XML 32 R21.htm IDEA: XBRL DOCUMENT v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 13. Income Taxes
For the three and six months ended June 30, 2025 and 2024, we recorded the following provisions for income taxes and effective tax rates as compared to our income (loss) before provision for income taxes (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Income (loss) before provision for income taxes$558,012 $(389,777)$792,202 $(153,618)
Provision for income taxes153,013 54,824 229,000 121,435 
Effective tax rate27.4%(14.1)%28.9%(79.0)%
Our effective tax rate for the three and six months ended June 30, 2025 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. 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. Our effective tax rate for the three and six months ended June 30, 2024 was higher than the U.S. statutory rate primarily due to a non-deductible charge of $710.9 million associated with the Escient acquisition.
The effective tax rate for the three and six months ended June 30, 2025 was favorable as compared to the three and six months ended June 30, 2024 primarily due to an the non-deductible charge associated with the Escient acquisition in the prior year period.
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.
On July 4, 2025, the U.S. enacted legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” and commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA modified key provisions of the Tax Cuts and Jobs Act of 2017, including but not limited to, the expensing of domestic research costs, the deduction for Foreign-Derived Intangible Income, and the Global Intangible Low-Taxed Income regime. The OBBBA introduces multiple elections and features various effective dates, with some provisions effective in 2025 and others in subsequent years.
Under ASC 740, entities are required to recognize the impact of new income tax legislation in the period of enactment. We are currently evaluating the OBBBA’s various provisions and elections, including their potential impact on our effective tax rate and the realizability of deferred tax assets, and intend to reflect these effects in our financial statements for the period ending September 30, 2025.