Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 13. Income Taxes At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal, international, and state income taxes and the permanent impacts of differences in book and tax accounting. The Company recognized an income tax benefit of $1.9 million and $6.2 million for the three and nine months ended September 30, 2026, respectively, compared with an income tax benefit of $2.3 million and $2.2 million for the three and nine months ended September 30, 2025, respectively. The effective tax rate was (56.9)% and (112.4)% for the three and nine months ended September 30, 2026, respectively, compared with 64.8% and 18.3% for the three and nine months ended September 30, 2025, respectively. The Company’s effective tax rate was negative for the three and nine months ended September 30, 2026 because the Company recorded an income tax benefit on consolidated pre-tax income. In the U.S., the valuation allowance against federal and state deferred tax assets limits income tax expense to current state taxes of approximately $0.1 million for the nine months ended September 30, 2026, notwithstanding U.S. pre-tax income. In foreign jurisdictions in which the Company does not maintain a valuation allowance, the Company recorded an income tax benefit on pre-tax losses. The decrease in the income tax benefit for the three months ended September 30, 2026 as compared with the three months ended September 30, 2025, was primarily attributable to a discrete income tax benefit of approximately $2.0 million recognized in the three months ended September 30, 2025 upon enactment of the One Big Beautiful Bill Act (the “OBBBA”). The income tax benefit increased for the nine months ended September 30, 2026, as compared with the nine months ended September 30, 2025, primarily because of higher pre-tax operating losses outside the U.S. in jurisdictions without a valuation allowance. These increased losses were primarily driven by higher amortization of acquired intangible assets resulting from the first-quarter 2026 change in the remaining useful life of the developed technology acquired in 2020. See Note 1, “Description of Business and Summary of Significant Accounting Policies,” to these condensed consolidated financial statements, for additional information. The Company does not maintain a valuation allowance outside of the U.S. because reversal of existing deferred tax liabilities support realization of the related deferred tax assets.
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