Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company computes its year-to-date provision for (benefit from) income taxes by applying the estimated annual effective tax rate to year-to-date pretax ordinary income or loss and adjusts the provision for (benefit from) income taxes for discrete tax items recorded in the period. The estimated annual effective tax rate is subject to fluctuation based on the level and mix of earnings and losses by tax jurisdiction, foreign tax rate differentials, the relative impact of permanent book to tax differences and the impact of any valuation allowances. Each quarter, a cumulative adjustment is recorded for any fluctuations in the estimated annual effective tax rate as compared to the prior quarter. As a result of these factors, and due to potential changes in the Company’s period-to-period results, fluctuations in the Company’s effective tax rate and respective tax provisions or benefits may occur. For the nine months ended September 30, 2026, the Company recorded a benefit from income taxes of $0.51 billion on a pretax loss of $1.74 billion, which resulted in an effective tax rate of 29.4%. For the nine months ended September 30, 2025, the Company recorded a provision for income taxes of $3.35 billion on pretax income of $11.93 billion, which resulted in an effective tax rate of 28.0%. During the nine months ended September 30, 2026 and 2025, the Company’s benefit from (provision for) income taxes primarily related to the tax effects of changes in the fair value of its bitcoin holdings. During the three months ended September 30, 2026, the fair value of the Company’s bitcoin holdings increased above their average cost basis. This resulted in (i) the elimination of the deferred tax asset related to the previous unrealized loss on the Company’s bitcoin holdings, (ii) the release of the $4.60 billion valuation allowance established during the six months ended June 30, 2026 against the Company’s U.S. federal and state deferred tax assets, and (iii) the recognition of a net deferred tax liability related to the Company’s bitcoin holdings as of September 30, 2026, the components of which are described below. As of September 30, 2026, the Company recorded (i) a deferred tax liability of $1.98 billion related to the unrealized gain on its bitcoin holdings and (ii) a deferred tax asset of $91.5 million related to capital losses from sales of bitcoin. If, in future periods, the fair value of bitcoin declines below the average cost basis of the Company’s bitcoin holdings, the Company would record a deferred tax asset for the unrealized loss and may be required to establish a valuation allowance against its U.S. federal and state deferred tax assets. The Company will continue to regularly assess the realizability of deferred tax assets. The Company records liabilities related to its uncertain tax positions. As of September 30, 2026, the Company had gross unrecognized income tax benefits, including accrued interest, of $13.5 million, of which $3.1 million was recorded in “Other long-term liabilities” and $10.4 million was recorded in “Deferred tax liability” in the Company’s Consolidated Balance Sheet. As of December 31, 2025, the Company had gross unrecognized income tax benefits of $13.4 million, including accrued interest, $3.0 million of which was recorded in “Other long-term liabilities” and $10.4 million of which was recorded in “Deferred tax liability” in the Company’s Consolidated Balance Sheet.
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