XML 32 R17.htm IDEA: XBRL DOCUMENT v3.25.3
Note 9 - Income Taxes
 6 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 9. Income Taxes

 

We reported an income tax provision as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2025

  

2024

  

2025

  

2024

 

Income tax (benefit) expense

 $(477) $384  $1,793  $901 

Effective tax rate

  (23.9)%  10.1%  19.9%  11.7%

 

For interim income tax reporting, we estimate our annual effective tax rate and apply this effective tax rate to our year-to-date pre-tax income. Each quarter, our estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. Additionally, the tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations.

 

The effective tax rate for both the three and six months ended September 30, 2025 differed from the statutory federal rate of 21% primarily due to the impact of the valuation allowance on U.S. deferred taxes. During fiscal year 2025, we adjusted the valuation allowance related to our operations in Germany, and in fiscal year 2026, we incurred higher German statutory taxes. 

 

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) introduced several changes to U.S. tax legislation, with certain provisions becoming applicable to us in fiscal year 2026. These changes include the immediate expensing of domestic research and experimental expenditures, accelerated tax deductions for qualified property, and modifications to certain international tax frameworks. We have incorporated the applicable provisions of OBBBA into our income tax provision as of September 30, 2025, resulting in a reduction of U.S. current tax expense. We are continuing to evaluate the impacts of the legislation on our Consolidated Financial Statements for the annual period.