Income Taxes |
3 Months Ended |
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Jan. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes To determine our income tax expense or benefit for interim periods, consistent with accounting standards, we apply the estimated annual effective income tax rate to year-to-date results, plus any applicable discrete items, which are recorded in the period in which they occur. Discrete items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitations, tax benefits on equity compensation, and increases or decreases in valuation allowances on deferred tax assets. Our estimated annual effective tax rates from continuing operations for the three months ended January 31, 2026 and 2025 were 4.4% and 25.3%, respectively. The difference between our estimated annual effective income tax rate and the U.S. federal statutory rate of 21% principally results from discrete tax items, U.S. state taxes, a non-U.S. tax rate differential and other permanent differences. Total discrete tax expense recorded in the first quarter of fiscal 2026 was $1.1 million, primarily related to equity-based compensation award activity and state deferred tax remeasurement from legal entity reorganization activities. The primary discrete item affecting the 2025 effective rate was the benefit of $0.4 million related to equity-based compensation award activity. We evaluate the likelihood of realization of our deferred tax assets by considering both positive and negative evidence. We maintain a valuation allowance for certain state net operating losses which totaled $0.8 million as of January 31, 2026 and October 31, 2025, respectively. We also maintain a valuation allowance for capital losses which totaled $3.6 million as of January 31, 2026 and October 31, 2025, respectively. On July 4, 2025, the One Big Beautiful Bill Act was enacted. There were multiple business tax provisions that have an impact to the company, including a reclass of our income tax payable and deferred tax liability related to the timing differences on fixed assets depreciation.
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