Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

The Company’s provision for (benefit from) income taxes for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter.

The Company’s effective tax rates for each period presented are the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company’s effective tax rate was (8.9)% and 18.0% for the three months ended September 30, 2022 and 2023, respectively, and 5.2% and 17.6% for the nine months ended September 30, 2022 and 2023, respectively.

For the three months ended September 30, 2022 and 2023, the Company’s benefit from income taxes varied from the tax computed at the U.S. federal statutory income tax rate primarily due to the Company maintaining a U.S. valuation allowance on the Company’s deferred tax asset during the three months ended September 30, 2022, which was released during the fourth quarter of 2022, the tax effects of stock-based compensation, including certain restructurings, recognized during the three months ended September 30, 2023 in connection with the Company’s IPO, and an increase in U.S. research and development credit generation during the three months ended September 30, 2023.

For the nine months ended September 30, 2022 and 2023, the Company’s provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate primarily due to the Company maintaining a U.S. valuation allowance on the Company’s deferred tax assets during the nine months ended September 2022, which was released during the fourth quarter of 2022, being subject to minimal state income taxes during the nine months ended September 30, 2022, the tax effects of stock-based compensation, including certain restructurings, recognized during the nine months ended September 30, 2023 in connection with the Company’s IPO, and an increase in U.S. research and development credit generation during the nine months ended September 30, 2023.