Income taxes |
9 Months Ended |
|---|---|
Oct. 31, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes | Income taxes For the three and nine months ended October 31, 2025, the Company recorded tax expense of $854 and $372, respectively, compared to $442 and $1,702, respectively, for the corresponding periods in the prior year. The Company’s tax expense was 26.9% and 3.4% of income (loss) before income taxes for the nine months ended October 31, 2025 and 2024, respectively. The Company's effective tax rate differs from the U.S. statutory tax rate of 21% primarily because the Company records a valuation allowance against its U.S. deferred tax assets, and due to foreign income tax expense related to its Canadian branch and its subsidiary in India. The $372 year-to-date tax expense includes a discrete tax benefit of $2,220 recorded in the nine months ended October 31, 2025 primarily related to recognizing stock-based compensation deferred tax assets, return to provision adjustments and excess windfall related to its Canadian branch. The Canadian deferred tax assets were assessed in more detail in connection with the Company’s expectation of continued growth in the Canadian jurisdiction. Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. Management of the Company has evaluated the positive and negative evidence pertaining to the realizability of its deferred tax assets, including the Company’s history of losses, and concluded that it is more likely than not that the Company will not recognize the benefits for its U.S. deferred tax assets. On the basis of this evaluation, the Company has recorded a valuation allowance against its deferred tax assets that are not more likely than not to be realized at both October 31, 2025 and January 31, 2025. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The Company has reflected the estimated impact of the OBBBA in the year-to-date tax provision as of October 31, 2025. Further analysis will be performed through year-end; however, it is not expected to have a material impact on the Company’s effective tax rate due to the valuation allowance position recorded against the Company’s deferred tax assets that are not more likely than not to be realized. |