v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The U.S. and foreign components of income (loss) before income taxes for the years ended June 30, 2026, 2025, and 2024 are as follows (in thousands):
June 30, 2026June 30, 2025June 30, 2024
U.S.$478,545 $42,949 $(518,093)
Foreign14,182 18,515 2,566 
Total income (loss) before income taxes$492,727 $61,464 $(515,527)

Income tax expense (benefit) for the years ended June 30, 2026, 2025, and 2024 is summarized as follows (in thousands):
June 30, 2026June 30, 2025June 30, 2024
Current
Federal$241 $1,565 $— 
State13,266 176 1,442 
Foreign4,643 425 392 
Total current expense$18,150 $2,166 $1,834 
Deferred
Federal$(1,018,538)$139 $139 
State(441,455)(212)333 
Foreign4,776 7,186 (76)
Total deferred (benefit) expense(1,455,217)7,113 396 
Income tax (benefit) expense$(1,437,067)$9,279 $2,230 
The income tax benefit for the year ended June 30, 2026 was primarily attributable to a change in our assessment of the realizability of our domestic deferred tax assets. The income tax expense for the year ended June 30, 2025 was primarily attributable to U.S. federal and foreign income taxes. The income tax expense for the year ended June 30, 2024 was primarily attributable to various U.S. state and foreign income taxes and the tax amortization of certain intangible assets.

The table below presents a reconciliation of the U.S. statutory federal income tax rate to our effective tax rate subsequent to the adoption of ASU 2023-09 for the year ended June 30, 2026 (in thousands):

June 30, 2026
AmountPercent
U.S. statutory federal income tax rate$103,414 21.0 %
State and local income taxes, net of federal tax effect (1)
(547,531)(111.2)%
Other foreign tax effects6,875 1.4 %
Nontaxable or non-deductible items:
    Stock-based compensation (2)
(94,903)(19.3)%
    Non-deductible compensation expense (3)
18,643 3.8 %
      Other1,350 0.3 %
Tax benefit related to tax credits (4)
(21,021)(4.3)%
Change in unrecognized tax benefits9,443 1.9 %
Change in valuation allowance(913,659)(185.5)%
Other adjustments322 0.2 %
   Income tax benefit and effective income tax rate(1,437,067)(291.7)%
(1)Includes the state tax effect of the valuation allowance release. State and local taxes in California and New York made up the majority (greater than 50%) of the tax effect in this category.
(2)Primarily reflects excess tax benefits recognized upon the vesting or exercise of stock-based awards, partially offset by the tax effects of nondeductible stock-based compensation expense.
(3)Reflects the impact of applying Section 162(m), which prohibits deduction of certain excess employee compensation to certain “covered employees”.
(4)Primarily relates to research and development tax credits.

As previously disclosed for the years ended June 30, 2025 and 2024, prior to the adoption of ASU 2023-09, the following is a reconciliation of the U.S. statutory federal income tax rate to our effective tax rate:

June 30, 2025June 30, 2024
U.S. statutory federal income tax rate21.0 %21.0 %
State and local income taxes, net of federal tax benefit6.8 %8.9 %
Foreign rate differential1.7 %(0.1)%
California state tax law change26.3 %— %
Stock-based compensation(228.9)%(5.1)%
Non-deductible compensation expense70.0 %(5.6)%
Tax benefit related to tax credits, net(67.5)%4.3 %
Change in unrecognized tax benefits27.0 %(1.7)%
Change in tax status of a foreign subsidiary14.6 %— %
Other0.8 %— %
Change in valuation allowance143.0 %(22.1)%
Effective income tax rate14.8 %(0.4)%
Significant components of deferred tax assets and liabilities are as follows (in thousands):
June 30, 2026June 30, 2025
Net operating loss carryforwards$1,022,126 $1,034,551 
Allowance for credit losses161,002 116,570 
Stock-based compensation14,694 16,789 
Stock warrants194,424 142,143 
Operating lease liabilities7,658 8,386 
Capitalized R&E including internally developed software— 62,325 
Tax credit carryforwards119,074 108,026 
Other11,624 11,685 
Total deferred tax assets$1,530,602 $1,500,475 
Right-of-use lease assets(6,030)(5,021)
Capitalized R&E including internally developed software(40,895)— 
Other(1,522)(3,686)
Total deferred tax liabilities$(48,447)$(8,707)
Valuation allowance(15,119)(1,479,926)
Deferred tax assets (liabilities), net of valuation allowance$1,467,036 $11,842 

During the fourth quarter of the year ended June 30, 2026, we concluded that sufficient positive evidence was available to support the determination that it is more likely than not that a significant portion of our domestic deferred tax assets will be realized. Accordingly, we reduced the valuation allowance by $1.5 billion. In reaching this conclusion, we evaluated all available positive and negative evidence and gave significant weight to objectively verifiable evidence, including our achievement of a cumulative U.S. income position over the three-year period, measured using pretax book income adjusted for permanent book-to-tax differences, and our continued U.S. profitability in recent periods. We also considered anticipated future taxable income.

We continue to maintain a valuation allowance of $15.1 million against certain foreign net deferred tax assets and certain domestic capital loss deferred tax assets for which it is not more likely than not that the related tax benefits will be realized.

As of June 30, 2026, we had pretax U.S. federal net operating loss ("NOL") carryforwards of approximately $3.2 billion, state NOL carryforwards of $4.6 billion, and U.K. NOL carryforwards of $44.0 million. If not utilized, certain U.S. federal and state NOL carryforwards will begin to expire in 2027, whereas others, including foreign NOL carryforwards, have an unlimited carryforward period. Additionally, as of June 30, 2026, we also had U.S. federal and state research and development tax credit carryforwards of $150.1 million and $70.6 million, respectively. The U.S. federal research and development tax credit carryforwards will begin to expire in 2041 while the state research and development tax credits may be carried forward indefinitely.

Of the above NOL carryforwards, approximately $23.0 million pretax U.S. federal NOL carryforwards and $33.9 million state NOL carryforwards are from domestic acquisitions, which may be subject to an annual utilization limitation under Internal Revenue Code Section 382.

The future utilization of all domestic NOL and tax credit carryforwards may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383 and similar state provisions, due to ownership changes that may have occurred previously or that could occur in the future. Any limitation may result in the expiration of all or a portion of the NOL carryforwards before utilization.
For the year ended June 30, 2026, income taxes paid on a cash basis consisted of the following (in thousands):

June 30, 2026
Federal income taxes paid$910 
State and local income taxes paid:
     Pennsylvania915 
     Virginia673 
     Florida355 
     All other1,387 
     Total state and local income taxes paid$3,330 
Foreign income taxes paid:
     Canada1,647 
     Poland395 
     Spain336 
     All other— 
     Total foreign income taxes paid2,378 
Total income taxes paid, net$6,618 

The Company accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes. The following table provides a reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (in thousands):
June 30, 2026June 30, 2025June 30, 2024
Beginning balance$79,248 $61,514 $51,850 
Gross increase for tax positions related to the current year12,556 18,543 8,931 
Gross increase for tax positions related to prior years1,208 — 733 
Gross decrease for tax positions related to prior years— (809)— 
Ending balance$93,012 $79,248 $61,514 

As of June 30, 2026, the Company had $93.0 million of unrecognized tax benefits related to uncertain tax positions that, if recognized, would reduce its income tax expense by $86.7 million.

Interest and penalties on unrecognized tax benefits are recorded as a component of tax expense. During the years ended June 30, 2026, 2025, and 2024, we did not recognize accrued interest and penalties related to unrecognized tax benefits.

We file U.S. federal and state income tax returns as well as various foreign income tax returns with varying statutes of limitation. With respect to the Company’s major tax filings, all tax years remain open to examination due to the carryover of unused net operating losses.