TAXES

3 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

TAXES

TAXES

For interim financial statement purposes, U.S. GAAP provision (benefit) for taxes related to ordinary income (loss) is determined by applying an estimated annual effective income tax rate against a company’s ordinary income (loss), subject to certain limitations on the benefit of losses. Provision (benefit) for taxes related to items not characterized as ordinary income is recognized as a discrete item when incurred. The estimation of the Company’s income tax provision requires the use of management forecasts and other estimates, application of statutory income tax rates, and an evaluation of valuation allowances. The Company’s estimated annual effective income tax rate may be revised, if necessary, in each interim period.

The worldwide effective income tax rates for the three months ended March 31, 2026 and March 31, 2025 were 26.93% and 27.41%, respectively. The decrease in benefit from income taxes was primarily driven by decrease in the loss before taxes and a lower effective tax rate primarily due to fewer discrete tax items related to stock-based compensation expenses.

The effective tax rate was higher than the 21% U.S. federal statutory rate for the three months ended March 31, 2026, primarily due to state taxes and discrete tax benefits from stock-based compensation.

The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and

resolving uncertain tax positions. This evaluation is based on factors including, but not limited to, changes in facts

or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Interest and

penalties related to unrecognized tax benefits are included within income tax expense. For the three months

ended March 31, 2026, the Company recorded an income tax benefit related to its Federal and California R&D

Credits of $0.7 million and $0.4 million, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various states. As of the date of

this filing, the Company is not currently under examination by income tax authorities in federal, state, or other

jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four

years, respectively, from the date of utilization of any net operating loss or credits.