Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

14. 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 September 30, 2020, the Company utilized the annual effective tax rate methodology to determine its income tax provision. For the interim period ended September 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 months ended September 30, 2021, the Company recorded an income tax provision of $428. The income tax provision related primarily to foreign taxes. For the three months ended September 30, 2020, the Company recorded an income tax provision of $301 related primarily to foreign taxes.

The effective tax rate for the three months ended September 30, 2021 was (0.62)% on a pre-tax loss of $68,701. The effective tax rate for the three months ended September 30, 2020 was (2.37)% on a pre-tax loss of $12,702. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.