Income Taxes |
6 Months Ended |
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Jun. 30, 2025 | |
| Income Taxes | |
| Income Taxes | 20.Income Taxes The Company’s income tax expense for the three months ended June 30, 2025 and 2024 was $13,630 and $1,126, respectively. The Company’s income tax expense for the six months ended June 30, 2025 and 2024 was $3,463 and $2,849, respectively. The income tax expense reflects the Company’s estimate of the effective tax rates expected to be applicable for the full year, adjusted for any discrete events that are recorded in the period in which they occurred. The estimates are re-evaluated each quarter based on the estimated tax for the full year. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the condensed consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the condensed consolidated statement of operations. The effective tax rate for the three and six months ended June 30, 2025 was 16.92% and 60.82%, compared to 99.03% and 31.89% in the same period of the prior year, respectively. The decrease in the effective tax rate for the three months ended June 30, 2025, is primarily due to the reversal of the valuation allowance because the net unrealized capital loss from digital assets as of March 31, 2025 became a net unrealized capital gain as of June 30, 2025, and higher tax benefits associated with employee stock-based compensation. The increase in the effective tax rate for the six months ended June 30, 2025, is primarily due to the estimated penalties from the potential DOJ settlement that are not deductable for tax purposes. The effective tax rate for the three months ended June 30, 2025 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit), tax benefits associated with employee share-based compensation plans and federal research and development (“R&D”) credit benefit and reversal of a valuation allowance associated with the Company’s digital assets investments. As of June 30, 2025, and December 31, 2024, the Company had $465 and $487, respectively, of unrecognized tax benefits, excluding interest and penalties. The Company’s practice is to recognize interest and penalty expenses related to uncertain tax positions, which was $190 and $155 as of June 30, 2025 and December 31, 2024, respectively. On August 16, 2022, the Creating Helpful Incentives to Produce Semiconductors for America Act of 2022 (“CHIPS and Science Act”), and Inflation Reduction Act (“IRA”) were signed into law in the United States. Among other things, the CHIPS and Science Act provides incentives and tax credits for the global chip manufacturers who choose to set-up or expand existing operations in the United States. The IRA imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. The IRA is primarily applicable to large corporations with an annual revenue of $1 billion or over. Implementation of this act had no impact on the Company’s condensed consolidated financial statements as of June 30, 2025. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. This legislation includes changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance. The Company is assessing the legislation and its effect on the condensed consolidated financial statements, which are expected to be reflected in the three-month period ended September 30, 2025.
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