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Income Taxes | 6 Months Ended
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Jun. 28, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents income taxes and the effective tax rates for the periods indicated (in thousands, except percentages):
|  | Three Months Ended |  | Six Months Ended
|  | June 28, 2025 |  | June 29, 2024 |  | June 28, 2025 |  | June 29, 2024
Income (loss) before income taxes |  | $ | 3,427 |  |  | $ | (8,682) |  |  | $ | 437 |  |  | $ | (8,214) |
Income taxes (benefit) |  | $ | 3,626 |  |  | $ | (724) |  |  | $ | 5,423 |  |  | $ | (359) |
Effective tax rate |  | 105.8 | % |  | 8.3 | % |  | 1,241.0 | % |  | 4.4 | %
The Company has historically recorded its interim period provision for income taxes by applying a forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items. However, due to the level of forecasted provision for income taxes relative to the forecasted pre-tax income used in computing the effective tax rate, the effective tax rate is highly sensitive to fluctuations in pre-tax income and does not provide a reliable estimate for income taxes in the interim period. As such, the Company has computed its provision for income taxes for the three and six months ended June 28, 2025 and June 29, 2024 using an actual year-to-date tax calculation. The Company plans to revert to applying a forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items once that method is reliably estimable. The Company’s effective tax rate for the three and six months ended June 28, 2025 differed from the statutory federal corporate tax rate of 21% primarily due to state taxes, the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S. federal research tax credits, excess tax benefits from stock-based compensation and the U.S. tax impact of foreign operations. The Company maintained a valuation allowance of $30.6 million for the three and six months ended June 28, 2025, compared to $29.9 million for the three and six months ended June 29, 2024, on certain U.S. federal and state deferred tax assets that the Company believes are not more likely than not to be realized in future periods. The Company considered scheduled reversals of deferred tax liabilities, historic profitability, projected future taxable income, ongoing tax planning strategies and other matters, including the period over which its deferred tax assets will be recoverable, in assessing the need for and the amount of the valuation allowance. In the event that actual results differ from these estimates, or if the Company decides to adjust these estimates in the future periods, further adjustments to its valuation allowance may be recorded, which could materially impact the Company’s financial position and net income in the period of the adjustment. In December 2021, the Organization for Economic Cooperation and Development enacted model rules for a new global minimum tax framework (“Pillar Two”), and certain governments in countries in which the Company operates have enacted local Pillar Two legislation, with an effective date from January 1, 2024. The Company currently does not expect Pillar Two to have a material impact on its financial statements. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting businesses. The OBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. Additionally, the OBBBA permanently eliminates the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. The Company expects these provisions to result in a reduction of current income tax liabilities and a corresponding reduction to deferred tax assets. The Company will continue to analyze the OBBBA and its impact on its financial statements and will reflect any impact in the period of enactment.

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