Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

The table below presents our income (loss) before income taxes, income tax benefit (expense) and effective income tax rates for all periods presented (in thousands, except percentages):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Income (loss) before income taxes	$	(12,060	)	$	2,151		$	(72,326	)	$	92,099
Income tax benefit (expense)		6,115			(374	)		11,262			(15,854	)
Effective tax rate		50.7	%		17.4	%		15.6	%		17.2	%

We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have statutory tax rates different from those in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to United States income, the utilization of net operating loss and tax credit carry forwards, changes in geographic mix of income and expense, and changes in management’s assessment of matters such as the ability to realize deferred tax assets, and changes in tax laws.

Our effective tax rates were 50.7% and 17.4% for the three months ended September 30, 2022 and 2021, respectively. The increase in effective tax rates was primarily due to the change in the forecast and the mix of losses between the various jurisdictions.

Our effective tax rates were 15.6% and 17.2% for the nine months ended September 30, 2022 and 2021, respectively. The decrease in effective tax rates was primarily due to an increase in losses in our foreign subsidiaries, which was partially offset by a decrease in excess tax benefits from stock-based compensation recognized in the nine months ended September 30, 2022, as compared to the same period last year. In addition, in the nine months ended September 30, 2021, we recorded a $1.4 million one-time tax

expense related to the remeasurement of our United Kingdom deferred tax liabilities as a result of the enactment of the increased corporate tax rate in the United Kingdom.

Unrecognized tax benefits were $3.8 million as of September 30, 2022 and December 31, 2021, and if recognized, would favorably affect the effective income tax rate in future periods.