Income Taxes

9 Months Ended

Mar. 29, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded an income tax benefit of $12,643 and $10,446 on a loss before income taxes of $57,217 and $5,290 for the third quarters ended March 29, 2024 and March 31, 2023, respectively. The Company recorded an income tax benefit of $43,811 and $13,619 on a loss before income taxes of $170,674 and $33,718 for the nine months ended March 29, 2024 and March 31, 2023, respectively.

During the third quarter and nine months ended March 29, 2024, the Company recognized a tax provision of $772 and $2,419 related to stock compensation shortfalls, respectively. During the third quarter and nine months ended March 31, 2023 the Company recognized a tax (benefit) provision of $(91) and $1,655 related to stock compensation shortfalls, respectively. During the third quarter ended March 31, 2023, the Company concluded its income tax audit with the Internal Revenue Service for fiscal years 2016 through 2018 and subsequently recognized a tax benefit of $1,335 related to a release of income tax reserves for unrecognized income tax benefits.

The effective tax rate for the third quarters and nine months ended March 29, 2024 and March 31, 2023 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation shortfalls and state taxes. The effective tax rate for the third quarter and nine months ended March 31, 2023 also differed from the federal statutory rate due to the release of income tax reserves for previously unrecognized income tax benefits.

The Tax Cuts and Jobs Act of 2017 requires companies to capitalize and amortize domestic research and development expenditures over five years for tax purposes, and foreign research and development expenditures over fifteen years for tax purposes, effective for the Company beginning in the fiscal year ended June 30, 2023. Based on guidance issued during the year, the Company refined the amount of research and development expenditures capitalized and recorded certain current and deferred tax adjustments in the third quarter ended March 29, 2024. The Company will continue to monitor guidance and any proposed regulations and adjust the estimates as necessary.