Income taxes |
3 Months Ended |
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Apr. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes | Income taxes The income tax provision is calculated for an interim period by distinguishing between elements recognized in the income tax provision through applying an estimated annual effective tax rate to a measure of year-to-date operating results referred to as “ordinary income (or loss),” and discretely recognizing specific events referred to as “discrete items” as they occur. For the three months ended April 30, 2026 and 2025, the Company recorded tax expense of $1,760 and $735, respectively. The Company’s tax expense was 37.3% and 23.1% of income (loss) before income taxes for the three months ended April 30, 2026 and 2025, respectively. The Company's effective tax rate differs from the U.S. statutory tax rate of 21% primarily because the Company records a valuation allowance against its U.S. deferred tax assets, and due to foreign income tax expense related to its Canadian branch and its subsidiary in India before considering discrete items. During the three months ended April 30, 2026, the Company recorded tax expense of $551 to record the impact on income tax expense of a measurement period adjustment recorded for the AccessOne acquisition. Additionally, the Company recorded tax expense of $131 related to certain employee stock compensation shortfall which is required to be treated as a discrete item. The year-on-year change in effective tax rate is primarily a result of the US operations turning from loss to profit during the year-to-date reporting period combined with the discrete items mentioned above that were not applicable in the three months ended April 30, 2025. Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. Management of the Company has evaluated the positive and negative evidence pertaining to the realizability of its deferred tax assets, including the Company’s history of losses, and concluded that there is uncertainty regarding the ability to realize the benefit of its U.S. deferred tax assets primarily relating to net operating loss carryforwards. On the basis of this evaluation, the Company has recorded a valuation allowance against its deferred tax assets that are not more likely than not to be realized at both April 30, 2026 and January 31, 2026.
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