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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The U.S. and foreign components of income before income taxes were as follows:
| Years Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
U.S. | $ | 253.9 |  |  | $ | 199.5 |  |  | $ | 11.8 |
Foreign | 46.3 |  |  | 15.1 |  |  | (2.0) |
Income before income taxes | $ | 300.2 |  |  | $ | 214.6 |  |  | $ | 9.8 |
The provision for income taxes consists of the following:
| Years Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 5.8 |  |  | $ | — |  |  | $ | — |
State | 6.4 |  |  | 3.7 |  |  | 1.3 |
Foreign | 6.6 |  |  | 4.1 |  |  | 4.8 |
Total current tax expense | 18.8 |  |  | 7.8 |  |  | 6.1 |
Deferred: |  |  |  |  |
Federal | (111.1) |  |  | 0.1 |  |  | — |
State | (18.6) |  |  | — |  |  | — |
Foreign | (7.2) |  |  | 0.4 |  |  | (0.9) |
Total deferred tax (benefit) expense | (136.9) |  |  | 0.5 |  |  | (0.9) |
Income tax (benefit) expense | $ | (118.1) |  |  | $ | 8.3 |  |  | $ | 5.2 |
Reconciliations of the U.S. federal statutory rate to the Company’s effective tax rate are as follows:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
U.S. federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Foreign tax rate differential | 1.1 |  |  | 0.6 |  |  | 13.2 |
State taxes, net of federal benefit | 2.3 |  |  | 2.4 |  |  | (5.0) |
Federal and state R&D credits | (4.4) |  |  | (5.9) |  |  | (49.4) |
Stock-based compensation | 0.5 |  |  | (3.2) |  |  | (94.8) |
Non-deductible officers’ compensation | 0.6 |  |  | 1.3 |  |  | 52.4 |
Permanent items | 1.1 |  |  | 0.7 |  |  | 6.3 |
Foreign income taxed in the U.S. | 0.9 |  |  | 0.7 |  |  | 14.5 |
Change in valuation allowance | (59.8) |  |  | (10.8) |  |  | 124.4 |
Tax rate changes | — |  |  | 0.5 |  |  | (30.9) |
Change to prior year R&D credit | (2.8) |  |  | (2.8) |  |  | — |
Other | 0.2 |  |  | (0.6) |  |  | 1.7 |
Effective tax rate | (39.3) | % |  | 3.9 | % |  | 53.4 | %
The income tax benefit in 2024 primarily resulted from the release of substantially all of the valuation allowance maintained against deferred tax assets discussed below and the completion of a research and development (“R&D”) credit study for the periods 2017 through 2022, which resulted in a $8.3 million income tax benefit from the increase to U.S. federal and state R&D credit carryforwards. For all periods presented, no provision for income taxes has been provided on undistributed earnings of the Company’s foreign subsidiaries, except for Canada, because such earnings are indefinitely reinvested in the foreign operations. The Company has recorded a deferred tax liability for the tax costs on these earnings to the extent they cannot be repatriated in a tax-free manner. A deferred tax liability related to the repatriation of approximately $57.3 million indefinitely reinvested earnings has not been recorded. Events that could trigger a tax liability include, but are not limited to, distributions, reorganizations or restructurings, and/or tax law changes. Determining the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings is not practicable due to complexities associated with the hypothetical calculation. The Company files federal, state, and foreign tax returns, which are subject to examination by the relevant tax authorities. The Company’s U.S. federal and state tax returns are currently open to examination for tax years 2021 through 2023. In addition, the Company’s U.S. net operating loss carryforwards from 2001 and forward may be subject to examination in the periods that they are utilized. The following table summarizes the activity related to the Company’s unrecognized tax benefits:
| Years Ended December 31,
(in millions) | 2024 |  | 2023
Unrecognized tax benefits at beginning of year | $ | 5.0 |  |  | $ | — |
Additions related to current period tax positions | 2.7 |  |  | 2.6 |
Additions related to prior period tax positions | 5.1 |  |  | 2.4 |
Unrecognized tax benefits at end of year | $ | 12.8 |  |  | $ | 5.0 |
As of December 31, 2024 and 2023, the Company had unrecognized tax benefits that would impact the effective tax rate if recognized of $12.8 million and $5.0 million, respectively. As of December 31, 2022, the Company had no unrecognized tax benefits that would impact the effective tax rates. No interest and penalties were recognized related to uncertain tax positions for the years ended December 31, 2024, 2023, and 2022, respectively, and no interest or penalties were accrued as of December 31, 2024 and 2023, respectively. The Company does not anticipate that the amount of existing unrecognized tax benefits will materially increase or decrease within the next 12 months. The components of the net deferred tax asset were as follows:
| As of December 31,
(in millions) | 2024 |  | 2023
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 23.4 |  |  | $ | 91.4 |
Tax credits | 56.6 |  |  | 54.1 |
Capitalized research and development expenditures | 78.8 |  |  | 53.3 |
Accrued expenses | 34.4 |  |  | 25.1 |
Amortization of debt discount | 4.2 |  |  | 7.8 |
Inventory capitalization | 8.2 |  |  | 6.5 |
Intangible assets | 6.4 |  |  | 8.0 |
Incentive compensation | 14.7 |  |  | 13.5 |
Stock-based compensation | 10.2 |  |  | 8.0 |
Other | 7.1 |  |  | 5.4 |
Total deferred tax assets | 244.0 |  |  | 273.1 |
Deferred tax liabilities: |  |  |
Prepaid assets | (9.3) |  |  | (7.7) |
Property, plant and equipment | (47.4) |  |  | (38.1) |
Capitalized contract acquisition costs | (13.1) |  |  | (10.4) |
Unrealized gains on cash flow hedges | (1.2) |  |  | (5.1) |
Other | (7.4) |  |  | (7.7) |
Total deferred tax liabilities | (78.4) |  |  | (69.0) |
Net deferred tax asset before valuation allowance | 165.6 |  |  | 204.1 |
Valuation allowance | (23.9) |  |  | (202.9) |
Net deferred tax asset | $ | 141.7 |  |  | $ | 1.2 |
The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making such assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets and, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. During the year ended December 31, 2024, the Company recorded a $182.5 million non-cash income tax benefit related to the release of a substantial portion of its valuation allowance against deferred tax assets. This was based on the Company’s evaluation of the positive and negative evidence including cumulative income (loss) position, revenue growth, current profitability and expectations regarding future forecasted income. The remaining change in the valuation allowance is comprised of a $4.8 million increase related to current year state R&D credits, partially offset by $1.3 million of federal R&D credits that will not be utilized prior to expiration. The valuation allowance at December 31, 2024 primarily relates to certain U.S. state tax credits and state net operating loss carryforwards. As of December 31, 2024, the Company’s net operating loss carryforwards were as follows:
(in millions) | Expiration Period |  | Net Operating Loss Carryforwards
U.S. federal | 2029 |  | $ | 54.9 |
State | 2025 - 2042 |  | $ | 203.1 |
Foreign | Indefinite |  | $ | 1.7 |
As of December 31, 2024, the Company’s tax credit carryforwards were as follows:
(in millions) | Expiration Period |  | Tax Credit Carryforwards
U.S. federal | 2025 - 2044 |  | $ | 44.3 |
State | 2025 - 2044 |  | $ | 30.7 |
The above loss and credit carryforwards, which may be utilized in a future period, may be subject to limitations based on changes in the ownership of the Company ordinary shares.

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