Income Taxes |
6 Months Ended |
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Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes For the three and six months ended June 30, 2025, we recorded income tax expense of $55,000 and $109,000, respectively, compared to $30,000 and $60,000, respectively, for the same periods in 2024. Our effective tax rate for the three and six months ended June 30, 2025 was (0.4)% and (0.5)%, respectively, compared to 0.2% and 1.0%, respectively, for the same periods in 2024. The effective tax rate in both periods was primarily driven by the full valuation allowance maintained against the Company’s deferred tax assets. For the three and six months ended June 30, 2025, the Company’s provision for income taxes was based on its worldwide estimated annualized effective tax rate, except for (1) jurisdictions for which a loss is expected for the year and no benefit can be realized for those losses, (2) jurisdictions for which forecasted pre-tax income or loss cannot be estimated, and (3) the tax effect of discrete items occurring during the period. The tax for jurisdictions for which a forecast cannot be estimated is based on actual taxes and tax reserves for the quarter. Under the provisions of ASC 740, Income Taxes, the determination of the Company’s ability to recognize its deferred tax assets requires an assessment of both negative and positive evidence. The Company determined that it was not more likely than not that the Company could recognize its deferred tax assets. The evidence evaluated by the Company included operating results during the most recent three-year period and future projections, with more weight given to historical results than expectations of future profitability, which are inherently uncertain. Certain entities’ net losses in recent periods represented sufficient negative evidence to require a valuation allowance against its net deferred tax assets. This valuation allowance will be evaluated periodically and could be reversed partially or totally if business results sufficiently improve to support realization of deferred tax assets. As of June 30, 2025, unrecognized tax benefits were $1.4 million, of which none would affect the effective tax rate, if recognized. It is the Company’s policy to classify accrued interest and penalties to unrecognized tax benefits in the provision for income taxes. There were no accrued interest or penalties as of June 30, 2025 or December 31, 2024. The disclosures regarding uncertain tax positions included in our 2024 Annual Report continue to be accurate for the three and six months ended June 30, 2025. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law, introducing significant U.S. tax changes. Key provisions of the OBBBA include changes to bonus depreciation, capitalized research and development expenditures and interest deductibility. The Company does not expect the OBBBA to have a material impact on its effective tax rate or consolidated financial statements.
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