XML 28 R22.htm IDEA: XBRL DOCUMENT v3.25.2
Income Taxes
 6 Months Ended
Jul. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

13. Income Taxes

The following table provides details of income taxes for the periods indicated:

 

 

 

Three Months Ended July 31,

 

 

Six Months Ended July 31,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

Loss before income taxes

 

$

(19,742

)

 

$

(34,142

)

 

$

(43,425

)

 

$

(71,316

)

Provision for income taxes

 

 

253

 

 

 

747

 

 

 

898

 

 

 

1,505

 

Effective tax rate

 

(1.3)%

 

 

(2.2)%

 

 

(2.1)%

 

 

(2.1)%

 

 

The Company recorded an expense for income taxes of $0.3 million and $0.9 million for the three and six months ended July 31, 2025, respectively. The Company recorded an expense for income taxes of $0.7 million and $1.5 million for the three and six months ended July 31, 2024, respectively. The decreases in income tax expense for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, were primarily due to a decrease in the proportion of profits generated in the U.S. and reduction in U.S. tax expenses because of the One Big Beautiful Bill Act (OBBBA).

 

On July 4, 2025, President Trump signed the OBBBA, which includes a broad range of tax reform provisions affecting businesses. The OBBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. The Company is in the process of evaluating the financial statement impact of these provisions to future periods, but does not expect the OBBBA to have a material impact on its consolidated financial statements.

 

The Company files federal and state income tax returns in the United States and in various foreign jurisdictions. The Company’s fiscal years 2022 through 2025 are generally open and subject to potential examination by U.S. federal tax authorities. The Company’s fiscal years 2021 through 2025 are generally open and subject to potential examination by state tax authorities. The Company’s fiscal years 2018 to 2025 remain open to examination by foreign tax authorities. Fiscal years outside of the normal statute of limitations remain open to audit by tax authorities due to tax attributes generated in those earlier years, which have been carried forward and may be audited in subsequent years when utilized.

The Company regularly assesses the likelihood of adverse outcomes resulting from potential tax examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of July 31, 2025, the gross amount of unrecognized tax benefits was approximately $21.2 million. If the estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense could be required. If events occur, and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities could result in tax benefits being recognized in the period in which the Company determines the liabilities are no longer necessary. At this time the Company is not able to reasonably estimate the amount of tax reserve that will reverse within the next 12 months.