Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
3 Months Ended
Jun. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three months ended June 30, 2021 was 32% compared to 36% for the three months ended June 30, 2020.
Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at June 30, 2021, a valuation allowance continues to be recorded against certain deferred tax assets based upon the conclusion that it was more likely than not that these assets would not be realized. The valuation allowance at June 30, 2021 relates primarily to accrued interest, capitalized development costs, and foreign tax credits. Given the Company’s current earnings and anticipated future earnings, it is reasonably possible that within the next twelve months sufficient positive evidence may become available to allow the Company to conclude that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets. However, the exact timing and amount of the valuation allowance release are subject to change based on the Company’s growth and profitability.