v3.26.1
Income Taxes
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes were as follows:
 
 Year Ended March 31,
 202620252024
Domestic$64,856 $56,342 $62,082 
Foreign27,268 24,711 21,531 
$92,124 $81,053 $83,613 
 

The components of income tax expense (benefit) were as follows:

 Year Ended March 31,
 202620252024
Current:
Federal$950 $11,983 $7,845 
State1,158 2,971 4,242 
Foreign11,659 13,467 12,220 
Total current13,767 28,421 24,307 
Deferred:
Federal3,430 (20,989)(82,773)
State194 1,543 (19,740)
Foreign4,076 (4,028)(7,087)
Total deferred7,700 (23,474)(109,600)
Total income tax expense (benefit)$21,467 $4,947 $(85,293)
A reconciliation of the statutory tax rates and the effective tax rates for the year ended March 31, 2026 is presented below under the disclosure requirements of ASU No. 2023‑09, which the Company adopted on a prospective basis. Reconciliations for the years ended March 31, 2025 and 2024 continue to be presented in accordance with prior guidance.
Year Ended March 31,
2026
AmountPercent
U.S. federal statutory tax rate
$19,346 21.0 %
State and local income taxes, net of federal income tax effect (1)
(262)(0.3)%
Foreign tax effects
Brazil
Withholding taxes2,117 2.3 %
Poland
Changes in valuation allowances
1,018 1.1 %
Other(12)— %
Other foreign jurisdictions3,427 3.7 %
Effect of cross-border tax laws
Global intangible low-taxed income699 0.8 %
Tax Credits
Research and development tax credits(6,094)(6.6)%
Foreign tax credit(322)(0.3)%
Changes in valuation allowances
724 0.8 %
Nontaxable or nondeductible items
Stock-based compensation(1,163)(1.3)%
Other1,748 1.9 %
Worldwide changes in unrecognized tax benefits
175 0.2 %
Other adjustments
66 — %
Effective income tax expense$21,467 23.3 %
(1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Florida, Maryland, Minnesota and New Jersey for the year ended March 31, 2026.

Year Ended March 31,
20252024
Statutory federal income tax expense rate21.0 %21.0 %
State and local income tax expense, net of federal income tax effect— %2.4 %
Foreign earnings taxed at different rates5.6 %5.7 %
U.S. tax on GILTI & FDII(4.2)%(3.3)%
Domestic permanent differences including acquisition items2.9 %1.1 %
Foreign tax credits(4.1)%(2.5)%
Research credits(6.0)%(9.3)%
Tax reserves3.1 %— %
Valuation allowance6.8 %(125.3)%
Enacted tax law changes(2.8)%(0.4)%
Stock-based compensation(13.4)%6.7 %
Other differences, net(2.8)%1.9 %
Effective income tax expense (benefit)6.1 %(102.0)%
The significant components of our deferred tax assets and liabilities are as follows:
 March 31,
 20262025
Deferred tax assets:
Net operating losses$7,920 $6,873 
Stock-based compensation6,908 5,729 
Deferred revenue38,209 33,125 
Tax credits34,893 26,206 
Accrued expenses2,235 1,576 
Allowance for doubtful accounts and other reserves1,270 1,117 
R&D Capitalization under IRC § 17478,260 83,826 
Depreciation and amortization4,651 9,074 
Capped call20,979 — 
Other12,928 6,162 
Less: valuation allowance(25,667)(23,550)
Total deferred tax assets182,586 150,138 
Deferred tax liabilities:
Withholding taxes(217)(289)
Deferred commissions(21,650)(16,011)
Other(8,518)(1,844)
Total deferred tax liabilities(30,385)(18,144)
Net deferred tax asset$152,201 $131,994 

Net deferred tax assets arise due to the recognition of income and expense items for tax purposes, which differ from those used for financial statement purposes. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. At March 31, 2026 and 2025, we recorded valuation allowances of $25,667 and $23,550, respectively, which reflect uncertainties around our ability to generate sufficient income in certain jurisdictions to utilize our net deferred tax assets which primarily relate to Federal Foreign Tax Credits and NJ State R&D Credits. We believe it is more likely than not that we will have sufficient taxable income to realize our remaining deferred tax assets.

For federal income tax purposes, beginning in our fiscal year 2023, we were required to capitalize and amortize domestic research and development ("R&D") expenditures over five years and foreign R&D over fifteen years (such expenditures were previously deducted as incurred). Our cash flows from operations are adversely affected due to significantly higher cash tax payments in fiscal years 2023 to 2025 accordingly. The One Big Beautiful Bill Act, enacted on July 4, 2025, includes several corporate tax provisions relevant to U.S. businesses. Included in this legislation are provisions that allow for the immediate expensing of domestic R&D expenses, extensions of bonus depreciation, and modifications to the international tax regimes. The provisions in the legislation are generally effective beginning in our fiscal year 2026 and have been included in our operating results. Our cash flows from operations are positively affected due to lower federal cash tax payments in fiscal year 2026.

At March 31, 2026, we had $1,425 remaining federal net operating loss ("NOL") carryforwards and state NOL carryforwards of $1,467 which expire over various years beginning in March 2033 depending on the jurisdiction. As of March 31, 2026, we had foreign NOL carryforwards of $3,177 that will expire over various years beginning in March 2028 depending on the jurisdiction and $51,583 that will not expire. As of March 31, 2026, we had no federal capital loss carryforwards. At March 31, 2026, we had foreign capital loss carryforwards of $816 that will not expire.

At March 31, 2026, we had $7,107 remaining federal R&D tax credit carryforwards and state R&D tax credit carryforwards of approximately $28,734. The NJ R&D credit carryforwards of $18,560 expire over various years beginning from March 2026 through March 2041. The California R&D credits of $10,174 do not expire.
At March 31, 2026, we had federal foreign tax credits ("FTC") carryforwards of approximately $7,644 which are expected to expire from March 2030 through March 2034. We had no foreign FTC.

We conduct business globally and as a result, file income tax returns in the United States and in various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. The following table summarizes the tax years subject to income tax examinations by tax authorities as of March 31, 2026. The years subject to income tax examination in our foreign jurisdictions cover the maximum time period with respect to these jurisdictions. Due to NOLs, in some cases the tax years continue to remain subject to examination with respect to such NOLs.
 
Tax JurisdictionYears Subject to Income
Tax Examination
U.S. FederalFiscal 2022 - Present
Foreign jurisdictionsFiscal 2015 - Present
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in each of our tax jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction. A number of years may lapse before a particular matter is audited and finally resolved. A summary of the changes in the amount of unrecognized tax benefits is as follows:
 Year Ended March 31,
 202620252024
Beginning balance of unrecognized tax benefits$11,748 $9,673 $9,388 
Additions for prior year tax positions68 1,391 3 
Reductions for prior year tax positions and lapse in statute of limitations(1,179)(471)(220)
Additions for current year tax positions1,195 1,155 502 
Additions for tax positions related to purchase accounting5,795 — — 
Ending balance of unrecognized tax benefits$17,627 $11,748 $9,673 
Interest income, expense and penalties related to unrecognized tax benefits are recorded in income tax expense in the Consolidated Statements of Operations. In the years ended March 31, 2026, 2025, and 2024, the impact related to interest expense, interest income and penalties was not significant.
The amount of cash taxes paid for the year ended March 31, 2026 was as follows:
 Total
Federal$3,184 
State 3,316 
Foreign
Canada2,441 
United Kingdom(2,249)
India2,972 
Other3,948 
Income taxes, net of amounts refunded$13,612