Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company is required to calculate its interim income tax provision using the estimated annual effective tax rate (“AETR”) method prescribed by ASC 740-270, and as such, excludes losses in jurisdictions where the Company cannot benefit in computing its worldwide AETR. A separate AETR is computed and applied to ordinary losses in the U.S. and China as required by ASC 740-270-30-36(a). For the three and six months ended June 30, 2026, the Company recorded income tax expense of $1.2 million and $1.0 million, respectively. The AETR differed from the U.S. federal statutory tax rate of 21% due primarily to a full valuation allowance against the Company's deferred tax assets in the U.S. and China, income in foreign jurisdictions that are taxed at higher rates than the U.S. federal rate, and the impact of discrete items that may occur in any given year but are not consistent from year to year. For the three and six months ended June 30, 2025, the Company recorded income tax benefit of $1.0 million and $0.1 million, respectively. The estimated worldwide AETR differed from the U.S. federal statutory tax rate of 21% due primarily to a full valuation allowance against the Company's U.S. deferred tax assets, income in foreign jurisdictions that are taxed at higher rates than the U.S. federal rate, and the impact of discrete items that may occur in any given year but are not consistent from year to year. The Company has established a valuation allowance against its deferred tax assets in the U.S. and China, because it is more likely than not that the deferred tax assets will not be realized. In determining whether deferred tax assets are realizable, the Company considers numerous factors including historical profitability, the amount of future taxable income and the existence of taxable temporary differences that can be used to realize deferred tax assets. The Company applies ASC 740, the accounting standard addressing the accounting for uncertainty in income taxes, which prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return. The Company has gross unrecognized tax benefits of $1.8 million and $1.7 million as of June 30, 2026 and December 31, 2025, respectively. The Company is subject to taxation and files income tax returns in the U.S. federal and various state and foreign jurisdictions. The Company is subject to routine examinations in the jurisdictions in which the Company conducts business. While the timing and outcome of tax examinations are inherently uncertain, the Company does not currently expect the resolution of ongoing examinations to have a material impact on its consolidated financial statements.
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