Income Taxes

9 Months Ended

Sep. 30, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Effective Tax Rate

The overall effective tax rate for the three months ended September 30, 2026 was 27.8%. This rate differs from the federal statutory rate due to state income taxes and increases in tax reserves, partially offset by a net tax benefit from stock-based compensation and R&D tax credits. The effective tax rate was favorably impacted by a $3.3 million net tax benefit from stock-based compensation for stock awards that vested during the three months ended September 30, 2026.

By comparison, our overall effective tax rate for the three months ended September 30, 2025 was 113.9%. This rate differed from the federal statutory rate due to lower pre-tax book income in that period, which magnified the relative impact of permanent and discrete items, including the impact of changes in tax law on our R&D tax credit. The effective tax rate was favorably impacted by a $15.4 million net tax benefit from stock-based compensation for stock awards that vested during the three months ended September 30, 2025.

The overall effective tax rate for the nine months ended September 30, 2026 was 18.0%. This rate differs from the federal statutory rate due to the favorable impact of R&D tax credits, a net tax benefit from stock-based compensation, and a gain on an investment transaction not recognized for tax, partially offset by increases in tax reserves and state income taxes. The effective tax rate was favorably impacted by a $26.4 million net tax benefit from stock-based compensation for stock awards that vested during the nine months ended September 30, 2026.

By comparison, our overall effective tax rate for the nine months ended September 30, 2025 was (43.1)%. This rate differed from the federal statutory rate due to the net favorable impacts of stock-based compensation and R&D tax credits, partially offset by an increase in uncertain tax positions. The effective tax rate was favorably impacted by an $84.2 million net tax benefit from stock-based compensation for stock awards that vested during the nine months ended September 30, 2025.