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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We recorded a provision for income taxes of $3.9 million and $9.1 million for the three and nine months ended September 30, 2025, respectively. We recorded a provision for income taxes of $8.2 million and $13.5 million for the three and nine months ended September 30, 2024, respectively. The effective tax rate for the
three months ended September 30, 2025 and 2024 was 46% and 43%, respectively. The effective tax rate for the nine months ended September 30, 2025 and 2024 was 49% and 44%, respectively. The difference from the federal statutory rate of 21% is primarily due to the recognition of significant non-deductible stock-based compensation and other discrete adjustments.
Gross unrecognized tax benefits were $16.4 million and $13.4 million as of September 30, 2025 and December 31, 2024, respectively. The gross unrecognized tax benefits, if recognized by us, will result in a reduction of approximately $15.8 million, excluding interest and penalties, to the provision for income taxes, thereby favorably impacting our effective tax rate. Our policy is to recognize interest and penalties related to income tax matters in income tax expense. For the periods presented, interest and penalties related to income tax positions were not material to our unaudited condensed consolidated financial statements.
We are subject to taxation and file income tax returns in the U.S. federal, state, and foreign jurisdictions. The federal income tax returns for the years 2021 and forward and state income tax returns for the tax years 2008 and forward remain open to examination. We are under examination in two states which are not expected to have an impact on our results of operations, cash flows and financial condition.
On July 4, 2025, H.R. 1, the One Big Beautiful Bill Act, or OBBBA, was enacted. The OBBBA includes provisions related to bonus depreciation, provisions related to domestic research and development expenses as well as modifications to the business interest expense limitation calculation. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses. As a result of incorporating these updated provisions into our income tax provision for the three and nine months ended September 30, 2025 we recorded a decrease to our deferred tax assets with no material changes to our effective tax rate. We are currently assessing the impact of OBBBA to our consolidated financial statements for the year ending December 31, 2025.