Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The Company measures its interim period tax expense using an estimated annual effective tax rate and adjustments for discrete taxable events that occur during the interim period. The estimated annual effective income tax rate is based upon the Company’s estimations of annual pre-tax income, the geographic mix of pre-tax income, and its interpretations of tax laws. The Company updates the estimate of its annual effective tax rate at the end of each quarterly period. The Company recorded income tax expense of $1.4 million and $2.9 million for the three months ended March 31, 2023 and 2022, respectively. The tax expense for the three months ended March 31, 2023 decreased by approximately $1.5 million, as compared to the same period in 2022, primarily due to a decrease in pretax income that resulted in a $2.2 million decrease in tax expenses based on the Company's projected effective tax rate and offset by an approximate $0.6 million increase in stock compensation shortfalls.