferred tax assets of $133.7 million, recorded through equity for the year ended March 31, 2024. Each contemplated exchange is expected have a corresponding decrease in deferred tax assets, recorded through equity. Additionally, there was an increase in deferred tax assets due to exchanges of Class B and Class C units that occurred during the year ended March 31, 2024, detailed further below. In connection with the exchanges of Class B units and Class C units of the Partnership for Class A common stock by certain limited partners of the Partnership during fiscal 2024, the Company recorded an overall increase to deferred tax assets as of March 31, 2024 of $15.2 million, and a net increase in the valuation allowance of $1.3 million. Additionally, in connection with the exchange transactions, the Company recorded a corresponding Tax Receivable Agreements liability of $17.4 million, representing 85% of the incremental net cash tax savings for the Company due to the exchanging limited partners. The Company made payments of $10.3 million, $6.0 million and $0.8 million during the years ended March 31, 2024, 2023 and 2022, respectively, under the Tax Receivable Agreements. As of March 31, 2024, the Company’s total Tax Receivable Agreements liability was $206.8 million. See notes 13 and 14 for more information. The Company evaluates the realizability of its deferred tax assets on a quarterly basis and adjusts the valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax assets may not be realized. The total ending valuation allowance for the year ended March 31, 2024 was $13.6 million. Apart from the valuation allowance, the Company believes that the remaining deferred tax assets will be realized in full. A summary of the change in valuation allowance by year is as follows:
| Valuation Allowance
Balance at March 31, 2022 | $ | 13,422 |
Income tax decrease | (1,975) |
Equity increase | 905 |
Balance at March 31, 2023 | 12,352 |
Income tax decrease | (1,210) |
Equity decrease | — |
Equity increase | 2,454 |
Balance at March 31, 2024 | $ | 13,596 |
As of March 31, 2024, the Company has not recorded any unrecognized tax benefits and does not expect there to be any material changes to uncertain tax positions within the next 12 months. The Company files income tax returns as required by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company may be subject to examination by U.S. federal and certain state and local tax authorities. Management has analyzed the Company’s tax positions taken with respect to all applicable income tax issues, for all open tax years, and for all jurisdictions in which the Company is required to file tax returns and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s consolidated financial statements for the years ended March 31, 2024, 2023 and 2022. The Company files U.S. federal, state, local and foreign tax returns on a calendar-year basis. With limited exception, returns filed prior to 2019 are no longer subject to examination by the applicable taxing authorities. There are currently no material examinations being conducted of the Company by tax authorities.

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- 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
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