Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.25.3
Income Taxes
 12 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Table 11.1: Components of Provision for Income Taxes
For the Year Ended September 30,
2025 2024 2023
(in thousands)
Current provision/(benefit):
Federal $ 96,446  $ 82,875  $ 34,033 
State and local 31,245  26,951  12,332 
Foreign 14,840  25,791  584 
Total current provision for income taxes 142,531  135,617  46,949 
Deferred tax expense/(benefit):
Federal (11,499) (16,347) (1,495)
State and local (3,861) (5,447) (673)
Foreign (1,356) (14,228) 3,720 
Total deferred tax expense/(benefit) (16,716) (36,022) 1,552 
Provision for income taxes $ 125,815  $ 99,595  $ 48,501 
Table 11.2: Components of Income before Provision for Income Taxes by Jurisdiction
For the Year Ended September 30,
2025 2024 2023
(in thousands)
Domestic $ 438,863  $ 377,594  $ 198,115 
Foreign 5,986  28,915  12,178 
Income before provision for income taxes $ 444,849  $ 406,509  $ 210,293 
Table 11.3: Reconciliation of Tax Expense at Statutory Rate to Actual Tax Expense
For the Year Ended September 30,
2025 2024 2023
Amount (1) Amount (1) Amount (1)
(dollars in thousands)
Tax expense at statutory rate $ 93,418  21.0  % $ 85,367  21.0  % $ 44,162  21.0  %
Increase/(decrease) due to:
State income taxes, net of federal benefit 24,203  5.4  % 21,582  5.3  % 11,501  5.5  %
Foreign taxation rate differentials 80  —  % 875  0.2  % (590) (0.3) %
Non-deductible expenses 4,147  0.9  % 2,444  0.6  % 2,889  1.4  %
Global intangible low taxed income 750  0.2  % 1,257  0.3  % 2,274  1.1  %
Valuation allowance - foreign jurisdictions —  —  % 734  0.2  % 2,010  1.0  %
Tax credits (6,384) (1.4) % (8,997) (2.2) % (6,645) (3.2) %
Divestiture-related charges 8,379  1.9  % —  —  % —  —  %
Excess tax expense/(benefits) from stock-based compensation (1,546) (0.3) % (1,656) (0.4) % (1,399) (0.7) %
Other 2,768  0.6  % (2,011) (0.5) % (5,701) (2.7) %
Income tax expense $ 125,815  28.3  % $ 99,595  24.5  % $ 48,501  23.1  %
(1)Percentage of income before provision for income taxes.
Table 11.4: Components of Deferred Tax Assets and Liabilities
As of September 30,
2025 2024
(in thousands)
Deferred tax assets/(liabilities):
Costs deductible in future periods $ 44,686  $ 42,856 
Deferred revenue 11,756  10,459 
Stock compensation 10,363  7,482 
Capital loss carryforward 204  7,872 
Net operating loss carryforwards 8,128  35,492 
Amortization of goodwill and intangibles (176,438) (183,406)
Capitalized software (19,820) (23,661)
Accounts receivable - unbilled —  (4,731)
Property and equipment 28  1,286 
Prepaid expenses (13,946) (11,696)
Financial instruments (1,013) (2,413)
Valuation allowance (967) (31,956)
Other (510) (1,901)
Net deferred tax liability $ (137,529) $ (154,317)
Our deferred tax assets and liabilities are held in various national and international jurisdictions and therefore may not be offset. Accordingly, our presentation of deferred taxes on our consolidated balance sheets is split between jurisdictions that show a net deferred tax asset and a net deferred tax liability.
Table 11.5: Deferred Tax Assets and Liabilities By Jurisdiction Positions
As of September 30,
2025 2024
(in thousands)
Total of tax jurisdictions with net deferred tax assets $ 11,491  $ 14,801 
Total of tax jurisdictions with net deferred tax liabilities (149,020) (169,118)
Net deferred tax liabilities $ (137,529) $ (154,317)
We consider our foreign earnings in excess of the earnings subject to the one-time transition tax to be indefinitely reinvested outside of the U.S. in accordance with the relevant accounting guidance for income taxes. Accordingly, no U.S. deferred taxes were recorded with respect to such earnings. As of September 30, 2025, our foreign subsidiaries held approximately $49.6 million of cash and cash equivalents in either U.S. Dollars or local currencies.
The provision for income taxes includes all provision to return adjustments included in the year recognized in the financial statements.
We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more likely than not" that the position will be sustained upon examination. The total amount of unrecognized tax benefits that, if recognized, would affect our annual effective income tax rate was $5.0 million and $3.4 million at September 30, 2025 and 2024, respectively.
We report interest and penalties as a component of income tax expense. We recognize and present uncertain tax positions on a gross basis (i.e., without regard to likely offsets for deferred tax assets, deductions, and/or credits that would result from payment of uncertain tax amounts).
Table 11.6: Reconciliation of the Beginning and Ending Amounts of Potential Tax Benefits
For the Year Ended September 30,
2025 2024 2023
(in thousands)
Balance at beginning of year $ 10,892  $ 6,233  $ 8,676 
Decreases for lapse of statute of limitations (300) —  (2,051)
Decreases for settlements with taxing authorities —  —  (692)
Increases for tax positions taken in current year 500  1,100  300 
Increases for tax positions taken in prior year 4,841  6,148  — 
Decreases for tax positions taken in prior year (33) (2,589) — 
Balance at end of year $ 15,900  $ 10,892  $ 6,233 
We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to federal income tax examinations for years before 2022 and to state and local income tax examinations by tax authorities for years before 2020. In international jurisdictions, similar rules apply to filed income tax returns, although the tax examination limitations and requirements may vary. We are no longer subject to audit by tax authorities for foreign jurisdictions for years prior to 2021.