INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

20.INCOME TAXES:

The components of income before income taxes are as follows (in thousands):

	Year ended December 31,
	2024		2023		2022
United States	$	72,823	$	71,514	$	77,205
Foreign		199,305		173,657		191,025
Income before income taxes	$	272,128	$	245,171	$	268,230

The components of the income tax expense are as follows (in thousands):

	Year ended December 31,
	2024			2023			2022
Current income tax (expense) benefit:
Federal	$	(34,199	)	$	(15,848	)	$	(51,980	)
State		(3,452	)		(3,048	)		(1,833	)
Foreign		(31,515	)		(27,030	)		(31,302	)
		(69,166	)		(45,926	)		(85,115	)
Deferred income tax (expense) benefit:
Federal		16,799			(460	)		25,916
State		2,995			3,936			1,216
Foreign		(677	)		290			(186	)
		19,117			3,766			26,946
Income tax expense	$	(50,049	)	$	(42,160	)	$	(58,169	)

Reconciliation of the statutory U.S. federal tax rate to the Company's effective tax rate is as follows:

	Year ended December 31,
	2024			2023			2022
Statutory U.S. federal income tax rate		21.0	%		21.0	%		21.0	%
Effect of foreign operations		(4.0	)		(4.0	)		(4.9	)
U.S. International Tax (Sub F, GILTI, FDII)		2.3			2.9			4.2
Research tax credits		(2.8	)		(2.4	)		(1.9	)
Redetermination of foreign tax credit utilization		—			(2.0	)		—
Nondeductible employee compensation		1.6			1.7			1.9
State income taxes, net of federal benefit		0.2			(0.2	)		0.1
Other		0.1			0.2			1.3
Effective tax rate		18.4	%		17.2	%		21.7	%

The following table summarizes Company tax credit carry forwards for tax return purposes as of December 31, 2024 (in thousands):

	Tax Benefit		Expiration Date
Tax credit carry forwards:
State research tax credits	$	9,356	2035-2039
Foreign tax credits	$	186	2032
Total credit carry forwards	$	9,542

Significant components of the Company's net deferred tax assets and liabilities are as follows (in thousands):

	December 31,
	2024			2023
Deferred tax asset:
Capitalized research expenditures	$	55,277		$	39,459
Retirement plan		13,633			12,555
Tax credit carry forwards		9,542			8,938
Accruals and reserves		6,988			7,180
Lease liabilities		6,073			6,671
Stock-based compensation		1,475			1,498
Deferred revenue		655			1,741
Other		2,783			1,362
		96,426			79,404
Valuation allowance		(10,167	)		(9,551	)
Deferred tax assets		86,259			69,853
Deferred tax liability:
Lease Assets		(5,297	)		(6,302	)
Acquisition goodwill		(1,854	)		(1,549	)
Other		(788	)		(2,894	)
Deferred tax liabilities		(7,939	)		(10,745	)
Net deferred tax assets	$	78,320		$	59,108

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the Company's ability to generate future taxable income to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credits. As part of its assessment, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. During the year ended December 31, 2024, based on our previous earnings history, a current evaluation of expected future taxable income and other evidence, we determined to retain the valuation allowance that relates to New Jersey research and development credits and unrealized loss on investments. In addition, a portion of the investment loss was realized resulting in a capital loss carryforward that is not more likely than not to be used within the carryforward period. As such, the company provided a valuation allowance against the capital loss. There are no indicators against the realizability of the remaining net deferred tax assets.

On December 27, 2018, the Korean Supreme Court, citing prior cases, held that only royalties paid with respect to Korean registered patents are considered Korean source income and subject to Korean withholding tax under the applicable law and interpretation of the Korea-U.S. Tax Treaty. The Company has incurred Korean withholding tax of $14.9 million for each of the years ended December 31, 2018, through December 31, 2022. Based on the Korean Supreme Court decision, a tax refund request on behalf of the Company was or will be filed with the Korean National Tax Service (KNTS) for the entire period from January 1, 2018, to December 31, 2022. The Company received a formal rejection from the KNTS; and in May 2022 filed an appeal with the Korean Tax Tribunal. On December 18, 2023, the Company received a formal rejection from the Tax Tribunal. Anticipating the rejection of the appeal, in September 2023 the Company filed a petition to the District Court. The District Court is gathering information and has scheduled another hearing for March 2025. The Company has been advised by a prominent Korean law firm that there is a more-likely-than-not chance of success. As a result, the Company has recorded a long-term asset of $52.9 million and $60.1 million as of December 31, 2024 and 2023, respectively for the receipt of the Korean withholding tax. The Company also recorded foreign exchange loss of $7.2 million and $732,000 for the years ended December 31, 2024 and 2023, respectively, due to the fluctuation of the Korean Won to the U.S. Dollar and resulting remeasurement of this Won-denominated receivable. The Company will amend U.S. federal tax returns for the 2018 to 2022 years when the anticipated refund from KNTS is received to offset the additional tax liability. The Company has recorded a long-term liability of $15.7 million as of December 31, 2024 and 2023, for the estimated amounts due to the U.S. federal government based on the amendment of the Company's U.S. tax returns, indicating that lower withholding amounts were required.

The Company is not subject to examinations by the federal tax authority for the years prior to 2021. The Company's state and foreign tax returns are open for a period of generally three to four years. The Company closed an audit of the tax years 2019 and 2020 with the state of California, which resulted in no change to the return as filed.

The above estimates may change in the future and upon settlement.