XML 53 R17.htm IDEA: XBRL DOCUMENT
v3.25.1

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes For the years ended March 31, 2025, 2024, and 2023, the Company recorded a provision for income taxes of $3.1 million, $3.6 million, and $2.8 million, respectively. The components of the consolidated provision for income taxes for fiscal 2025, 2024, and 2023 consisted of the following:
| March 31,
Current: | 2025 |  | 2024 |  | 2023
Federal | $ | 505 |  |  | $ | 714 |  |  | $ | 423 |
State | 1,065 |  |  | 2,384 |  |  | 1,331 |
Foreign | 1,579 |  |  | 544 |  |  | 1,053 |
Total current income tax provision | $ | 3,149 |  |  | $ | 3,642 |  |  | $ | 2,807 |
The Company's income from continuing operations before income taxes included $1.3 million, $2.6 million, and $2.7 million of foreign subsidiary income for the years ended March 31, 2025, 2024, and 2023, respectively. The Company is permanently reinvesting the earnings of its profitable foreign subsidiaries to facilitate expansion of overseas operations. If the Company were to remit these earnings, the tax impact would be immaterial. The Company accounts for Global Intangible Low-Taxed Income ("GILTI") as period costs when incurred. Deferred tax assets and (liabilities) were comprised of the following:
| March 31, 2025 |  | March 31, 2024
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 268,818 |  |  | $ | 296,036 |
Research and development and other credit carryforwards | 27,565 |  |  | 28,118 |
Stock-based compensation | 6,600 |  |  | 7,540 |
Reserves and allowances | 14,441 |  |  | 17,463 |
Operating lease liability | 15,997 |  |  | 15,456 |
Capitalized IRC 174 costs | 74,610 |  |  | 51,317 |
Fixed assets and intangibles | 6,282 |  |  | 6,435 |
Gross deferred tax assets | 414,313 |  |  | 422,365 |
Valuation allowance | (368,773) |  |  | (368,408) |
Total deferred tax assets | $ | 45,540 |  |  | $ | 53,957 |
Deferred tax liabilities: |  |  |
Intangibles | (15,172) |  |  | (19,045) |
Deferred contract acquisition costs | (21,004) |  |  | (26,303) |
Operating lease, right-of-use asset | (9,478) |  |  | (8,724) |
Net deferred taxes | $ | (114) |  |  | $ | (115) |
The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. For the year ended March 31, 2025, the Company continues to maintain a full valuation allowance against its US deferred tax assets as it considered the cumulative losses in recent periods to be substantial negative evidence. At March 31, 2025, management determined that a valuation allowance of approximately $368.8 million was needed, compared with approximately $368.4 million as of March 31, 2024. At March 31, 2025, the Company had federal net operating loss carryforwards of approximately $1,023.8 million, of which $321.5 million are related to years prior to fiscal 2019 and begin to expire in 2035. The remaining $702.3 million carry forward indefinitely but can only be used to apply to 80% of the Company’s taxable income for a given tax year. As of March 31, 2025, the Company also had state net operating loss carry-forwards of $869.4 million, the majority of which expire at various dates between 2026 and 2044. In addition, at March 31, 2025, the Company had research and development credit carryforwards for federal and California tax reporting purposes of approximately $15.5 million and $24.2 million, respectively. The federal income tax credit carryforwards will expire at various dates between 2037 and 2045, while the California income tax credits will carry forward indefinitely. A reconciliation of the Company's provision for income taxes to the amounts computed using the statutory United States federal income tax rate is as follows:
| Years Ended March 31,
| 2025 |  | 2024 |  | 2023
Tax benefit at statutory rate | $ | (5,053) |  |  | $ | (13,429) |  |  | $ | (15,075) |
State income taxes before valuation allowance, net of federal effect | (1,404) |  |  | (2,821) |  |  | (3,088) |
Foreign tax rate differential | 1,621 |  |  | (8) |  |  | 492 |
Research and development credits | (454) |  |  | 714 |  |  | (2,513) |
Change in valuation allowance | 5,195 |  |  | 7,908 |  |  | (1,708) |
Compensation/option differences | 4,253 |  |  | 8,449 |  |  | 16,858 |
Non-deductible compensation | 1,625 |  |  | 2,612 |  |  | 4,397 |
Foreign-derived intangible income deduction | (602) |  |  | — |  |  | — |
Other | (2,032) |  |  | 217 |  |  | 3,444 |
Total income tax provision | $ | 3,149 |  |  | $ | 3,642 |  |  | $ | 2,807 |
For the years ended March 31, 2025, 2024, and 2023, the statutory federal rate was 21%. The Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| Years ended March 31,
| 2025 |  | 2024 |  | 2023
Balance at beginning of year | $ | 10,811 |  |  | $ | 10,113 |  |  | $ | 9,850 |
Gross increases - tax positions in prior period | — |  |  | 1,457 |  |  | 163 |
Gross increases - tax positions related to the current year | 165 |  |  | 431 |  |  | 158 |
Gross decreases - tax positions in prior period | (903) |  |  | (337) |  |  | — |
Settlements | — |  |  | (287) |  |  | — |
Lapse of statute of limitations | — |  |  | (512) |  |  | (34) |
Other | 1 |  |  | (54) |  |  | (24) |
Balance at end of year | $ | 10,074 |  |  | $ | 10,811 |  |  | $ | 10,113 |
At March 31, 2025, the Company had unrecognized tax benefits of $10.1 million, all of which, if recognized, would favorably affect the Company's effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company's policy for recording interest and penalties associated with tax examinations is to record such items as a component of operating expense income before taxes. For the year ended March 31, 2025 and 2024, the Company recognized $0.0 million and $0.2 million, respectively, in penalties and interest related to unrecognized tax benefits. Utilization of the Company's net operating loss and tax credit carryforwards are subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. The Company has performed an analysis of its changes in ownership under Section 382 of the Internal Revenue Code as well as with respect to the net operating loss and tax credit carryforwards inherited as part of the Fuze acquisition. The Company currently expects the Section 382 limitation to apply with respect to the Fuze carryforwards and limit the Company’s ability to fully utilize the Fuze net operating loss carryforwards, prior to their expiration. The Company files United States federal and state income tax returns in jurisdictions with varying statutes of limitations. Due to the Company’s net operating loss and tax credit carryforwards, the fiscal years 2003 and forward generally remain subject to examination by federal and most state tax authorities.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration