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Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

14. Income Taxes

 

The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly provision for income taxes, and estimate of the Company’s annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.

 

The income tax provision effective tax rate for the three months ended March 31, 2025 and 2024 was 6.68% and (0.32)%, respectively. Income taxes expense for the three months ended March 31, 2025 was calculated using a full year effective tax rate and applying that to year-to-date earnings in the current interim period and related to deferred tax liabilities on indefinite lived intangible assets. Income tax expense for the three months ended March 31, 2024 is related to deferred tax liabilities on indefinite lived intangible assets. The effective tax rate differs from the statutory rate due to the full valuation allowance.

 

The realization of deferred tax assets is dependent upon a variety of factors, including the generation of future taxable income, the reversal of deferred tax liabilities, and tax planning strategies. Based upon the Company’s historical operating losses and the uncertainty of future taxable income, the Company has provided a valuation allowance against the deferred tax assets that will not be realized as of March 31, 2025 and 2024.

 

As of March 31, 2025 and 2024, the Company has no uncertain tax positions or interest and penalties accrued.