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INCOME TAXES | 6 Months Ended
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Jul. 31, 2025
INCOME TAXES |
INCOME TAXES | NOTE 11 – INCOME TAXES The Company’s income tax amounts for the six months ended July 31, 2025 and 2024 differed from corresponding amounts computed by applying the federal corporate income tax rate of 21% to the income before income taxes for the periods as presented below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Six Months Ended July 31,
​ |  | 2025 |  | 2024
U.S. statutory federal income tax expense | ​ | $ | 13,739 | ​ | $ | 7,475
Difference resulting from: | ​ | ​ | ​ | ​ | ​ | ​
State income taxes, net of federal tax effect | ​ |  | 1,253 | ​ |  | 1,186
Unrecognized tax loss benefit | ​ | ​ | — | ​ | ​ | 961
Executive compensation limitation | ​ | ​ | 792 | ​ | ​ | 404
Stock-based compensation windfall | ​ | ​ | (7,994) | ​ | ​ | (531)
Other permanent differences and adjustments, net | ​ | ​ | (193) | ​ | ​ | 19
Income tax expense | ​ | $ | 7,597 | ​ | $ | 9,514
​ On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law. The legislation includes several changes to U.S. federal income tax law that generally allow for more favorable deductibility of certain business expenses beginning in calendar year 2025, including the restoration of immediate expensing for domestic research and development expenditures and the reinstatement of 100% bonus depreciation for qualified property. The OBBBA also includes certain modifications to the U.S. taxation of foreign activity, including changes to rules governing foreign tax credits, Global Intangible Low-Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and the Base Erosion and Anti-Abuse Tax (“BEAT”), among other changes. Most of these modifications to the U.S. taxation of foreign activity are generally effective for tax years beginning after December 31, 2025. Certain benefits from the OBBBA, such as deducting previously capitalized domestic research and development expenditures, are included in the income tax expense for the three and six months ended July 31, 2025. The Company is currently evaluating the impact on future periods. The Company does not expect the impact of the OBBBA to be material. Net Operating Loss (“NOL”) Carryback The tax changes enacted by the Coronavirus, Aid, Relief and Economic Security Act signed into law in March 2020 (the “CARES Act”) included re-establishing a carryback period for certain losses to five years. The NOLs eligible for carryback under the CARES Act included the Company’s domestic loss for the year ended January 31, 2020 (“Fiscal 2020”), which was approximately $39.5 million. The Company made the appropriate filing during the year ended January 31, 2021 with the Internal Revenue Service (the “IRS”) requesting carryback refunds of income taxes paid for the years ended January 31, 2016 (“Fiscal 2016”) and 2015 (“Fiscal 2015”) in the approximate total amount of $12.7 million, which is included in income tax refunds receivable along with related accrued interest. At the instruction of the IRS, the Company filed amended income tax returns for Fiscal 2016 and Fiscal 2015 during the year ended January 31, 2024. The bad debt deduction that generated the majority of the domestic NOL during Fiscal 2020 is under examination by the IRS. As of July 31, 2025, the IRS had not completed the examination and approval process for the Company’s amended tax returns and refund request. Research and Development Tax Credits During the year ended January 31, 2023, the Company filed amended federal income tax returns for the year ended January 31, 2022 (“Fiscal 2022”) and for the year ended January 31, 2021 (“Fiscal 2021”) that included research and development tax credits in the total amount of $5.8 million, which was netted with a provision for uncertain tax return positions in the amount of $2.4 million. In May 2023, the Company received notification that these amended federal income tax returns were selected for examination. In July 2025, the IRS concluded its examination of the Company’s amended federal income tax returns for Fiscal 2021 and Fiscal 2022 and issued its final revenue agents report that disallowed in full the research and development tax credits claimed by the Company for those periods. In August 2025, the Company began the formal process of challenging the IRS’s findings. The Company intends to contest the disallowance and believes it has substantial authority supporting its position. In addition, soon after the IRS issued its final revenue agents report in July 2025, the Company filed a notice of claim under its corresponding tax liability insurance policy, seeking recovery related to the disallowed research and development tax credits reported in the amended returns. The claim is currently under review by the insurance provider. Income Tax Refunds As of July 31, 2025 and January 31, 2025, the balances of other current assets in the condensed consolidated balance sheet included income tax refunds receivable, related accrued interest, and prepaid income taxes in the total amount of approximately $33.6 million and $30.9 million, respectively. The income tax refunds include the amounts expected to be received from the IRS upon its review and approval of the Company’s NOL carryback refund request and the completion of its examination of the amended tax returns for Fiscal 2022 and Fiscal 2021 as described above. Income Tax Returns The Company is subject to federal and state income taxes in the U.S., and income taxes in Ireland and the U.K. Tax treatments within each jurisdiction are subject to the interpretation of the related tax laws and regulations which require significant judgments to apply. The Company is no longer subject to income tax examinations by authorities for its fiscal years ended on or before January 31, 2021, except for those matters described above and several notable exceptions, including Ireland, the U.K. and several states where the open periods are one year longer. Solar Energy Projects The Company holds equity investments in Solar Tax Credit (“STC”) investments. Primarily, the STC investments are structured as limited liability companies that invest in solar energy projects that are eligible to receive energy tax credits. As of July 31, 2025, the Company had $11.5 million of remaining cash investment commitments related to its STC investments, which the Company paid in August 2025. At July 31, 2025 and January 31, 2025, the investment accounts balances were $3.2 million and $4.6 million, respectively, which are included in other assets in the condensed consolidated balance sheets. The Company has elected to use the proportional amortization method (“PAM”) for STC investments that qualify. For the Company’s STC investments that qualify for PAM, the Company recognized $0.8 million and $1.5 million of income tax credits and other income tax benefits during the three and six months ended July 31, 2025, respectively. For the six months ended July 31, 2024, the Company recognized $0.7 million of income tax credits and other income tax benefits. For the three months ended July 31, 2024, the income tax credits and other income tax benefits recognized were not material. For the three and six months ended July 31, 2025, the Company recorded amortization related to STC investments of $0.7 million and $1.4 million, respectively. For the six months ended July 31, 2024, the Company recorded amortization related to STC investments of $0.7 million. For the three months ended July 31, 2024, the recorded amount of STC investment amortization was immaterial. The amount of non-income tax related activity and other returns related to the STC investments that qualify for PAM were not material for the three and six months ended July 31, 2025 and 2024. For the three and six months ended July 31, 2025 and 2024, the Company’s share of activity from its STC investments that do not qualify for PAM was not material.

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