Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The domestic and foreign components of (loss) before provision for income taxes and the provision for income taxes were as follows (in millions):

	Fiscal Year Ended December 31, 2024		Fiscal Year Ended December 31, 2023		Fiscal Year Ended December 31, 2022
United States	$	(71.8)	$	(125.0)	$	(169.5)
Foreign	37.9		19.7		(137.1)
Net loss before provision/(benefit) from income taxes	$	(33.9)	$	(105.3)	$	(306.6)
Income tax provision/(benefit):
Current:
Federal	$	3.1	$	8.6	$	—
State and local	2.6		2.0		2.9
Foreign	20.8		13.7		16.1
Total current provision/(benefit)	$	26.5	$	24.3	$	19.0
Deferred:
Federal	$	(11.0)	$	(17.6)	$	(19.6)
State and local	(2.3)		(5.5)		(4.2)
Foreign	(10.5)		(7.8)		(13.4)
Total deferred provision/(benefit)	$	(23.8)	$	(30.9)	$	(37.2)
Total provision/(benefit) from income taxes	$	2.7	$	(6.6)	$	(18.2)

The provision (benefit) for income taxes differs from the amount computed by applying the U.S. Federal statutory income tax rate to loss before provision for income taxes as follows:

	Fiscal Year Ended December 31, 2024		Fiscal Year Ended December 31, 2023		Fiscal Year Ended December 31, 2022
Income tax at U.S. Federal statutory rate	21.0	%	21.0	%	21.0	%
State and local taxes, net of federal impact	3.0	%	2.4	%	0.3	%
Foreign tax rate differential	(7.1)	%	(1.5)	%	(0.5)	%
U.S. tax on foreign earnings, net of foreign tax credits	(9.6)	%	(2.2)	%	(0.9)	%
State and local tax legislative changes	—	%	1.3	%	0.6	%
Research and development tax credits	3.7	%	1.7	%	0.5	%
U.S. foreign derived intangible income deduction	7.5	%	3.5	%	—	%
Change in valuation allowance	(13.4)	%	(9.0)	%	(1.4)	%
Unrecognized tax benefits	1.1	%	(2.2)	%	(0.2)	%
Stock-based compensation expense	(6.3)	%	(3.4)	%	(2.0)	%
Warrant liability change in fair value	(3.4)	%	(5.5)	%	2.8	%
Impact of foreign exchange	1.6	%	(0.1)	%	—	%
Non-deductible compensation	(5.1)	%	—	%	—	%
Goodwill impairment	—	%	—	%	(14.5)	%
Other	(0.9)	%	0.3	%	0.2	%
Total effective income tax rate	(7.9)	%	6.3	%	5.9	%

Certain reclassifications have been made to the components of Tax Rate Reconciliation for the year ending December 31, 2023 and 2022, to conform to the current presentation.

As of December 31, 2024, U.S. federal and state income taxes of approximately $16.5 million have not been provided on approximately $142.0 million of certain earnings and profits that are permanently reinvested. We do not expect to incur additional material U.S. federal income taxes on other earnings that are indefinitely reinvested. It is not practicable to estimate the deferred tax liability for state, foreign or withholding taxes on other earnings and profits that are indefinitely reinvested due to complex analysis and calculations considering various tax laws, exchange rates, local law restrictions that may apply to a portion of such earnings, and various tax planning alternatives we could employ if we repatriated these earnings.

The OECD (Organisation for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar Two) for multinational enterprises with annual global revenues exceeding €750 million. Pillar Two has been agreed upon in principle by over 140 countries. Many countries have taken steps to enact Pillar Two legislation which we anticipate will be effective for the Company for the year ended December 31, 2025. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. While we are still evaluating the potential consequences in each country, we expect the impact to be immaterial.

The components of the Company’s net deferred tax assets and liabilities consist of the following (in millions):

	December 31, 2024		December 31, 2023
Deferred tax assets:
Net operating loss carryforwards	$	12.9	$	19.1
Federal and state credit carryforwards	0.6		4.4
Property, plant and equipment	0.2		0.6
Deferred and other revenue differences	7.4		7.5
Interest carryforwards	31.2		23.2
Other reserves and accrued expenses	14.9		18.4
Lease liabilities	8.4		8.7
Derivatives	1.8		5.4
Other assets	7.9		7.7
Capitalized research and development	12.4		10.1
Total deferred tax assets	97.7		105.1
Less: valuation allowance	(32.9)		(30.0)
	$	64.8	$	75.1

	December 31, 2024		December 31, 2023
Deferred tax liabilities:
Purchased technologies and other intangibles	$	(92.7)	$	(122.2)
Deferred and other revenue differences	(9.0)		(13.9)
Property, plant and equipment	(10.0)		(11.9)
Lease right of use assets	(7.6)		(8.2)
Other liabilities	(6.6)		(2.9)
Total deferred tax liabilities	(125.9)		(159.1)
Net deferred tax liabilities	$	(61.1)	$	(84.0)

Management regularly evaluates the recoverability of deferred tax assets and recognizes the tax benefit only if reassessment demonstrates that they are more likely than not realizable. At such time, if it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be adjusted. In assessing the need for a valuation allowance, management considers all available evidence, both positive and negative, including reversals of existing temporary differences; historical levels of income; expectations and risks associated with estimates of future taxable income; and any ongoing tax planning strategies.

At December 31, 2024, the Company evaluated the realizability of the deferred tax assets and concluded that a valuation allowance of $32.9 million, mostly relating to interest carryforwards and non-U.S. net operating losses, should continue to be recorded. At December 31, 2023, the valuation allowance was $30.0 million, mostly relating to interest carryforwards and non-U.S. net operating losses. At December 31, 2022, the valuation allowance was $23.9 million, mostly relating to U.S. foreign tax credit carryovers and non-U.S. net operating losses and restricted interest carryforwards.

	Fiscal Year Ended December 31, 2024		Fiscal Year Ended December 31, 2023		Fiscal Year Ended December 31, 2022
Balance, beginning of period	$	30.0	$	23.9	$	20.7
Decreases from business combinations	—		—		(0.4)
Other increases	10.0		9.8		5.3
Other decreases	(7.1)		(3.7)		(1.7)
Balance, end of period	$	32.9	$	30.0	$	23.9

For the year ended December 31, 2024, the Company increased the valuation allowance by a net $2.9 million primarily related to an increase in interest carryforwards and a decrease in tax credits in the U.S. For the year ended December 31, 2023, the Company increased the valuation allowance by $6.1 million primarily related to interest and capital loss carryforwards in the U.S. For the year ended December 31, 2022, the Company increased the valuation allowance by$3.2 million primarily related to losses in the U.K.

As of December 31, 2024, the Company had U.S. state and non-U.S. net operating loss carryforwards of $45.4 million, and $37.1 million, respectively. A majority of the U.S. state net operating losses will continue to expire in years ending December 31, 2025 through 2044. Materially, the foreign net operating losses have an indefinite carryover period. As of December 31, 2024, the Company had U.S. federal and state tax credit carryforwards of $0.6 million available to offset future U.S. federal and state income taxes payable. U.S. federal and state tax credit carryforwards will expire in years ending December 31, 2025 through 2044.

The ability to utilize U.S. federal and state attributes may be limited under Section 382 of the Internal Revenue Code, in the event of an "ownership change." An "ownership change" is defined by Section 382 as a cumulative change in ownership of the Company of more than 50% within a three-year period. Section 382 imposes an annual limitation on the amount of post-ownership change taxable income that may be offset with pre-ownership change net operating losses or income tax liability that may be offset with pre-ownership change tax credit carryforwards of the loss corporation experiencing the ownership change. As of December 31, 2024, the Company does not expect the use of the U.S. federal and state attributes to be limited under Section 382 of the Internal Revenue Code and similar state tax laws. The Company continues to monitor the impact of the ownership change on attributes as future changes in the business could further limit the use of these attributes.

As of December 31, 2024, the Company had $7.5 million of unrecognized tax benefits related to uncertain tax positions, all of which would affect its effective tax rate if recognized. Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next twelve months a reduction in unrecognized tax benefits may occur in the range of zero to $1.0 million due to the expiration of various statutes of limitations and potential settlements. As of December 31, 2023, the Company had $8.4 million of unrecognized tax benefits related to uncertain tax positions, all of which would affect its effective tax rate if recognized. As of December 31, 2022, the Company had $6.9 million of unrecognized tax benefits related to uncertain tax positions, $6.3 million of which would affect its effective tax rate if recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	Fiscal Year Ended December 31, 2024		Fiscal Year Ended December 31, 2023		Fiscal Year Ended December 31, 2022
Balance, beginning of period	$	8.4	$	6.9	$	6.6
Current year additions to positions	1.0		2.7		1.3
Additions from business combinations	—		—		1.4
Lapse of applicable statute of limitations	(0.1)		(0.2)		(0.4)
Reductions to prior year positions	(1.8)		(1.0)		(2.0)
Foreign currency translation adjustments	—		—		—
Balance, end of period	$	7.5	$	8.4	$	6.9

The Company has recorded $6.3 million, $7.1 million, and $3.5 million of unrecognized tax benefits as non-current income taxes payable as of December 31, 2024, December 31, 2023, and December 31, 2022, respectively. The Company has also recorded $1.2 million, $1.3 million, and $3.4 million of unrecognized tax benefits as a reduction of net deferred tax assets included in other liabilities in the accompanying consolidated balance sheets at December 31, 2024, December 31, 2023, and December 31, 2022, respectively.

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. Accrued interest and penalties as of December 31, 2024, December 31, 2023, and December 31, 2022, were approximately $1.7 million, $1.2 million, and $0.9 million, respectively. The ultimate amount and timing of any future cash settlements cannot be predicted with reasonable certainty.

The Company conducts business globally and, as a result, one or more of its subsidiaries files U.S. federal and state income tax returns and income tax returns in other foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United Kingdom, France, Germany, Canada, and the United States. With the exception of a few insignificant jurisdictions, the Company is no longer subject to U.S. federal or non-U.S. income tax examinations for years prior to June 30, 2018. The Company is no longer subject to U.S. state and local income tax examinations for years prior to the 2006 tax year.

In many cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by tax authorities. The following describes open tax years by major tax jurisdictions as of December 31, 2024:

	Years Open
Jurisdiction:
Canada	2019 – 2024
France	2022 – 2024
Germany	2019 – 2024
United Kingdom	2022 – 2024
United States—Federal	2017 – 2024
United States—State	2006 – 2024