Company: CTLPP
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023882
Chunk: 78

Company: CANTALOUPE, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 78
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 2025, respectively, and was based primarily on minimum state tax obligations.The Company assesses the realizability of deferred tax assets by considering both positive and negative evidence including forecasts of future taxable income. As of March 31, 2025, the Company concluded that it is more likely than not a portion of its deferred tax assets, primarily related to federal and state net operating loss carryforwards, will be realized. The Company therefore released $42.2 million of its valuation allowance associated with U.S. federal and certain state deferred tax assets. These U.S. federal and state deferred tax assets were created primarily as a result of net operating loss carryforwards from historical business operations. Key factors supporting the conclusion to release a portion of the valuation allowance in the third quarter included current fiscal year to date profitability, sustained cumulative profitability over the last three years and reasonable expectations of future period profitability both in the near and long term.  These factors, amongst others, provided adequate positive evidence in the third quarter to support the conclusion that sufficient taxable income will be generated in the future and a portion of the valuation allowance is no longer warranted. The Company continues to maintain a valuation allowance associated with certain state net operating loss carryforwards due to state specific net operating loss utilization limitation rules.For the three and nine months ended March 31, 2025, the Company recorded an income tax benefit of $41.9 million and $41.3 million, respectively. The income tax benefit for the three and nine months ended March 31, 2025, relates to the $42.2 million valuation allowance release, offset by state income and deferred taxes related to goodwill amortization for tax purposes.

22

For the three and nine months ended March 31, 2024, the Company recorded an income tax provision of $0.1 million and $0.2 million, respectively. The provisions for three and nine months ended March 31, 2024 primarily relates to state income and deferred taxes related to goodwill amortization for tax purposes. The provision was based upon actual income before income taxes for the nine months ended March 31, 2024, as this provided a more reliable estimate of the income tax provision than an estimated annual effective income tax rate.The Company had a total unrecognized income tax benefit of $0.7 million and $0.7 million as of March 31, 2025 and 2024, respectively.

13. EARNINGS PER SHARE CALCULATION

Basic earnings per share is