Income taxes |
6 Months Ended |
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Jul. 31, 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 and six months ended July 31, 2026, the Company recorded tax expense of $1,321 and $3,081, respectively, compared to a tax benefit of $1,217 and $482, respectively, for the corresponding periods in the prior year. The Company’s tax expense was 38.7% and 12.9% of income (loss) before income taxes for the six months ended July 31, 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 and six months ended July 31, 2026, the Company recorded discrete tax expense of $1,254 and $1,936, respectively, related to AccessOne acquisition related measurement period adjustments, employee stock compensation shortfall and prior year return to provision adjustments. The most significant discrete item is related to AccessOne measurement period adjustments of $469 and $1,020, respectively, for the three and six months ended July 31, 2026. 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. 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 July 31, 2026 and January 31, 2026.
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