v3.26.1
Income taxes
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The components of income (loss) before the provision for income taxes are as follows (in thousands):
Fiscal year ended March 31,
 202620252024
Domestic$20,865 $130,386 $142,507 
Foreign19,594 15,109 (1,517)
Total$40,459 $145,495 $140,990 
The components of the provision for income taxes are as follows (in thousands):
Fiscal year ended March 31,
 202620252024
Current:  
US federal$(11,168)$(26,543)$(12,505)
State(4,690)(6,286)(4,078)
Foreign(1,819)(44)(20)
Total current(17,677)(32,873)(16,603)
Deferred: 
US federal5,113 2,660 2,130 
State1,902 491 746 
Foreign(3,479)(3,684)400 
Total deferred3,536 (533)3,276 
Total provision for income taxes$(14,141)$(33,406)$(13,327)
The Company adopted ASU 2023-09 effective for its annual period beginning April 1, 2025 and adopted the changes to the tax disclosures guidance on a prospective basis. The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate before income taxes for the year of the adoption of ASU 2023-09:
Fiscal year ended March 31, 2026
AmountPercent
Income before provision for income taxes$40,459 
Federal statutory rate(8,497)21.0 %
State and local income taxes, net of federal income tax effect(1)
(1,639)4.1 %
Foreign tax effects:
United Kingdom:
Statutory tax rate difference between United Kingdom and United States(710)1.8 %
Other adjustments(495)1.2 %
Other foreign jurisdictions(73)0.2 %
Effect of cross-border tax laws:
Global intangible low-taxed income(1,985)4.9 %
Subpart F(546)1.3 %
Other(53)0.1 %
Nontaxable or nondeductible items:
IRC section 162(m) limitation(15,025)37.1 %
Stock-based compensation(2)
14,001 (34.6)%
Enhanced inventory deduction645 (1.6)%
Other(372)0.9 %
Tax credits:
Foreign tax credits1,083 (2.7)%
Change in valuation allowance(24)0.1 %
Change in unrecognized tax benefits(173)0.4 %
Other adjustments(278)0.7 %
Effective tax rate$(14,141)34.9 %
(1) State taxes in Texas, California, Oregon, New York and Illinois made up a majority (greater than 50 percent) of the tax effect in this category.
(2) This category includes the tax effects of share-based payment awards, such as windfalls and shortfalls.
The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate before income taxes for years prior to the adoption of ASU 2023-09:
Fiscal year ended March 31,
20252024
Federal statutory rate21.0 %21.0 %
State tax, net of federal benefit3.2 %1.8 %
Nondeductible business expenses0.4 %0.4 %
Nondeductible employee compensation16.0 %4.3 %
Provision-to-return adjustment(0.3)%(0.2)%
Uncertain tax positions0.1 %— %
Stock-based compensation(19.3)%(18.4)%
Change in valuation allowance— %0.4 %
Effects of foreign operations1.6 %— %
Others0.3 %0.2 %
Effective tax rate23.0 %9.5 %
The amount of income tax paid, net of refunds, are as follows (in thousands):
Fiscal year ended March 31,
 2026
US federal$14,440 
State:
California1,077 
All states representing less than five percent of total2,414 
Total state3,491 
Foreign:
UK3,119 
All jurisdictions representing less than five percent of total311 
Total foreign3,430 
Total cash taxes$21,361 
The income taxes paid for the years ended March 31, 2025 and March 31, 2024 were $25.3 million and $12.4 million, respectively.
The components of net deferred taxes arising from temporary differences are as follows (in thousands):
March 31, 2026March 31, 2025
Deferred tax assets:  
Compensation$— $88 
Inventory and receivables14,972 16,570 
Accrued expenses9,330 5,124 
Stock compensation10,474 8,186 
Net operating losses31 403 
Right of use liability12,817 9,730 
Capitalized research and development2,593 3,514 
Other2,961 1,925 
Gross deferred tax assets53,178 45,540 
Valuation allowance(769)(744)
Net deferred tax assets52,409 44,796 
Deferred tax liabilities:
Goodwill402 3,906 
Fixed assets and internally developed software21,009 9,548 
Intangible assets17,524 22,872 
Right of use asset11,383 9,255 
Other824 1,487 
Deferred tax liabilities51,142 47,068 
Net deferred tax (assets) liabilities$(1,267)$2,272 
The deferred tax assets and liabilities are reported in the accompanying balance sheets as follows (in thousands):
March 31, 2026March 31, 2025
Deferred tax assets$7,464 $1,540 
Deferred tax liabilities6,197 3,812 
Net deferred tax (assets) liabilities$(1,267)$2,272 
The valuation allowance was $0.8 million and $0.7 million as of March 31, 2026 and March 31, 2025, respectively, primarily relating to an investment impairment for which we do not believe a tax benefit is more likely than not to be realized.
As of March 31, 2026, the Company had gross federal, state and foreign net operating loss carryforwards of zero, $0.7 million and zero, respectively. The state net operating loss carryforwards can either be carried forward 20 years or indefinitely. The state net operating loss carryforwards will begin to expire in 2038.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Fiscal year ended March 31,
 202620252024
Balance at beginning of year$550 $433 $442 
Increases for prior year tax positions105 — — 
Increases for current year tax positions167 163 108 
Decreases for prior year tax positions— (6)(19)
Decreases due to statutes lapsing(108)(40)(98)
Balance at end of year$714 $550 $433 
If all of the Company’s unrecognized tax benefits as of March 31, 2026, March 31, 2025 and March 31, 2024 were recognized, $0.7 million, $0.5 million and $0.4 million, respectively, of unrecognized tax benefits, would impact the effective tax rate.
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. The Company's liability for unrecognized tax benefits is recorded within other long-term liabilities on the consolidated balance sheet. The Company had $0.3 million and $0.2 million of accrued gross interest and penalties as of March 31, 2026 and March 31, 2025, respectively. The Company recognized net interest and penalties (benefit)/expense of $43 thousand, $56 thousand and $(21) thousand for the fiscal years ended March 31, 2026, March 31, 2025 and March 31, 2024, respectively.
The Company files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. As of March 31, 2026, with few exceptions, the Company or its subsidiaries are no longer subject to examination prior to tax fiscal year ended March 31, 2022.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The legislation includes several changes to US federal tax law, including the permanent extension of certain expiring Tax Cuts and Jobs Act provisions and modifications to the US taxation of foreign activity. Certain provisions were effective for 2025, while others apply to tax years beginning after December 31, 2025. The Company has evaluated the impact of the OBBBA and incorporated the applicable provisions into its consolidated financial statements for the current reporting period. As part of its initial assessment of the corporate tax provisions, the Company expects to elect immediate expensing of US incurred research or experimental expenditures and full bonus depreciation for certain assets placed in service after January 19, 2025. As a result of these expected elections, US cash taxes decreased in fiscal year 2026 with no material impact to the Company’s effective tax rate.
The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with rules effective beginning in 2024 and expanding in 2025. Some jurisdictions in which the Company operates have enacted Pillar 2 legislation, while others continue to advance implementation; the U.S. has not adopted the rules. On January 5, 2026, the OECD/G20 released the Side by Side (SbS) package, which provides administrative simplifications and new safe harbors, including exemptions from certain top‑up taxes for qualifying US-parented groups and an extension of the Transitional Country-by-Country Reporting Safe Harbor through 2027. The Company is monitoring these developments and evaluating potential impacts. Based on current information, the Company has considered Pillar 2 tax within the provision for income taxes and does not expect Pillar 2 to have a material effect on its effective tax rate or consolidated financial statements.