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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before provision for income taxes was as follows:
 Year Ended December 31,
 202420232022
 (in thousands)
United States$9,101,391 $5,602,762 $4,623,218 
Foreign864,266 602,643 640,711 
Income before income taxes$9,965,657 $6,205,405 $5,263,929 
The components of provision for income taxes for all periods presented were as follows:
 
 Year Ended December 31,
 202420232022
 (in thousands)
Current tax provision:
Federal$1,093,667 $854,170 $109,910 
State214,814 181,684 119,795 
Foreign536,915 304,539 676,827 
Total current1,845,396 1,340,393 906,532 
Deferred tax provision:
Federal(520,510)(412,760)(52,434)
State(41,700)(55,475)(30,691)
Foreign(29,160)(74,743)(51,402)
Total deferred(591,370)(542,978)(134,527)
Provision for income taxes$1,254,026 $797,415 $772,005 
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory Federal income tax rate to income before income taxes is as follows:

 Year Ended December 31,
 202420232022
 (in thousands)
Expected tax expense at U.S. Federal statutory tax rate$2,092,710 $1,303,123 $1,105,428 
State income taxes, net of Federal income tax effect166,311 104,717 92,084 
Foreign earnings at other than U.S. rates13,909 (32,292)104,665 
Research and development tax credit(185,312)(87,036)(146,615)
Excess tax benefits on stock-based compensation(435,909)(119,043)(75,211)
Foreign-derived intangible income deduction(502,968)(426,597)(361,013)
Nontaxable and nondeductible items70,386 41,782 44,046 
Other34,899 12,761 8,621 
Provision for income taxes$1,254,026 $797,415 $772,005 
Effective Tax Rate13 %13 %15 %
The components of deferred tax assets and liabilities were as follows:
 
 As of December 31,
 20242023
 (in thousands)
Deferred tax assets:
Stock-based compensation$440,889 $486,876 
Tax credits and net operating loss carryforwards834,402 544,431 
Capitalized research expenses1,075,474 593,439 
Accruals and reserves152,142 137,251 
Operating lease liabilities522,489 516,574 
OCI hedging losses— 35,707 
Unrealized losses12,157 26,506 
Other18,197 11,615 
Total deferred tax assets3,055,750 2,352,399 
Valuation allowance(540,272)(442,293)
Net deferred tax assets2,515,478 1,910,106 
Deferred tax liabilities:
Depreciation & amortization(370,709)(357,477)
Operating right-of-use lease assets(449,661)(435,216)
OCI hedging gains(220,009)— 
       Acquired intangibles(282,187)(233,433)
       Other(15,354)(9,430)
Total deferred tax liabilities(1,337,920)(1,035,556)
Net deferred tax assets$1,177,558 $874,550 
The following table shows the deferred tax assets and liabilities within our Consolidated Balance Sheets:
 As of December 31,
 20242023
 (in thousands)
Total deferred tax assets:
Other non-current assets$1,290,160 $1,000,760 
Total deferred tax liabilities:
Other non-current liabilities(112,602)(126,210)
Net deferred tax assets$1,177,558 $874,550 
As of December 31, 2024, for tax return purposes, the Company had $694 million of California R&D tax credit carryforwards which can be carried forward indefinitely, $943 million of state net operating loss carryforwards which will begin to expire in 2026, $41 million of foreign tax credit carryforwards which will begin to expire in 2033, and $420 million of foreign net operating loss carryforwards which will begin to expire in 2025.
In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of December 31, 2024, the valuation allowance of $540 million was primarily related to California R&D tax credits, state net operating loss carryforwards, and foreign tax credits that the Company does not expect to realize.
At December 31, 2024, we have not provided for applicable U.S. income and foreign withholding taxes on an immaterial amount of undistributed foreign earnings that we intend to indefinitely reinvest. For the balance of undistributed earnings for which we are not indefinitely reinvested, we have provided the appropriate taxes.
The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as “Other non-current liabilities” and a reduction of deferred tax assets which is classified as "Other non-current assets" in the Consolidated Balance Sheets. As of December 31, 2024 and 2023, the total amount of gross unrecognized tax benefits was $432 million and $327 million, respectively, of
which $251 million and $188 million, respectively, if recognized, would favorably impact the Company’s effective tax rate. The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows:
 
As of December 31,
202420232022
(in thousands)
Balance at the beginning of the year$327,105 $226,977 $202,557 
Increases related to tax positions taken during the current period93,325 65,630 26,865 
Increases related to tax positions taken during prior periods15,751 76,794 — 
Decreases related to tax positions taken during prior periods(3,901)(10,117)(2,445)
Decreases related to settlements with taxing authorities— (32,179)— 
Decreases related to expiration of statute of limitations— — — 
Balance at the end of the year$432,280 $327,105 $226,977 
The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes and in “Other non-current liabilities” in the Consolidated Balance Sheets. During the years ended December 31, 2024, 2023 and 2022, the Company recorded $16 million, $25 million, and $2 million, respectively, net of interest and penalties in the provision for income taxes. The amount of interest and penalties accrued at December 31, 2024 and 2023 was $44 million and $28 million, respectively.
The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for years 2016 through 2018 and is subject to examination for 2019 through 2023. The Company is also generally subject to examination by various state and foreign jurisdictions for years 2017 through 2023. While the Company is in various stages of inquiry and examination with certain taxing authorities and believes that its tax positions will more likely than not be sustained, it is nonetheless possible that future obligations related to these matters could arise. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from an examination.
Given the potential outcome of current examinations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, an estimate of the range of reasonably possible adjustments cannot be made at this time.