v3.26.1
Income Taxes
 12 Months Ended
May 02, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following tables reflect the significant components of our income tax provision. The pretax income (loss) attributable to domestic and foreign operations was as follows:
Year Ended
May 2, 2026April 26, 2025April 27, 2024
Domestic$47,731 $(13,407)$46,763 
Foreign10,603 7,556 7,288 
Income (loss) before income taxes
$58,334 $(5,851)$54,051 
Income tax expense consisted of the following:
Year Ended
May 2, 2026April 26, 2025April 27, 2024
Current:
Federal$(246)$6,819 $21,174 
State823 1,786 5,512 
Foreign2,572 1,965 1,813 
Deferred:
Federal8,709 (5,308)(8,101)
State1,392 (946)(1,045)
Foreign(292)(46)77 
$12,958 $4,270 $19,430 
In fiscal 2026, the Company retrospectively adopted ASU 2023-09, Improvements to Income Tax Disclosures. The reconciliation of items accounting for the difference between income taxes computed at the United States federal statutory rate and the Company's effective rate for the fiscal years 2026, 2025, and 2024 is summarized as follows:
Year Ended
May 2, 2026April 26, 2025April 27, 2024
AmountPercentAmountPercentAmountPercent
Income (loss) before income taxes$58,334 $(5,851)$54,051 
Federal income tax expense at statutory rate12,250 21.0 %(1,229)21.0 %11,351 21.0 %
State and local income tax, net of federal income tax effect (a)1,750 3.0 %664 (11.3)%3,529 6.5 %
Foreign tax effects
Canada
Statutory tax rate difference between Canada and United States(96)(0.2)%(176)3.0 %(123)(0.2)%
Ontario provincial income taxes
166 0.3 %298 (5.1)%207 0.4 %
Other provincial income taxes
10 — %42 (0.7)%36 0.1 %
Other(7)— %19 (0.3)%2 — %
China
Statutory tax rate difference between China and United States263 0.5 %130 (2.2)%140 0.3 %
Other52 0.1 %42 (0.7)%19 — %
Ireland
Statutory tax rate difference between Ireland and United States(111)(0.2)%(59)1.0 %(31)(0.1)%
Changes in valuation allowance(370)(0.6)%(85)1.5 %(36)(0.1)%
Other56 0.1 %56 (1.0)%48 0.1 %
Other Foreign Jurisdictions90 0.2 %66 (1.1)%97 0.2 %
Effect of cross-border tax laws
GILTI (net of credit)21 — %72 (1.2)%63 0.1 %
Foreign-derived intangible income (FDII)
55 0.1 %(87)1.5 %(327)(0.6)%
Other3 — %— — %— — %
Tax credits
Research & Development Tax Credit(717)(1.2)%(1,003)17.1 %(1,203)(2.2)%
Other(67)(0.1)%(9)0.2 %— — %
Changes in valuation allowance(288)(0.5)%641 (11.0)%2,117 3.9 %
Nontaxable or nondeductible items
Meals & entertainment
325 0.5 %305 (5.2)%270 0.5 %
Stock options
(681)(1.2)%(853)14.6 %(178)(0.3)%
Change in fair value of convertible debt
— — %4,729 (80.9)%3,476 6.4 %
IRC Section 162(m) limitation
143 0.2 %142 (2.4)%— — %
Debt issuance costs amortization
— — %425 (7.4)%— — %
Other105 0.1 %44(0.8)%23 — %
Change in uncertain tax positions, net
Change in FIN 48 Reserve33 0.1 %90(1.5)%(35)(0.1)%
Other Reconciling Adjustments(27)— %6(0.1)%(15)— %
Effective Tax Rate
12,958 22.2 %4,270 (73.0)%19,430 35.9 %
(a) For the year ended May 2, 2026, state taxes in California, Florida, Maryland, Minnesota, New York, Pennsylvania and Wisconsin made up the majority (greater than 50 percent) of the tax effect in this category. For the year ended April 26, 2025, state taxes in California, Minnesota, and Texas made up the majority (greater than 50 percent) of the tax effect in this
category. For the year ended April 27, 2024, state taxes in California, Massachusetts, Minnesota, New Jersey, New York, Pennsylvania and Wisconsin made up the majority (greater than 50 percent) of the tax effect in this category.
Our effective tax rate for fiscal 2026 was 22.2 percent. The effective income tax rate for fiscal 2026 was primarily impacted due to the research and development credit, reversals of valuation allowances on Ireland net operating losses, and other permanent tax adjustments.
Our effective tax rate for fiscal 2025 was negative 73.0 percent. The effective income tax rate for fiscal 2025 was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, and a write down of deferred taxes related to debt issuance costs on the conversion of the Convertible Note.
Our effective tax rate for fiscal 2024 was 35.9 percent. During fiscal 2024, our effective income tax rate was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.
Cash paid for income taxes, net of refunds, received for fiscal years 2026, 2025, and 2024 was as follows:
Year Ended
May 2, 2026April 26, 2025April 27, 2024
U.S. Federal Taxes
$1,800 $12,500$19,500 
U.S. State Taxes
California306 410768 
Other U.S. States
1,178 2,7143,719 
Foreign Taxes
Canada474 418326 
Ontario, Canada371 313250 
China559 8201,194 
Other Foreign436 631695 
Total cash paid for income taxes, net of refunds$5,124 $17,806 $26,452 

The components of the net deferred tax assets were as follows:
May 2, 2026April 26, 2025
Deferred tax assets:
Accrued warranty obligations$9,057 $8,819 
Vacation accrual2,546 2,443 
Deferred maintenance revenue1,173 998 
Allowance for excess and obsolete inventory3,366 3,590 
General reserve281 628 
Equity compensation498 282 
Allowance for credit losses accounts379 4,242 
Inventory capitalization1,861 3,115 
Accrued compensation and benefits950 942 
Capital loss carry forwards
3,700 — 
Unrealized loss on foreign currency exchange82 — 
Net operating loss carry forwards754 862 
Outside basis difference in equity method investments2,998 7,030 
Section 174 Capitalization8,123 12,840 
Research and development tax credit carry forwards81 76 
Lease accounting - lease liability1,079 1,250 
Other640 646 
Total deferred tax assets37,568 47,763 
Valuation allowance(7,214)(7,887)
Net deferred tax assets30,354 39,876 
Deferred tax liabilities:
Property and equipment(5,184)(5,904)
Deferred software implementation costs(1,061)— 
Lease accounting - right of use asset(1,058)(1,250)
Prepaid expenses(641)(557)
Unrealized gain on foreign currency exchange— (146)
Other(166)— 
Total deferred tax liabilities(8,110)(7,857)
Net deferred tax asset$22,244 $32,019 

The classification of the net deferred tax assets in the accompanying Consolidated Balance Sheets is:
May 2, 2026April 26, 2025
Non-current assets$22,266 $32,104 
Non-current liabilities(22)(85)
$22,244 $32,019 
As of May 2, 2026, we had total valuation allowances against deferred tax assets of $7,214, as compared to $7,887 as of April 26, 2025, representing an decrease of $673 during fiscal 2026. The decrease in valuation allowance is attributed to reversals of valuation allowances primarily related to Ireland net operating losses as described below. The majority of the valuation allowances are attributable to outside basis differences in equity method investments of $2,998 as well as capital losses of $3,700 which were generated during fiscal 2026 for the disposal of an equity method investment which essentially
was a recharacterization of the deferred tax asset and corresponding valuation allowance already in place. A small portion of the total valuation allowances are related to foreign net operating loss carryforwards as described below. We consider all positive and negative evidence available in determining the potential of realizing deferred tax assets, including past operating results and the forecast of future earnings, category of income, future taxable income, and prudent and feasible tax planning strategies. If sufficient evidence of our ability to generate applicable taxable income in the jurisdictions in which we currently maintain a valuation allowance causes us to determine that our deferred tax assets are more likely than not realizable, we would release our valuation allowance, which would result in an income tax benefit being recorded in our Consolidated Statements of Operations.
As of May 2, 2026, we had foreign net operating loss (“NOL”) carryforwards of approximately $3,957 primarily related to our operations in Belgium and Ireland, which have indefinite lives. A deferred tax asset has been recorded for all NOL carryforwards totaling approximately $752. However, due to uncertainty in future taxable income in Belgium, a valuation allowance has been recorded for $516 for the full amount of the Belgium NOL’s. The valuation allowance on Ireland NOL’s was reversed during fiscal 2026 due to a return to profitability and future taxable income expected.
As of May 2, 2026, we have not accrued taxes related to the outside basis difference in our non-U.S. subsidiaries, as we currently intend to indefinitely reinvest those earnings. The determination of the deferred tax liability is not practical.
The summary of changes in the amounts related to unrecognized uncertain tax benefits are:
May 2, 2026April 26, 2025
Balance at beginning of year$446 $356 
Gross increases related to prior period tax positions30 24 
Gross decreases related to prior period tax positions(19)(22)
Gross increases related to current period tax positions91 122 
Lapse of statute of limitations(69)(34)
Balance at end of year$479 $446 
All of our unrecognized tax benefits would have an impact on the effective tax rate if recognized. We recognized the release of $69 in unrecognized tax benefits related to the lapse of a statute of limitations in fiscal 2026. Interest and penalties incurred associated with uncertain tax positions are included in the “Income tax expense” line item in our Consolidated Statements of Operations. Accrued interest and penalties are included in the related tax liability line item in our Consolidated Balance Sheets of $63 and $41 as of May 2, 2026 and April 26, 2025, respectively.
Additional tax information:
We are subject to United States federal income tax as well as income taxes of multiple state and foreign jurisdictions. Fiscal years 2023, 2024, and 2025 remain open to U.S. federal tax examinations, and fiscal years 2022, 2023, 2024 and 2025 remain open for U.S. state income tax examinations. Certain subsidiaries are also subject to income tax in several non-U.S. jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2015. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense in our Consolidated Statements of Operations. We regularly assess the likelihood of an adverse outcome resulting from examinations to determine the adequacy of our tax reserves. As of May 2, 2026, we believe that it is more likely than not that the tax positions taken will be sustained upon the resolution of audits resulting in no material impact on our consolidated financial position and the results of operations and cashflows. However, the final determination with respect to any tax audits, including any related litigation costs, settlements, penalties and/or interest assessments, could be materially different from our accruals and could have a material effect on our financial position, results of operations, and/or cash flows in the periods for which that determination is made.
In October 2021, the Organization for Economic Co-operation and Development (“OECD”)/G20 finalized the significant components of a two-pillar global tax reform plan, which has now been agreed to by the majority of OECD members. Pillar Two requires multinational enterprises with annual global revenue exceeding €750 million to pay a global minimum tax of 15 percent. We anticipate being subject to the compliance requirements beginning in our fiscal year 2027. We continue to evaluate the potential impact on future periods of the Pillar Two framework and the implementation of the
Pillar Two rules in the jurisdictions in which we operate. We do not anticipate that Pillar Two compliance will have a material impact on our financial statements.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates with the earliest provisions taking effect in fiscal 2026 and others beginning in fiscal 2027 and beyond. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws affecting current taxes to be reflected in the estimated annual effective tax rate going forward, and adjustments to existing deferred taxes to be recognized on deferred tax balances to be recognized in the period in which the legislation is enacted. We note that as of May 2, 2026, there were no material impacts to our effective tax rate; however, the OBBBA allows for the timing of certain deductions to be recognized in deferred taxes in the financial statements. These include deductions for the bonus depreciation and Section 174 capitalization of domestic research and development costs. We will continue to evaluate the future tax and other provisions of the OBBBA and the potential effects on our financial position, results of operations, and cash flows.