Qorvo, Inc.QRVO
Qorvo, Inc. Income Taxes Disclosure
13. INCOME TAXES
Income before income taxes consists of the following components (in thousands):
| Fiscal Year | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| United States | $ | (102,415) | $ | (405,546) | $ | (281,790) | |||||||||||
| Foreign | 500,688 | 471,445 | 355,350 | ||||||||||||||
| Total | $ | 398,273 | $ | 65,899 | $ | 73,560 | |||||||||||
The components of the income tax provision are as follows (in thousands):
| Fiscal Year | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Current tax expense (benefit): | |||||||||||||||||
| Federal | $ | 4,125 | $ | 19,482 | $ | 36,155 | |||||||||||
| State | 1,023 | 92 | 232 | ||||||||||||||
| Foreign | 93,520 | 75,447 | 88,090 | ||||||||||||||
| 98,668 | 95,021 | 124,477 | |||||||||||||||
| Deferred tax expense (benefit): | |||||||||||||||||
| Federal | (22,757) | (91,101) | 6,532 | ||||||||||||||
| State | (2,499) | 49 | (1,090) | ||||||||||||||
| Foreign | (14,128) | 6,315 | 13,963 | ||||||||||||||
| (39,384) | (84,737) | 19,405 | |||||||||||||||
| Total | $ | 59,284 | $ | 10,284 | $ | 143,882 | |||||||||||
A reconciliation of the U.S. federal statutory income tax rate to the Company's effective tax rate, pursuant to the disclosure requirements of ASU 2023-09, is as follows (dollars in thousands):
| Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | ||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 83,637 | 21.0 | % | $ | 13,839 | 21.0 | % | $ | 15,448 | 21.0 | % | ||||||||||||||
State and Local Taxes, Net of Federal Tax Effect (1) | (1,086) | (0.3) | % | (400) | (0.6) | % | (1,213) | (1.6) | % | |||||||||||||||||
| Foreign Tax Effects | ||||||||||||||||||||||||||
| Singapore | ||||||||||||||||||||||||||
| Statutory tax rate difference | (22,235) | (5.6) | % | (19,448) | (29.5) | % | (20,051) | (27.3) | % | |||||||||||||||||
| Tax holiday and other rate differences | (57,069) | (14.3) | % | (48,891) | (74.2) | % | (45,580) | (62.0) | % | |||||||||||||||||
| Restructuring-related impact | (19,824) | (5.0) | % | — | — | % | — | — | % | |||||||||||||||||
| Global minimum taxes | 39,002 | 9.8 | % | — | — | % | — | — | % | |||||||||||||||||
| Other | 1,165 | 0.3 | % | 954 | 1.4 | % | 1,234 | 1.7 | % | |||||||||||||||||
| Ireland | ||||||||||||||||||||||||||
| Statutory tax rate difference | 6,569 | 1.6 | % | 3,828 | 5.8 | % | 16,596 | 22.6 | % | |||||||||||||||||
| Changes in valuation allowance | (4,948) | (1.2) | % | 2,784 | 4.2 | % | 5,251 | 7.1 | % | |||||||||||||||||
| Restructuring-related impact | 16,404 | 4.1 | % | — | — | % | — | — | % | |||||||||||||||||
| Goodwill impairment | — | — | % | — | — | % | 18,237 | 24.8 | % | |||||||||||||||||
| Other | (417) | (0.1) | % | (150) | (0.2) | % | (23) | — | % | |||||||||||||||||
| France | ||||||||||||||||||||||||||
| Statutory tax rate difference | (1,291) | (0.3) | % | (688) | (1.0) | % | (1,437) | (2.0) | % | |||||||||||||||||
| Changes in valuation allowance | 8,037 | 2.0 | % | 5,762 | 8.7 | % | 5,724 | 7.8 | % | |||||||||||||||||
| Goodwill impairment | — | — | % | — | — | % | 4,784 | 6.5 | % | |||||||||||||||||
| Other | 58 | — | % | (688) | (1.0) | % | (909) | (1.2) | % | |||||||||||||||||
| China | ||||||||||||||||||||||||||
| Statutory tax rate difference | 47 | — | % | 177 | 0.3 | % | 2,346 | 3.2 | % | |||||||||||||||||
| Restructuring-related impact | — | — | % | (664) | (1.0) | % | 45,096 | 61.3 | % | |||||||||||||||||
| Other | 556 | 0.1 | % | (928) | (1.4) | % | 5,111 | 6.9 | % | |||||||||||||||||
| Other Foreign Jurisdictions | ||||||||||||||||||||||||||
| Statutory tax rate difference | 8,233 | 2.1 | % | 3,632 | 5.5 | % | 4,025 | 5.5 | % | |||||||||||||||||
| Other | 139 | — | % | 1,145 | 1.7 | % | (125) | (0.2) | % | |||||||||||||||||
| Effect of Cross-Border Tax Laws | ||||||||||||||||||||||||||
| Global intangible low-taxed income | 71,418 | 17.9 | % | 70,132 | 106.4 | % | 110,572 | 150.3 | % | |||||||||||||||||
| Subpart F income | 12,731 | 3.2 | % | 9,599 | 14.6 | % | 19,121 | 26.0 | % | |||||||||||||||||
| Foreign-derived intangible income | (4,486) | (1.1) | % | (4,848) | (7.4) | % | — | — | % | |||||||||||||||||
| Restructuring-related impact | (6,461) | (1.6) | % | 5,034 | 7.6 | % | — | — | % | |||||||||||||||||
| Other | (340) | (0.1) | % | (672) | (1.0) | % | 574 | 0.8 | % | |||||||||||||||||
| Tax Credits | ||||||||||||||||||||||||||
| Research & development credits | (30,354) | (7.6) | % | (25,305) | (38.4) | % | (22,392) | (30.4) | % | |||||||||||||||||
| Foreign tax credit | (77,588) | (19.5) | % | (32,142) | (48.8) | % | (46,940) | (63.8) | % | |||||||||||||||||
| Restructuring-related impact | 5,409 | 1.4 | % | (5,944) | (9.0) | % | (7,624) | (10.4) | % | |||||||||||||||||
| Changes in Federal Valuation Allowance | (41) | — | % | 27,938 | 42.4 | % | 24 | — | % | |||||||||||||||||
| Nontaxable or Nondeductible Items | ||||||||||||||||||||||||||
| Disallowed stock-based and officers' compensation | 14,634 | 3.7 | % | 11,793 | 17.9 | % | 10,148 | 13.8 | % | |||||||||||||||||
| Restructuring-related impact | — | — | % | (2,093) | (3.2) | % | 5,388 | 7.3 | % | |||||||||||||||||
| Goodwill impairment | 3,987 | 1.0 | % | — | — | % | 5,489 | 7.5 | % | |||||||||||||||||
| Other | 3,685 | 0.9 | % | 1,434 | 2.2 | % | 6,574 | 8.9 | % | |||||||||||||||||
| Changes in Unrecognized Tax Benefits | 9,603 | 2.4 | % | (5,016) | (7.6) | % | 8,451 | 11.5 | % | |||||||||||||||||
| Other Adjustments | 110 | 0.1 | % | 110 | 0.2 | % | (17) | — | % | |||||||||||||||||
| Effective Tax Rate | $ | 59,284 | 14.9 | % | $ | 10,284 | 15.6 | % | $ | 143,882 | 195.6 | % | ||||||||||||||
(1) Primarily consisting of taxes attributable to California and Texas.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA permanently extends several tax provisions originally introduced under the 2017 Tax Cuts and Jobs Act, and also repeals, modifies and introduces various other tax measures with varying effective dates. The OBBBA did not have a material impact on the Consolidated Financial Statements for the fiscal year ended March 28, 2026.
The following table presents cash paid for income taxes, net of refunds received, by jurisdiction, pursuant to the disclosure requirements of ASU 2023-09 (in thousands):
| Fiscal Year | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Federal | $ | 13,659 | $ | 8,065 | $ | 16,123 | |||||||||||
| State and local | 1,089 | 444 | 841 | ||||||||||||||
| Foreign | |||||||||||||||||
| China | 15,344 | 31,588 | 42,955 | ||||||||||||||
| Singapore | 22,505 | 24,891 | 33,414 | ||||||||||||||
| Germany | 3,295 | 22,268 | 11,333 | ||||||||||||||
| Other | 40 | 1,956 | (14) | ||||||||||||||
| Total | $ | 55,932 | $ | 89,212 | $ | 104,652 | |||||||||||
The timing of cash tax payments and refunds is determined by jurisdiction-specific statutory requirements, which may not correspond to the period in which the related income tax expense is recognized.
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 basis used for income tax purposes. The deferred income tax assets and liabilities are measured in each taxing jurisdiction using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Significant components of the Company’s net deferred income taxes are as follows (in thousands):
| March 28, 2026 | March 29, 2025 | ||||||||||
| Deferred income tax assets: | |||||||||||
| Capitalized research and development expenses | $ | 103,142 | $ | 96,198 | |||||||
| Research and other tax credits | 43,312 | 42,066 | |||||||||
| Employee benefits | 37,412 | 34,335 | |||||||||
| Capital loss carryforwards | 29,221 | 29,334 | |||||||||
| Net operating loss carryforwards | 25,437 | 25,045 | |||||||||
| Inventories | 17,593 | 17,485 | |||||||||
| Lease liabilities | 12,871 | 13,713 | |||||||||
| Other | 21,050 | 14,012 | |||||||||
| Total deferred income tax assets | 290,038 | 272,188 | |||||||||
| Valuation allowance | (90,855) | (85,722) | |||||||||
| Total deferred income tax assets, net of valuation allowance | $ | 199,183 | $ | 186,466 | |||||||
| Deferred income tax liabilities: | |||||||||||
| Property and equipment | $ | (28,703) | $ | (34,912) | |||||||
| Intangible assets | (17,897) | (34,289) | |||||||||
| Right-of-use assets | (11,819) | (12,985) | |||||||||
| Accrued tax on unremitted foreign earnings | (8,906) | (8,701) | |||||||||
| Other | (2,356) | (4,948) | |||||||||
| Total deferred income tax liabilities | (69,681) | (95,835) | |||||||||
| Net deferred income tax asset | $ | 129,502 | $ | 90,631 | |||||||
Amounts included in the Consolidated Balance Sheets: | |||||||||||
| Other non-current assets | $ | 130,794 | $ | 101,439 | |||||||
| Other long-term liabilities | (1,292) | (10,808) | |||||||||
| Net deferred income tax asset | $ | 129,502 | $ | 90,631 | |||||||
The Company has recorded a valuation allowance against certain U.S. and foreign deferred tax assets as of March 28, 2026 and March 29, 2025. These valuation allowances were established based upon management's opinion that it is more likely than not (a likelihood of more than 50 percent) that the benefit of these deferred tax assets will not be realized.
The components of the change in valuation allowances and ending balances are as follows (in thousands):
| Fiscal Year | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Beginning valuation allowance | $ | 85,722 | $ | 43,636 | $ | 35,896 | |||||||||||
| Charged (credited) to income tax provision: | |||||||||||||||||
| Domestic tax attributes and deferred tax assets | 746 | 33,344 | (3,367) | ||||||||||||||
| Foreign tax attributes and deferred tax assets | 3,311 | 8,802 | 10,904 | ||||||||||||||
Translation and other charges (1) | 1,076 | (60) | 203 | ||||||||||||||
| Ending valuation allowance | $ | 90,855 | $ | 85,722 | $ | 43,636 | |||||||||||
| Components of ending valuation allowance: | |||||||||||||||||
| Domestic deferred tax assets | $ | 66,516 | $ | 65,769 | $ | 32,406 | |||||||||||
| Foreign deferred tax assets | 24,339 | 19,953 | 11,230 | ||||||||||||||
| Valuation allowance | $ | 90,855 | $ | 85,722 | $ | 43,636 | |||||||||||
(1) Other charges primarily relate to purchase accounting adjustments.
As of March 28, 2026, the Company had federal tax loss carryforwards of approximately $20.4 million, some of which expire in fiscal years 2029 to 2038, and state tax loss carryforwards of approximately $91.9 million, some of which expire in fiscal years 2027 to 2044, the remainder of which will carry forward indefinitely. Federal research tax credits of $87.7 million expire in fiscal years 2044 to 2046, and a portion of the Company's state research tax credits of $72.0 million expire in fiscal years 2027 to 2043, while the remainder carry forward indefinitely. The Company had foreign tax loss carryforwards of $97.0 million as of March 28, 2026, the majority of which will carry forward indefinitely. Each tax loss carryforward and tax credit expires only if unused prior to its respective expiration date. The utilization of acquired domestic tax assets is subject to certain annual limitations as required under Section 382 of the Internal Revenue Code of 1986, as amended, and similar state income tax provisions.
The Company currently operates in numerous international jurisdictions, which expose the Company to taxation in various regions. The Company is not permanently reinvested on earnings of its foreign subsidiaries which have been subject to U.S. federal taxation and has recognized a corresponding deferred tax liability for the estimated tax that would be incurred upon repatriation.
The Company has foreign subsidiaries with tax holiday agreements in Costa Rica and Singapore, which provide for reduced income tax rates expiring in December 2027 and December 2031, respectively. These incentives are contingent upon the Company satisfying specified employment and investment requirements. Upon the divestiture of operations in Costa Rica, the Company began the process to deregister from the Costa Rica tax holiday agreement. As a result of the Company’s active tax holiday agreements, income tax expense decreased relative to the statutory rate by $64.0 million (an impact of approximately $0.69 per basic share and $0.68 per diluted share) in fiscal 2026 and $54.0 million (an impact of approximately $0.57 per basic and diluted share) in fiscal 2025. The overall benefit derived from the Company’s Singapore tax holiday was adversely impacted in fiscal 2026 due to Singapore’s implementation of a minimum tax of 15% on income, which resulted in the Company recording $39.0 million of incremental income tax expense. Certain countries in which the Company operates, including Singapore, have implemented legislation and other guidance to align their international tax rules with the Organization for Economic Co-operation and Development’s (the "OECD") Base Erosion and Profit Shifting recommendations and action plan, including establishment of a minimum tax of 15% on global income (commonly referred to as the OECD's global minimum tax regime or "Pillar Two"). On January 5, 2026, the OECD released additional Pillar Two guidance introducing a new “side-by-side” system, which, upon adoption by local legislatures, will exclude U.S. headquartered companies from some aspects of minimum taxation.
The Company’s gross unrecognized tax benefits totaled $154.6 million, $145.7 million and $158.9 million as of March 28, 2026, March 29, 2025 and March 30, 2024, respectively. Of these amounts, $148.8 million, $139.6 million and $152.6 million as of March 28, 2026, March 29, 2025 and March 30, 2024, respectively, represent the
amounts of unrecognized tax benefits that, if recognized, would impact the effective tax rate in each of the fiscal years.
The Company’s gross unrecognized tax benefits increased from $145.7 million as of March 29, 2025 to $154.6 million as of March 28, 2026, primarily due to current year tax positions, partially offset by the expiration of statute of limitations on prior-year positions.
A summary of the changes in the amount of gross unrecognized tax benefits is as follows (in thousands):
| Fiscal Year | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Beginning balance | $ | 145,717 | $ | 158,899 | $ | 152,331 | |||||||||||
| Additions based on positions related to current year | 11,832 | 16,696 | 5,298 | ||||||||||||||
| Additions for tax positions in prior years | 578 | 1,593 | 2,280 | ||||||||||||||
| Reductions for tax positions in prior years | (1,297) | (536) | (2,416) | ||||||||||||||
| Expiration of statute of limitations | (2,197) | (24,983) | (436) | ||||||||||||||
Other (reductions) additions (1) | — | (5,952) | 1,842 | ||||||||||||||
| Ending balance | $ | 154,633 | $ | 145,717 | $ | 158,899 | |||||||||||
(1) Relates to divestitures and purchase accounting related adjustments.
It is the Company’s policy to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. During fiscal years 2026, 2025 and 2024, the Company recognized $0.8 million, $2.2 million and $3.5 million, respectively, of interest and penalties related to uncertain tax positions. Accrued interest and penalties related to unrecognized tax benefits totaled $8.3 million, $7.5 million and $5.3 million as of March 28, 2026, March 29, 2025 and March 30, 2024, respectively.
The unrecognized tax benefits of $154.6 million and accrued interest and penalties of $8.3 million as of March 28, 2026 are recorded in the Consolidated Balance Sheet as a $44.4 million other long-term liability, with the balance reducing the carrying value of the gross deferred tax assets.
The Company files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. The Company’s fiscal 2021 U.S. federal and state tax returns and subsequent tax years remain open for examination, as well as attributes brought forward into those years. As of March 28, 2026, the Company’s U.S. federal income tax return for fiscal 2023 is under examination. While the ultimate resolution of this examination is uncertain, the Company believes that its tax positions are reasonably supported and that adequate reserves, if any, have been recorded in accordance with ASC 740. The Company is also subject to examination by various international tax authorities, with tax years subject to examination varying by jurisdiction.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 8, 2026 | Showing above |
| 2025 | May 19, 2025 | |
| 2024 | May 20, 2024 | |
| 2023 | May 19, 2023 | |
| 2022 | May 20, 2022 | |
| 2021 | May 24, 2021 | |
| 2020 | May 20, 2020 | |
| 2019 | May 17, 2019 | |
| 2018 | May 21, 2018 | |
| 2017 | May 23, 2017 | |
| 2016 | May 31, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.