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Income Taxes
 9 Months Ended
Sep. 30, 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.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes several significant changes to U.S. corporate income tax provisions. Among other items, the legislation allows for the immediate deduction of domestic research and development expenditures, reinstates 100% bonus depreciation for qualified property placed in service after January 19, 2025, and modifies certain aspects of the international tax framework. The provisions of the OBBBA have varying effective dates, with certain provisions effective in 2025 and others taking effect in subsequent years. For the three months ended September 30, 2025, the Company recognized a $2 million income tax benefit as a result of the favorable tax law changes enacted under OBBBA.
The Company’s effective tax rate was 64.8% and 18.3% for the three and nine months ended September 30, 2025, respectively, and 228.7% and 21.0% for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2025, the effective tax rate decreased from the three and nine months ended September 30, 2024, primarily due to increased operating loss in the U.S. This increased operating loss did not result in a corresponding increase to income tax benefit because the related tax assets are subject to a valuation allowance. In periods in which the Company is in a pre-tax loss position, a decrease in effective tax rate is considered unfavorable, as it indicates that a smaller portion of the pre-tax loss is recognized as an income tax benefit. This unfavorable change in the effective tax rate was partially offset by the favorable U.S. income tax law changes enacted under OBBBA.
The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net 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 September 30, 2025, a valuation allowance against U.S. federal and state deferred tax assets was required.
The Company’s effective tax rate for the three and nine months ended September 30, 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.