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Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

We are subject to U.S. federal, state and foreign income taxes. For the three months ended September 30, 2023, we recorded an income tax benefit of approximately $(0.1) million. For the nine months ended September 30, 2023, we recorded a provision for income taxes of approximately $1.2 million. Our effective tax rate was approximately (1.0)% and (22.9)% for the three and nine months ended September 30, 2023, respectively. For the three and nine months ended September 30, 2022, we recorded a provision for income taxes of $0.3 million and $0.9 million, respectively. Our effective tax rate was approximately 0.4% for the nine months ended September 30, 2022. The primary difference between the effective tax rate and the federal statutory rate is due to the benefit of net operating losses utilized during the periods and the full valuation allowance we established on our federal, state, and certain foreign deferred tax assets.

We have historically recorded our interim period provision for income taxes by applying our forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items. However, due to the level of forecasted provision for income taxes relative to the forecasted income used in computing the effective tax rate, the effective tax rate is highly sensitive to fluctuations in income and does not provide a reliable estimate for income taxes in the interim period. As such, we have computed our provision for income taxes for the three and nine months ended September 30, 2023 using an actual year-to-date tax calculation. We plan to revert back to applying our forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items once that method produces more reliable results.

The tax benefit of net operating losses, temporary differences and credit carryforwards is required to be recorded as an asset to the extent that management assesses that realization is "more likely than not". Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. A high degree of judgment is required to determine if, and the extent to which, valuation allowances should be recorded against deferred tax assets. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Based on all available evidence as of September 30, 2023, both positive and negative, and the weight of that evidence to the extent such evidence can be objectively verified, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized, and, accordingly, has provided a valuation allowance.