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Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

Note 15 — Income Taxes

​

The amounts of income (loss) before income taxes attributable to domestic and foreign operations were as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year ended December 31,
​		2024			2023			2022
​	​	(in thousands)
Domestic	​	$	99,711	​	$	(33,383)	​	$	47,368
Foreign	​		(30,877)	​		5,045	​		3,617
Total	​	$	68,834	​	$	(28,338)	​	$	50,985
​	​	​	​	​	​	​	​	​	​

​

Significant components of the expense (benefit) for income taxes consisted of the following:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year ended December 31,
​		2024			2023			2022
​	​	(in thousands)
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	2,087	​	$	3,299	​	$	—
Foreign	​		1,365	​		1,136	​		1,506
State and local	​		397	​		(194)	​		577
Total current expense (benefit) for income taxes	​		3,849	​		4,241	​		2,083
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​		(1,599)	​		(3,026)	​		(96,811)
Foreign	​		(6,684)	​		512	​		(484)
State and local	​		(446)	​		303	​		(20,745)
Total deferred expense (benefit) for income taxes	​		(8,729)	​		(2,211)	​		(118,040)
Total expense (benefit) for income taxes	​	$	(4,880)	​	$	2,030	​	$	(115,957)

​

The income tax expense (benefit) was reconciled to the tax expense computed at the U.S. federal statutory tax rate as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year ended December 31,
​		2024			2023			2022
​	​	(in thousands)
Income tax expense (benefit) at U.S. statutory rates	​	$	14,455	​	$	(5,951)	​	$	10,706
State taxes, net of U.S. federal impact	​		425	​		1,073	​		1,101
Effect of international operations	​		(2,814)	​		(7,668)	​		(11,149)
Research and development tax credit	​		(7,945)	​		(7,287)	​		(6,470)
Net change in valuation allowance	​		52	​		662	​		(104,972)
Change in accrual for unrecognized tax benefits	​		2,534	​		(369)	​		3,349
Share-based compensation	​	​	206	​	​	2,084	​	​	606
Tax benefits associated with asset impairments	​	​	(11,815)	​	​	—	​	​	—
Extinguishment of debt	​	​	—	​	​	19,289	​	​	—
Adoption of new accounting standard	​	​	—	​	​	—	​	​	(9,295)
Other	​		22	​		197	​		167
Total expense (benefit) for income taxes	​	$	(4,880)	​	$	2,030	​	$	(115,957)

​

Deferred income taxes reflect the effect of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The tax effects of the temporary differences were as follows:

​

​	​	​	​	​	​	​
​	​	December 31,
​		2024			2023
​	​	(in thousands)
Deferred tax assets:	​	​	​	​	​	​
Inventory valuation		$	12,500	​	$	12,682
Net operating losses	​	​	6,734	​		5,841
Credit carry forwards	​	​	46,753	​	​	49,086
Warranty and installation accruals	​	​	2,054	​		1,766
Share-based compensation	​	​	5,802	​		4,637
Contract liabilities	​	​	7,775	​	​	19,785
Operating leases	​	​	8,620	​	​	8,034
Research and experimental capitalization	​	​	46,667	​	​	34,504
Depreciation	​	​	4,037	​	​	1,588
Other	​	​	5,033	​		4,885
Total deferred tax assets	​	​	145,975	​		142,808
Valuation allowance	​	​	(11,797)	​		(11,745)
Net deferred tax assets	​	​	134,178	​		131,063
​	​	​	​	​	​	​
Deferred tax liabilities:	​	​	​	​	​	​
Purchased intangible assets	​	​	8,673	​		14,166
Operating leases	​	​	6,003	​	​	5,548
Total deferred tax liabilities	​	​	14,676	​		19,714
Net deferred taxes		$	119,502	​	$	111,349

​

The Company does not permanently reinvest its earnings from certain foreign jurisdictions and has accrued for foreign tax withholdings of $1.2 million on its unremitted earnings as of December 31, 2024.

​

During the year ended December 31, 2024, the Company’s income tax benefit of $4.9 million was primarily attributed to 1) a $12.2 million income tax benefit associated with asset impairments, 2) a $7.9 million income tax benefit related to research and development tax credits, and 3) a $5.1 million income tax benefit related to Foreign-Derived Intangible Income, partially offset by 4) a $20.3 million income tax expense related to pre-tax income from operations.

​

At December 31, 2024, the Company had U.S. federal research and development credits of $35.1 million that will expire between 2035 and 2044. Additionally, the Company has state and local NOL carryforwards of approximately $55.4 million (a net deferred tax asset of $3.9 million, net of federal tax benefits and before the valuation allowance) that will expire between 2026 and 2041. Finally, the Company has state credits of $34.2 million, some of which are indefinite and others that will expire between 2025 and 2039.

​

A roll-forward of the Company’s uncertain tax positions for all U.S. federal, state, and foreign tax jurisdictions was as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	December 31,
​		2024			2023			2022
​	​	(in thousands)
Balance at beginning of year	​	$	15,741	​	$	16,110	​	$	12,761
Additions for tax positions related to current year	​		2,497	​		2,596	​		4,180
Additions for tax positions related to prior years	​		77	​		83	​		—
Reductions for tax positions related to prior years	​		(1,437)	​		(3,048)	​		(731)
Settlements	​		—	​		—	​		(100)
Balance at end of year	​	$	16,878	​	$	15,741	​	$	16,110

​

If the amount of unrecognized tax benefits at December 31, 2024 were recognized, the Company’s income tax provision would decrease by $14.7 million. The gross amount of interest and penalties accrued in income tax payable in the Consolidated Balance Sheets was approximately $0.7 million and $0.6 million at December 31, 2024 and 2023, respectively.

​

The Company, or one of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions. All material consolidated federal income tax matters have been concluded for years through 2017 subject to subsequent utilization of NOLs generated in such years. All material state and local income tax matters have been reviewed through 2012. The majority of the Company’s foreign jurisdictions have been reviewed through 2015. The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2016 through 2023 for Germany, 2017 through 2023 for China, 2022 through 2023 for Taiwan, and 2021 through 2023 for Singapore. The Company does not anticipate that its uncertain tax position will change significantly within the next twelve months subject to the completion of the ongoing tax audits and any resultant settlement.

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The entire disclosure for income tax.

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