v3.26.1
Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

8. Income Taxes

The provision for income taxes is attributable to U.S federal, state, and foreign income taxes. The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate and includes the tax effect of items required to be recorded discretely in the interim periods in which those items occur.

A reconciliation of the Company’s effective tax rate is as follows:

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2026

 

 

2025

 

Estimated annual effective tax rate before discrete items

 

 

25.4

%

 

 

25.7

%

Discrete items recognized

 

 

(15.1

)%

 

 

(28.4

)%

Effective tax rate recognized in the statements of operations

 

 

10.3

%

 

 

(2.7

)%

During the three months ended March 31, 2026, the Company’s effective tax rate was lower than the U.S. federal income tax rate, primarily as a result of including $12.5 million in net tax benefits resulting from the recognition of excess tax benefits from share-based compensation, partially offset by limitations on the deductibility of certain executive compensation. During the three months ended March 31, 2025, the Company's effective tax rate was lower than the U.S. federal income tax rate, primarily as a result of including $2.4 million in tax benefits resulting from the recognition of excess tax benefits from share-based compensation.