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Income Taxes | 12 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | The following is a summary of our income (loss) before income taxes by geography:
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
U.S. | $ | (21,524) |  |  | $ | (23,708) |  |  | $ | (35,508) |
Non-U.S. | 118,483 |  |  | 152,154 |  |  | 5,286 |
Total | $ | 96,959 |  |  | $ | 128,446 |  |  | $ | (30,222) |
The components of the (benefit) provision for income taxes are as follows:
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
U.S. Federal | $ | (121) |  |  | $ | (307) |  |  | $ | 1,634 |
U.S. State | 412 |  |  | 670 |  |  | 769 |
Non-U.S. | 42,235 |  |  | 42,458 |  |  | 39,792 |
Total current | 42,526 |  |  | 42,821 |  |  | 42,195 |
Deferred: |  |  |  |  |
U.S. Federal | (1,823) |  |  | 825 |  |  | 3,522 |
U.S. State | 14 |  |  | (4) |  |  | 465 |
Non-U.S. | 43,390 |  |  | (93,004) |  |  | 109,311 |
Total deferred | 41,581 |  |  | (92,183) |  |  | 113,298 |
Total | $ | 84,107 |  |  | $ | (49,362) |  |  | $ | 155,493 |
The following is a reconciliation of the standard U.S. federal statutory tax rate and our effective tax rate:
| Year Ended June 30,
| 2025 |  | 2024 |  | 2023
U.S. federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal effect | 0.3 |  |  | (1.1) |  |  | 3.7 |
Tax rate differential on non-U.S. earnings | 18.9 |  |  | 5.9 |  |  | (52.5) |
Change in valuation allowance | 13.8 |  |  | (47.9) |  |  | (457.2) |
Nondeductible interest expense | 12.7 |  |  | 5.6 |  |  | (30.2) |
Change in entity status | — |  |  | — |  |  | 4.0 |
Compensation related items | 3.8 |  |  | 0.6 |  |  | (13.7) |
Goodwill impairment | — |  |  | — |  |  | (4.1) |
Irish foreign tax credit | 6.7 |  |  | (24.8) |  |  | 21.4 |
Tax on repatriated earnings | 0.5 |  |  | 6.1 |  |  | (15.0) |
Gain on the extinguishment of debt | — |  |  | (0.2) |  |  | 2.8 |
Notional interest deduction (Italy) | — |  |  | (0.6) |  |  | 2.6 |
Patent box (Italy) | (0.3) |  |  | (0.3) |  |  | (1.5) |
Tax credits and incentives | (2.6) |  |  | (3.1) |  |  | 24.1 |
Non-U.S. tax rate changes | (0.1) |  |  | (0.1) |  |  | (1.1) |
U.S. foreign-derived intangible income (FDII) | (0.7) |  |  | (1.0) |  |  | 2.7 |
U.S. base erosion and anti-abuse tax (BEAT) | (0.2) |  |  | 0.1 |  |  | (2.1) |
Net tax benefit on intellectual property transfer | — |  |  | — |  |  | 1.0 |
Tax loss carryforward expirations | 2.9 |  |  | 0.4 |  |  | (5.1) |
Business and withholding taxes | 0.9 |  |  | 0.9 |  |  | (1.2) |
Uncertain tax positions | (5.1) |  |  | 0.1 |  |  | (10.5) |
Other non-deductible expenses | 4.7 |  |  | 1.4 |  |  | (6.0) |
Tax on unremitted earnings | 0.9 |  |  | 0.6 |  |  | (1.6) |
Changes to derivative instruments | (4.0) |  |  | (2.1) |  |  | 3.1 |
Capital loss carryforward expirations | 3.9 |  |  | — |  |  | — |
Non-deductible intercompany debt forgiveness | 2.2 |  |  | — |  |  | — |
Other | 6.5 |  |  | 0.1 |  |  | 0.9 |
Effective income tax rate | 86.7 | % |  | (38.4) | % |  | (514.5) | %
The effective tax rate reconciliation uses the U.S. statutory tax rate of 21% instead of the 12.5% statutory tax rate of Ireland, our country of domicile, as the U.S. is one of our most significant operating jurisdictions in terms of revenue, manufacturing and personnel, and management believes it is more meaningful to the readers of the financial statements. For the year ended June 30, 2025, our effective tax rate was above our U.S. federal statutory tax rate primarily due to a change in estimate for our Swiss valuation allowance on Swiss deferred tax assets related to Swiss tax reform benefits recognized in fiscal year 2020. During the fourth quarter of 2025 we recognized tax expense of $26,804 to adjust the partial valuation allowance in Switzerland to reflect the current estimated usage of these tax assets. We considered all available evidence, including the near-term impact of recent product-mix shifts in the Vista segment, the expectation of the timing of future taxable income, and the expiration of the tax assets. This is compared to a tax benefit of $105,765 in the year ended June 30, 2024 to partially release the full valuation allowance previously recorded in the quarter ended December 31, 2022. As some of these tax assets will expire prior to when they can be used, a partial valuation allowance remained against those expected to expire unused. The prior year release was based on cumulative income in Switzerland, current period and forecasted profits resulting in the ability to utilize some of these tax assets prior to their expiration. In addition, we had non-deductible interest expense and losses in certain jurisdictions for which we cannot recognize a tax benefit. The jurisdictions that have the most significant impact to our non-U.S. tax provision include Canada, Germany, India, Ireland, Italy, the Netherlands, Spain, and Switzerland. The applicable tax rates in these jurisdictions range from 12.5% to 30%. The total tax rate impact from operating in non-U.S. jurisdictions is included in the line “Tax rate differential on non-U.S. earnings” in the above tax rate reconciliation table. For the year ended June 30, 2025, our effective tax rate was 86.7% as compared to the prior year effective tax rate of (38.4)%. The increase in our effective tax rate as compared to the prior year is primarily due to changes in the Swiss valuation allowance year over year as discussed above. Our fiscal year 2024 effective tax rate was higher than fiscal year 2023 primarily due to pre-tax income for the year ended June 30, 2024 as compared to a pre-tax loss for the year ended June 30, 2023 and changes in the Swiss valuation allowance year over year. As of June 30, 2025, we had a deferred tax asset of $141,872, gross of valuation allowance, related to Swiss tax-amortizable goodwill. During the year ended June 30, 2025, the Swiss tax-amortizable goodwill deferred tax asset increased due to currency exchange rate changes, offset by partial utilization. Significant components of our deferred income tax assets and liabilities consisted of the following at June 30, 2025 and 2024:
| June 30, 2025 |  | June 30, 2024
Deferred tax assets: |  |  |
Swiss tax-amortizable goodwill | $ | 141,872 |  |  | $ | 130,985 |
Net operating loss carryforwards | 59,476 |  |  | 66,572 |
Leases | 30,377 |  |  | 28,661 |
Depreciation and amortization | 4,352 |  |  | 4,765 |
Accrued expenses | 14,117 |  |  | 15,572 |
Share-based compensation | 18,809 |  |  | 19,530 |
Tax credit and other carryforwards | 61,626 |  |  | 69,644 |
Derivative financial instruments | 10,603 |  |  | — |
U.S. Internal Revenue Code Section 174 capitalization | 6,254 |  |  | 6,253 |
Interest limitation carryforwards | 29,796 |  |  | 23,291 |
Other | 996 |  |  | 1,520 |
Subtotal | 378,278 |  |  | 366,793 |
Valuation allowance | (248,367) |  |  | (211,655) |
Total deferred tax assets | 129,911 |  |  | 155,138 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (42,237) |  |  | (37,432) |
Leases | (27,252) |  |  | (24,797) |
Tax on unremitted earnings | (9,045) |  |  | (7,984) |
Derivative financial instruments | (2,116) |  |  | (4,250) |
Other | (11,483) |  |  | (10,317) |
Total deferred tax liabilities | (92,133) |  |  | (84,780) |
Net deferred tax assets | $ | 37,778 |  |  | $ | 70,358 |
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. We have recorded a partial valuation allowance of $78,911 against the Swiss tax-amortizable goodwill deferred tax asset, which we can only benefit from through calendar year 2029 under our Swiss tax ruling. In addition, we have recorded valuation allowances of $51,300 against deferred tax assets related to tax losses in certain jurisdictions (mainly Australia, Bermuda, Brazil, Cyprus, France, Ireland, Japan, and the United Kingdom), $29,796 against interest limitation carryforwards (mainly the Netherlands and the U.S.), and $31,339 against Irish foreign tax credits, for which management has determined that it is more likely than not that these will not be realized. Many of the tax losses, the interest limitation carryforwards and the foreign tax credit carryforwards do not expire, but management has determined it is more likely than not that these will not be utilized. We will continue to assess the realization of the deferred tax assets based on operating results on a quarterly basis. A reconciliation of the beginning and ending amount of the valuation allowance for the year ended June 30, 2025 is as follows:
Balance at June 30, 2024 | $ | 211,655 |
Charges to earnings (1) | 12,455 |
Charges to other accounts (2) | 24,257 |
Balance at June 30, 2025 | $ | 248,367 |
_________________ (1) Amount is primarily related to the partial increase of the Swiss valuation allowance, losses in certain jurisdictions (mainly Bermuda and Brazil) and interest limitation carryforwards in certain jurisdictions (mainly the U.S.), offset by decreased Irish foreign tax credit carryforwards, tax loss expirations in certain jurisdictions (mainly Japan) and U.S. capital loss expirations. (2) Amount is primarily related to increased deferred tax assets on non-U.S. net operating losses, Irish foreign tax credits, and Swiss tax-amortizable goodwill due to currency exchange rate changes, and unrealized losses on derivative financial instruments included in accumulated other comprehensive loss. As of June 30, 2025, we had tax-effected U.S. state net operating losses of $1,604 that expire on various dates from fiscal year 2033 through fiscal year 2045 or with unlimited carryforward. We also had tax-effected non-U.S. net operating loss carryforwards of $57,873, with amounts expiring on various dates through fiscal year 2035 or having unlimited carryforward. In addition, we had $29,165 of tax credit carryforwards primarily related to U.S. federal and state research and development credits, which expire on various dates beginning in fiscal year 2030 or having unlimited carryforward. Lastly, we had $31,339 of Irish foreign tax credits with unlimited carryforward. The benefits of these carryforwards are dependent upon the generation of taxable income in the jurisdictions in which they arose. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("the Act"), which makes permanent several of the provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. Among other provisions, the Act reinstates 100% bonus depreciation, immediate expensing of U.S. research and development costs and modifies the calculation for the interest expense limitation under U.S. Internal Revenue Code §163(j). We are currently evaluating the full effects of the legislation but do not believe it will have a material impact on our financial statements. We consider the following factors, among others, in evaluating our plans for indefinite reinvestment of our subsidiaries’ earnings: (i) the forecasts, budgets, and financial requirements of both our parent company and its subsidiaries, both for the long term and for the short term; (ii) the ability of Cimpress plc to fund its operations and obligations with earnings from other businesses within the global group without incurring substantial tax costs; and (iii) the tax consequences of any decision to reinvest earnings of any subsidiary. As of June 30, 2025, no tax provision has been made for $93,756 of undistributed earnings of certain of our subsidiaries as these earnings are considered indefinitely reinvested. If, in the future, we decide to repatriate the undistributed earnings from these subsidiaries in the form of dividends or otherwise, we could be subject to withholding taxes payable in the range of $19,500 to $20,500 at that time. A cumulative deferred tax liability of $9,045 has been recorded attributable to undistributed earnings that we have deemed are not indefinitely reinvested. The remaining undistributed earnings of our subsidiaries are not deemed to be indefinitely reinvested and can be repatriated with no tax cost. Accordingly, there has been no provision for income or withholding taxes on these earnings. A reconciliation of the gross beginning and ending amount of unrecognized tax benefits is as follows:
Balance June 30, 2022 | $ | 12,996 |
Additions based on tax positions related to the current tax year | 2,167 |
Additions based on tax positions related to prior tax years | 770 |
Reductions based on tax positions related to prior tax years | (62) |
Reductions due to audit settlements | — |
Reductions due to lapse of statute of limitations | (225) |
Cumulative translation adjustment | (22) |
Balance June 30, 2023 | 15,624 |
Additions based on tax positions related to the current tax year | 450 |
Additions based on tax positions related to prior tax years | 405 |
Reductions based on tax positions related to prior tax years | (527) |
Reductions due to audit settlements | (264) |
Reductions due to lapse of statute of limitations | (1,021) |
Cumulative translation adjustment | (13) |
Balance June 30, 2024 | 14,654 |
Additions based on tax positions related to the current tax year | 5,272 |
Additions based on tax positions related to prior tax years | 51 |
Reductions based on tax positions related to prior tax years | (289) |
Reductions due to audit settlements | (237) |
Reductions due to lapse of statute of limitations | (7,506) |
Cumulative translation adjustment | (1) |
Balance June 30, 2025 | $ | 11,944 |
For the year ended June 30, 2025, the amount of unrecognized tax benefits (exclusive of interest) that, if recognized, would impact the effective tax rate is $375. We recognize interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. The interest and penalties recognized as of years ended June 30, 2025, 2024, and 2023 were $17, $2,394, and $1,924, respectively. It is reasonably possible that a further change in unrecognized tax benefits in the range of $350 to $450 may occur within the next twelve months related to the settlement of one or more audits or the lapse of applicable statutes of limitations. We believe we have appropriately provided for all tax uncertainties. We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in multiple jurisdictions globally. The years 2014 through 2025 remain open for examination by the United States Internal Revenue Service and the years 2015 through 2025 remain open for examination in the various states and non-U.S. tax jurisdictions in which we file tax returns. We are currently under income tax audit in certain jurisdictions globally. We believe that our income tax reserves are adequately maintained taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain, and therefore there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows.

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