v3.26.1
Income Taxes
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income Before Income Taxes. Components of income before income taxes recorded in the consolidated
statements of comprehensive income were as follows:
Years Ended March 31,
2026
2025
2024
Domestic (1)
$1,084,446
$1,033,428
$688,981
Foreign
241,910
209,871
289,960
Total
$1,326,356
$1,243,299
$978,941
(1) Domestic income before income taxes for the year ended March 31, 2024, is presented net of intercompany dividends (or
repatriated cash) of $250,000. No intercompany dividends (or repatriated cash) that were subject to income taxes from a
foreign subsidiary were declared during years ended March 31, 2026, and 2025.
Income Tax Expense. Components of income tax expense (benefit) recorded in the consolidated statements of
comprehensive income were as follows:
Years Ended March 31,
2026
2025
2024
Current income taxes
Federal
$205,062
$177,652
$146,939
State
34,461
43,847
32,065
Foreign
53,978
61,254
41,884
Total current income taxes
293,501
282,753
220,888
Deferred income taxes
Federal
11,649
(1,134)
(3,113)
State
3,329
219
(2,336)
Foreign
(6,194)
(4,630)
3,939
Total deferred income taxes
8,784
(5,545)
(1,510)
Total income tax expense
$302,285
$277,208
$219,378
Income Tax Expense Reconciliation. The following tables provide the reconciliation of income tax expense
(benefit) to the amount computed by applying the US federal statutory tax rate to income before income taxes. The
following table reflects the prospective adoption of ASU 2023-09 and the subsequent table provides prior year
reconciliations before the adoption of ASU 2023-09.
Year Ended March 31,
2026
US federal statutory tax rate
$278,535
21.0%
Domestic
United States
State income taxes, net of federal income tax benefit (1)
30,417
2.3
Effect of cross-border tax laws
Foreign tax credits
(25,919)
(2.0)
Global intangible low-taxed income (commonly known as GILTI)
25,819
1.9
Foreign derived intangible income (commonly known as FDII)
(19,456)
(1.5)
Other
3,400
0.3
Tax credits
(1,700)
(0.1)
Changes in valuation allowances
(4,060)
(0.3)
Nontaxable or nondeductible items
7,862
0.6
Other adjustments
799
0.1
Effects of changes in tax laws or rates enacted in the current period (2)
—
—
Foreign tax effects
Other foreign jurisdictions
(5,140)
(0.4)
Changes in net unrecognized tax benefits
11,728
0.9
Effective income tax expense and rate
$302,285
22.8%
(1) State taxes in California, New York, and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this
category.
(2) No impact applicable to the periods presented.
Years Ended March 31,
2025
2024
Computed expected income taxes
$261,093
$205,578
State income taxes, net of federal income tax benefit
45,991
32,023
Foreign rate differential
(13,078)
(15,976)
Gross unrecognized tax benefits
(1,594)
1,301
Intercompany transfers of assets
10,430
(1,817)
US tax on foreign earnings
(14,548)
4,750
Other
(11,086)
(6,481)
Total
$277,208
$219,378
The following table presents cash paid for income taxes, net of refunds, reflecting the prospective adoption of ASU
2023-09:
Year Ended March 31,
2026
Federal
$181,284
State
18,465
Foreign
China
15,991
Other foreign jurisdictions
18,574
Total foreign
34,565
Total cash paid for income taxes, net of refunds
$234,314
For the years ended March 31, 2025, and 2024, cash paid for income taxes was $345,397 and $234,062,
respectively, gross of immaterial tax refunds.
Deferred Taxes. The tax effects of temporary differences that give rise to significant portions of deferred tax assets
and deferred tax liabilities are as follows:
As of March 31,
2026
2025
Deferred tax assets
Amortization of intangible assets
$—
$12,413
Operating lease liabilities
42,032
38,051
Uniform capitalization adjustment to inventory
9,713
10,723
State related taxes and credit carryforwards
2,268
3,107
Reserves and accruals
80,216
69,803
Net operating loss carry-forwards
11,033
10,421
Other
964
1,188
Gross deferred tax assets
146,226
145,706
Valuation allowances
(3,957)
(5,138)
Total deferred tax assets
142,269
140,568
Deferred tax liabilities
As of March 31,
2026
2025
Prepaid expenses
(10,239)
(8,727)
Operating lease assets
(31,925)
(29,189)
Depreciation of property and equipment
(25,825)
(23,359)
Other
(5,779)
(1,702)
Total deferred tax liabilities
(73,768)
(62,977)
Deferred tax assets, net
$68,501
$77,591
The deferred tax assets are currently expected to be realized between fiscal years 2027 and 2032. Based on the
level of historical taxable income and projections for future taxable income over the periods in which the deferred
tax assets are deductible, management believes it is more likely than not that the results of future operations will
generate sufficient taxable income to realize the net deferred tax assets. The Company’s tax valuation allowances,
and changes therein, are primarily driven by foreign losses in jurisdictions in which the Company expects limited
future profitability, as well as the release of a valuation allowance on domestic tax attributes.
Repatriation of Cash. Certain earnings of the Company’s non‑US subsidiaries are subject to US taxation, including
amounts treated as global intangible low-taxed income (commonly known as GILTI), which limits the differences
between the financial reporting and income tax basis of foreign undistributed earnings. In addition, as of March 31,
2026, foreign withholding taxes have not been provided on unremitted earnings of the Company’s non‑US
subsidiaries, as these amounts are considered to be indefinitely reinvested. The Company expects to repatriate
foreign earnings, and the related cash, only to the extent such earnings have been or will be subject to US income
tax and such cash is not required to fund ongoing operations. Due to the number of foreign jurisdictions involved
and the variability in applicable tax laws, the Company is unable to reasonably estimate the amount of foreign
withholding taxes that may be incurred upon repatriation. No intercompany dividends subject to foreign withholding
tax were declared by the Company during the year ended March 31, 2026.
Changes in Tax Law. The Company has evaluated and is currently monitoring the impact of recent tax law
changes on its consolidated financial statements for the following:
•On July 4, 2025, H.R. 1, also known as the One Big Beautiful Bill Act, was signed into law.
Elements relevant to the Company include the reinstatement of bonus depreciation, the deductibility
of domestic research and development expenses, and modifications to international provisions. The
legislation has multiple effective dates, with certain provisions effective during fiscal year 2026 and
other relevant provisions effective during the fiscal year ending March 31, 2027 (next fiscal year).
The Company applied the applicable provisions of the new tax law during fiscal year 2026, which
did not have a material impact on the effective tax rate, but did provide cash tax benefits due to
accelerated tax deductions.
•Various jurisdictions in which the Company operates have enacted legislation in response to Pillar
Two model rules (Pillar Two) that were previously released by the Organization for Economic Co-
operation and Development (commonly known as OECD), introducing a 15% global minimum tax
rate applied on a country-by-country basis for large multinational corporations. The Company
applied the applicable provisions of the new tax law during fiscal year 2026. The effects of the new
tax law are included in the ‘Foreign tax effects’ line item in the section above titled “Income Tax
Expense Reconciliation,” but did not have a material impact on the Company’s consolidated
financial statements. The Company will continue to monitor Pillar Two developments and reflect the
impact of legislative changes in future periods including the additional guidance released in January
2026 regarding the Side-by-Side Framework to exclude US parented companies from the scope of
some Pillar Two taxes.
Unrecognized Tax Benefits. When tax returns are filed, some positions taken are subject to uncertainty about the
merits of the position taken or the amount that would be ultimately sustained upon examination. The benefit of a tax
position is recorded in the consolidated financial statements during the period in which the Company believes it is
more likely than not that the position will be sustained upon examination by taxing authorities, and is presented in
the ‘Changes in net unrecognized tax benefits’ line item in the section above titled “Income Tax Expense
Reconciliation.” The recognition threshold is measured as the largest amount of tax benefit that is more than 50%
likely to be realized upon settlement. The portion of the benefit that exceeds the amount measured, as described
above, is recorded as a liability for unrecognized tax benefits, along with any associated interest and penalties, in
the consolidated balance sheets.
A reconciliation of the beginning and ending amounts of total gross unrecognized tax benefits are as follows:
Years Ended March 31,
2026
2025
2024
Beginning balance
$21,233
$45,620
$44,901
Gross increase related to current year tax positions
5,400
4,499
4,318
Gross increase related to prior year tax positions
8,669
4,662
4,629
Gross decrease related to prior year tax positions
(4,738)
(4,309)
(4,698)
Settlements with taxing authorities
(1,800)
(22,793)
(582)
Lapse of statute of limitations
(2,426)
(6,446)
(2,948)
Ending balance
$26,338
$21,233
$45,620
Total gross unrecognized tax benefits recorded in the consolidated balance sheets are as follows:
As of March 31,
2026
2025
Current liability
Income tax payable
$6,206
$5,688
Long-term liability
Income tax liability
20,132
15,545
Total
$26,338
$21,233
As of March 31, 2026, and 2025, gross unrecognized tax benefits exclude immaterial federal benefits for state
income taxes related to uncertain tax positions in the Company’s income tax returns that would affect the
Company’s effective tax rate, if recognized. Interest and penalties recorded in income tax liability in the consolidated
balance sheets as of March 31, 2026, and 2025, and in interest expense in the consolidated statements of
comprehensive income during the years ended March 31, 2026, 2025, and 2024, were immaterial.
The Company has on-going income tax examinations in various state and foreign tax jurisdictions and regularly
assesses tax positions taken during years open to examination. The Company files income tax returns in the US
federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer
subject to US federal, state, local, or foreign income tax examinations by tax authorities before fiscal year 2022.
Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all
applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be
materially different from the Company’s estimates or from its historical income tax provisions and accruals. The
results of an audit or litigation could have a material impact on results of operations or cash flows in the periods for
which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs,
settlements, penalties, or interest assessments. However, management does not currently expect any such audits
and inquiries to have a material impact on the Company’s consolidated financial statements.