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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Summary of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In thousands)		2023				2022				2021
Current
Federal		$	2,545			$	4,572			$	11
State			26				88				(63	)
International			10,004				(4,347	)			4,166
Total Current			12,575				313				4,114
Deferred
Federal			46,252				(47,429	)			—
State			6,607				(6,776	)			—
International			(37,301	)			(8,183	)			(1,784	)
Total Deferred			15,558				(62,388	)			(1,784	)
Total Income Tax Expense (Benefit)		$	28,133			$	(62,075	)		$	2,330

Effective Income Tax Rate Differs from Federal Statutory Rate

The effective income tax rate differs from the federal statutory rate due to the following:

		2023				2022				2021
Tax provision computed at the federal statutory rate			21.00	%			21.00	%			21.00	%
State income tax provision, net of federal benefit			1.34				2.60				13.33
Federal research credits			3.26				6.74				53.77
Foreign taxes			3.52				6.29				(4.69	)
Tax-exempt income			0.06				0.21				3.75
Change in valuation allowance			(35.19	)			63.92				(75.26	)
Non-deductible transaction costs			—				(2.74	)			(39.48	)
Foreign tax credits			2.45				(0.40	)			0.14
Stock-based compensation			(0.57	)			(2.09	)			10.74
Withholding taxes			0.01				0.03				0.14
Alabama law change			—				—				(25.39	)
Adtran Networks tax exempt income			1.42				—				—
Return to accrual			0.62				0.24				9.48
Global intangible low-taxed income ("GILTI")			(5.87	)			(8.08	)			(4.29	)
Adtran Networks Goodwill Impairment			(4.62	)			—				—
Other, net			0.40				(0.24	)			(0.19	)
Effective Tax Rate			(12.17	)%			87.48	%			(36.95	)%

Loss Before Expense (Benefit) for Income Taxes

Loss before expense (benefit) for income taxes for the years ended December 31, 2023, 2022 and 2021 is as follows:

(In thousands)		2023				2022				2021
U.S. entities		$	(113,951	)		$	(33,720	)		$	(14,982	)
International entities			(117,259	)			(37,243	)			8,677
Total		$	(231,210	)		$	(70,963	)		$	(6,305	)

Summary of Supplemental Balance Sheet Information Related to Deferred Tax Assets (Liabilities)

Deferred income taxes on the Consolidated Balance Sheets result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The significant components of current and non-current deferred taxes as of December 31, 2023 and 2022 consist of the following:

(In thousands)		2023				2022
Deferred tax assets:
Inventory		$	19,623			$	5,818
Accrued expenses			3,533				7,865
Deferred compensation			6,284				5,792
Stock-based compensation			2,023				1,373
Uncertain tax positions related to state taxes and related interest			105				102
Pensions			8,607				5,952
Foreign losses			2,705				4,744
State losses and credit carry-forwards			4,259				3,516
Federal loss and research carry-forwards			78,450				64,995
Lease liabilities			7,701				4,093
Capitalized research and development expenditures			48,192				31,248
Investments			—				160
Valuation allowance			(86,567	)			(5,201	)
Total Deferred Tax Assets			94,915				130,457
Deferred tax liabilities:
Property, plant and equipment			(9,093	)			(8,982	)
Intellectual property			(86,572	)			(108,671	)
Right of use lease assets			(8,424	)			(6,594	)
Investments			(694	)			—
Total Deferred Tax Liabilities			(104,783	)			(124,247	)
Net Deferred Tax (Liabilities) Assets		$	(9,868	)		$	6,210

Supplemental balance sheet information related to deferred tax assets (liabilities) as of December 31, 2023 and 2022 were as follows:

		December 31, 2023
(In thousands)		Deferred Tax Assets (Liabilities)				Valuation Allowance				Deferred Tax Assets (Liabilities), net
Domestic		$	101,120			$	(84,767	)		$	16,353
International			(24,421	)			(1,800	)			(26,221	)
Total		$	76,699			$	(86,567	)		$	(9,868	)

		December 31, 2022
(In thousands)		Deferred Tax Assets				Valuation Allowance				Deferred Tax Assets, net
Domestic		$	61,726			$	(3,177	)		$	58,549
International			(50,315	)			(2,024	)			(52,339	)
Total		$	11,411			$	(5,201	)		$	6,210

Change in Unrecognized Income Tax Benefits

The change in the unrecognized income tax benefits for the years ended December 31, 2023, 2022 and 2021 were as follows:

(In thousands)		2023				2022				2021
Balance at beginning of period		$	17,885			$	17,836			$	1,078
Increases for tax position related to:
Prior years			—				—				17,025
Current year			129				123				136
Decreases for tax positions related to:
Prior years			(17,025	)			(13	)			(27	)
Expiration of applicable statute of limitations			—				(61	)			(376	)
Balance at end of period		$	989			$	17,885			$	17,836

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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