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INCOME TAXES

12 Months Ended

Jun. 30, 2025

INCOME TAXES

INCOME TAXES

10.INCOME TAXES

The following is a geographical breakdown of income before the provision for income taxes (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​		2023			2024			2025
Pre-tax income:	​	​	​	​	​	​	​	​	​
United States	​	$	7,114	​	$	41,330	​	$	30,218
Foreign	​		108,124	​	​	119,884	​	​	155,876
Total pre-tax income	​	$	115,238	​	$	161,214	​	$	186,094

​

Our provision (benefit) for income taxes consists of the following (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​		2023			2024			2025
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	6,860	​	$	22,229	​	$	12,218
State	​		861	​	​	2,122	​	​	2,260
Foreign	​		19,717	​	​	22,842	​	​	31,066
Total current provision	​		27,438	​	​	47,193	​	​	45,544
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​	$	(2,547)	​	$	(13,375)	​	$	(7,667)
State	​		(678)	​	​	(594)	​	​	(853)
Foreign	​		(753)	​	​	(164)	​	​	(567)
Total deferred (benefit)	​		(3,978)	​	​	(14,133)	​	​	(9,087)
Total provision	​	$	23,460	​	$	33,060	​	$	36,457

​

As of June 30, 2024 and 2025, our liability for uncertain tax positions was $18.1 million and $15.4 million, respectively. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $15.1 million as of June 30, 2025.

We recognize potential interest and penalties related to income tax matters in income tax expense. As of June 30, 2025, we have accrued $2.9  million for interest and penalties. Our uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. These include fiscal years after 2021 for federal purposes, fiscal years after 2020 for state purposes and fiscal years after 2017 for various foreign jurisdictions. Future developments, such as the settlement of income tax positions or the expiration of applicable statutes of limitation, could result in changes to our liability for unrecognized tax benefits. Since the ultimate resolution of uncertain tax positions depends on many factors and assumptions, we are not able to estimate the range of potential changes in the liability for unrecognized tax benefits or the timing of such changes.

A summary of activity of unrecognized tax benefits for fiscal 2024 and 2025 is as follows (in thousands).

​

​	​	​	​
Balance at June 30, 2023		$	14,978
Additions on tax positions for the current year	​		2,800
Additions on tax positions from prior years	​		1,002
Reduction in tax positions from prior year	​		(866)
Balance at June 30, 2024	​	$	17,914
Additions on tax positions for the current year	​		1,296
Additions on tax positions from prior years	​		234
Reductions to tax positions from prior year for dispute settlements	​	​	(438)
Reductions to prior year tax positions	​	​	(305)
Reduction to prior year tax positions for statute of limitations closure	​		(3,108)
Balance at June 30, 2025	​	$	15,593

​

Deferred income tax assets (liabilities) consisted of the following (in thousands):

​

​	​	​	​	​	​	​
​	​	June 30,
​		2024			2025
Deferred income tax assets:	​	​	​	​	​	​
Tax credit carryforwards	​	$	5,960	​	$	6,383
Net operating loss carryforwards	​		3,311	​	​	3,339
Customer advances	​		10,008	​	​	6,521
Allowance for doubtful accounts	​		3,615	​	​	3,146
Inventory reserve	​		11,754	​	​	14,636
Accrued liabilities	​		2,877	​	​	3,209
Operating lease liabilities	​	​	7,732	​	​	5,540
Stock and deferred compensation	​		12,624	​	​	14,504
Other assets	​		1,145	​	​	1,700
Total deferred income tax assets	​		59,026	​	​	58,978
Valuation allowance	​		(9,365)	​	​	(10,471)
Net deferred income tax assets	​		49,661	​	​	48,507
Deferred income tax liabilities:	​	​	​	​	​	​
Depreciation	​		(5,543)	​	​	(6,280)
Amortization of intangible assets	​		(12,096)	​	​	(13,784)
Withholding tax on unrepatriated foreign earnings	​	​	(7,834)	​	​	(8,496)
Operating lease ROU assets	​	​	(7,223)	​	​	(5,482)
Other liabilities	​		(6,568)	​	​	(3,604)
Total deferred income tax liabilities	​		(39,264)	​	​	(37,646)
Net deferred income tax liability	​	$	10,397	​	$	10,861

​

The components of the net deferred income tax liability are classified in the consolidated balance sheets as follows (in thousands):

​

​	​	​	​	​	​	​
​	​	June 30,
​		2024			2025
Long term deferred income tax asset, included in other assets	​	$	13,684	​	$	14,195
Long term deferred income tax liability	​		(3,287)	​	​	(3,334)
Net deferred income tax liability	​	$	10,397	​	$	10,861

​

The components of current taxes receivable and payable and prepaid taxes are classified in the consolidated balance sheets as follows (in thousands):

​

​	​	​	​	​	​	​
​		June 30,
​	​	2024			2025
Current taxes receivable and prepaid taxes, included in prepaid expenses and other current assets	​	$	13,347	​	$	10,958
Current taxes payable, included in other accrued expenses and current liabilities	​		(17,320)	​	​	(22,285)
Net tax receivable (payable)	​	$	(3,973)	​	$	(11,327)

​

As of June 30, 2025, we had federal, state and foreign net operating losses carryforwards of approximately $0.5 million, $15.6 million and $8.7 million, respectively. Our net operating loss carryforwards will begin to expire in the tax year ending June 30, 2026. As of June 30, 2025, we had federal and state tax credit carryforwards of approximately $2.9 million and $7.3 million, respectively. Our credit carryforwards will begin to expire in the tax year ending June 30, 2032.

We have established valuation allowances that relate to the net operating losses of certain subsidiaries, capital losses, and tax credits. During the year ended June 30, 2025, we recorded a net aggregated increase of $1.0 million to these valuation allowances. We evaluate the need for valuation allowances on a jurisdiction-by-jurisdiction basis and release such allowances when sufficient positive evidence exists to conclude that it is more likely than not that the deferred tax assets will be realized.

We recognized all excess tax benefits and tax deficiencies related to equity-based compensation as a component of income tax expense or benefit in the period in which they occur, in accordance with ASC718. An income tax benefit of approximately $0.8 and $1.7 million was recognized in fiscal 2024 and 2025, respectively.

The consolidated effective income tax rate differs from the federal statutory income tax rate due primarily to the following:

​

​	​	​	​	​	​	​	​
​	​	June 30,
​		2023		2024		2025
Provision for income taxes at federal statutory rate	​	21.0	%	21	%	21	%
Research and development tax credits	​	(1.5)	​	(1.6)	​	(1.5)	​
Foreign income subject to tax at other than federal statutory rate	​	0.2	​	1.7	​	2.1	​
Stock compensation	​	(0.4)	​	(0.5)	​	(0.9)	​
Officers’ compensation	​	5.5	​	4.1	​	3.2	​
Change in valuation allowance	​	(0.5)	​	1.0	​	0.2	​
Unrecognized tax expense (benefit)	​	0.3	​	3.7	​	(1.3)	​
State tax expense	​	0.3	​	0.9	​	1.1	​
U.S. tax on foreign earnings	​	1.4	​	(0.8)	​	(0.2)	​
Changes in prior year estimates	​	(1.1)	​	(2.4)	​	0.3	​
Global intangible low-taxed income, net of foreign tax credits	​	0.8	​	0.8	​	0.9	​
Foreign Derived Intangible Income Benefit	​	(1.8)	​	(4.3)	​	(1.9)	​
Non-taxable earnings from acquisitions	​	(2.1)	​	(0.8)	​	(0.5)	​
Patent box benefit	​	(1.9)	​	(3.2)	​	(2.8)	​
Other	​	0.2	​	0.9	​	(0.1)	​
Effective income tax rate	​	20.4	%	20.5	%	19.6	%

​

The provision for income taxes consists of provisions for federal, state, and foreign income taxes. We operate in an international environment with significant operations in various locations outside the U.S. Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates.

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The entire disclosure for income tax.

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