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Note 6 - Derivative Instruments
 12 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

6.    Derivative Instruments

 

Net gains and losses related to foreign exchange contracts are recorded as a component of “Other income (expense)” in the Consolidated Statements of Operations and are as follows for the fiscal years ended September 30, 2025, 2024 and 2023 (in thousands):

 

  

Year Ended September 30,

 
  

2025

  

2024

  

2023

 

Realized losses on derivatives not designated as hedging instruments

 $(4,103) $(2,808) $(1,174)

 

The notional amounts of the Company’s derivative instruments as of September 30, 2025 and 2024 were as follows (in thousands):

 

   

Year Ended September 30,

 
 

Hedge Designation

 

2025

  

2024

 
          

Cross-currency swap

Net Investment Hedge

 $260,025  $75,978 

Foreign exchange contracts

Undesignated

  44,603   60,101 

 

The fair value of derivative instruments are as follows at September 30, 2025 and 2024 (in thousands):

 

  

Fair Value of Assets

  

Fair Value of Liabilities

 

As of September 30,

 

2025

  

2024

  

2025

  

2024

 

Derivatives designated as hedging instruments

                

Cross-currency swap

 $—  $—  $(33,420) $(1,915)

Derivatives not designated as hedging instruments

                

Foreign exchange contracts

 $21  $9  $(120) $(213)

Total fair value

 $21  $9  $(33,540) $(2,128)

 

Hedging Activities

 

On February 1, 2023, the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $436.0 million for €400.0 million at a weighted average interest rate of 1.66%. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity. At the maturity of the cross currency-swap on February 1, 2024, the Company delivered a notional amount of €400.0 million and received a notional amount of $436.0 million at a Euro to U.S. dollar exchange rate of 1.09, which included a gain of $1.4 million.

 

On February 1, 2024, the Company entered into another cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $76.0 million for €70.0 million at a weighted average interest rate of 1.44%. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries, which requires an exchange at maturity of the notional amounts. At the maturity of the cross currency-swap on February 3, 2025, the Company delivered a notional amount of €70.0 million and received a notional amount of $73.0 million at a Euro to U.S. dollar exchange rate of 1.0419, which included a gain of $3.0 million.

 

On February 3, 2025, the Company entered into another cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $260.0 million for €250.0 million at a weighted average interest rate of 1.80%. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity on February 2, 2026.

 

The cross-currency swaps were $33.4 million and $1.9 million and recorded within a “Derivative liability” as of  September 30, 2025 and  September 30, 2024, respectively, in the Consolidated Balance Sheets.

 

The outstanding cross-currency swap is marked to market at each reporting period, representing the fair value of the cross-currency swap, any changes in fair value are recognized as a component of “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets. The cross-currency swap is classified within Level 2 of the fair value hierarchy, described in Note 2,  Summary of Significant Accounting Policies and in Note 15,  Fair Value Measurements below.

 

Interest earned on the cross-currency swap is recorded within “Interest income, net” in the Consolidated Statements of Operations. For the fiscal years ended September 30, 2025 and 2024, the Company recorded interest income of $3.4 million and $3.1 million, respectively, on these instruments.