Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2025 |
|---|
| Income Tax Disclosure [Abstract] |
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| Summary of Income Before Income Tax Is Comprised |
Income before income tax is comprised of the following:
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Cayman |
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(17,082 |
) |
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(5,305 |
) |
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(21,802 |
) |
Income recorded in Hong Kong |
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23,741 |
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34,983 |
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14,208 |
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Income from other foreign operations |
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54,389 |
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77,731 |
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147,721 |
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Income before taxes |
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61,048 |
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107,409 |
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140,127 |
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| Summary of Components of Income Tax Provision |
The components of income tax provision (benefit) were as follows:
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Current taxes: |
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Hong Kong taxes — current |
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3,983 |
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5,428 |
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1,728 |
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Foreign taxes — current |
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3,764 |
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13,154 |
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15,937 |
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Total current taxes |
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7,747 |
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18,582 |
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17,665 |
|
Deferred taxes: |
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Hong Kong taxes — deferred |
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— |
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— |
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— |
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Foreign taxes — deferred |
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428 |
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(422 |
) |
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(173 |
) |
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Total deferred taxes |
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428 |
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(422 |
) |
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(173 |
) |
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Income tax expense |
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8,175 |
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18,160 |
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17,492 |
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Effective tax rate |
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13.4 |
% |
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16.9 |
% |
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12.5 |
% |
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| Summary of Reconciliation of Income Tax Expense on Pretax Income at Statutory Rate and Income Tax Expense |
A reconciliation of the Hong Kong statutory rate of 16.5% to the Company’s effective tax rate for the year ended December 31, 2025 was as follows :
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Tax at Hong Kong Statutory Rate |
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23,121 |
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16.5 |
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Other Jurisdiction Tax Effects |
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Cayman Islands |
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Statutory tax rate difference between Hong Kong and Cayman Islands |
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(3,482 |
) |
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(2.5 |
) |
Nontaxable or nondeductible items |
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7,078 |
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5.1 |
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Other |
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290 |
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0.2 |
|
Macau |
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Statutory tax rate difference between Hong Kong and Macau |
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(2,075 |
) |
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(1.5 |
) |
Other |
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(131 |
) |
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(0.1 |
) |
China |
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Statutory tax rate difference between Hong Kong and China |
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3,154 |
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2.3 |
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Tax Credits |
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(4,825 |
) |
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(3.4 |
) |
Changes in Valuation Allowances |
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762 |
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0.5 |
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Other |
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(202 |
) |
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(0.1 |
) |
U.S. |
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Statutory tax rate difference between Hong Kong and U.S. |
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(1,855 |
) |
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(1.3 |
) |
Changes in Valuation Allowances |
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2,589 |
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1.9 |
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Other |
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31 |
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0.0 |
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Other Foreign Jurisdictions |
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Statutory tax rate difference between Hong Kong and Other Foreign Jurisdictions |
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1,046 |
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0.8 |
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Other |
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638 |
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0.5 |
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Changes in Unrecognized Tax Benefits |
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(8,647 |
) |
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(6.2 |
) |
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Provision for income taxes and effective tax rate |
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17,492 |
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12.5 |
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| A reconciliation of the Company’s income tax expense at Cayman statutory rate and provision for income tax prior to adoption of ASU 2023-09 is shown below:
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Tax expense at Cayman statutory rate |
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— |
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— |
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Differences between Cayman and other statutory tax rates |
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9,979 |
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16,107 |
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Permanent differences |
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206 |
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365 |
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Temporary differences |
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(1,614 |
) |
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(2,703 |
) |
Alternative minimum tax |
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1 |
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1 |
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Income tax on undistributed earnings |
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— |
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193 |
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Net changes in income tax credit |
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(205 |
) |
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(101 |
) |
Net changes in valuation allowance of deferred income tax assets |
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3,260 |
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5,014 |
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Net operating loss carryforwards |
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(1,805 |
) |
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497 |
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Liabilities related to unrealized tax benefits |
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5,482 |
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(42 |
) |
Adjustment of prior years’ taxes and others |
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(7,129 |
) |
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(1,171 |
) |
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Income tax expense |
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8,175 |
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18,160 |
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| Summary of Income Tax Paid By Individual Jurisdiction |
The following table presents income taxes paid, net of refunds received, for the year ended December 31, 2025.
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Hong Kong |
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5,729 |
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Macau |
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10,078 |
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Others |
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906 |
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Total income tax paid, net of refunds |
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16,713 |
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| Summary of Deferred Income Tax Assets (Liabilities) |
Significant components of our deferred tax assets (liabilities) at the end of each period are as follows:
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Stock-based compensation |
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1,520 |
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3,090 |
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Allowance for sales return |
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1,024 |
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472 |
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Inventory reserve |
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3,122 |
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1,939 |
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Foreign currency translation |
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(126 |
) |
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7 |
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Property and equipment |
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(628 |
) |
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(568 |
) |
Investment tax credits |
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3,596 |
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3,603 |
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Net operating loss carryforwards |
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21,607 |
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24,636 |
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Others |
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6,563 |
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7,228 |
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Valuation allowance |
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(27,800 |
) |
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(31,356 |
) |
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Net deferred tax assets |
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8,878 |
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9,051 |
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| Summary of Reconciliation of Unrecognized Tax Benefits |
A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
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Balance, beginning of year |
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37,105 |
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43,764 |
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43,584 |
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Increases in tax positions taken in current year |
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16,054 |
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4,376 |
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6,328 |
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Decrease in tax position taken in prior year primarily related to the resolution of tax audit |
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(9,395 |
) |
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(4,556 |
) |
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(14,654 |
) |
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Balance, end of year |
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43,764 |
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43,584 |
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35,258 |
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| Summary of Major Jurisdictions and Tax Year Subject to Examination by Tax Authorities |
The Company files income tax returns in the U.S. and foreign jurisdictions. The following table summarizes the Company’s major jurisdictions and tax years that remain subject to examination by tax authorities as of December 31, 2025:
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Tax Jurisdiction |
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Tax Years |
China |
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2022 and onward |
Hong Kong |
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2022 and onward |
Taiwan |
|
2020 and onward |
United States |
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2020 onward |
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