XML 30 R21.htm IDEA: XBRL DOCUMENT v3.23.3
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income TaxesThe Company computed the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income and adjusted for discrete tax items in the period. The Company's provision for income taxes was $21.4 million and $55.8 million for the three and nine months ended September 30, 2023, respectively, and $15.0 million and $46.2 million for the three and nine months ended September 30, 2022, respectively.
For the three and nine months ended September 30, 2023, the difference between the U.S. statutory rate and the Company's effective tax rate was primarily due to jurisdictional mix of earnings, tax credits, and state income taxes.

For the three and nine months ended September 30, 2022, the difference between the U.S. statutory rate and the Company's effective tax rate was primarily due to the requirement to capitalize research expenditures in accordance with the TCJA, which was partially offset by the utilization of U.S. deferred tax assets which had a full valuation allowance.

The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on the Company's ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. As of September 30, 2023, the Company continues to maintain valuation allowances against its deferred tax assets in California and one foreign jurisdiction.

The Company is subject to income tax audits in the U.S. and foreign jurisdictions. The Company records liabilities related to uncertain tax positions and believes that it has provided adequate reserves for income tax uncertainties in all open tax years.

Unrecognized tax benefits increased by $13.4 million during the nine months ended September 30, 2023. The increase was driven by a gross increase in unrecognized tax benefits related to tax positions taken in the period of approximately $14.6 million, of which $11.3 million, if recognized, would affect the Company's effective tax rate and $3.3 million would result in adjustment to deferred tax assets with corresponding adjustments to the valuation allowance. The gross increase was partially offset by a decrease in unrecognized tax benefits of approximately $1.2 million due to a statute of limitations lapse related to prior period tax positions.

It is reasonably possible that there could be changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions, or the expiration of applicable statutes of limitations; however, the Company is not able to estimate the impact of these items at this time.