Income Taxes

3 Months Ended

Oct. 02, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded an income tax provision of $220 and an income tax benefit of $4,021 on income before income taxes of $13,308 and losses before income taxes of $16,536 for the first quarters ended October 2, 2026 and September 26, 2025, respectively.

For the first quarter ended October 2, 2026, the Company calculated the U.S. income tax provision using the discrete method as though the three-month period was the annual period as this was more appropriate given the facts and circumstances. The Company determined that the application of the estimated annual effective tax rate (“AETR”) method, generally required by FASB ASC 740, Income Taxes, is impractical given that normal deviations in the projected close to break-even pre-tax net income (loss) could result in a disproportionate and unreliable effective tax rate under the AETR method.

During the first quarters ended October 2, 2026 and September 26, 2025, the Company recognized tax benefits of $5,437 and $1,120 related to stock compensation windfalls, respectively.

The effective tax rate for the first quarters ended October 2, 2026 and September 26, 2025 differed from the federal statutory rate primarily due to stock compensation windfalls, non-deductible compensation, state taxes, and federal and state research and development credits.

The Company continues to maintain a valuation allowance on all of its foreign net operating loss carryforwards and the majority of its state research and developmental tax credit carryforwards. Based on forecasted taxable income and the scheduled reversal of the remaining deferred tax assets, the Company believes it is more likely than not that all other deferred tax assets will be recognized.