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Income Taxes | 6 Months Ended
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Jun. 29, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision (benefit) for income taxes for the three and six months ended June 29, 2025 was $(0.3) million and $0.2 million, respectively, or an effective tax rate of (8.9)% and 9.8%, respectively. The provision for income taxes for the three and six months ended June 30, 2024 was $0.2 million and $0.6 million, respectively, or an effective tax rate of (2.1)% and (3.1)%, respectively. Provision for income taxes decreased for the three and six months ended June 29, 2025, compared to the prior year period, primarily due to lower international tax on account of expected use of research and development credits in Ireland and a reduction in the domestic year-to-date pre-tax book income ratio used to estimate the quarterly tax provision. The higher effective tax rate this quarter is due to the low income from operations this quarter compared to the much higher amount of loss in prior year period. The lower effective tax rate for the three and six months ended June 29, 2025, compared to the U.S. federal income tax rate, is primarily due to the valuation allowance on our net U.S. deferred tax assets and the impact of a lower tax rate on foreign earnings. We have recorded a full valuation allowance against U.S. net deferred tax assets. We will continue to maintain a full valuation allowance on U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. However, given our current and anticipated future domestic earnings, we believe that there is a reasonable possibility that within the next 12-24 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the U.S. valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense, which could be material, for the period the release is recorded. On July 4, 2025, the One Big Beautiful Bill Act (“OBBB“), a significant tax reform package, was enacted. The bill introduced a number of corporate tax changes effective for tax years beginning after December 31, 2024. Key provisions of the OBBB include: •Reinstatement of immediate expensing for domestic research and development expenses under new Section 174A; •Restoration of 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025; and •Modifications to the limitation on business interest expense under Section 163(j). We are currently evaluating the potential impacts of the OBBB on our future financial results. The restoration of research and development expensing, in particular, may result in tax benefits beginning in 2025, depending on future elections and capital spending plans. These impacts, if any, will be reflected in the financial statements for the period ending December 31, 2025.

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