v3.26.1
Income Taxes
 12 Months Ended
Jun. 27, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Loss before provision (benefit) for income taxes was as follows:
202620252024
United States$(125.1)$(64.3)$(80.5)
Foreign45.7 (49.2)(44.1)
Loss before provision (benefit) for income taxes$(79.4)$(113.5)$(124.6)
The provision (benefit) for income taxes consisted of the following:
202620252024
Current tax (benefit) provision
Federal$0.7 $2.4 $(17.4)
State— — — 
Foreign6.9 7.3 56.0 
7.6 9.7 38.6 
Deferred tax (benefit) provision
Federal395.0 (49.9)(280.8)
State— — — 
Foreign8.8 (25.5)(8.0)
403.8 (75.4)(288.8)
Provision (benefit) for income taxes$411.4 $(65.7)$(250.2)
The provision for income taxes differs from the U.S. federal statutory rate for fiscal 2026, as follows, reflecting the adoption of ASU 2023-09:

2026
Amount Percent
U.S. federal statutory tax rate (16.7)21.0 %
State and local income taxes, net of federal income tax effect— — %
Foreign tax effects
Hong Kong
Statutory tax rate difference between Hong Kong and United States(1.4)1.8 %
Share-based payment awards(2.7)3.4 %
Other(0.3)0.4 %
India
Statutory tax rate difference between India and United States1.6 (2.0)%
Share-based payment awards2.3 (2.9)%
Other (0.8)0.6 %
Japan
Statutory tax rate difference between Japan and United States0.4 (0.5)%
Foreign exchange gain/(loss)1.2 (1.5)%
Share-based payment awards (1.1)1.4 %
Other(0.1)0.1 %
Israel
Statutory tax rate difference between Israel and United States(0.2)0.3 %
Foreign exchange gain/(loss)(1.4)1.8 %
Other1.9 (2.3)%
Other foreign jurisdictions1.3 (1.6)%
Effect of cross-border tax laws
Foreign-derived deduction eligible income(4.7)5.9 %
Subpart F income 2.6(3.2)%
Global intangible low-taxed income1.3(1.6)%
Foreign disregarded entity income(1.4)1.7 %
Tax credits
  Research and development tax credits(8.0)10.1 %
Changes in valuation allowances425.3(535.6)%
Nontaxable or nondeductible Items
Non-deductible share-based compensation7.2(9.1)%
Non-deductible officer compensation5.9(7.4)%
Changes in unrecognized tax benefits(0.7)0.9 %
Other adjustments(0.1)0.2 %
Effective tax rate411.4(518.1)%

The effective tax rate for fiscal 2026 diverged from the combined U.S. federal and state statutory tax rate primarily due to $425.3 million of non-cash tax expenses associated with the establishment of a full valuation allowance against our U.S.
federal deferred tax assets. During the fourth quarter of fiscal 2026, we recorded a full valuation allowance against our net U.S. federal deferred tax assets after determining that it was not more likely than not that such deferred tax assets would be realized, primarily based on our three-year cumulative adjusted taxable loss position for U.S. federal income tax purposes as of fiscal 2026.

For fiscal 2025 and 2024 , the benefit for income taxes differed from the U.S. federal statutory rate as follows:
20252024
Benefit at U.S. federal statutory tax rate$(23.8)$(26.2)
Non-deductible share-based compensation7.2 7.6 
Shortfall/(windfall) related to share-based compensation3.9 3.5 
Non-deductible officer compensation2.5 4.8 
Business credits(4.4)(5.2)
Foreign tax differential(10.6)45.2 
U.S. inclusion of foreign income(10.3)(0.3)
Deferred taxes on unremitted foreign earnings(14.2)— 
U.S. provision to return adjustment 0.5 (18.1)
Deferred tax benefit from domestication (7.7)(262.8)
Tax benefit from U.S. transition tax(8.9)— 
Other differences0.1 1.3 
Benefit for income taxes$(65.7)$(250.2)
Non-current deferred tax assets and non-current deferred tax liabilities are included in deferred tax assets and other long-term liabilities, respectively, in the accompanying consolidated balance sheets.
Significant components of deferred tax assets (liabilities) consisted of the following:
20262025
Deferred tax assets:
Capital loss carryforward$35.4 $34.6 
Inventory write downs5.2 5.7 
Intangibles and capitalized research and development costs351.2 306.5 
Property and equipment 3.5 3.9 
Share-based compensation8.9 22.6 
Nondeductible interest— 22.6 
Lease liabilities8.5 10.7 
Business credit carryforward97.2 89.0 
Net operating loss carryforward10.8 17.9 
Other accruals26.6 18.0 
547.3 531.5 
Valuation allowance(522.6)(94.8)
24.7 436.7 
Deferred tax liabilities:
Right-of-use assets(8.1)(10.2)
Acquisition intangibles(16.2)(22.7)
(24.3)(32.9)
Net deferred tax assets$0.4 $403.8 
Realization of deferred tax assets depends on our generating sufficient U.S. and certain foreign taxable income in future years to obtain a benefit from the utilization of those deferred tax assets on our tax returns. Accordingly, the amount of deferred tax assets considered realizable or unrealizable may increase or decrease when we reevaluate the underlying basis for our estimates of future U.S. and foreign taxable income. As of the end of fiscal 2026, we maintained a valuation allowance of $522.6 million against deferred tax assets related to capital loss carryforwards in a foreign jurisdiction and substantially all of our U.S. federal and California deferred tax assets, reducing these deferred tax assets to the amounts that we believe are more likely than not to be realized. The net change in the valuation allowance during fiscal 2026 was an increase of $427.8 million.
We consider almost all earnings of our foreign subsidiaries as not indefinitely reinvested overseas and have made appropriate provisions for income or withholding taxes, that may result from a future repatriation of those earnings. We continue to assert indefinite reinvestment with respect to certain accumulated earnings and outside basis differences, primarily related to our DSPG acquisition. If these earnings and outside basis differences were recognized in a taxable transaction, the associated foreign tax credits would be expected to reduce the related U.S. income tax liability. The amount of the unrecognized deferred tax liability related to these indefinitely reinvested earnings and outside basis differences is not practicable to determine.
As of the end of fiscal 2026, we had federal, California, and foreign net operating loss carryforwards of $2.8 million, $26.2 million and $55.7 million, respectively. The federal net operating loss can be carried forward indefinitely and the California net operating loss will begin to expire in fiscal 2027 if not utilized. Most of the foreign net operating loss carryforwards have no expiration date. Under current tax law, net operating loss and tax credit carryforwards are available to offset future income or income taxes, if utilized before expiration. However, the use of these carryforwards may be limited by statute or upon the occurrence of certain events, including significant changes in ownership.
We had $41.5 million and $78.6 million of federal and state research tax credit carryforwards, respectively, as of the end of fiscal 2026. The federal research tax credit carryforward will begin to expire in 2038 and the state research tax credit can be carried forward indefinitely.
The total liability for gross unrecognized tax benefits related to uncertain tax positions, included in other liabilities in our consolidated balance sheets, decreased by $3.0 million from $44.6 million in fiscal 2025 to $41.6 million in fiscal 2026. Of this amount, $30.6 million will reduce the effective tax rate on income from continuing operations, if recognized. A reconciliation of the beginning and ending balance of gross unrecognized tax benefits for fiscal 2026, 2025, and 2024 consisted of the following:
202620252024
Beginning balance$44.6 $46.5 $43.7 
Increase in unrecognized tax benefits related to current year tax positions3.3 1.9 10.4 
Decrease in unrecognized tax benefits related to prior year tax positions(2.7)(2.4)(5.3)
Decrease due to effective settlement with tax authorities— (0.4)— 
Remeasurement of unrecognized tax benefits1.6 1.2 (1.0)
Decrease due to statute expiration(5.2)(2.2)(1.3)
Ending balance$41.6 $44.6 $46.5 
Accrued interest and penalties decreased by $0.1 million in fiscal 2026 as compared to fiscal 2025 and increased by $0.6 million in fiscal 2025 as compared to fiscal 2024. Accrued interest and penalties were $4.1 million and $4.2 million as of the end of fiscal 2026 and 2025, respectively. Our policy is to classify interest and penalties, if any, as components of income tax expense.
Our major tax jurisdictions are the U.S., Hong Kong SAR, Japan, India, Israel, and the United Kingdom. From fiscal 2018 onward, we remain subject to examination by one or more of these jurisdictions.
The amount of cash paid for income taxes (net of refunds) for fiscal 2026, is as follows:
2026
Federal $6.0 
State— 
Foreign
Switzerland(5.3)
Hong Kong (2.4)
India 2.4 
Taiwan1.2 
China 1.0 
Other countries 0.3 
Total income taxes paid, net of refunds $3.2 

Cash paid for income taxes, net of refunds, during fiscal 2025 and 2024, was $47.2 million and $55.2 million, respectively.