Income Taxes

9 Months Ended

Sep. 30, 2024

Income Taxes

Income Taxes

Note 14.  Income Taxes

Income tax expense was $6.8 million for the three months ended September 30, 2024, compared to $7.7 million for the three months ended September 30, 2023. The $0.9 million decrease was primarily due to a decrease in pre-tax income. Income tax expense was $20.6 million for the nine months ended September 30, 2024, compared to $16.0 million for the nine months ended September 30, 2023. The increase was primarily due to a decrease in in the benefit received from share-based compensation.

The effective tax rate for the three and nine months ended September 30, 2024 was less than the U.S. statutory rate of 21% primarily attributable to the Foreign Derived Intangible Income deduction, Federal research and development tax credits and excess tax benefits from share-based compensation.

The deferred income taxes of $58.9 million and $53.4 million as of September 30, 2024 and December 31, 2023, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. As of September 30, 2024, we have recorded a $12.1 million valuation allowance in the U.S. against certain tax credits due to the uncertainty of their realization. Realization of our net deferred tax assets is dependent on future taxable income. We believe it is more likely than not that such assets will be realized; however, ultimate realization could be impacted by market conditions and other variables not known or anticipated at this time.