Income Taxes

9 Months Ended

Sep. 29, 2025

Income Tax Disclosure [Abstract]

Income Taxes

(8) Income Taxes

The Company’s effective tax rate is impacted by the mix of foreign and U.S. income, tax rates in China and Hong Kong, the U.S. federal income tax rate, apportioned state income tax rates, the generation of credits, and deductions available to the Company as well as changes in valuation allowances and certain non-deductible items. No tax benefit was recorded on the losses incurred in certain foreign jurisdictions as a result of corresponding increases in the valuation allowances in these jurisdictions.

During the quarter and three quarters ended September 29, 2025, the Company’s effective tax rate was impacted by a net discrete benefit of $37 and $3,321, respectively, and the One Big Beautiful Bill Act (OBBBA) tax impact, as discussed below. The net discrete benefit was primarily related to the deduction of stock‑based compensation, partially offset by accruals for potential assessments and uncertain tax positions in various jurisdictions.

The Company has various foreign subsidiaries formed or acquired to conduct or support its business outside the U.S. The Company expects its earnings attributable to most foreign subsidiaries may be repatriated back to the U.S. and so a deferred tax liability has been recorded for foreign withholding taxes and the estimated federal/state tax impact on any repatriation. For those other companies with earnings currently being reinvested outside of the U.S., no deferred tax liability on undistributed earnings has been recorded.

OBBBA

On July 4, 2025, the OBBBA was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The OBBBA includes provisions such as the permanent extension of certain provisions of the Tax Cuts and Jobs Act that were set to expire at the end of 2025 and modifications to the international tax framework. Because Topic 740 requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted, the Company’s tax provisions for the quarter and three quarters ended September 29, 2025 incorporated the estimated effects of the tax law changes including the accelerated depreciation of qualified property and the immediate expensing of U.S. research and development expenditure paid or incurred for tax years beginning after December 31, 2024. The Company recorded a $5,186 benefit from the decrease in the U.S. valuation allowance resulting from the OBBBA impact to its deferred tax assets.