Income Taxes

12 Months Ended

Oct. 02, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

8.    INCOME TAXES

Income before income taxes consists of the following components (in millions):

	Fiscal Years Ended
	October 2, 2026		October 3, 2025		September 27, 2024
United States	$	(248.4)	$	133.5	$	1.9
Foreign	462.1		393.2		634.5
Income before income taxes	$	213.7	$	526.7	$	636.4

The provision for income taxes consists of the following components (in millions):

	Fiscal Years Ended
	October 2, 2026		October 3, 2025		September 27, 2024
Current tax expense:
Federal	$	30.2	$	45.3	$	79.0
State	0.1		0.1		0.2
Foreign	101.3		59.5		60.8
	131.6		104.9		140.0
Deferred tax expense (benefit):
Federal	(74.1)		(80.8)		(120.5)
State	(0.2)		—		(0.5)
Foreign	(15.7)		25.5		21.4
	(90.0)		(55.3)		(99.6)
Provision for income taxes	$	41.6	$	49.6	$	40.4

The actual income tax expense is different than that which would have been computed by applying the federal statutory tax rate to income before income taxes. A reconciliation of income tax expense as computed at the United States federal statutory income tax rate to the provision for income tax expense, pursuant to the disclosure requirements of ASU 2023-09, is as follows (in millions, except percentages):

	Fiscal Year Ended
	October 2, 2026
	Amount		Percent
Tax expense at United States statutory rate	$	44.9	21.0	%
State and local income tax, net of federal (1)	(0.1)		(0.1)
Foreign tax effects:
Singapore
Foreign tax rate difference	(19.7)		(9.2)
Withholding tax	12.4		5.8
Mexico
Foreign tax rate difference	7.2		3.4
Prior adjustment	(5.5)		(2.6)
Other adjustments	1.4		0.7
Japan
Local and other taxes	9.7		4.6
Return to provision	2.8		1.3
Other adjustments	(6.1)		(2.8)
Other foreign jurisdictions	(1.3)		(0.6)
Effect of cross-border tax laws:
Global intangible low-taxed income	12.8		6.0
Foreign-derived intangible income	(19.4)		(9.1)
Other	0.7		0.3
Tax credits:
R&D	(34.5)		(16.1)
Foreign tax credit	(12.5)		(5.8)
Changes in valuation allowances	0.5		0.2
Nontaxable or non-deductible items:
Stock-based compensation	18.4		8.6
162(m) compensation	6.7		3.1
Transaction cost	15.7		7.3
Other	0.6		0.3
Changes in unrecognized tax benefits	21.9		10.2
Other adjustments	(15.0)		(7.0)
Provision for income taxes	$	41.6	19.5	%

(1) Primarily consisting of taxes attributable to California, Florida, and Texas.

	Fiscal Years Ended
	October 3, 2025		September 27, 2024
Tax expense at United States statutory rate	$	110.6	$	133.6
Foreign tax rate difference	(22.0)		(84.7)
Effect of stock compensation	10.2		11.3
Research and development credits	(44.5)		(28.7)
Change in tax reserve	(1.4)		11.1
Global Intangible Low-Taxed Income	4.0		18.1
Foreign Derived Intangible Income	(44.7)		(49.3)
Section 162(m) limitation	15.8		10.6
Remeasurement of concessionary tax rate	19.0		—
Other, net	2.6		18.4
Provision for income taxes	$	49.6	$	40.4

The following table presents cash paid for income taxes, net of refunds received, by jurisdictions, pursuant to the disclosure requirements of ASU 2023-09 (in millions):

	Fiscal Year Ended
	October 2, 2026
Federal	$	56.3
State and local	0.2
Foreign
Singapore	46.4
Mexico	23.7
Japan	12.5
Other foreign jurisdiction	1.2
Total	$	140.3

The Company does not have any outstanding repatriation tax within the Consolidated Balance Sheets as of October 2, 2026. The Company had accrued $56.3 million of the deemed repatriation tax in short-term liabilities within the Consolidated Balance Sheets as of October 3, 2025.

The Company operates under a tax holiday in Singapore, which is effective through September 30, 2030. The current tax holiday is conditioned upon the Company’s compliance with certain conditions, including employment and investment thresholds in Singapore. The impact of the tax holiday decreased Singapore taxes owed by $6.6 million, $6.6 million, and $67.7 million during fiscal 2026, fiscal 2025, and fiscal 2024, respectively, which resulted in tax benefits of $0.04, $0.04, and $0.42 of diluted earnings per share, respectively.

Deferred income tax assets and liabilities consist of the tax effects of temporary differences related to the following (in millions):

	As of
	October 2, 2026		October 3, 2025
Deferred tax assets:
Inventory	$	37.2	$	24.4
Accrued compensation and benefits	20.3		18.6
Product returns, allowances, and warranty	16.7		5.1
Share-based compensation	32.3		32.4
Net operating loss carry forwards	6.2		6.4
Tax credits	198.1		179.6
Lease liabilities	40.5		48.9
R&D capitalization	316.7		257.6
Intangible assets	35.6		43.6
Other, net	9.2		15.8
Deferred tax assets	712.8		632.4
Less valuation allowance	(204.3)		(186.8)
Net deferred tax assets	508.5		445.6
Deferred tax liabilities:
Property, plant, and equipment	(28.8)		(48.0)
Right of use assets	(41.6)		(50.1)
Net deferred tax liabilities	(70.4)		(98.1)
Total net deferred tax assets	$	438.1	$	347.5

The deferred tax assets and liabilities based on tax jurisdictions are presented on the Consolidated Balance Sheets as follows (in millions):

	As of
	October 2, 2026		October 3, 2025
Deferred tax assets	$	468.9	$	375.6
Deferred tax liabilities	(30.8)		(28.1)
Net deferred tax assets	$	438.1	$	347.5

In accordance with GAAP, management has determined that it is more likely than not that a portion of the Company’s historic and current year income tax benefits will not be realized. As of October 2, 2026, the Company has a valuation allowance of $204.3 million. This valuation allowance is comprised of $189.1 million related to United States federal and state tax attributes and $15.2 million related to foreign deferred tax assets. The United States tax credits relate primarily to California research tax credits that can be carried forward indefinitely, for which the Company has provided a full valuation allowance. The Company does not anticipate sufficient taxable income or tax liability to utilize the United States and foreign credits. If these benefits are recognized in a future period, the valuation allowance on deferred tax assets will be reversed and up to a $204.3 million income tax benefit may be recognized. The Company believes that future reversals of taxable temporary differences, and its forecast of continued earnings in its domestic and foreign jurisdictions, support its decision to not record a full valuation allowance on other deferred tax assets. The Company will continue to assess its valuation allowance in future periods. The net valuation allowance increased by $17.5 million in fiscal 2026 primarily related to increases in federal and state tax credit carryforwards as well as foreign tax attributes.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions):

	Unrecognized Tax Benefits
Balance as of October 3, 2025	$	64.2
Increases based on positions related to prior years	28.7
Decreases based on positions related to prior years	(6.3)
Increases based on positions related to current year	15.7
Decreases based on expirations of statute of limitations	(5.5)
Decreases based on settlements with taxing authorities	(13.6)
Balance as of October 2, 2026	$	83.2

Of the total unrecognized tax benefits as of October 2, 2026, $65.5 million would impact the effective tax rate, if recognized. The remaining unrecognized tax benefits would not impact the effective tax rate, if recognized, due to the Company’s valuation allowance on certain tax attributes.

The Company recognized interest and penalties related to unrecognized tax benefits within income taxes in the accompanying Consolidated Statements of Operations. During fiscal 2026, fiscal 2025, and fiscal 2024, the Company recognized $11.2 million, $2.5 million, and $5.5 million, respectively, of interest or penalties related to unrecognized tax benefits. Accrued interest and penalties of $13.9 million and $9.9 million related to uncertain tax positions have been included in long-term tax liabilities within the Consolidated Balance Sheets as of October 2, 2026, and October 3, 2025, respectively.

The Company is currently under examination by the Internal Revenue Service for fiscal 2024 and by the California Franchise Tax Board for fiscal 2022 and fiscal 2023. The Company is in the early stages of evaluating the scope and potential impact of these examinations.

The Company’s major tax jurisdictions as of October 2, 2026 are the United States, California, Mexico, Japan, and Singapore. For the United States, the Company has open tax years dating back to fiscal 2023. For California, the Company has open tax years dating back to fiscal 2008. For Mexico, the Company has open tax years dating back to fiscal 2019. For Japan, the Company has open tax years dating back to fiscal 2019. For Singapore, the Company has open tax years dating back to fiscal 2021. The Company is subject to audit examinations by the respective taxing authorities on a periodic basis, of which the results could impact its financial position, results of operations, or cash flows.

In August 2022, the U.S. government enacted the Inflation Reduction Act, which imposes a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income exceeding $1.0 billion. The Company was subject to the provisions of CAMT at the beginning of fiscal 2024. CAMT did not have an impact on the Company’s consolidated financial statements during fiscal 2026, fiscal 2025, and fiscal 2024.

In December 2021, the Organization for Economic Co-operation and Development’s (“OECD”) Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) released Global Anti-Base Erosion (“GloBE”) rules under Pillar Two. Many countries have implemented laws based on Pillar Two, which was effective for the Company beginning in fiscal 2025. In January 2026, the OECD Inclusive Framework on BEPS released significant administrative guidance including the side-by-side safe harbor package that will apply to U.S. multinational enterprise groups. Pillar Two did not have a material impact on the Company’s consolidated financial statements during fiscal 2026 and fiscal 2025. The Company continues to evaluate the impact of proposed and enacted legislative changes as new guidance becomes available.

In July 2025, the U.S. government enacted the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains numerous provisions, including the permanent extension or restoration of certain expiring corporate income tax provisions, originally introduced by the Tax Cuts and Jobs Act of 2017, and incremental modifications to the international tax framework. The OBBBA did not have a material impact on the Company’s consolidated estimated annualized effective tax rate during fiscal 2026.