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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company has recorded a provision for income taxes of $0.2 million for the nine months ended September 30, 2025. The effective tax rate of 5.1% differs from the United States statutory tax rate of 21% primarily due to state income tax, nondeductible stock compensation, research and development tax credits and the change in the valuation allowance. The Company had no provision for income taxes for the nine months ended September 30, 2024. As discussed in “Note 16—Income Taxes” to the notes to the consolidated financial statements contained in the Annual Report, the Company has a valuation allowance against the full amount of its net deferred tax assets. The Company currently provides a valuation allowance against deferred tax assets when it is more likely than not that some portion or all of its deferred tax assets will not be realized. The Company has not recognized any unrecognized tax benefits in its balance sheet. The Company is subject to income tax in the United States, as well as various state and international jurisdictions. The federal and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statute of limitations. Additional information regarding the statutes of limitations can be found in Note 16 - Income Taxes of the Company’s Annual Report. The Inflation Reduction Act of 2022 included tax legislation that became effective in the first quarter of 2023. Significant legislation for corporate taxpayers includes a corporate alternative minimum tax of 15% for companies with $1 billion or more in average net financial statement profits over the three previous years, as well as a 1% indirect excise tax on the repurchase of shares by a publicly traded company. The Company does not expect this legislation to have an effect on the tax provision as of September 30, 2025, however the Company will continue to evaluate the effect on the tax provision each reporting period. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill (“OBBB”), which resulted in the extension of many provisions of the current tax law as well as other rule changes that could impact the Company’s tax provision in 2025 or 2026. Examples of the new tax law include the following: •Full expensing of U.S. research and development costs under Section 174A. •Retroactive expensing of unamortized U.S. research and development costs capitalized between 2022 and 2024; either all in 2025, or over two years in 2025 and 2026. •Return of the Section 163(j) taxable income base excluding the deductions for depreciation and amortization in 2025 (change from “Tax EBIT” to “Tax EBITDA”). •Decrease in the Section 250 deduction for Net CFC Tested Income (formerly GILTI) to 40% (from 50%) in 2026, instead of the scheduled decrease to 37.5% prior to the OBBB. •Decrease in the Section 250 deduction for foreign-derived income to 33.34% (from 37.5%) in 2026, instead of the scheduled decrease to 21.875% prior to the OBBB. •Increase in the foreign tax credit rate on Net CFC Tested Income (formerly GILTI) to 90% (from 80%), and a 10% disallowance on repatriation, in 2026. •Removal of the allocation of interest expense and research and development expense to Net CFC Tested Income (formerly GILTI) in calculating the foreign tax credit limitation, effective in 2026. The Company decreased its current tax provision from $0.7 million for the six months ending June 30, 2025 to $0.2 million for the nine months ending September 30, 2025 as a result of the OBBB changes related to Section 174A, as well as the retroactive expensing of unamortized U.S. research and development costs capitalized between 2022 and 2024. As the Company records a full valuation on deferred tax assets, there is no deferred tax provision recorded as a result of the OBBB.

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