Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 12. Income Taxes The Company computes its (benefit from) provision for income taxes for interim periods using an estimated annual effective tax rate based on anticipated annual pretax income or loss. The estimated annual effective tax rate is applied to the Company’s year-to-date income or loss, and is adjusted for discrete items recorded in the period. The (benefit from) provision for income taxes was $(541.7) million and $(0.5) million for the three months ended September 30, 2026 and 2025, respectively, and $(535.1) million and $7.9 million for the nine months ended September 30, 2026 and 2025, respectively. The benefit for income taxes recorded in the three and nine months ended September 30, 2026, consists primarily of the partial release of the valuation allowance on U.S. deferred tax assets. The Company regularly assesses the need for a valuation allowance on its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of all available evidence, whether it's more-likely-than-not that some or all of the deferred tax assets will be realized. Historically, the Company concluded that a valuation allowance was required against its deferred tax assets based on management’s determination that it was not more likely than not that those assets would be realized. As of September 30, 2026, the Company concluded that it was more likely than not that its some of its domestic deferred tax assets would be realized and, accordingly, that a valuation allowance against them was no longer required, primarily due to the Company’s cumulative prior twelve quarter U.S. pre-tax income, as well as its recent and anticipated future earnings. Based on the Company’s analysis above, the Company concluded that it is more likely than not that the majority of its U.S. deferred tax assets are realizable. As a result, the Company released $544.9 million of the valuation allowance on its U.S. deferred tax assets as of September 30, 2026. The release related primarily to U.S. federal and state net operating loss carryforwards, tax credit carryforwards, and capitalized research and development expenditures. As the change in valuation allowance occurred during an interim period, the Company included the change in valuation allowance resulting from current year ordinary income in the estimated annual effective tax rate and recorded the release of the valuation allowance as a discrete tax benefit in the interim period. This resulted in the recognition of incremental deferred tax assets and an income tax benefit of $544.9 million during the three month months ended September 30, 2026. The Company has recorded current U.S. income tax expense of $3.9 million and $10.1 million for the three and nine months ended September 30, 2026. The Company’s judgment regarding the need for a valuation allowance may reasonably change in future reporting periods due to many factors, including changes in expectations of future profitability in the U.S. and changes in tax laws or regulations. The Company will continue to maintain a valuation allowance against deferred tax assets where it believes it is more likely than not that they will not be realized. The remaining U.S. valuation allowance as of September 30, 2026 was $43.2 million, maintained against deferred tax assets related to capital losses and certain state net operating losses. During the three and nine months ended September 30, 2026, there were no material changes to the total amount of unrecognized tax benefits.
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