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Income Taxes
 3 Months Ended
Apr. 30, 2025
INCOME TAXES  
Income Taxes
9.
Income Taxes
The Company’s provision for inc
ome
taxes for the three months ended April 30, 2025 and 2024 is based on the estimated annual effective tax rate, in addition to discrete items.
The Company’s effective tax rate for the first quarter of FY26 was 23.4%, which differs from the U.S. federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions. The Company’s effective tax rate for the first quarter of FY25 was 19.0% which differs from the U.S. federal statutory rate of 21%, primarily due to rate differentials in foreign tax jurisdictions and the Global Intangible Low-Taxed Income (“GILTI”) provision and impacts from the final
earn-out
adjustments related to the Pacific and Eagle acquisitions.
The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. The valuation allowance was $6.8 million and $6.6 million as of April 30, 2025 and January 31, 2025, respectively.
With the exception of our UK and China subsidiaries for which we accrue relevant deferred tax impacts related to
non-indefinitely
reinvested cash, we consider the excess of the amount for financial reporting over the tax basis (including undistributed and previously taxed earnings) of investments in our other foreign subsidiaries as of April 30, 2025 to be indefinitely reinvested in the foreign jurisdictions on the basis of our specific plan for reinvestment and estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Therefore, we have not provided for deferred taxes related to such excess or the relevant portions thereof and disclosed that the determination of any deferred taxes related to this excess is not practicable in those permanently reinvested jurisdictions. We have made no changes to our policy on indefinite reinvestment during the quarter ended April 30, 2025.