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Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company determines its effective tax rate each quarter based upon its estimated annual effective tax rate. The Company records the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year where no tax benefit can be recognized are excluded from the estimated annual effective tax rate.
Income tax expense, (loss) income before income taxes and the corresponding effective tax rate for the three and six months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Income tax expense$5,428 $8,081 $9,625 $10,784 
(Loss) income before income taxes(13,490)6,608 (42,559)10,913 
Effective tax rate(40)%122 %(23)%99 %
The effective tax rate for the three and six months ended June 30, 2026 varied from the effective tax rate for the three and six months ended June 30, 2025 primarily due to the geographic mix of pre-tax income and losses, and the inability to record a tax expense for pre-tax income and a benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances and other permanent items.
The income tax rate for the three and six months ended June 30, 2026 and 2025 varied from the U.S. statutory rate primarily due to the inability to record a tax expense for pre-tax income and a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, tax credits, the impact of income taxes on foreign earnings taxed at rates varying from the U.S. statutory rate, and other permanent items.
The Company’s current and future provision for income taxes is impacted by changes in valuation allowances in the U.S. and certain foreign jurisdictions. The Company’s future provision for income taxes will include no tax benefit with respect to losses incurred and, except for certain jurisdictions, no tax expense with respect to income generated in these countries until the respective valuation allowances are eliminated. Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions. The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine, based on the weight of the evidence, if a valuation allowance for its deferred tax assets is necessary. Such evidence includes historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded. If operating results improve or decline on a continual basis in a particular jurisdiction, the Company’s decision regarding the need for a valuation allowance could change, resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax expense in the period recognized and subsequent periods. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities.
The Company has an ongoing dispute related to its 2015-2018 U.S. federal income tax filings. The Internal Revenue Service (“IRS”) asserts that income earned by a Netherlands subsidiary from its Mexican branch operations constitutes foreign based company sales income under Section 954(d) of the Internal Revenue Code and should be recognized currently as taxable income on the Company’s 2015-2018 U.S. federal income tax filings. The IRS has also proposed similar adjustments for the 2019-2022 tax years. The Company has been unable to reach a resolution through the IRS appeals process, but does plan to continue to challenge these proposed adjustments through the litigation process in the U.S. Court of Federal Claims in the future, if necessary. The Company believes, after consultation with tax and legal counsel, that it is more likely than not that it will ultimately be successful in defending its position. As such, the Company has not recorded any impact of the IRS’s proposed adjustment in its condensed consolidated financial statements as of the three and six months ended June 30, 2026. In the event the Company is not successful in defending its position, the potential income tax expense impact, including interest, related to tax years 2015 through June 30, 2026 is less than $10,000.
The Organization for Economic Co-operation and Development (“OECD”) has introduced model rules that propose a global minimum tax framework which has been implemented and enacted by a number European Union member states and other jurisdictions around the world. The Company has recorded the impact of the global minimum tax as currently enacted in the condensed consolidated financial statements for the three and six months ended June 30, 2026 and June 30, 2025. On January 5, 2026 the OECD announced a new package of administrative guidance under the Pillar Two global minimum tax rules which introduces a new Side by Side Safe Harbor (“SbS Safe Harbor”) that allows multinational enterprise groups with an ultimate parent entity located in a qualified side by side regime to elect a deemed top-up tax of zero across all domestic and foreign operations. As of June 30, 2026, while the OECD has identified the United States as a qualifying jurisdiction, the SbS Safe Harbor has not yet been formally enacted into domestic law in most jurisdictions where we have operations. As a result, we have not reflected the potential benefits of the SbS Safe Harbor election in our condensed consolidated financial statements for the three and six months ended June 30, 2026. The Company will continue to monitor the legislative progress of the SbS Safe Harbor and other Pillar Two measures and adjust its calculations accordingly when provisions are enacted. We do not expect these changes to have a material impact on the Company’s condensed consolidated financial statements.
On July 4, 2025, the United States enacted a budget reconciliation package known as the One Big Beautiful Bill Act of 2025 (“OBBBA”) into law. The OBBBA includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with some provisions that took effect in 2025 and others being implemented through 2027. The tax reform provisions of the OBBBA did not have a material impact on the Company’s condensed consolidated financial statements for the six months ended June 30, 2026.