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Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company computes its (benefit from) provision for income taxes for interim periods by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusting for discrete items arising in that quarter.
The Company’s effective tax rates on pre-tax income were (218.5)% and 19.4% for the three months ended June 30, 2026 and 2025, respectively, and (118.4)% and 22.4% for the six months ended June 30, 2026 and 2025, respectively. The difference between the effective tax rate and the U.S. federal statutory rate of 21.0% for the three and six months ended June 30, 2026 was primarily the result of the release of the Company's valuation allowance against its U.S. deferred tax assets. For the three and six months ended June 30, 2025, the difference was primarily the result of foreign income taxed at different rates, changes in the U.S. valuation allowance, non-deductible stock-based compensation, and recognition of a discrete income tax benefit, primarily driven by excess stock-based compensation deductions.
Due to cumulative losses in the U.S. during prior periods, the Company had maintained a full valuation allowance against its U.S. deferred tax assets, including net operating loss carryforwards, capitalized research costs, and tax credits related primarily to research and development. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative.
During the three months ended June 30, 2026, the Company reached a cumulative income position in the United States over the previous three years, which constituted objective and verifiable positive evidence and thus received significant weighting in the Company’s assessment. Additional positive evidence considered by the Company included recent utilization of U.S. tax attribute carryforwards and future forecasts of continued profitability in the U.S.
In completing its assessment, the Company also weighed significant negative evidence, including the limited tenure of recently achieved U.S. profitability, the inherent risk in projecting taxable income over the carryforward periods of existing tax attributes, and variable macroeconomic conditions that may impact the Company’s ability to generate forecasted taxable income. The Company also considered that future tax deductions associated with stock-based compensation depend on the Company’s stock price, which is inherently unpredictable and introduces additional uncertainty into its forecasts of future U.S. taxable income.
Upon considering the weighted impact of all evidence, both positive and negative, the Company concluded that the positive evidence, including the objective three-year cumulative income position, outweighed the negative evidence and that it was more likely than not that its U.S. federal and state deferred tax assets would be realizable. As a result, the Company released its full U.S. valuation allowance and recognized a corresponding $140.6 million discrete tax benefit during the three months ended June 30, 2026. The effect of the valuation allowance release is included as a component of the ‘(Benefit from) Provision for income taxes’ in the accompanying Condensed Consolidated Statements of Operations.
The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and internationally. As of June 30, 2026, tax years 2012 through 2021, and 2023 through 2025 remain open for examination by taxing authorities. The Company’s 2022 federal tax return was audited by the Internal Revenue Service, with no adjustments.