Income Taxes

6 Months Ended

Jun. 30, 2023

Income Taxes

Income Taxes

12. Income Taxes

The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. A valuation allowance has been established against the Company’s U.S. federal and state deferred tax assets, which results in an annualized effective tax rate for the Company’s U.S. operations of 0%. During Q2 of 2023 a valuation allowance was established against the Company's French deferred tax asset. For the three months ended June 30, 2023, the Company recorded an income tax provision of $0.1 million related to foreign tax activity on a pretax loss of $15.6 million, resulting in an effective tax rate of (0.95)%. For the three months ended June 30, 2022, the Company recorded an income tax benefit of $8 thousand related to foreign tax activity on a pretax income of $0.8 million, resulting in an effective tax rate of (0.98)%. For the six months ended June 30, 2023, the Company recorded an income tax provision of $0.1 million related to foreign tax activity on a pretax loss of $32.0 million, resulting in an effective tax rate of (0.4)%. For the six months ended June 30, 2022, the Company recorded an income tax provision of $26.0 thousand related to foreign tax activity on a pretax loss of $8.9 million, resulting in an effective tax rate of (0.3)%. These effective tax rates differ from the U.S. federal statutory rate primarily due to the valuation allowance against the Company’s domestic deferred tax assets.