Income Taxes

12 Months Ended

Mar. 29, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income (loss) before income taxes consisted of (in thousands):

	Fiscal Years Ended
	March 29, 2025		March 30, 2024		March 25, 2023
U.S.	$	538	$	(10,343)	$	(141,670)
Non-U.S.	444,376		374,279		396,409
	$	444,914	$	363,936	$	254,739

The provision (benefit) for income taxes consists of (in thousands):

	Fiscal Years Ended
	March 29, 2025		March 30, 2024		March 25, 2023
Current:
U.S.	$	39,932	$	42,184	$	60,603
Non-U.S.	73,573		60,615		52,023
Total current tax provision	$	113,505	$	102,799	$	112,626
Deferred:
U.S.	1,575		(5,178)		(28,529)
Non-U.S.	(1,673)		(8,257)		(6,061)
Total deferred tax provision	(98)		(13,435)		(34,590)
Total tax provision	$	113,407	$	89,364	$	78,036

The effective income tax rates differ from the rates computed by applying the statutory federal rate to pretax income as follows (in percentages):

	Fiscal Years Ended
	March 29, 2025	March 30, 2024	March 25, 2023
U.S. federal statutory rate	21.0	21.0	21.0
Foreign income taxed at different rates	(3.5)	(7.1)	(14.4)
Stock-based compensation	(1.7)	(0.1)	(0.3)
Foreign-derived intangible income deduction	—	(0.2)	—
GILTI and Subpart F income	14.1	14.6	30.6
Foreign tax credits	(5.6)	(4.1)	(7.7)
Change in valuation allowance	—	—	0.2
Release of prior year unrecognized tax benefits	—	(0.2)	—
Interest related to unrecognized tax benefits	0.6	0.7	0.7
U.S. research and development credit	—	(0.7)	—
Other	0.6	0.7	0.5
Effective tax rate	25.5	24.6	30.6

Under the legislation commonly referred to as the Tax Cuts and Jobs Act ("Tax Act"), research and development expenses incurred for tax years beginning after December 31, 2021 must be capitalized and amortized over five or fifteen years for tax purposes, depending on where the research activities are conducted. Because the Company elected to treat global intangible low-taxed income ("GILTI") as a period cost, the capitalization of research and development costs in the computation of GILTI resulted in an increase in the Company's provision for income taxes in fiscal years 2023, 2024 and 2025.

The Tax Act also required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred. We elected to pay the transition tax over the eight-year period provided in the Tax Act. As of March 29, 2025, the remaining balance of our transition tax obligation was $10.7 million, which will be paid as the final installment in fiscal year 2026.

Significant components of our deferred tax assets and liabilities as of March 29, 2025 and March 30, 2024 are (in thousands): 

	March 29, 2025		March 30, 2024
Deferred tax assets:
Accrued expenses and allowances	$	3,939	$	3,559
Net operating loss carryforwards	889		932
Research and development tax credit carryforwards	12,024		12,547
Stock-based compensation	23,099		28,437
Lease liabilities	23,562		25,564
Capitalized research and development	10,461		11,307
Depreciation and amortization	6,823		994
Other	714		938
Total deferred tax assets	$	81,511	$	84,278
Valuation allowance for deferred tax assets	(12,475)		(12,508)
Net deferred tax assets	$	69,036	$	71,770
Deferred tax liabilities:
Right of use asset	20,302		22,279
Acquisition intangibles	134		845
Other	450		—
Total deferred tax liabilities	$	20,886	$	23,124
Total net deferred tax assets	$	48,150	$	48,646

Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized.

At March 29, 2025, the Company had gross federal net operating loss carryforwards of $1.5 million, all of which are subject to certain limitations under Section 382 of the Internal Revenue Code and expire in fiscal years 2026 through 2031. At March 29, 2025 the Company had gross foreign net operating loss carryforwards of $0.2 million that do not expire and gross state net operating loss carryforwards of $6.2 million that expire in fiscal years 2026 through 2030. In addition, the Company had $12.1 million of state business tax, minimum tax, and research and development tax credit carryforwards. Certain of these state tax credits will expire in fiscal years 2026 through 2034, and others do not expire.

The Company maintains a valuation allowance for certain deferred tax assets primarily relating to certain state net operating loss and state tax credit carryforwards due to the likelihood that they will expire or go unutilized. Our valuation allowance decreased by $33 thousand in fiscal year 2025, which was the net effect of a gross increase of $206 thousand that affected the effective tax rate and a gross decrease of $239 thousand that was offset by a corresponding reduction in deferred tax assets on the balance sheet.  Management believes that the Company’s results from future operations will generate sufficient taxable income in the appropriate jurisdictions and of the appropriate character such that it is more likely than not that the remaining deferred tax assets will be realized.

At March 29, 2025, unremitted earnings of our foreign subsidiaries that can be distributed without tax consequence, other than withholding taxes that may apply based on the jurisdiction of the subsidiary, are not expected to be indefinitely reinvested. We accrued an immaterial amount of withholding taxes on foreign earnings expected to be remitted in the next year due to the planned liquidation of a foreign entity. No other taxes have been accrued for potential foreign withholding taxes on other foreign earnings as these amounts are not material. We have not provided additional income taxes for other outside basis differences inherent in our foreign entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to all other outside basis differences in these entities is not practicable at this time.

On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. et al. v. Commissioner which concluded that the regulations relating to the treatment of stock-based compensation expense in intercompany cost-sharing arrangements were invalid. In 2016 the U.S. Internal Revenue Service appealed the decision to the U.S. Court of Appeals for the Ninth Circuit (the “Ninth Circuit”). On July 24, 2018, the Ninth Circuit issued a decision that was subsequently withdrawn and a reconstituted panel conferred on the appeal. On June 7, 2019, the Ninth Circuit reversed the decision of the U.S. Tax Court and upheld the cost-sharing regulations. On February 10, 2020, Altera Corp. filed a Petition for a Writ of Certiorari with the Supreme Court of the United States, which was denied by the Supreme Court on June 22, 2020. Although the issue is now resolved within the Ninth Circuit, the Ninth Circuit's opinion is not binding in other circuits. The potential impact of this issue on the Company, which is not located within the jurisdiction of the Ninth Circuit, is unclear at this time. We will continue to monitor developments related to this issue and the potential impact of those developments on the Company's current and prior fiscal years.

The following table summarizes the changes in the unrecognized tax benefits (in thousands): 

	March 29, 2025		March 30, 2024
Beginning balance	$	32,077	$	32,879
Additions based on tax positions related to the current year	—		—
Reduction for the lapse of applicable statute of limitations	—		(802)
Ending balance	$	32,077	$	32,077

At March 29, 2025, the Company had gross unrecognized tax benefits of $32.1 million, all of which would impact the effective tax rate if recognized. The Company’s unrecognized tax benefits are classified as “Non-current income taxes” in the consolidated balance sheet. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. During fiscal years 2025 and 2024 we recognized interest expense, net of tax, of approximately $2.8 million and $2.4 million, respectively. The total amount of interest accrued as of March 29, 2025 was $12.0 million.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions including the United Kingdom. Fiscal years 2017 through 2019 and 2022 through 2025 remain open to examination by the major taxing jurisdictions in which the Company operates. 

The Company's fiscal year 2017, 2018, and 2019 federal income tax returns are under examination by the U.S. Internal Revenue Service ("IRS").  The IRS has proposed adjustments that would increase U.S. taxable income related to transfer pricing matters with respect to our U.S. and U.K. affiliated companies. The final Revenue Agent’s Report asserted additional tax of approximately $168.3 million, excluding interest, and imposed penalties of approximately $63.7 million. We do not

agree with the IRS's positions and have not accrued an additional liability. We intend to vigorously dispute the proposed adjustments. We are pursuing resolution through the administrative process with the IRS Independent Office of Appeals and, if necessary, through judicial remedies. We expect it could take a number of years to reach resolution on these matters. Although the final resolution of these matters is uncertain, the Company believes adequate amounts have been reserved for any adjustments to the provision for income taxes that may ultimately result. However, if the IRS prevails in these matters, the assessed tax, interest, and penalties, if any, could have an adverse impact on our financial position, results of operations, and cash flows in future periods. The Company is not under an income tax audit in any other major taxing jurisdiction.