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Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
14. Income Taxes
At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal, international, and state income taxes and the permanent impacts of differences in book and tax accounting.
The Company’s effective tax rate was 1.8% and 2.1% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the effective tax rate is primarily due to increased earnings within the U.S., resulting in additional tax payable. This increased U.S. tax liability offsets the benefit being recognized on losses outside of the U.S., resulting in a lower effective tax rate.
The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its deferred tax assets. The Company primarily considered its historic performance, the nature of its deferred tax assets and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. Based on an analysis of these factors, the Company determined that as of March 31, 2025, a valuation allowance against U.S. federal and state deferred tax assets was required.
The Company’s effective tax rate for the three months ended March 31, 2025 differed from the federal statutory tax rate of 21% in the U.S. primarily due to a valuation allowance recorded against U.S. federal and state net deferred tax assets.