Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
 6 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

 

Note 9. Income Taxes

 

At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter.

 

Our effective tax rate for the three and six months ended September 30, 2024 was (31.5)% and (20.5)%, respectively. The Company’s effective tax rate for the three and six months ended September 30, 2024 differed from the federal statutory tax rate of 21% primarily due to the valuation allowance recognized against deferred tax assets in the U.S., and permanent tax adjustment of intercompany interest expense in Mexico and Netherlands.

 

Judgment is required in determining whether deferred tax assets will be realized in full or in part. Management assesses the available positive and negative evidence on a jurisdictional basis to estimate if deferred tax assets will be recognized and when it is more likely than not that all or some deferred tax assets will not be realized, and a valuation allowance must be established. As of September 30, 2024, the Company continues to maintain a valuation allowance in the U.S.