Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

The Company is subject to U.S. federal and various state corporate income taxes as well as taxes in foreign jurisdictions where foreign subsidiaries have been established.

The Company recorded an income tax expense of $1.9 million and $11.2 million in the three months ended June 30, 2024 and 2023, respectively. The Company recorded an income tax expense of $8.6 million and $13.6 million in the six months ended June 30, 2024 and 2023, respectively. The effective tax rate was (13.9)% and (55.5)% for the six months ended June 30, 2024 and 2023. During the six months ended June 30, 2024, the Company recognized a net discrete tax expense of $0.5 million, primarily due to the withholding taxes paid in various countries by its Korean subsidiary. During the six months ended June 30, 2023, the Company recognized a net discrete tax expense of $9.4 million, primarily due to audit payments made by its Korean subsidiary with respect to a tax audit assessment made by the Korean tax authority and withholding taxes paid in various countries by its Korean subsidiary.

The Company’s income tax provision for the six months ended June 30, 2024, is determined using an estimate of the Company’s annual effective tax rate, adjusted for any discrete items reflected in the relevant period. The effective tax rate for the three months ended March 31, 2024 and the six months ended June 30, 2024, were 50.6% and (13.9)%, respectively. The change in effective tax rate is primarily driven by losses generated from the vesting of stock-based compensation where no tax benefit could be realized. The provision for income taxes differs from the amount of income tax computed by applying the U.S. statutory federal tax rate of 21% to the loss before income taxes due to tax benefits not recognized as a result of a full valuation allowance established by the Company and most of its foreign subsidiaries along with withholding taxes paid in various countries by the Company's Korean subsidiary.