Income Taxes |
3 Months Ended |
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Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company's income tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company's quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pretax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company does business, tax law developments and possible outcomes of audits. The Company's estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to non-deductible stock-based compensation expense, state taxes, the benefit of U.S. federal income tax credits, enacted tax legislation, and the benefits related to the Foreign-Derived Deduction-Eligible Income (“FDDEI”) Deduction. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Beginning in 2026, the OBBBA changes to the FDDEI deduction and Net CFC Tested Income (“NCTI”) became effective. The Company has recognized the effects of these OBBBA provisions in its financial results for the three months ended March 31, 2026. The Company recorded an income tax provision of $14.3 million and $10.8 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an effective tax rate of 22.1% and 18.5%, respectively. The increase in income tax provision for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, was primarily due to an increase in non-deductible stock-based compensation, a decrease in the federal R&D credit, and an increase in tax expense arising from discrete adjustments in the period, partially offset by the increase in the tax benefit from FDDEI rules that became effective in 2026 under OBBBA.
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