Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

The Company’s income tax provision consists of federal, foreign, and state taxes necessary to align the Company’s year-to-date tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary.

For the interim period ended June 30, 2022, the Company utilized the annual effective tax rate methodology to determine its income tax provision. For the interim period ended June 30, 2021, the Company departed from the annual effective tax rate methodology and computed its income tax provision using a discrete method. The use of the discrete method was made in accordance with authoritative accounting guidance, which allows for the use of a discrete method when there are significant changes to the projected annual effective tax rate as a result of minor adjustments to projected pre-tax earnings.

For the three and six months ended June 30, 2022, the Company recorded an income tax provision of $343 and income tax benefit of $2,256, respectively. The effective tax rate for the three months ended June 30, 2022 was negative 0.4% on a pre-tax loss of $85,666 and 1.41% on a pre-tax loss of $160,302, for the six months ended June 30, 2022.

For the three and six months ended June 30, 2021, the Company recorded an income tax provision of $584 and an income tax benefit of $993, respectively. The effective tax rate for the three months ended June 30, 2021 was negative 0.62% on a pre-tax loss of $94,338 and 0.83% on a pre-tax loss of $120,289, for the six months ended June 30, 2021.

The effective tax rate differs from the U.S. statutory rate primarily related to limited tax benefit recorded for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.