v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 9: INCOME TAXES
We file a consolidated federal income tax return in the U.S. with the IRS and file tax returns in various state, local, and foreign jurisdictions. Tax returns are typically examined and either settled upon completion of the examination or through the appeals process. With respect to federal, state and local jurisdictions and countries outside of the U.S., we are typically subject to examination for three to six years after the income tax returns have been filed. Our U.S. federal income tax returns for tax years 2022 and prior have been examined or are otherwise closed. The IRS examination of the 2020 tax year is complete, although the statute of limitations remains open. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest, and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that might be incurred due to federal, state, local or foreign audits.
The components of income from continuing operations upon which domestic and foreign income taxes have been provided are as follows:
(in 000s)
Year ended June 30,202620252024
Domestic$537,329 $437,971 $489,912 
Foreign316,559 343,432 272,410 
Total income before income taxes$853,888 $781,403 $762,322 
The components of income tax expense for continuing operations are as follows:
(in 000s)
Year ended June 30,202620252024
Current:
Federal$13,481 $143,298 $191,664 
State13,059 30,716 9,695 
Foreign49,108 21,689 18,240 
75,648 195,703 219,599 
Deferred:
Federal8,940 (52,659)(59,441)
State(386)(4,454)(11,749)
Foreign33,368 33,363 15,950 
41,922 (23,750)(55,240)
Total income tax expense (benefit):
Federal$22,421 $90,639 $132,223 
State12,673 26,262 (2,054)
Foreign82,476 55,052 34,190 
Total income taxes for continuing operations$117,570 $171,953 $164,359 
We operate in multiple income tax jurisdictions both within the U.S. and internationally. Accordingly, management must determine the appropriate allocation of income to each of these jurisdictions based on transfer pricing analyses of comparable companies and predictions of future economic conditions. Although these intercompany transactions reflect arm’s length terms and the proper transfer pricing documentation is in place, transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting changes may impact our mix of earnings in countries with differing statutory tax rates.

A reconciliation of income taxes for the year ended June 30, 2026, between the statutory U.S. federal tax rate and our effective tax rate from continuing operations is as follows:
(dollars in 000s)
Year ended June 30, 2026AmountPercent
U.S. statutory tax rate$179,317 21.0 %
State and local income taxes, net of federal benefit1
12,525 1.5 %
Foreign tax effects
Ireland
          Statutory income tax rate differential (22,574)(2.6)%
          Other7,790 0.9 %
Other foreign jurisdictions3,992 0.5 %
Effects of cross-border tax laws, net of foreign tax credits
Global intangible low-taxed income21,242 2.5 %
Other(1,453)(0.2)%
Tax credits(5,939)(0.7)%
Nontaxable or nondeductible items4,905 0.6 %
Other (2,388)(0.3)%
Changes in unrecognized tax benefits (79,847)(9.4)%
Effective tax rate$117,570 13.8 %
(1) State taxes in California, Illinois, Minnesota, Texas, and New York make up greater than 50% of the tax effect in this category.

The reconciliation between the statutory U.S. federal tax rate and our effective tax rate from continuing operations for the years ended June 30, 2025 and 2024 is as follows:
Year ended June 30,20252024
U.S. statutory tax rate21.0 %21.0 %
Change in tax rate resulting from:
State income taxes, net of federal income tax benefit1.3 %1.4 %
Earnings taxed in foreign jurisdictions(2.1)%(1.9)%
Permanent differences0.7 %0.7 %
Uncertain tax positions1.9 %(0.4)%
U.S. tax on income from foreign affiliates1.7 %4.1 %
Federal income tax credits(1.6)%(2.4)%
Foreign investment recapture— %2.6 %
Change in valuation allowance - domestic0.3 %— %
Change in valuation allowance - foreign— %(2.8)%
Other(1.2)%(0.7)%
Effective tax rate22.0 %21.6 %
Our effective tax rate from continuing operations was 13.8%, 22.0%, and 21.6% for fiscal years ended June 30, 2026, 2025, and 2024, respectively. The decrease in the effective tax rate for fiscal year 2026 is primarily attributable to the settlement of an IRS examination related to our 2020 U.S. federal income tax return and related carryback claims to tax years 2015 through 2018 tax years.
In the United States, on July 4, 2025, H.R. 1 was signed into law. Among other provisions, the legislation reinstates immediate expensing for domestic research and experimental expenditures, extends 100% bonus depreciation for qualified property placed in service beginning January 20, 2025, and makes certain other provisions of the Tax Cuts and Jobs Act permanent. The impact of this legislation is reflected in our financial statements for the fiscal year ended June 30, 2026, and there was no material impact on our effective tax rate.
We account for income taxes under the asset and liability method, which requires us to record deferred income tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. Deferred taxes are determined separately for each tax-paying component within each tax jurisdiction based on provisions of enacted tax law. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
We record a valuation allowance to reduce our deferred tax assets to the estimated amount that we believe is more likely than not to be realized. Determination of a valuation allowance for deferred tax assets requires that we make judgments about future matters that are not certain, including projections of future taxable income and evaluating potential tax-planning strategies
The significant components of deferred tax assets and liabilities are reflected in the following table:
(in 000s)
As ofJune 30, 2026June 30, 2025
Deferred tax assets:
Deferred revenue19,165 33,435 
Allowance for credit losses26,485 30,098 
Deferred and stock-based compensation7,528 7,204 
Net operating loss carry-forward13,071 38,856 
Tax credit carry-forward8,513 6,569 
Lease liabilities151,596 130,911 
Federal tax benefits related to state unrecognized tax benefits26,172 31,061 
Internally developed software81,926 84,301 
Intangibles - intellectual property51,178 61,138 
Property and equipment8,973 1,873 
Other13,455 13,679 
Valuation allowance(19,789)(18,538)
Total deferred tax assets388,273 420,587 
Deferred tax liabilities:
Prepaid expenses and other(17,706)(20,396)
Lease right of use assets(148,278)(128,204)
Intangibles(36,100)(43,879)
Total deferred tax liabilities(202,084)(192,479)
Net deferred tax assets$186,189 $228,108 
A reconciliation of the deferred tax assets and liabilities and the corresponding amounts reported in the consolidated balance sheets is as follows:
(in 000s)
As ofJune 30, 2026June 30, 2025
Deferred income tax assets$186,189 $228,108 
Deferred tax liabilities— — 
Net deferred tax asset$186,189 $228,108 
Changes in our valuation allowance for fiscal years 2026, 2025 and 2024 are as follows:
(in 000s)
Year ended June 30,202620252024
Balance, beginning of the year$18,538 $16,569 $57,566 
Additions charged to costs and expenses1,960 4,166 4,584 
Deductions(709)(2,197)(45,581)
Balance, end of the year$19,789 $18,538 $16,569 
Our valuation allowance on deferred tax assets had a net increase of $1.3 million during the current period. The $2.0 million of additions charged to costs is primarily related to foreign tax credits generated in the current fiscal year that we do not expect to utilize in future years. The increase is offset by a $0.7 million decrease to our valuation allowance balance for adjustments primarily related to certain domestic and foreign net operating losses utilized in the current fiscal year and changes in future projections of net operating loss utilization.
Certain of our subsidiaries file stand-alone returns in various state, local and foreign jurisdictions, and others join in filing consolidated or combined returns in such jurisdictions. As of June 30, 2026, we had net operating losses of $13.1 million in various states and foreign jurisdictions. The amount of state and foreign net operating losses varies by taxing jurisdiction. We maintain a valuation allowance of $3.7 million on state net operating losses
and $5.6 million on foreign net operating losses for the portion of such loses that, more likely than not, will not be realized. Of the total net operating loss deferred tax assets, $3.8 million are more likely than not to be realized. Net operating loss deferred tax assets of $8.5 million will expire in varying amounts during fiscal years 2027 through 2046 and the remaining $4.6 million have no expiration.
We do not intend to repatriate non-borrowed funds held by our foreign subsidiaries in a manner that would trigger a tax liability; therefore, no provision has been made for income taxes that might be payable upon remittance of such earnings. The amount of unrecognized tax liability on these foreign earnings, net of expected foreign tax credits, is immaterial as of June 30, 2026.
Changes in unrecognized tax benefits for fiscal years 2026, 2025 and 2024 are as follows:
(in 000s)
Year ended June 30,202620252024
Balance, beginning of the year$266,548 $251,787 $240,063 
Additions based on tax positions related to prior years6,588 574 1,232 
Reductions based on tax positions related to prior years(6,803)— (4,604)
Additions based on tax positions related to the current year25,819 37,883 37,063 
Reductions based on tax positions related to the current year(5,419)— — 
Reductions related to the 2020 IRS examination closure(120,392)— — 
Reductions related to settlements with tax authorities(998)(379)(4,472)
Expiration of statute of limitations(29,182)(23,317)(17,495)
Balance, end of the year$136,161 $266,548 $251,787 
Included in the total gross unrecognized tax benefit ending balance as of June 30, 2026, 2025 and 2024 are $120.5 million, $232.8 million and $207.5 million respectively, which if recognized, would impact our effective tax rate. The decrease in unrecognized tax benefits during the year was primarily attributable to the closure of the IRS examination of the Company's 2020 U.S. federal income tax return and related carryback years, as well as the expiration of statute of limitations.
Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. During the fiscal years ended June 30, 2026, 2025, and 2024, the Company recorded a net interest benefit of $12.3 million, and net interest expense of $1.4 million and $14.1 million, respectively. The total penalties, if any, recorded for the same periods were immaterial. The total gross interest and penalties accrued as of June 30, 2026 and 2025 totaled $27.8 million and $44.7 million, respectively.
The amounts paid for income taxes (net of refunds received) were as follows:
(in 000s)
Year ended June 30,2026
Federal$150,564 
State and local11,458 
Foreign:
Ireland25,685 
Other14,427 
Total$202,134