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Income Taxes | 3 Months Ended
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Mar. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | (7) 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 income or loss and adjusts the provision for (benefit from) income taxes for discrete tax items recorded in the period. The estimated effective tax rate is subject to fluctuation based on the level and mix of earnings and losses by tax jurisdiction, foreign tax rate differentials, and the relative impact of permanent book to tax differences. 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 three months ended March 31, 2025, the Company recorded a benefit from income taxes of $1.73 billion on a pretax loss of $5.94 billion, which resulted in an effective tax rate of 29.0%. For the three months ended March 31, 2024, the Company recorded a benefit from income taxes of $160.8 million on a pretax loss of $213.9 million, which resulted in an effective tax rate of 75.2%. During the three months ended March 31, 2025, the Company’s benefit from income taxes primarily related to the tax effect of the unrealized loss on digital assets. During the three months ended March 31, 2024, the Company’s benefit from income taxes primarily related to the (i) a tax benefit related to share-based compensation (including the income tax effects of exercises of stock options and vesting of share-settled restricted stock units) and (ii) a tax benefit from an increase in the Company’s deferred tax asset related to the impairment on its bitcoin holdings. As of March 31, 2025, the Company had a valuation allowance of $0.5 million primarily related to the Company’s deferred tax assets related to foreign tax credits in certain jurisdictions that, in the Company’s present estimation, more likely than not will not be realized. As of March 31, 2025, the Company had deferred tax liabilities with respect to the unrealized gain on its bitcoin holdings of approximately $2.28 billion. The Company’s deferred tax liabilities are partially offset by deferred tax assets, such as net operating losses and capitalized research and development costs. If the market value of bitcoin declines in future periods, the Company’s deferred tax liability with respect to the unrealized gain on its bitcoin holdings will decrease, and the Company may be required to establish additional valuation allowances against its 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 March 31, 2025, the Company had gross unrecognized income tax benefits, including accrued interest, of $10.3 million, of which $2.9 million was recorded in “Other long-term liabilities” and $7.4 million was recorded in “Deferred tax liabilities” in the Company’s Consolidated Balance Sheet. As of December 31, 2024, the Company had gross unrecognized income tax benefits of $10.2 million, including accrued interest, $2.9 million of which was recorded in “Other long-term liabilities” and $7.3 million of which was recorded in “Deferred tax assets, net” in the Company’s Consolidated Balance Sheet. As of March 31, 2025 and December 31, 2024, the Company had income taxes payable of $6.7 million and $9.5 million, respectively, recorded in “Accounts payable, accrued expenses, and operating lease liabilities” in the Company’s Consolidated Balance Sheets.

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