v3.25.2
Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes for the years ended June 30, 2025, 2024 and 2023, was taxed under the following jurisdictions (in thousands):
202520242023
U.S.$359,741 $181,107 $128,589 
Non-U.S.1,317,825 1,083,691 973,075 
Income before income taxes$1,677,566 $1,264,798 $1,101,664 
The provision for income taxes is presented below (in thousands):
202520242023
Current:Federal$19,744 $57,103 $36,631 
State19,919 17,250 14,142 
Non-U.S.298,170 219,372 198,767 
337,833 293,725 249,540 
Deferred: Federal(5,701)(22,915)(21,721)
State(1,231)(4,632)(2,389)
Non-U.S.(54,058)(22,331)(21,322)
(60,990)(49,878)(45,432)
Provision for income taxes$276,843 $243,847 $204,108 
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. federal income tax rate of 21% for the years ended June 30, 2025, 2024 and 2023, to pretax income as a result of the following (in thousands):
202520242023
Taxes computed at statutory U.S. rate$352,289 $265,608 $231,349 
Increase (decrease) in income taxes resulting from:
State income taxes, net of U.S. tax benefit15,590 8,609 9,448 
Research and development credit(28,859)(27,786)(21,481)
Change in valuation allowance20,644 849 (5,007)
Effect of non-U.S. tax rates(12,225)(15,838)(3,982)
Foreign tax credits(3,896)(8,293)(3,988)
Stock-based compensation expense1,735 4,875 (6,282)
Cessation of business(35,847)— — 
Net refunds for prior tax years(29,976)— — 
Other(2,612)15,823 4,051 
Provision for income taxes$276,843 $243,847 $204,108 
We reported net deferred tax assets and liabilities in our consolidated balance sheets at June 30, 2025 and June 30, 2024, as follows (in thousands):
20252024
Non-current deferred tax asset$253,119 $203,569 
Non-current deferred tax liability(77,682)(79,339)
Net deferred tax asset$175,437 $124,230 
The components of our deferred tax assets and liabilities at June 30, 2025 and June 30, 2024, are as follows (in thousands):
20252024
Deferred tax assets:
Employee liabilities$37,189 $35,336 
Tax credit carry overs1,577 9,271 
Inventories20,523 15,602 
Provision for warranties5,997 6,112 
Provision for doubtful debts4,942 5,340 
Net operating loss carryforwards14,408 23,455 
Capital loss carryover27,454 5,587 
Stock-based compensation expense12,752 11,538 
Deferred revenue31,289 28,030 
Research and development capitalization132,043 125,411 
Lease liabilities21,138 25,602 
Hedging contracts94,626 56,324 
State income taxes2,883 3,566 
Other18,527 5,538 
425,348 356,712 
Less valuation allowance(30,072)(9,384)
Deferred tax assets395,276 347,328 
Deferred tax liabilities:
Goodwill and other intangibles(196,698)(192,398)
Right of use assets(18,491)(22,843)
Property, plant and equipment(4,650)(7,857)
Deferred tax liabilities(219,839)(223,098)
Net deferred tax asset$175,437 $124,230 
As of June 30, 2025, we had $6.0 million of U.S. federal and state net operating loss carryforwards and $8.4 million of non-U.S. net operating loss carryforwards, which expire in various years beginning in 2026 or carry forward indefinitely.
The valuation allowance at June 30, 2025 relates to a provision for uncertainty of the utilization of net operating loss carryforwards of $0.6 million, capital loss of $28.8 million and other items of $0.6 million. We believe that it is more likely than not that the benefits of deferred tax assets, net of any valuation allowance, will be realized.
A substantial portion of our manufacturing operations and administrative functions in Singapore operate under certain tax holidays and tax incentive programs that will expire in whole or in part at various dates through June 30, 2030. The end of certain tax holidays may be extended if specific conditions are met. The net impact of these tax holidays and tax incentive programs increased our net income by $67.4 million ($0.46 per diluted share) for the year ended June 30, 2025, $49.6 million ($0.34 per diluted share) for the year ended June 30, 2024, and $40.5 million ($0.27 per diluted share) for the year ended June 30, 2023.
As a result of the Tax Cuts and Jobs Act of 2017, or the TCJA, we have treated all non-U.S. historical earnings as taxable. Therefore, future repatriation of cash held by our non-U.S. subsidiaries will generally not be subject to U.S. federal tax if repatriated. The total amount of these undistributed earnings at June 30, 2025 amounted to approximately $4.7 billion. In the event our non-U.S. earnings had not been permanently reinvested, approximately $5.9 million in U.S. state deferred taxes would have been recognized in the consolidated financial statements.
The TCJA also introduced U.S. taxation on certain global intangible low-taxed income, or GILTI. We have elected to account for tax expense attributable to GILTI tax as a period cost when incurred.
In accounting for uncertainty in income taxes, we recognize a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (that is, a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position”
refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for annual periods. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of income. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. Based on all known facts and circumstances and current tax law, we believe the total amount of unrecognized tax benefits on June 30, 2025 is not material to our results of operations, financial condition or cash flows, and if recognized, would not have a material impact on our effective tax rate.
Our income tax returns are based on calculations and assumptions subject to audit by various tax authorities. In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws. We regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes. We are currently under audit by the ATO for the 2018 tax year. If any ongoing tax audits are resolved in a manner not consistent with management’s expectations, the result could be a material adjustment to our past or future taxable income, tax payable or deferred tax assets, and may require us to pay penalties and interest that could materially adversely affect our financial results.
Tax years 2018 to 2024 remain subject to examination by the major tax jurisdictions in which we are subject to tax.