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Income Taxes
 12 Months Ended
Aug. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes consisted of the following (in thousands):
Fiscal Year Ended August 31,
202520242023
United States$54,936 $47,345 $49,871 
Foreign (1)
46,690 44,163 35,292 
Income before income taxes$101,626 $91,508 $85,163 
(1)Included in these amounts are income before income taxes for the EIMEA segment of $34.7 million, $31.4 million and $25.6 million for the fiscal years ended August 31, 2025, 2024 and 2023, respectively.
The provision for income taxes consisted of the following (in thousands):
Fiscal Year Ended August 31,
202520242023
Current:
Federal$(4,726)$9,559 $9,973 
State1,543 820 1,039 
Foreign12,945 12,596 9,023 
Total current9,762 22,975 20,035 
Deferred:
United States657 (1,413)(806)
Foreign213 302 (59)
Total deferred870 (1,111)(865)
Provision for income taxes$10,632 $21,864 $19,170 
Deferred tax assets and deferred tax liabilities consisted of the following (in thousands):
August 31,
2025		August 31,
2024
Deferred tax assets:
Accrued payroll and related expenses$1,451 $1,321 
Reserves and accruals1,758 2,166 
Research and development expenses2,078 1,520 
Stock-based compensation expense2,547 2,622 
Uncertain tax positions and related interest234 1,266 
Uniform capitalization2,020 1,774 
Tax credit carryforwards4,399 4,197 
Other2,571 2,673 
Total gross deferred tax assets17,058 17,539 
Valuation allowance(4,552)(4,305)
Total net deferred tax assets12,506 13,234 
Deferred tax liabilities:
Property and equipment, net(3,449)(3,940)
Amortization of tax goodwill and intangible assets(15,793)(15,458)
Other(1,612)(1,909)
Total deferred tax liabilities(20,854)(21,307)
Net deferred tax liabilities$(8,348)$(8,073)
The Company had state net operating loss (“NOL”) carryforwards of $7.8 million as of August 31, 2025, which generated a net deferred tax asset of $0.5 million. The state NOL carryforwards, if unused, will expire between fiscal years 2026 and 2045. The Company also had tax credit carryforwards of $4.4 million as of August 31, 2025, of which $4.3 million is attributable to U.K. tax credit carryforwards, which do not expire.
Future utilization of the U.K. tax credit carryforwards and certain state carryforwards is uncertain and is dependent upon several factors that may not occur, including the generation of future taxable income in certain jurisdictions. At this time, management does not conclude that it is “more likely than not” that all of the related deferred tax assets will be realized. Accordingly, the Company recorded an insignificant change in its valuation allowance during the fiscal year ended August 31, 2025 and the cumulative valuation allowance recorded against the related deferred tax asset associated with the
U.K. tax credit carryforwards was $4.1 million as of August 31, 2025, and state carryforwards were insignificant as of August 31, 2025.
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows (in thousands):
Fiscal Year Ended August 31,
202520242023
Amount computed at U.S. statutory federal tax rate$21,341 $19,217 $17,884 
Effect of foreign operations3,323 3,339 1,583 
Net (benefit) from GILTI/FDII(3,339)(2,696)(2,071)
Uncertain tax positions(8,049)947 1,377 
Interest and other true-ups related to uncertain tax positions(3,416)— — 
Other772 1,057 397 
Provision for income taxes$10,632 $21,864 $19,170 
On July 4, 2025, the One Big Beautiful Bill Act ("OBBB Act”) was enacted into law. The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The significant provisions of the OBBB Act will be effective between fiscal years ended August 31, 2025 through fiscal year ended August 31, 2027, and the Company does not expect these provisions to have a material impact on our effective tax rate.
The provision for income taxes was 10.5% and 23.9% of income before income taxes for the fiscal years ended August 31, 2025 and 2024, respectively. The decrease in the effective income tax rate from period to period was primarily due to the expiration of the statute of limitations on the uncertain tax position associated with the Tax Cuts and Jobs Act’s mandatory one-time “toll tax” on unremitted foreign earnings. The release of the uncertain tax position generated a favorable income tax adjustment of $11.9 million, net of the tax effect of the related interest during twelve months ended August 31, 2025.
Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands):
 Fiscal Year Ended August 31,
 20252024
Unrecognized tax benefits – beginning of fiscal year$9,147 $9,275 
Increases for prior period tax positions181 — 
Increases for current period tax positions218 184 
Expirations of statute of limitations for assessment(8,558)(312)
Settlements with taxing authorities(87)— 
Unrecognized tax benefits – end of fiscal year$901 $9,147 
Gross unrecognized tax benefits totaled $0.9 million and $9.1 million for the fiscal years ended August 31, 2025 and 2024, respectively, of which $0.7 million and $9.0 million, respectively, would affect the Company’s effective income tax rate if recognized. Interest and penalties related to uncertain tax positions included in tax expense was a benefit of $4.4 million for the fiscal year ended August 31, 2025 and an expense of $1.2 million for the fiscal year ended August 31, 2024. The total balance of accrued interest and penalties related to uncertain tax positions was insignificant and $4.6 million for the fiscal years ended August 31, 2025 and 2024, respectively. Total unrecognized tax benefits including interest and penalties were $1.1 million and $13.7 million as of August 31, 2025 and 2024, respectively, and are recorded in other long-term liabilities in the Company’s consolidated balance sheets.
The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes and closed audits, the Company’s federal income tax returns for years prior to fiscal year 2022 are not subject to examination by the U.S. Internal Revenue Service. The Company is currently under audit in various state jurisdictions for fiscal years 2022 through 2024. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2021 are no longer subject to examination. The Company has estimated an amount of unrecognized tax
benefits, including interest and penalties, related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months to be insignificant. Audit outcomes and the timing of settlements are subject to significant uncertainty.
Income taxes receivable of $4.9 million and $0.5 million are recorded in the Company’s consolidated balance sheets as of August 31, 2025 and 2024, respectively. Income taxes receivable are included in other current assets, which also consists of miscellaneous prepaid expenses and deposits.