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10. INCOME TAXES | 9 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | 10. INCOME TAXES The Company has calculated the tax provision based on the year-to-date actual effective tax rate, adjusted for discrete items in the quarter. The approach is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The Company believes, at this time, the use of this cutoff approach is more appropriate than the annual effective tax rate method due to the high degree of uncertainty in estimating annual pre-tax income. The quarterly tax provision is subject to fluctuation due to factors including certain book and tax differences, valuation allowances against deferred tax assets, or changes in or interpretation of tax laws. We consider new evidence (both positive and negative) at each reporting date that could affect our view of the future realization of deferred tax assets. We evaluate information such as historical financial results, historical taxable income, projected future taxable income, expected timing of the reversals of existing temporary differences and available prudent and feasible tax planning strategies in our analysis. The Company had income tax expense (including discrete items) of $18,107 and income tax benefit of $9,495 for the three months ended June 30, 2025 and 2024, respectively. The Company also had income tax expense of $24,281 and $3,499 for the nine months ended June 30, 2025 and 2024, respectively. The Company's effective income tax rate (including discrete items) was 6.6% and 3.9% for the three months ended June 30, 2025 and 2024, and 6.2% and -4.4% for the nine months ended June 30, 2025 and 2024, respectively. The unrealized gain on fair market value of bitcoin for the nine months ended June 30, 2025, combined with the unrealized gain on fair market value of bitcoin as of September 30, 2024, generated a cumulative taxable temporary difference which, used as a source of income to recognize deferred tax assets in future periods, resulted in a partial release of valuation allowance in the amount of $47.5 million. The Company's effective tax rate differs from the U.S. statutory rate of 21% primarily as a result of the aforementioned release of the valuation allowance. The Company currently maintains a partial valuation allowance on its U.S. deferred tax assets. Based on recent financial performance and improved forecasts, it is reasonably possible that sufficient positive evidence may become available within the next 12 months to support the release of all or additional portions of this valuation allowance. Any such release would result in a non-cash income tax benefit in the period recorded. The timing and amount of any release will depend on the level of sustained profitability and other relevant factors.

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