Income Taxes |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Note 9. Income Taxes The following table presents the Company’s income tax expense (in thousands) and effective income tax rate:
The effective tax rate for the three months ended March 31, 2025 was primarily impacted by the change in U.S. valuation allowance, foreign taxes, and Federal and State current tax. The effective tax rate for the three months ended March 31, 2024 was primarily impacted by the release of U.S. valuation allowance for PDP acquired net deferred tax liabilities. The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold. Interest and penalties associated with income tax matters are included in the provision for income taxes in the condensed consolidated statements of operations. As of March 31, 2025, the Company had uncertain tax positions of $2.5 million, inclusive of $0.6 million of interest and penalties. As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred taxes will not be realized. The Company considers all positive and negative evidence in determining if, based on the weight of such evidence, a valuation allowance is required. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. Due to the significant 2022 pre-tax loss, coupled with cumulative book losses projected in early future years, the Company recorded a valuation allowance on its net U.S. deferred tax assets as of December 31, 2022. The Company continues to maintain this valuation allowance for the three months ended March 31, 2025. For the three months ended March 31, 2024, the Company recorded a $6.7 million of tax benefit related to the PDP acquisition, including a reversal of $7.0 million of valuation allowance for PDP acquired net deferred tax liabilities. The Company is subject to income taxes domestically and in various foreign jurisdictions. The Company files U.S., state and foreign income tax returns in jurisdictions with various statutes of limitations. The federal tax years open under the statute of limitations are 2021 through 2023, and the state tax years open under the statute of limitations are 2020 through 2023, and the foreign tax years open under the statute of limitations are 2021 through 2023. |
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