Income Taxes |
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| Income Taxes | 6.Income Taxes The Company’s tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter including excess tax benefits from stock-based compensation and changes in unrecognized tax benefits. In each quarter, the Company updates the annual effective tax rate based on the most recent annual forecast and makes a year-to-date adjustment to the tax provision. The estimated annual effective tax rate is subject to significant volatility due to several factors including the Company’s ability to accurately forecast the pre-tax book income and permanent adjustments in multiple jurisdictions, the effects of benefits related to stock-based compensation and the impact of changes in unrecognized tax benefits. The following table provides effective tax rate information for the three and six months ended June 30, 2026 and 2025: Effective tax rate information
The Company’s tax provision for the three and six months ended June 30, 2026 was favorably impacted by net windfalls related to stock-based compensation, partially offset by IRS section 162(m) adjustments, the U.S tax implications of Global Intangible Low Taxed Income (GILTI) and the impact of foreign exchange fluctuations. The Company’s overall effective tax rate for the six months ended June 30, 2026, after discrete adjustments differs from the U.S. federal statutory rate of 21% due to the favorable effect of stock-based compensation, partially offset by IRS section 162(m) adjustments, the U.S. tax implications of Global Intangible Low Taxed Income (GILTI) and the impact of foreign exchange fluctuations. In addition, the Company’s effective tax rate reflects the impact of state tax planning and apportionment methodologies, which reduced the incremental state income tax impact that would otherwise increase the combined federal and state statutory rate. The Company’s effective tax rate for the six months ended June 30, 2025 differs from the U.S. federal statutory rate of 21% due to the favorable effect of stock-based compensation and change in valuation allowance, offset in part by IRS section 162(m) adjustments, state income tax provisions and tax effect of foreign operations. The following table presents a roll-forward of the Company’s unrecognized tax benefits and associated interest for the six months ended June 30, 2026 (in thousands):
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