Income Taxes |
3 Months Ended |
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Sep. 26, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes We account for income taxes under the asset and liability method. The provision for income taxes recorded in interim periods is based on our estimate of the annual effective tax rate applied to year-to-date income before provision for income taxes, adjusted for discrete items required to be recognized in the period in which they are incurred. In each quarter, we update our estimate of the annual effective tax rate, and if the estimated annual tax rate changes, we make a cumulative adjustment in that quarter. Our quarterly tax provision and our quarterly estimate of the annual effective tax rate can be subject to volatility due to several factors, including our ability to accurately forecast annual income before provision for income taxes in each of the tax jurisdictions in which we operate. The provision for (benefit from) income taxes was $2.2 million and $(2.1) million for the three months ended September 2026 and September 2025, respectively, which represented estimated federal, foreign, and state income taxes. The effective tax rate for the three months ended September 2026 diverged from the combined U.S. federal and state statutory tax rate primarily due to the current-year increase in the U.S. valuation allowance, non-deductible share-based compensation and non-deductible officer compensation, partially offset by the benefit of research credits. The effective tax rate for the three months ended September 2025 diverged from the combined U.S. federal and state statutory tax rate primarily due to non-deductible share-based compensation and non-deductible officer compensation, partially offset by the benefit of research credits and foreign income taxed at lower rates. We assess the realizability of our deferred tax assets at each reporting period by weighing all available positive and negative evidence, including our ability to carry back net operating losses to prior periods, the reversal of deferred tax liabilities, tax planning strategies and projected future taxable income. As of September 2026, we continued to maintain a full valuation allowance against our net U.S. federal deferred tax assets based on our conclusion that the realization of these assets was not more likely than not. The primary negative evidence was our cumulative adjusted U.S. federal taxable loss for the most recent three-year period. The other available positive evidence was not sufficient to overcome this negative evidence. The total liability for gross unrecognized tax benefits related to uncertain tax positions increased $0.4 million during the three months ended September 2026, to $42.0 million, and was included in other long-term liabilities on our condensed consolidated balance sheets. If recognized, the total gross unrecognized tax benefits would reduce the effective tax rate on income from continuing operations. Accrued interest and penalties related to unrecognized tax benefits as of September 2026 were $4.3 million; this balance increased by $0.2 million compared to June 2026. We classify interest and penalties as components of income tax expense. Any prospective adjustments to our unrecognized tax benefits will be recorded as an increase or decrease to income tax expense and cause a corresponding change to our effective tax rate. Accordingly, our effective tax rate could fluctuate materially from period to period. Our major tax jurisdictions are the United States, Hong Kong SAR, Japan, Israel and the United Kingdom. From fiscal 2018 onward, we remain subject to examination by one or more of these jurisdictions.
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