Income Taxes |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | 11. Income Taxes The following table presents our income (loss) before income taxes, income tax benefit (expense) and effective income tax rates for all periods presented (in thousands, except percentages):
We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have statutory tax rates different from those in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the utilization of net operating loss and tax credit carry forwards, changes in geographic mix of income and expense, changes in management’s assessment of matters such as the ability to realize deferred tax assets, and changes in tax laws. Our effective tax rates were tax benefit of 0.3% and 1.8% for the three months ended June 30, 2026 and 2025, respectively. Our effective tax rates were tax benefit and expense of 0.8% and (5.8)% for the six months ended June 30, 2026 and 2025, respectively. The US tax provision for the three months and six months ended June 30, 2026 and 2025 was consistently recorded based on actual quarterly tax provision in lieu of annual projected effective tax rate. The change in our effective tax rate for the three months ended June 30, 2026, compared to the prior year period, was primarily driven by changes in the geographic mix of income and losses across jurisdictions, partially offset by the release of a FIN 48 reserve upon the conclusion of our Netherlands income tax audit. For the six months ended June 30, 2026, the effective tax rate was similarly impacted by jurisdictional earnings mix and the Netherlands audit settlement, as well as a discrete tax benefit of approximately $1.0 million recognized in the current period related to an internal reorganization and intellectual property transfer from the U.K. to the U.S. We assess our deferred tax assets and liabilities to determine if it is more likely than not that they will be realized; if not, a valuation allowance is required to be recorded. Previously, in the third quarter of 2024, we reached a cumulative loss position over the previous three years, and with consideration of other negative evidence, we concluded that it is more likely than not that we will not realize our U.S. federal and state deferred tax assets. As a result of the foregoing, a full valuation allowance was recorded for the quarter ended September 30, 2024. The deferred tax liability related to indefinite-lived assets was excluded from sources of future taxable income, as the timing of its reversal cannot be predicted due to the nature of its indefinite life. Unrecognized tax benefits were $2.6 million as of June 30, 2026 and $3.8 million as of December 31, 2025, respectively, and if recognized, would favorably affect the effective income tax rate in future periods. |
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