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Income Taxes
 3 Months Ended
Sep. 30, 2025
Income Taxes  
Income Taxes

11. Income Taxes

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The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the development of tax planning strategies during the year. In addition, as a global commercial enterprise, our tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

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The effective tax rates for the three months ended September 30, 2024 and 2025 were 21.9% and 19.9%, respectively. During the three months ended September 30, 2024 and 2025, we recognized a net discrete tax benefit of $0.5 million and $0.9 million, respectively, related to equity-based compensation under ASU 2016-09 and changes in prior-year estimates and uncertain tax positions.

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On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. Key income-tax related provisions of the OBBBA relevant to our Company include the removal of mandatory capitalization of domestic research and development expenditures, permanent extension of bonus depreciation and revisions to international tax regimes. We are evaluating the financial impact of OBBBA, which is in effect for the current fiscal year ending June 30, 2026. The legislation will affect the timing and recognition of certain deductions, which, if implemented, could impact our effective tax rate and deferred tax balances in future periods.

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