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Income Taxes
 12 Months Ended
May 03, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income (loss) before provision (benefit) for income taxes consists of the following (in thousands):
Year Ended
May 3, 2025April 27, 2024April 29, 2023
United States$13,795 $8,611 $4,469 
International41,075 (31,356)(22,383)
$54,870 $(22,745)$(17,914)
The components of income tax expense (benefit) are summarized as follows (in thousands):
Year Ended
May 3, 2025April 27, 2024April 29, 2023
Current
Federal$— $2 $(24)
State12 3 2 
International2,253 1,484 762 
Total current tax expense 2,265 1,489 740 
Deferred
Federal— 3,092 (2,005)
State— 359 (218)
International423 684 116 
Total deferred tax expense (benefit) 423 4,135 (2,107)
Total tax expense (benefit)$2,687 $5,624 $(1,367)
The tax effects of significant items comprising the Company’s deferred taxes are as follows (in thousands):
May 3, 2025April 27, 2024
Deferred tax assets:
Accrued expense$1,904 $1,063 
Net operating losses28,557 4,443 
Research and development credits35,641 15,990 
Share compensation3,667 2,310 
Lease liability3,063 3,154 
Intangibles141 157 
Others11 — 
Total deferred tax assets72,984 27,117 
Deferred tax liabilities
Property and equipment basis(1,963)(1,774)
Right of use assets(2,890)(2,980)
Others— (8)
Total deferred tax liabilities(4,853)(4,762)
Valuation allowance(69,456)(23,258)
Net deferred taxes $(1,325)$(903)
A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. As of May 3, 2025, the Company recorded $69.5 million of valuation allowance. In fiscal year 2025, the valuation allowance increased by $46.2 million. The Company continues to maintain a full valuation allowance on its U.S. net deferred tax assets. The Company will continue to assess the future realization of its deferred tax assets in each applicable jurisdiction and adjust the valuation allowance accordingly. As of May 3, 2025, the Company had U.S. federal and state net operating loss carryforwards of approximately $130.7 million and $15.4 million, respectively. The U.S. federal net operating loss carryforwards can be carried forward indefinitely. The state net operating loss carryforwards will begin to expire in fiscal 2043. As of May 3, 2025, the Company had U.S. federal and state research credits of $29.2 million and $19.0 million, respectively. The federal research credits will begin to expire in 2039. The state research credits have no expiration date. As of May 3, 2025, the Company had no foreign tax credit carryover. Internal Revenue Code Section 382 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. In the event that we had a change of ownership, utilization of the net operating loss and tax credit carryforwards may be restricted.
A summary activity of the valuation allowance is as follows (in thousands):
May 3, 2025April 27, 2024
April 29, 2023
Beginning valuation allowance
$23,258 $9,306 $5,170 
Additions
46,197 13,952 4,136 
Ending valuation allowance
$69,456 $23,258 $9,306 
Foreign earnings may be subject to withholding taxes in local jurisdictions if they are distributed. The amount of cumulative undistributed earnings that are permanently reinvested that could be subject to withholding taxes were $47.1 million as of May 3, 2025. The Company intends to reinvest these earnings indefinitely.
The Company consists of a Cayman Islands parent holding company with various international and U.S. subsidiaries. The applicable statutory rate in Cayman Islands is zero for the Company for the years
ended May 3, 2025, April 27, 2024 and April 29, 2023. For purposes of the reconciliation between the provision for income taxes at the statutory rate and the effective tax rate, a U.S. statutory tax rate of 21% for the years ended May 3, 2025, April 27, 2024 and April 29, 2023 is applied as follows:
Year Ended
May 3, 2025April 27, 2024April 29, 2023
Statutory federal tax expense rate21 %21 %21 %
State tax, net of federal benefit— %(2)%1 %
Research tax credits(24)%20 %14 %
Share compensation(53)%24 %18 %
Other— %(1)%1 %
Foreign rate differential(12)%(34)%(32)%
Change in valuation allowance72 %(49)%(15)%
Withholding taxes1 %(4)%(1)%
Effective tax rate5 %(25)%8 %
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):
May 3, 2025April 27, 2024
Beginning gross unrecognized tax benefits $4,574 $2,865 
Additions for tax positions taken in the current year5,1961,988 
Subtractions for tax positions taken in the prior year(278)(210)
Lapses in statute of limitations(52)(69)
Ending gross unrecognized tax benefits $9,440 $4,574 
The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on such position’s technical merits as of the reporting date and only in an amount more likely than not to be sustained upon review by the tax authorities.
Included in the balance of unrecognized tax benefits as of May 3, 2025 and April 29, 2024 were potential benefits of $9.4 million and $4.6 million, respectively, which if recognized, would potentially affect the effective tax rate. If the unrecognized tax benefits were recognized, it would result in additional deferred tax assets, which are expected to require a full valuation allowance based on the Company’s current valuation allowance position. Unrecognized tax benefits are not expected to significantly increase or decrease within the next 12 months.
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. For the years ended May 3, 2025, April 29, 2024 and April 29, 2023, the Company’s current tax provision was not impacted by interest and penalties.
The Company files U.S. federal and state and non-U.S. income tax returns with varying statutes of limitations. The Company’s tax returns continue to remain subject to examination by U.S. federal authorities for the years ended April 30, 2022 through 2024 and by state authorities for the years ended April 30, 2021 through 2024. For the Company’s international subsidiaries, the tax years that remain open to examination vary based on the year that each entity began operating.