Income Taxes |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Income Taxes | Income Taxes We are subject to U.S. federal, state, and foreign income taxes. During the three months ended March 31, 2026 and 2025, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes.
Our effective tax rates for the three months ended March 31, 2026 and 2025 were lower than the U.S. statutory rate primarily due to excess tax benefits related to stock-based compensation. We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination by a taxing authority. As of March 31, 2026 and December 31, 2025, we had $420.3 million and $436.6 million, respectively, of net unrecognized tax benefits, which would affect our tax rate if recognized. We file U.S. federal income tax returns and income tax returns in various state, local and foreign jurisdictions. We have various income tax audits ongoing at any time throughout the world. Except for jurisdictions where we have net operating losses or tax credit carryforwards, we are no longer subject to any tax assessment from tax authorities for years prior to 2014 in jurisdictions that have a material impact on our consolidated financial statements. Due to the nature of the adjustments from a settlement with the United Kingdom’s HM Revenue & Customs in 2023, we have asserted our rights under the U.S./ U.K. Income Tax Convention pursuant to the mutual agreement procedures for the relief of double taxation for these matters. In December 2022, European Union member states reached an agreement to implement the minimum tax component (“Pillar Two”) of the Organization for Economic Co-operation and Development’s (the “OECD’s”), global international tax reform initiative with effective dates of January 1, 2024 and 2025. On January 5, 2026, the OECD announced that a ‘side-by- side’ agreement was reached with member countries creating safe harbors to exempt U.S. multi-nationals from certain taxes under the Pillar Two regime by recognizing the U.S. tax system as a compatible domestic minimum tax regime. Our exposure to other countries’ minimum tax regimes was limited before these changes, but the side-by-side agreement allows for certainty as our structure may change in the future. In July 2025, the U.S. enacted H.R.1, which includes significant provisions modifying the U.S. tax framework, including the ability for companies to immediately deduct research and development expenditures for 2025 and provisions for deducting previously capitalized amounts. H.R.1 does not have a material impact on our U.S. taxes for the first quarter of 2026, but we expect further guidance to be issued. We will review guidance when issued for impacts on future years and disclose any impacts if needed at that time. These legislative changes could have an impact on our future effective tax rates, tax liabilities, and cash taxes.
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