The majority of FY22 net income generated by MACOM Technology Solutions Holdings (MTSI), a wireless and wireline semiconductor solutions developer, is the result of a valuation allowance reversal. The company released $202.8 million— the majority of its domestic NOLs and R&D tax credit carryforwards— which resulted in a tax benefit that significantly inflated FY22 net income.

The reserve release accounted for 46.1% of FY22 net income.

It also lifted EPS by $2.91, or 85.8%.

To its credit, MACOM excluded the tax benefit from its Adjusted EPS calculation, which is used, in part, to calculate executive bonuses.