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Income Taxes | 6 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes On July 4th 2025, President Trump signed into law the “One Big Beautiful Bill Act” (“OBBBA” or “the Bill”) which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain domestic and international provisions of the 2017 Tax Cuts & Jobs Act. Due to the timing of the Bill enactment, the impact of the Bill is not reflected in the Company’s Q2 income tax provision. Based on the Company’s review, this new Act will not result in a material change to the Company’s income tax provision for 2025 other than potentially reclassifying current tax liabilities and non-current deferred tax assets. The Company is still analyzing the provisions of the OBBBA and expects to update its Q3 2025 tax provision accordingly. The Company’s effective tax rate was 21.0% and 21.7% for the three months ended June 30, 2025 and June 30, 2024, respectively. The decrease in the effective tax rate was due primarily to a change in the jurisdictional mix of earnings, an increase in untaxed income attributed to noncontrolling interests, and an increase in general business tax credits resulting from a 2024 tax return to provision adjustment, partially offset by decreases in the foreign-derived intangible income (FDII) deduction and in the deduction for equity-based compensation. The Company’s effective tax rate was 19.8% and 20.9% for the six months ended June 30, 2025 and June 30, 2024, respectively. The change in effective tax rate was primarily due to a change in the jurisdictional mix of earnings and an increase in untaxed income attributed to noncontrolling interests, partially offset by decreases in the FDII deduction and the windfall equity-based compensation deduction. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the three months ended June 30, 2025 primarily relates to the tax benefit related to untaxed income attributed to noncontrolling interests, and general business tax credits including tax credits from a tax return to provision adjustment, offset by state income taxes and foreign withholding taxes. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the six months ended June 30, 2025 primarily relates to a discrete windfall tax benefit from equity-based compensation, and the tax benefit related to untaxed income attributed to noncontrolling interests, partially offset by state income taxes and foreign withholding taxes. As of June 30, 2025, the Company’s deferred tax assets were subject to a valuation allowance of $46.4 million primarily related to foreign net operating loss carryforwards, foreign tax credit carryforwards, and capital losses that the Company has determined are not more-likely-than-not to be realized. The factors used to assess the likelihood of realization include: the past performance of the entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets. As of June 30, 2025 and December 31, 2024, the liability for income taxes associated with uncertain tax positions was $30.1 million and $29.5 million, respectively. Although the Company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably. It is reasonably possible that certain audits may conclude in the next 12 months and that the unrecognized tax benefits the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. Different non-US tax jurisdictions continue to enact legislation to adopt components of the Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Pillar Two Model Rules. The Company has evaluated the impact of the enacted legislation to date and has determined there is no material impact to the Company’s income tax provision. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending enactment of legislation by individual countries.

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