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Income Taxes | 3 Months Ended
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Mar. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company recorded a provision for income taxes of $7.3 million and $1.5 million for the three months ended March 31, 2025 and 2024, respectively. The provisions for income taxes for the three months ended March 31, 2025 and 2024 were primarily driven by the statutory tax expense for domestic and foreign jurisdictions for 2025 and 2024, respectively, offset by tax benefits from excess stock-based compensation deductions. During the three months ended March 31, 2025 and 2024, the Company paid foreign withholding taxes of $5.6 million and $5.1 million, respectively. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. Upon considering the relative impact of all evidence during 2025, both negative and positive, and the weight accorded to each, the Company concluded that it was more likely than not that the majority of its deferred tax assets would be realizable, with the exception of primarily its California research and development credits that have not met the “more likely than not” realization threshold criteria. As a result, the Company continues to maintain a valuation allowance on only those deferred tax assets that it does not think will be realizable. The Company has U.S. federal deferred tax assets related to research and development credits, foreign tax credits and other tax attributes that can be used to offset U.S. federal taxable income in future periods. These credit carryforwards will expire if they are not used within certain time periods. It is possible that some or all of these attributes could ultimately expire unused. The Company maintains liabilities for uncertain tax positions within its long-term income taxes payable accounts and as a reduction to existing deferred tax assets to the extent tax attributes are available to offset such liabilities. These liabilities involve judgment and estimation and are monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases and other information. As of December 31, 2024, the Company had $203.8 million of unrecognized tax benefits, before interest accrual, including $22.8 million recorded as a reduction of long-term deferred tax assets, $74.8 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and $106.2 million recorded to long-term income taxes payable, which are primarily comprised of $105.1 million in income taxes payable related to withholding taxes previously withheld from licensees in South Korea. As of March 31, 2025, the Company had approximately $209.3 million of unrecognized tax benefits, before interest accrual, including $23.2 million recorded as a reduction of long-term deferred tax assets, $74.8 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and $111.3 million recorded to long-term income taxes payable, which are primarily comprised of $110.3 million in income taxes payable related to withholding taxes previously withheld from licensees in South Korea. As a result of recent court rulings in 2023, the Company determined that it is more likely than not that withholding taxes paid in South Korea in the preceding five years are recoverable. In October 2023, the Company filed refund claims for withholding taxes paid in South Korea in the amount of $82.7 million related to the period from the fourth quarter of 2018 through the third quarter of 2023. The Company intends to file additional refund claims in the future for $4.2 million of withholding taxes paid in the fourth quarter of 2023, $18.2 million paid in 2024, and $5.1 million paid year-to-date in 2025. Therefore, the Company recorded long-term tax receivables of $110.3 million and $105.1 million, before interest accrual, related to these refund claims as of March 31, 2025 and December 31, 2024, respectively. If the South Korea withholding taxes are recovered through the refund claim process, the U.S. foreign tax credit claimed for these withholding taxes on historical federal tax returns will be forfeited. Therefore, the Company recorded a long-term tax payable of $110.3 million and $105.1 million as of March 31, 2025 and December 31, 2024, respectively. These amounts exclude interest and reflect the future U.S. federal tax liability in the event of filing amended federal tax returns to revise the foreign tax credit amounts. The recovery of South Korea withholding taxes paid before the fourth quarter of 2018 of $74.8 million is uncertain due to the statute of limitations for filing a refund claim. Thus, the Company did not record a long-term tax receivable and included the amount in the uncertain tax benefit. Although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time. Additionally, the Company’s future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where the Company has higher statutory rates or lower than anticipated in countries where it has lower statutory rates, by changes in valuation of its deferred tax assets and liabilities or by changes in tax laws or interpretations of those laws.

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