INCOME TAXES

6 Months Ended

Jun. 30, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Total income tax expense	$	(13,472)	$	(1,891)	$	(17,243)	$	(4,044)

The Company’s effective tax rate differs from the statutory rates of 21% for U.S. federal income tax purposes and 25% for Chinese income tax purposes primarily due to the effects of the valuation allowance and certain permanent book-tax differences, including stock-based compensation, Subpart F income, net CFC tested income (NCTI) inclusions, and the R&D super deduction. As a result, the Company recorded income tax expense of $17,243 and $4,044 for the six months ended June 30, 2026 and 2025, respectively. The increase in the Company's effective tax rate for the six months ended June 30, 2026 compared with the corresponding period in 2025 was primarily attributable to a higher estimated annual effective tax rate resulting from changes in the mix of earnings by jurisdiction and the relative impact of valuation allowances and permanent tax adjustments, partially offset by favorable discrete tax items recognized during 2026.

Under the changes to Section 174 enacted by the Tax Cuts and Jobs Act of 2017, which became effective on January 1, 2022, the Company is required to capitalize, and subsequently amortize R&D expenses over fifteen years for research activities conducted outside of the U.S. The capitalization of foreign R&D expenses results in an increase in the Company’s global intangible low-taxed income (“GILTI”) inclusion. The enactment of the One Big Beautiful Bill Act (“OBBBA”), signed into law in July 2025, repealed the mandatory capitalization requirement for domestic R&D expenses for tax years beginning after December 31, 2025. However, the capitalization requirement for research activities conducted outside of the U.S remains unchanged.

The Company had total unrecognized tax benefits of $20,905 as of June 30, 2026 and December 31, 2025. If recognized, the net impact on the Company’s effective tax rate would be approximately $20,770. The Company does not expect any significant changes in its unrecognized tax benefits within the next 12 months. The Company recognizes interest and penalties related to uncertain tax provisions as a component of income tax expense. For the six months ended June 30, 2026 and 2025, the Company recognized $905 and $807, respectively, of interest and penalties.

Pursuant to the Corporate Income Tax Law of mainland China, all of the Company’s mainland China subsidiaries are generally subject to mainland China Corporate Income Taxes at a statutory rate of 25%, except for ACM Shanghai and ACM Lingang, which qualify for preferential tax treatments. According to Guoshuihan 2009 No. 203, an entity certified as

an “advanced and new technology enterprise” is entitled to a preferential income tax rate of 15%. ACM Shanghai has been certified as an “advanced and new technology enterprise” in 2012 and subsequently renewed its certification in 2016, 2018, 2021, and 2024. The current certification remains effective through December 31, 2026. ACM Lingang is eligible for preferential tax incentives that provide for an exemption from income tax during its first two profitable years following the utilization of net operating loss carryforwards, followed by a reduced tax rate equal to 50% of the statutory tax rate for the subsequent three years.