PROVISION FOR INCOME TAXES |
6 Months Ended |
|---|---|
Jul. 31, 2026 | |
| PROVISION FOR INCOME TAXES | |
| PROVISION FOR INCOME TAXES | NOTE 11 – PROVISION FOR INCOME TAXES The Company’s effective income tax rate (“ETR”) for the six months ended July 31, 2026 and 2025 was 17.6% and 11.6%, respectively. The Company’s ETR for the six months ended July 31, 2026 and 2025 differed from the U.S. federal statutory rate of 21% primarily due to the favorable tax benefit resulting from stock option exercises and other share-based award settlements during the periods. For the six months ended July 31, 2026 and 2025, the amount of cash paid for income taxes, net of refunds received, was $15.1 million and $8.0 million, respectively. Valuation Allowance As of July 31, 2026, the Company maintained a valuation allowance of $10.3 million against certain deferred tax assets of its U.K. subsidiary, consisting primarily of net operating loss carryforwards. The Company assesses the realizability of these deferred tax assets each reporting period, considering all available positive and negative evidence, including its recent history of operating results in that jurisdiction, the expected reversal of taxable temporary differences, and projections of future taxable income. The Company’s U.K. operations have generated taxable income in recent periods. If that trend continues, it is reasonably possible that the Company could release all or a portion of this valuation allowance within the next 12 months, which would result in a material income tax benefit in the period of release. The amount and timing of any release will depend on the level of profitability achieved by the U.K. operations and the weight of the evidence available at the time of the assessment. Solar Energy Projects The Company holds equity investments in Solar Tax Credit (“STC”) investments. Primarily, the STC investments are structured as limited liability companies that invest in solar energy projects that are eligible to receive energy tax credits. As of July 31, 2026 and January 31, 2026, the investment accounts balances were $1.5 million and $1.7 million, respectively, which are included in other assets in the condensed consolidated balance sheets. As of July 31, 2026, the Company had no remaining cash investment commitments related to the STC investments. These investments are expected to provide positive overall returns over their expected lives. The Company has STC investments that qualify for the proportional amortization method (“PAM”). For these investments, the Company recognized income tax credits and other income tax benefits of less than $0.1 million during the three and six months ended July 31, 2026. For the three and six months ended July 31, 2025, the Company recognized $0.8 million and $1.5 million of income tax credits and other income tax benefits, respectively. For the three and six months ended July 31, 2026, the Company recorded amortization related to STC investments of less than $0.1 million. For the three and six months ended July 31, 2025, the Company recorded amortization related to STC investments of $0.7 million and $1.4 million, respectively. The amount of non-income tax related activity and other returns related to the STC investments that qualify for PAM was not material for the three and six months ended July 31, 2026 and 2025. For the three and six months ended July 31, 2026 and 2025, the Company’s share of activity from its STC investments that do not qualify for PAM was not material. |