Income Tax |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax | Income Tax The effective income tax rate was 9.3% and 18.2%, respectively, for the three months ended March 31, 2026 and 2025. The effective tax rate differs from the U.S. federal rate in 2026 primarily due to the windfall tax benefit on stock compensation activity, the executive compensation addback under Internal Revenue Code Section 162(m), generation of research and development tax credits, transaction costs, acquisition earn-outs, and state taxes. The effective tax rate differs from the U.S. federal rate in 2025 primarily due to the windfall tax benefit on stock compensation activity, the executive compensation addback under Internal Revenue Code Section 162(m), generation of research and development tax credits, and state taxes. For interim periods, the Company has historically utilized the estimated annual effective tax rate method under which the Company determined its provision for income taxes based on the current estimate of its annual effective tax rate for all jurisdictions. For the three months ended March 31, 2026, the Company utilized the discrete effective tax rate method for its domestic subsidiaries, while continuing to utilize the estimated annual effective rate methodology for its foreign subsidiaries. The discrete method treats the year-to-date period as if it were the annual period and determines the interim income taxes on that basis. Due to the significant estimation uncertainty for the domestic forecast as a result of the 2026 US WL Announcement as described in 2 – Summary of Significant Accounting Policies, the Company cannot reliably estimate its U.S. federal annual effective tax rate, and a discrete tax computation based on actual year-to-date results is the most appropriate method for computing U.S. federal income tax expense. The Company will re-evaluate the methodology in the next quarter, when objective data is available to support future estimated results of its United States weight loss offerings.
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