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Income Taxes (Tables) | 12 Months Ended
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Sep. 30, 2023
Income Tax Disclosure [Abstract] |
Schedule of Income Taxes | Income taxes on the consolidated statements of operations consisted of the following:
| Fiscal Year |
(In thousands) | 2023 |  |  | 2022 |  |  | 2021 |
Current expense (benefit): |  |  |  |  |  |  |  |
U.S. Federal | $ | 3,363 |  |  | $ | (510 | ) |  | $ | 263 |
U.S. State |  | 591 |  |  |  | (143 | ) |  |  | 108 |
International |  | 250 |  |  |  | 166 |  |  |  | 87 |
Total current expense (benefit) |  | 4,204 |  |  |  | (487 | ) |  |  | 458 |
Deferred (benefit) expense: |  |  |  |  |  |  |  |
U.S. Federal |  | — |  |  |  | 5,200 |  |  |  | 1,851 |
U.S. State |  | — |  |  |  | 515 |  |  |  | (62 | )
International |  | (181 | ) |  |  | (447 | ) |  |  | (138 | )
Total deferred (benefit) expense |  | (181 | ) |  |  | 5,268 |  |  |  | 1,651 |
Total income tax expense | $ | 4,023 |  |  | $ | 4,781 |  |  | $ | 2,109 |
Schedule of Reconciliation Difference of Income Taxes | The difference between amounts calculated at the statutory U.S. federal income tax rate of 21% and the Company’s effective tax rate was as follows:
| Fiscal Year |
(In thousands) | 2023 |  |  | 2022 |  |  | 2021 |
Amount at statutory U.S. federal income tax rate | $ | 522 |  |  | $ | (4,724 | ) |  | $ | 1,333 |
Change because of the following items: |  |  |  |  |  |  |  |
State income taxes, net of federal benefit |  | (632 | ) |  |  | (897 | ) |  |  | (273 | )
Foreign and state rate differential |  | 495 |  |  |  | 628 |  |  |  | 596 |
U.S. federal and foreign R&D credits |  | (1,544 | ) |  |  | (1,511 | ) |  |  | (920 | )
Valuation allowance change (1) |  | 4,083 |  |  |  | 10,978 |  |  |  | 1,059 |
Stock-based compensation (2) |  | 1,003 |  |  |  | 481 |  |  |  | (544 | )
U.S. Federal and state rate change |  | (152 | ) |  |  | — |  |  |  | (35 | )
Tax reserve change |  | 734 |  |  |  | (123 | ) |  |  | (150 | )
Foreign-derived income deduction |  | (403 | ) |  |  | — |  |  |  | — |
Contingent consideration |  | (164 | ) |  |  | 13 |  |  |  | 3 |
Impact of CARES Act (3) |  | — |  |  |  | — |  |  |  | 735 |
Acquisition-related transaction costs |  | — |  |  |  | — |  |  |  | 187 |
Other |  | 81 |  |  |  | (64 | ) |  |  | 118 |
Income tax expense | $ | 4,023 |  |  | $ | 4,781 |  |  | $ | 2,109 |
(1) In fiscal 2023, the valuation allowance increased primarily as a result of the incremental deferred tax assets recorded during fiscal 2023 related to capitalized U.S. R&D expenses and Ireland net operating losses (“NOLs”). In fiscal 2022, the valuation allowance increased primarily as a result of the establishment of a full valuation allowance against U.S. net deferred tax assets as of September 30, 2022. In fiscal 2021, the valuation allowance increased primarily as a result of the incremental deferred tax assets recorded during fiscal 2021 related to U.S. state R&D tax credit carryforwards and Ireland NOLs. (2) Includes non-deductible stock-based compensation. (3) Related to the remeasurement of deferred tax assets and liabilities associated with the CARES Act. Under the temporary provisions of CARES Act, NOL carryforwards and carrybacks could offset 100% of taxable income for taxable years beginning before 2021. In addition, NOLs arising in 2018, 2019 and 2020 taxable years could be carried back to each of the preceding five years to generate a refund.
Schedule of Deferred Income Taxes, Net | The components of deferred income taxes, net, consisted of the following and resulted from differences in the recognition of transactions for income tax and financial reporting purposes:
| September 30, |
(In thousands) | 2023 |  |  | 2022 |
Depreciable assets | $ | (3,802 | ) |  | $ | (3,995 | )
Deferred revenue |  | 1,082 |  |  |  | 2,103 |
Accruals and reserves |  | 2,052 |  |  |  | 1,615 |
Stock-based compensation |  | 2,665 |  |  |  | 2,443 |
Impaired strategic investments |  | 1,829 |  |  |  | 1,787 |
NOL carryforwards (1) |  | 4,578 |  |  |  | 6,379 |
U.S. Federal and state R&D credits (2) |  | 2,973 |  |  |  | 4,465 |
Capitalized R&D expenses |  | 7,976 |  |  |  | — |
Other |  | 648 |  |  |  | 848 |
Valuation allowance |  | (22,005 | ) |  |  | (17,672 | )
Deferred taxes, net | $ | (2,004 | ) |  | $ | (2,027 | )
(1) As of September 30, 2023, NOL carryforwards consisted of U.S. state NOL carryforwards of $0.3 million and Ireland NOL carryforwards of $4.2 million. U.S. state NOL carryforwards begin to expire in fiscal 2028. Irel and NOL carryforwards have an unlimited carryforward period. (2) As of September 30, 2023, U.S. federal and state R&D credits begin to expire in fiscal 2 028.
Summary of Reconciliation of Changes in Unrecognized Tax Benefits | Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes pursuant to accounting guidance. The following is a reconciliation of the changes in unrecognized tax benefits, excluding interest and penalties:
| Fiscal Year |
(In thousands) | 2023 |  |  | 2022 |  |  | 2021 |
Unrecognized tax benefits, beginning balance | $ | 2,793 |  |  | $ | 2,887 |  |  | $ | 2,871 |
Increases in tax positions for prior years |  | — |  |  |  | 53 |  |  |  | 15 |
Decreases in tax positions for prior years |  | (4 | ) |  |  | (35 | ) |  |  | (8 | )
Increases in tax positions for current year |  | 836 |  |  |  | 519 |  |  |  | 458 |
Lapse of the statute of limitations |  | (182 | ) |  |  | (631 | ) |  |  | (449 | )
Unrecognized tax benefits, ending balance | $ | 3,443 |  |  | $ | 2,793 |  |  | $ | 2,887 |

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