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Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
Note 12. Income Taxes
For the three and six months ended June 30, 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 (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Income before provision for income taxes$751,514 $558,012 $1,095,114 $792,202 
Provision for income taxes165,909 153,013 206,179 229,000 
Effective tax rate22.1%27.4%18.8%28.9%
Our effective tax rates for the three and six months ended June 30, 2026 were favorably impacted by tax benefits associated with the generation of tax credits and foreign tax effects. This was mostly offset by a net increase in valuation allowances against certain U.S. federal and state deferred tax assets. In addition, our effective tax rate for the six months ended June 30, 2026 was favorably impacted by changes in unrecognized tax benefits. Our effective tax rates for the three and six months ended June 30, 2025 were unfavorably impacted by an increase in valuation allowances against certain U.S. federal and state deferred tax assets. This was partially offset by tax rate benefits associated with the generation of tax credits and the effects of cross-border tax laws.
The effective tax rates for the three and six months ended June 30, 2026 were favorable as compared to the three and six months ended June 30, 2025 due to reversals of certain foreign valuation allowances and the impacts of the One Big Beautiful Bill Act (“OBBBA”) discussed below. The effective tax rate for the six months ended June 30, 2026 was also favorably impacted as compared to the prior year due to the recognition of previously unrecognized tax benefits and reversals of certain U.S. valuation allowances.
We accrue interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.
One or more of our legal entities file income tax returns in the U.S. and in certain foreign jurisdictions. Our income tax returns may be examined by tax authorities in those jurisdictions. Significant disputes may arise with tax authorities involving issues such as the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations and relevant facts. We were under U.S. federal audit for the 2021 tax year; during the first quarter of 2026, the federal audit for tax year 2021 was completed with no material matters identified.
The Organization for Economic Cooperation and Development Pillar 2 guidelines, supported by over 130 countries worldwide, establish a 15% global minimum tax on adjusted financial results. Pillar 2 legislation has been enacted in multiple jurisdictions in which we operate and became effective beginning in 2024. We have evaluated the impact of Pillar 2 on our business, and determined there are no material impacts on our effective tax rate at this time. We will continue to monitor additional enactments and guidance as they occur and assess any future impacts in the period they become effective.
In July 2025, the U.S. enacted the OBBBA, which modified certain provisions of the Tax Cuts and Jobs Act of 2017, including those related to the expensing of domestic research and development costs, the deduction for foreign-derived intangible income, and the global intangible low-taxed income regime. The OBBBA also introduced multiple elections related to the treatment of domestic research and development expenditures. As a result of these changes, we expect to fully deduct certain expenditures for which deferred tax assets had previously been recorded and, accordingly, no longer maintain a valuation allowance against such amounts. The absence of these deferred tax assets and related valuation allowance continues to have a favorable impact on our effective tax rate for the current period. We will continue to evaluate the application of the OBBBA’s various elections in connection with the preparation of our income tax return.