v3.25.2
Income Taxes
 9 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income (loss) before income taxes are as follows (dollars in thousands):
Three Months Ended June 30,Nine Months Ended June 30,
2025202420252024
Domestic$(7,488)$(305,748)$(15,788)$(510,459)
Foreign6,699 (50,348)12,435 (53,768)
Loss before income taxes$(789)$(356,096)$(3,353)$(564,227)
The components of the provision for (benefit from) income taxes are as follows (dollars in thousands):
Three Months Ended June 30,Nine Months Ended June 30,
2025202420252024
Domestic$337 $(34,655)$807 $(2,583)
Foreign1,595 (7,898)1,193 6,018 
Provision for (benefit from) income taxes$1,932 $(42,553)$2,000 $3,435 
Effective income tax rate(244.9)%11.9 %(59.6)%(0.6)%
The effective tax rates for the periods presented are based upon estimated income for the fiscal year and the statutory tax rates enacted in the jurisdictions in which we operate. For all periods presented, the effective tax rate differs from the 21.0% statutory U.S. tax rate due to the impact of the nondeductible stock-based compensation and our mix of jurisdictional earnings and related differences in foreign statutory tax rates.
Our effective tax rate for the three months ended June 30, 2025 was negative 244.9% compared to 11.9% for the three months ended June 30, 2024. Consequently, our provision for income taxes for the three months ended June 30, 2025 was $1.9 million, a net change of $44.5 million from a benefit from income taxes of $42.6 million for the three months ended June 30, 2024. This difference was attributable to the impairment of book goodwill and a change from estimating interim period taxes on the annual method to the year-to-date method for the three months ended June 30, 2024. Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to ordinary pre-tax income (loss), excluding unusual or infrequently occurring discrete items, for the reporting period. As small changes in the estimated ordinary income (loss) may result in a significant change in the estimated annual effective tax rate, we computed our provision based on the actual effective tax rate for the three and nine months ended June 30, 2024.
For the three months ended June 30, 2025, the Company recorded a non-cash out-of-period adjustment of $3.8 million to increase deferred tax assets and decrease goodwill to correct an error related to a prior period. Management evaluated this error under SAB No. 99 and SAB No. 108 and determined it was not material to prior annual or interim periods. Therefore, the correction was recorded in the current period’s financial statements rather than by restating prior periods.
Our effective tax rate for the nine months ended June 30, 2025 was negative 59.6% compared to negative 0.6% for the nine months ended June 30, 2024. Consequently, our provision for income taxes for the nine months ended June 30, 2025 was $2.0 million, a net change of $1.4 million from a provision for income taxes of $3.4 million for the nine months ended June 30, 2024. This difference was attributable to the impairment of book goodwill for the nine months ended June 30, 2024.

Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, limitations of availability of net operating loss carryforwards, and other matters in making this assessment.
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law. The Act makes permanent key elements of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, modifications to the international tax framework and the business interest expense limitation. We are currently evaluating the impact of the Act and expect the results of such evaluations to be reflected in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.