Income Taxes |
3 Months Ended | ||||||
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Mar. 31, 2026 | |||||||
| Income Tax Disclosure [Abstract] | |||||||
| Income Taxes | Note 13. Income Taxes For interim periods, we follow the general recognition approach whereby tax expense is recognized using an estimated annual effective tax rate, which is applied to the year-to-date operating results. Additionally, we recognize tax expense or benefit for any discrete items occurring within the interim period that were excluded from the estimated annual effective tax rate. Our effective tax rate may be subject to fluctuations during the year due to impacts from the following items: (i) changes in forecasted pre-tax and taxable income or loss, (ii) changes in statutory law or regulations in jurisdictions where we operate, (iii) audits or settlements with taxing authorities, (iv) the tax impact of expanded product offerings or business acquisitions, and (v) changes in valuation allowance assumptions. For the three months ended March 31, 2026 and 2025, we recorded income tax expense of $32,821 and $8,666, respectively. The income tax expense recognized in both periods was primarily attributable to the Company’s profitability, partially offset by discrete tax benefits for stock compensation recorded in each quarter. For the three months ended March 31, 2026, the Company’s effective tax rate was lower than the U.S. federal statutory rate primarily due to excess tax benefits from stock compensation. There were no material changes to our unrecognized tax benefits during the three months ended March 31, 2026. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination of whether a valuation allowance is necessary, the Company considers all available positive and negative evidence supporting the allowance. During the three months ended March 31, 2026, we continue to maintain a valuation allowance in certain state and foreign jurisdictions where sufficient positive evidence does not exist to support the realizability of deferred tax assets. Management will continue to assess the need for a valuation allowance in future periods.
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