Income Taxes (Tables)

12 Months Ended

Jun. 30, 2018

Schedule of domestic and foreign components of income before income tax provision

The components of income before income tax provision for the fiscal years ended June 30, 2020, 2019 and 2018 are as follows (in thousands):



	Years Ended June 30,
	2020		2019		2018
United States	$	35,701	$	45,126	$	39,394
Foreign	49,127		44,397		48,821
Income before income tax provision	$	84,828	$	89,523	$	88,215

Schedule of income tax provision

The income tax provision for the fiscal years ended June 30, 2020, 2019 and 2018, consists of the following (in thousands):



	Years Ended June 30,
	2020			2019			2018
Current:
Federal	$	4,568		$	12,308		$	11,090
State	1,727			2,917			815
Foreign	10,399			16,531			12,984
	16,694			31,756			24,889
Deferred:
Federal	(10,108		)	(13,078		)	14,304
State	(1,621		)	(2,888		)	265
Foreign	(2,043		)	(906		)	(1,015		)
	(13,772		)	(16,872		)	13,554
Income tax provision	$	2,922		$	14,884		$	38,443

Schedule of deferred tax assets and liabilities

The Company’s net deferred tax assets as of June 30, 2020 and 2019 consist of the following (in thousands):



	June 30,
	2020			2019
Research and development credits	$	24,304		$	20,858
Deferred revenue	20,354			18,963
Inventory valuation	13,946			11,856
Capitalized research and development costs	7,509			—
Stock-based compensation	4,075			6,080
Lease obligations	3,632			—
Accrued vacation and bonus	3,281			2,681
Prepaid and accrued expenses	2,560			—
Warranty accrual	2,051			1,948
Bad debt and other reserves	1,917			1,283
Marketing fund accrual	548			554
Other	3,652			3,276
Total deferred income tax assets	87,829			67,499
Deferred tax liabilities-depreciation and other	(4,428		)	(5,406		)
Right of use asset	(3,612		)	—
Valuation allowance	(24,891		)	(20,967		)
Deferred income tax assets, net	$	54,898		$	41,126

Reconciliation of effective income tax rate

The following is a reconciliation for the fiscal years ended June 30, 2020, 2019 and 2018, of the statutory rate to the Company’s effective federal tax rate:



	Years Ended June 30,
	2020		2019		2018
Income tax provision at statutory rate	21.0	%	21.0	%	28.1	%
State income tax, net of federal tax benefit	—		0.5		(0.1	)
Foreign rate differential	—		1.1		(6.0	)
Research and development tax credit	(13.1	)	(9.5	)	(8.7	)
Uncertain tax positions, net of (settlement) with Tax Authorities	(2.3	)	4.1		6.3
Foreign derived intangible / Subpart F income inclusion	(3.8	)	(2.1	)	0.7
Stock-based compensation	(2.8	)	2.1		1.8
Non deductible penalty on SEC matter	4.4		—		—
Provision to return true-up	(1.1	)	(1.6	)	1.5
Tax reform related charge	—		—		17.9
Qualified production activity deduction	—		—		(1.3	)
Other, net	1.1		1.0		3.4
Effective tax rate	3.4	%	16.6	%	43.6	%

Schedule of unrecognized tax benefits rollforward

The following table summarizes the activity related to the unrecognized tax benefits (in thousands):



	Gross* Unrecognized Income Tax Benefits
Balance at June 30, 2017	19,217
Gross increases:
For current year’s tax positions	6,864
For prior years’ tax positions	—
Gross decreases:
Decreases due to a lapse of the statute of limitations	(964		)
Balance at June 30, 2018	25,117
Gross increases:
For current year’s tax positions	7,789
For prior years’ tax positions	—
Gross decreases:
Decreases due to settlements with taxing authority	(1,504		)
Decreases due to lapse of statute of limitations	(3,354		)
Balance at June 30, 2019	28,048
Gross increases:
For current year’s tax positions	8,769
For prior years’ tax positions	505
Gross decreases:
Decreases due to settlements with taxing authority	(7,632		)
Decreases due to lapse of statute of limitations	(2,484		)
Balance at June 30, 2020	$	27,206

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*excludes interest, penalties, federal benefit of state reserves