Company: CVLT
Filing Date: 2025-05-05
Form Type: 10-K
Source: 0001169561-25-000034
Chunk: 102

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-05-05
Form: 10-K
Item: Item 8
Chunk 102
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.9 %Enacted tax law changes(2.8)%(0.4)%3.6 %Stock-based compensation(13.4)%6.7 %41.6 %Other differences, net(2.8)%1.9 %(3.7)%Effective income tax expense (benefit)6.1 %(102.0)%132.9 %

70

Commvault Systems, Inc. Notes to Consolidated Financial Statements — (Continued) (In thousands, except per share data) 

The significant components of our deferred tax assets and liabilities are as follows: March 31, 20252024Deferred tax assets:Net operating losses$6,873 $6,533 Stock-based compensation5,729 5,338 Deferred revenue33,125 29,748 Tax credits26,206 28,020 Accrued expenses1,576 1,775 Allowance for doubtful accounts and other reserves1,117 928 R&D Capitalization under IRC § 17483,826 58,867 Depreciation and amortization9,074 9,305 Other, DTA6,162 3,180 Less: valuation allowance(23,550)(18,140)Total deferred tax assets150,138 125,554 Deferred tax liabilities: Withholding taxes(289)(1,091)Deferred commissions(16,011)(12,573)Other, DTL(1,844)(2,426)Total deferred tax liabilities(18,144)(16,090)Net deferred tax asset$131,994 $109,464 Net deferred tax assets arise due to the recognition of income and expense items for tax purposes, which differ from those used for financial statement purposes. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. At March 31, 2025 and 2024, we recorded valuation allowances of $23,550 and $18,140, respectively, which reflect uncertainties around our ability to generate sufficient income in certain jurisdictions to utilize our net deferred tax assets which primarily relate to Federal Foreign Tax Credits and NJ State R&D Credits. We believe it is more likely than not that we will have sufficient taxable income to realize our remaining deferred tax assets.Beginning on March 31, 2023, for federal income tax purposes, we are required to capitalize and amortize domestic research and development