XML 41 R20.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of income before taxes are:
| Year Ended June 30,
| 2024 |  | 2023 |  | 2022
|  |  | (in thousands) |  |
U.S. operations | $ | 9,079 |  |  | $ | 19,001 |  |  | $ | 16,684 |
Non-U.S. operations | (11,722) |  |  | 711 |  |  | 478,386 |
Net income (loss) before income taxes | $ | (2,643) |  |  | $ | 19,712 |  |  | $ | 495,070 |
The provision for income taxes is comprised of:
| Year Ended June 30,
| 2024 |  | 2023 |  | 2022
|  |  | (in thousands) |  |
U.S. federal taxes: |  |  |  |
Current | $ | 485 |  |  | $ | 1,093 |  |  | $ | 645 |
Deferred | 1,652 |  |  | 549 |  |  | 2,260 |
Non-U.S. taxes: |  |  |  |
Current | 3,187 |  |  | 4,620 |  |  | 7,749 |
Deferred | (1,669) |  |  | (404) |  |  | 28,599 |
State taxes, net of federal benefit: |  |  |  |
Current | (6) |  |  | 79 |  |  | 5 |
Total provision for income taxes | $ | 3,649 |  |  | $ | 5,937 |  |  | $ | 39,258 |
The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows (in percentage):
| Year Ended June 30,
| 2024 |  | 2023 |  | 2022
United States statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Stock-based compensation | (3.7) |  |  | 0.2 |  |  | 0.0 |
Foreign taxes, net | (186.9) |  |  | 13.5 |  |  | (14.3) |
Outside basis difference on equity method investment | 27.4 |  |  | (1.0) |  |  | 1.2 |
Tax credits | 86.2 |  |  | (13.3) |  |  | (0.3) |
Non-deductible expenses | (6.9) |  |  | 1.5 |  |  | — |
Tax exempt income | 2.8 |  |  | (1.5) |  |  | — |
Withholding taxes | — |  |  | 9.0 |  |  | — |
Non-deductible executive compensation | (78.6) |  |  | 7.3 |  |  | 0.5 |
Foreign derived intangible income deduction | 0.0 |  |  | (7.2) |  |  | (0.3) |
Other | 0.6 |  |  | 0.6 |  |  | 0.1 |
| (138.1) | % |  | 30.1 | % |  | 7.9 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:
| June 30,
| 2024 |  | 2023
| (in thousands)
Deferred tax assets: |  |  |
Accrued compensation | $ | 2,188 |  |  | $ | 2,218 |
Net operating loss carryforwards | — |  |  | 18 |
Depreciation | 6,286 |  |  | 5,360 |
Tax credits | 16,161 |  |  | 15,180 |
Operating lease liabilities | 4,574 |  |  | 4,567 |
Capitalized R&D costs | 1,398 |  |  | 1,116 |
Accruals and reserves | 445 |  |  | 558 |
Total deferred tax assets | 31,052 |  |  | 29,017 |
Valuation allowance | (7,266) |  |  | (6,686) |
Total deferred tax assets, net of valuation allowance | 23,786 |  |  | 22,331 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (19,062) |  |  | (16,899) |
Right of use assets | (4,328) |  |  | (4,315) |
Investments | (26,263) |  |  | (27,864) |
Total deferred tax liabilities | (49,653) |  |  | (49,078) |
Net deferred tax liabilities | $ | (25,867) |  |  | $ | (26,747) |
The breakdown between deferred tax assets and liabilities is as follows:
| June 30,
| 2024 |  | 2023
| (in thousands)
Deferred tax assets | $ | 549 |  |  | $ | 536 |
Deferred tax liabilities | (26,416) |  |  | (27,283) |
Net deferred tax liabilities | $ | (25,867) |  |  | $ | (26,747) |
The Company’s valuation allowance related to deferred income taxes as reflected in the consolidated balance sheets was $7.3 million and $6.7 million as of June 30, 2024 and 2023, respectively. The change in valuation allowance for June 30, 2024 and 2023 was an increase of $0.6 million and an increase of $0.9 million, respectively. At June 30, 2024 and 2023, the Company provided a valuation allowance for its state research and development credit carryforward deferred tax assets of $7.3 million and $6.7 million, respectively, as it generated more state tax credits each year than it can utilize. The Company intends to maintain a valuation allowance equal to the state research and development credit carryforwards in excess of the state net deferred tax liabilities on all other state book/tax differences and net operating loss carryforward. At June 30, 2024, the Company had federal research and development tax credit carryforwards of approximately $8.2 million. The federal tax credits begin to expire in 2040, if not utilized. At June 30, 2024, the Company had state tax credit carryforwards of approximately $9.9 million, of which $9.0 million carryforward indefinitely, $0.6 million have a 10 to 15 year life (beginning to expire in 2033) and $0.3 million with a 20 year life, (beginning to expire in 2038). The Company intends to reinvest the undistributed earnings of its foreign subsidiaries indefinitely, except for Alpha and Omega Semiconductor (Cayman) Ltd. and AOS International LP. As of June 30, 2024, the cumulative earnings of Alpha and Omega Semiconductor (Cayman) and AOS International LP totaled $46.2 million, and there was no deferred tax liability recorded as there is no income nor withholding tax amongst the applicable jurisdictions. As of June 30, 2024, the cumulative amount of undistributed earnings of its foreign entities considered permanently reinvested is $414.6 million. Should the Company decide to remit this income to its Bermuda parent company in a future period, its provision for income taxes may increase materially in that period. The determination of the unrecognized deferred tax liability on these earnings is not practicable due to the complexity and variety of assumptions necessary to estimate the tax. As of June 30, 2024, the Company has recorded a deferred tax liability of $26.3 million for the basis difference related to our investment in the JV Company. A reconciliation of the beginning and ending amount of unrecognized tax benefits from July 1, 2021 to June 30, 2024 is as follows:
| Year Ended June 30,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Balance at beginning of year | $ | 9,335 |  |  | $ | 8,609 |  |  | $ | 7,645 |
Additions based on tax positions related to the current year | 764 |  |  | 804 |  |  | 1,121 |
Reductions based on tax positions related to prior years | (11) |  |  | (68) |  |  | (40) |
Reductions due to lapse of applicable statute of limitations | — |  |  | (10) |  |  | (117) |
Balance at end of year | $ | 10,088 |  |  | $ | 9,335 |  |  | $ | 8,609 |
At June 30, 2024, the total unrecognized tax benefits of $10.1 million included $7.1 million of unrecognized tax benefits that have been netted against the related deferred tax assets. The remaining $3.0 million of unrecognized tax benefits was recorded within long-term income tax payable on the Company's consolidated balance sheet as of June 30, 2024. The Company cannot reasonably estimate the timing and amount of potential cash settlements on the unrecognized tax benefits. The total unrecognized tax benefits of $10.1 million at June 30, 2024 included $6.9 million that, if recognized, would reduce the effective income tax rate in future periods. It is reasonably possible that the Company will recognize approximately $0.2 million reduction to its uncertain tax positions during the next twelve months due to a lapse in the applicable statute of limitations.. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period that such determination is made. The amount of interest and penalties accrued at June 30, 2024 was $0.5 million, of which $0.2 million was recognized in the year ended June 30, 2024. The amount of interest and penalties accrued at June 30, 2023 was $0.3 million, of which $0.1 million was recognized in the year ended June 30, 2023. The Company files its income tax returns in the United States and in various foreign jurisdictions. The tax years 2004 to 2024 remain open to examination by U.S. federal and state tax authorities due to tax attribute carryovers. The tax years 2018 to 2024 remain open to examination by foreign tax authorities.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration