XML 32 R22.htm IDEA: XBRL DOCUMENT v3.25.1
Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company generally provides for income taxes in interim periods based on the estimated annual effective tax rate for the year, adjusting for discrete items in the quarter in which they arise. For the three months ended March 31, 2025 and March 31, 2024, the Company recorded a benefit from income taxes of $2.5 million and $2.2 million, respectively.
The effective tax rate for the three months ended March 31, 2025 differed from the statutory rate of 21% primarily due to the unfavorable impact of state taxes, non-deductible compensation and equity charges, partially offset by the favorable benefit of the research and development credits and a foreign-derived intangible income (“FDII”) benefit deduction. The effective tax rate for the three months ended March 31, 2024 differed from the statutory rate of 21% primarily due to the favorable benefit of the research and development credits and state income taxes, partially offset by the unfavorable impact of Global Intangible Low-Taxed Income (“GILTI”) inclusion and non-deductible compensation and equity charges.
The Organization for Economic Co-Operation and Development introduced Base Erosion and Profit Shifting Pillar Two rules that impose a global minimum tax rate of 15% on multi-national corporations. These rules did not have an impact on the Company’s provision for income taxes for the three months ended March 31, 2025.
As of March 31, 2025 and December 31, 2024, the Company had gross unrecognized tax benefits of $10.8 million and $10.5 million, respectively. The Company recognizes interest and penalties related to uncertain tax positions in interest and other income (expense), net in the Condensed Consolidated Statements of Operations. Accrued interest and penalties are included within other long-term liabilities on the Condensed Consolidated Balance Sheets. As of March 31, 2025 and December 31, 2024, the amount of accrued interest and penalties was $0.8 million and $0.6 million, respectively.
The Company files income tax returns in the United States and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, France, the United Kingdom, and India. With few exceptions, as of March 31, 2025, the Company was no longer subject to U.S., state, and foreign tax examinations for years before 2021, 2020, and 2020, respectively.
Although the Company believes it has adequately provided for unrecognized tax benefits, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. It is not possible at this time to reasonably estimate changes in the unrecognized tax benefits within the next twelve months.