Income Taxes

3 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Mattel's benefit from income taxes was $32.5 million for the three months ended March 31, 2026, compared to $30.6 million for the three months ended March 31, 2025. The increase in benefit from income taxes was driven by a higher net loss from continuing operations before income taxes, excluding the impact of the gain recognized on the acquisition of Mattel163, partially offset by the lower net discrete income tax benefits in the first three months of 2026. Mattel recognized a net discrete income tax benefit of $4.6 million during the three months ended March 31, 2026, primarily related to previously unrecognized tax benefits, partially offset by a discrete tax expense related to the acquisition of Mattel163. Mattel recognized a net discrete tax benefit of $11.4 million during the three months ended March 31, 2025, primarily related to a change of its indefinite reinvestment assertion relating to certain foreign subsidiary earnings.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more-likely-than-not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. For the three months ended March 31, 2026, there were no material changes to Mattel's valuation allowance.

On July 4, 2025, H.R.1- the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA contains significant provisions, including the permanent extension or restoration of certain expiring corporate income tax provisions, originally introduced by the Tax Cuts and Jobs Act of 2017, and incremental modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective for the tax year beginning after December 31, 2024, and others effective for tax years beginning after December 31, 2025. Mattel has evaluated the OBBBA provisions that have been enacted and has included the related impact in the provision for income taxes for the three months ended March 31, 2026.