Income Taxes |
3 Months Ended |
|---|---|
Apr. 05, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company's effective tax rate was 16% and 15% for the three-month periods ended April 5, 2026 and March 30, 2025, respectively. The Company has defined its major tax jurisdictions as the United States, Ireland, China, Japan, and Korea, and within the United States, Massachusetts. The statutory tax rate is 12.5% in Ireland, 25% in China, 34.7% in Japan, and 22% in Korea, compared to the U.S. federal statutory corporate tax rate of 21%. These foreign tax rate differences resulted in a favorable impact to the effective tax rate for both the three-month periods ended April 5, 2026 and March 30, 2025. For the three-month period ended April 5, 2026, the Company recorded a net discrete tax benefit of $1,179,000, primarily driven by excess tax benefits related to stock‑based compensation. For the three-month period ended March 30, 2025, the Company recorded a net discrete tax benefit of $307,000, primarily driven by deferred tax adjustments partially offset by excess tax liabilities related to stock‑based compensation. The Company’s reserve for income taxes, including gross interest and penalties, was $24,195,000 as of April 5, 2026, of which $21,336,000 was classified as a non-current liability and $2,859,000 was classified as an offset to deferred tax assets. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period. Within the United States, the tax years 2022 through 2025 remain open to examination by the Internal Revenue Service, and 2021 through 2025 remain open to examination by various state tax authorities. The tax years 2017 through 2025 remain open to examination by various international taxing authorities in other jurisdictions in which the Company operates. The Organization for Economic Cooperation and Development ("OECD") provided model rules for a 15% global minimum tax, known as Pillar Two. Pillar Two has now been enacted by most key non-United States jurisdictions where the Company operates. From 2024 to 2025, the Company met at least one of the tests under the transitional safe harbor exception for all jurisdictions except for the United States. During 2024 and 2025, the Company had favorable treatment under a safe harbor that exempted U.S. multinational entity exposure to top-up tax under Pillar Two, which expired at the end of 2025. In 2026, OECD released the framework for a side-by-side system, providing a permanent solution for multinational entities headquartered in jurisdictions that had not fully adopted the Pillar Two Model Rules into domestic law but have current domestic tax regimes meeting certain requirements, including a high statutory tax rates (at least 20%) that had not fully adopted the Pillar Two Model Rules into domestic law. However, uncertainty remains related to the implementation of this arrangement across the various jurisdictions in which the Company operates, and the Company is now subject to top-up tax effective January 1, 2026. This minimum tax is treated as a period cost but did not have a material impact on the Company's financial results of operations for the three-month period ended April 5, 2026. The Company continues to monitor legislative developments.
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