Income Taxes

3 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Effective Tax Rate

The overall effective tax rate for the three months ended March 31, 2026 was 15.4%. This rate differs from the federal statutory rate due to the favorable impact of R&D tax credits, a gain on a related investment transaction not recognized for tax and windfall benefit on stock-based compensation, partially offset by executive compensation limitation under Internal Revenue Code (“IRC”) Section 162(m) on projected pre-tax income for the year, increases in uncertain tax positions and state taxes net of federal benefit. The effective tax rate was favorably impacted by a $8.8 million net tax benefit related to stock-based compensation for stock awards that vested during the three months ended March 31, 2026.

By comparison, our overall effective tax rate for the three months ended March 31, 2025 was 18.8%. This rate differed from the federal statutory rate due to the favorable impact of R&D tax credits and windfall benefit on stock-based compensation partially offset by executive compensation limitation under IRC Section 162(m), increases in uncertain tax positions and state taxes net of federal benefit. The effective tax rate was favorably impacted by a net $12.1 million discrete tax benefit associated with net windfall related to stock-based compensation for stock awards that vested during the three months ended March 31, 2025.