Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 12. Income Taxes
The Company computes its provision for (benefit from) income taxes for interim periods by applying its estimated annual effective tax rate to year-to-date loss or income for includable jurisdictions before income taxes from recurring operations and adjusting for discrete tax items arising in that interim period.
The Company monitors the realizability of the U.S. and U.K. deferred tax assets taking into account all relevant factors.
The Company’s benefit from income taxes was $13.2 million for the three months ended March 31, 2025. The income tax benefit was primarily attributable to the release of the valuation allowance of U.K. deferred tax assets. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of the available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. As of March 31, 2025, the Company achieved cumulative U.K. income during the prior twelve quarters when considering pre-tax income adjusted for permanent differences and other comprehensive losses. Based on all available positive and negative evidence, having demonstrated sustained profitability, which is objective and verifiable, and taking into account anticipated future earnings, the Company concluded it is more likely than not that its U.K. deferred tax assets will be realizable and released $16.4 million of the valuation allowance as a discrete tax benefit during the three months ended March 31, 2025. The Company continues to maintain a full valuation allowance on its U.S. deferred tax assets. The Company will release the valuation allowance when there is sufficient positive evidence to support the conclusion that it is more likely than not the deferred tax assets will be realized.
The Company’s provision for income taxes was $2.5 million for the three months ended March 31, 2024, primarily due to foreign, federal, and state income taxes. |