Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company uses the estimated annual effective tax rate approach to determine the provision for income taxes. The estimated annual effective tax rate is based on forecasted annual results and may fluctuate due to differences between the forecasted and actual results, changes in valuation allowances, and any other transactions that result in differing tax treatment.

For the three and nine months ended September 30, 2021, the Company recorded a $1.1 million income tax benefit and $0.2 million income tax expense, respectively. For the three and nine months ended September 30, 2020, the Company recorded income tax expense of $0.2 million and $0.5 million, respectively. The Company’s effective tax rates for the three and nine months ended September 30, 2021 were 1.1% and (0.2)%, respectively, and the effective tax rates for the three and nine months ended September 30, 2020 were (0.5)% and (0.9)%, respectively.

The Company’s estimated annual effective income tax rate for the three and nine months ended September 30, 2021 and 2020 differed from the statutory rate primarily due to the valuation allowance, non-deductible executive compensation, stock-based compensation, differences in tax rates in state and foreign jurisdictions, and other permanent items.