Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company computes its year-to-date provision for (benefit from) income taxes by applying the estimated annual effective tax rate to year-to-date pretax ordinary income or loss and adjusts the provision for (benefit from) income taxes for discrete tax items recorded in the period. The estimated effective tax rate is subject to fluctuation based on the level and mix of earnings and losses by tax jurisdiction, foreign tax rate differentials, the relative impact of permanent book to tax differences and the impact of any valuation allowances. Each quarter, a cumulative adjustment is recorded for any fluctuations in the estimated annual effective tax rate as compared to the prior quarter. As a result of these factors, and due to potential changes in the Company’s period-to-period results, fluctuations in the Company’s effective tax rate and respective tax provisions or benefits may occur. For the six months ended June 30, 2026, the Company recorded a benefit from income taxes of $1.92 billion on a pretax loss of $22.68 billion, which resulted in an effective tax rate of 8.5%. For the six months ended June 30, 2025, the Company recorded a provision for income taxes of $2.26 billion on a pretax income of $8.06 billion, which resulted in an effective tax rate of 28.0%. During the six months ended June 30, 2026, the Company’s benefit from income taxes primarily related to (i) the tax effect of the unrealized losses on digital assets as offset by (ii) the establishment of a full valuation allowance on domestic net deferred tax assets. During the six months ended June 30, 2025, the Company’s provision for income taxes primarily related to the tax effect of the unrealized gain on digital assets. As of June 30, 2026, the fair market value of the Company's bitcoin holdings has remained below its cost basis. As a result, the Company maintained a valuation allowance on all of its domestic net deferred tax assets. For the six months ended June 30, 2026 the Company recorded (i) a reversal of deferred tax liability of $2.42 billion on the unrealized gain on bitcoin holdings that existed as of December 31, 2025, (ii) a deferred tax asset for the unrealized loss on bitcoin holdings of $4.12 billion, and (iii) a deferred tax asset for the capital loss from the sale of bitcoin holdings of $24.4 million. These deferred tax assets were offset in full by a valuation allowance against all domestic net deferred tax assets of $4.60 billion that, in the Company’s present estimation, more likely than not will not be realized. If, in future periods, the fair market value of bitcoin increases and exceeds the cost basis of the Company's bitcoin holdings, the deferred tax asset with respect to unrealized loss would be reversed and the valuation allowance on domestic net deferred tax assets could be released. The Company will continue to regularly assess the realizability of deferred tax assets. The Company records liabilities related to its uncertain tax positions. As of June 30, 2026, the Company had gross unrecognized income tax benefits, including accrued interest, of $13.5 million, of which $3.1 million was recorded in “Other long-term liabilities” and $10.4 million was recorded in “Deferred tax assets” in the Company’s Consolidated Balance Sheet. As of December 31, 2025, the Company had gross unrecognized income tax benefits of $13.4 million, including accrued interest, $3.0 million of which was recorded in “Other long-term liabilities” and $10.4 million of which was recorded in “Deferred tax liability” in the Company’s Consolidated Balance Sheet.
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