Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes When a reliable estimate cannot be made, the Company computes the interim income tax provision based on the actual effective tax rate for the year-to-date period by applying the discrete method. The Company has calculated its effective tax rate using the discrete method for the three and nine months ended September 30, 2026 and 2025. The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences between the tax and financial statement reporting basis of assets and liabilities. Quarterly, the Company assesses whether it is more likely than not that sufficient taxable income will be generated to realize deferred income tax assets, and a valuation allowance is recorded when it is more likely than not that some portion, or all, of the Company’s deferred tax assets, will not be realized. The Company considers sources of taxable income from prior period carryback periods, future reversals of existing taxable temporary differences, tax planning strategies and future projected taxable income when assessing the future realization of deferred tax assets, as applicable. The Company’s effective tax rate for the three and nine months ended September 30, 2026 was 0% and a benefit of 2.7%, respectively, on pre-tax losses, compared to an expense of 1.3% and 2.2%, respectively, on pre-tax losses for the three and nine months ended September 30, 2025. The effective tax rate for the three and nine months ended September 30, 2026 and 2025 was lower than the statutory rate primarily due to nonrecognition of current period tax benefits due to the valuation allowance recorded for U.S. federal and state net operating losses. In assessing the sources of taxable income and the need for a valuation allowance, the Company considers all available positive and negative evidence, which includes a recent history of cumulative losses. As of September 30, 2026, it was more likely than not that the benefit from a portion of its federal, state and foreign deferred tax assets will not be realized. Accordingly, as of September 30, 2026, the Company had a valuation allowance of $161 million against its deferred tax assets, primarily U.S. federal, state and foreign net operating loss carryforwards. During the three months ended September 30, 2026, the Company recorded a valuation allowance against its deferred tax assets, primarily U.S. federal, state and foreign net operating loss carryforwards, of $20 million, $2 million, and $1 million, respectively. During the nine months ended September 30, 2026, the Company recorded a valuation allowance against its deferred tax assets, primarily for U.S. federal, state and foreign net operating loss carryforwards of $85 million, $8 million, and $3 million, respectively.
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