Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company generally provides for income taxes in interim periods based on the estimated annual effective tax rate for the year, adjusting for discrete items in the quarter in which they arise. For the six months ended June 30, 2026 and 2025, the Company recorded income tax expense of $15.1 million and $2.3 million, respectively, by applying its estimated annual effective tax rate to its year-to-date measure of ordinary income and adjusted for $0.5 million and $2.0 million, respectively, of discrete income tax expense primarily from equity compensation. The effective tax rate for both the six months ended June 30, 2026 and 2025 differed from the statutory rate of 21% primarily due to the unfavorable impact of state taxes, non-deductible compensation and equity charges, partially offset by the favorable impact of the research and development credits and a Foreign-Derived Deduction-Eligible Income (“FDDEI”) benefit deduction. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States, which includes significant tax reform provisions. Included in the OBBBA are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. Key international income tax provisions enacted by OBBBA became effective for the tax year 2026. Notable changes include modifications to the deduction for foreign‑derived income (formerly Foreign‑Derived Intangible Income, now Foreign‑Derived Deduction‑Eligible Income), revisions to the Global Intangible Low-Taxed Income regime (renamed Net Controlled Foreign Corporation (“CFC”) Tested Income), and related changes to the computation of certain international income inclusions. The OBBBA provisions did not have a significant impact on the Company’s results of operations, financial position, and cash flows for the six months ended June 30, 2026. The Organization for Economic Co-Operation and Development (“OECD”) has previously established a global minimum tax framework under its Base Erosion and Profit Shifting (“BEPS”) Pillar Two initiative, which is intended to ensure that in-scope multinational enterprise groups are subject to a minimum effective tax rate of 15% on a jurisdictional basis. In January 2026, the OECD issued additional Administrative Guidance, including the Side-by-Side (“SbS”) package, to further clarify and coordinate the application of the Pillar Two framework with certain domestic minimum tax regimes. These developments did not have an impact on the Company’s provision for income taxes for the six months ended June 30, 2026. The Company continues to monitor the evolving Pillar Two legislation in the jurisdictions in which it operates. As of June 30, 2026 and December 31, 2025, the Company had gross unrecognized tax benefits of $11.8 million and $11.3 million, respectively. The Company recognizes interest and penalties related to uncertain tax positions in interest and other income (expense), net in the Condensed Consolidated Statements of Operations. Accrued interest and penalties are included within other long-term liabilities on the Condensed Consolidated Balance Sheets. As of June 30, 2026 and December 31, 2025, the amount of accrued interest and penalties was $1.4 million and $1.1 million, respectively. The Company files income tax returns in the United States and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, France, the United Kingdom and India. The Company is currently in early stages of examination by the Internal Revenue Service (“IRS”) for the tax year ended December 31, 2023. With few exceptions, as of June 30, 2026, the Company was no longer subject to federal U.S., state, and foreign tax examinations for years before 2022, 2021, and 2021, respectively.
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