Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.22.1
Income Taxes
 9 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income TaxesThe Company's provision for income taxes as a percentage of pre-tax earnings (“effective tax rate”) is based on a current estimate of the annual effective income tax rate, adjusted to reflect the impact of discrete items. In accordance with ASC 740, Accounting for Income Taxes, jurisdictions forecasting losses that are not benefited due to valuation allowances are not included in our forecasted effective tax rate.
During the three and nine months ended December 31, 2021, a tax provision of $3,718 and $4,799, respectively, resulted in an effective tax rate of 34.5% and 23.7%, respectively. Differences between the tax provision and the statutory rate primarily relate to state income taxes, nontaxable adjustments to the AdColony and Fyber earn-outs, and tax deductions for stock compensation that exceed the book expense.
The Company recorded a net increase to deferred tax liabilities of $35,733 in the fiscal first quarter 2022 ended June 30, 2021, related to the AdColony and Fyber acquisitions. The increase in deferred tax liabilities primarily resulted from the revaluation of the acquired intangible assets. The Company’s valuation allowance increased by $13,667 for certain acquired deferred tax assets of Fyber GmbH due to a history of losses in the taxing jurisdiction. Net operating loss (NOL) carryforwards acquired in the AdColony and Fyber acquisitions were as follows:
AdColony
Jurisdiction NOLs Expiration Dates
U.S. Federal $60,924 2032 through 2037
U.S. Federal $47,704 Indefinite
State taxing jurisdictions $129,685 2026 through 2041
Fyber
Jurisdiction NOLs Expiration Dates
Germany $90,203 Indefinite
Israel $17,885 Indefinite
During the three and nine months ended December 31, 2020, a tax provision of $1,061 and $2,098 resulted in an effective tax rate of 6.8% and 7.8%, respectively. Differences in the tax provision and statutory rate are primarily due to changes in the valuation allowance.