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Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 12. Income Taxes
For the three months ended March 31, 2025 and 2024, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes (in thousands):
Three Months Ended
March 31,
20252024
Income before provision for income taxes$234,190 $236,159 
Provision for income taxes75,987 66,611 
Effective tax rate32.4%28.2%
Our effective tax rate for the three months ended March 31, 2025 and 2024 was higher than the U.S. statutory rate primarily due to an increase in our valuation allowance against certain U.S. federal and state deferred tax assets and foreign losses with no associated tax benefit (i.e., full valuation allowance). This was partially offset by tax rate benefits associated with research and development and orphan drug tax credit generations and the foreign derived intangible income deduction.
The effective tax rate for the three months ended March 31, 2025 was unfavorable as compared to the prior year period primarily due to an increase in our valuation allowance against certain U.S. federal and state deferred tax assets, partially offset by a decrease in foreign losses with no associated tax benefit and an increase in tax credit generations.
We accrue interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.
One or more of our legal entities file income tax returns in the U.S. and in certain foreign jurisdictions. Our income tax returns may be examined by tax authorities in those jurisdictions. Significant disputes may arise with tax authorities involving issues such as the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations and relevant facts. In the U.S., the statute of limitations remains open beginning with tax year 2021. We are currently under U.S. federal audit for tax year 2021.
The Organization for Economic Cooperation and Development Pillar 2 guidelines, which were supported by over 130 countries worldwide, are designed to impose a 15% global minimum tax on adjusted financial results. We have evaluated the impact of Pillar 2 on our business, and determined there are no material impacts on our effective tax rate at this time. As countries we operate in enact legislation implementing Pillar 2, we will assess the impact on our financial statements in the period of enactment.