XML 29 R18.htm IDEA: XBRL DOCUMENT v3.25.3
INCOME TAXES
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The following table provides a summary of the Company’s effective tax rate:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Reported tax rate20.8 %47.5 %9.3 %35.3 %
The Company’s effective income tax rates for the three months ended September 30, 2025 and 2024 were 20.8% and 47.5%, respectively. For the three months ended September 30, 2025, the Company’s effective tax rate was primarily driven by the tax expense generated in certain profitable foreign jurisdictions and the inclusion of Global Intangible Low Taxed Income (“GILTI”); offset by federal, state, and international tax benefits generated from operating losses and favorable prior year tax return positions. For the three months ended September 30, 2024, the tax rate is primarily due to the limitation of foreign tax credits in the U.S. and the limitation of federal tax credits in Switzerland, caused by lower book income.

The Company’s effective income tax rates for the nine months ended September 30, 2025 and 2024 were 9.3% and 35.3%, respectively. For the nine months ended September 30, 2025, the Company’s effective tax rate was primarily driven by the goodwill impairment charge, as a portion of the charge is non-deductible for tax, as well as the inclusion of GILTI and the global minimum tax in certain foreign jurisdictions; offset by federal, state, and international tax benefits generated from operating losses and favorable prior year tax return positions. For the nine months ended September 30, 2024, the tax rate is primarily due to the limitation of foreign tax credits in the U.S. and the limitation of federal tax credits in Switzerland, caused by lower book income and a $1.9 million shortfall from stock-based compensation.
Changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate. Various governments, both U.S. and non-U.S., are increasingly focused on tax reform and revenue-raising legislation. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes a number of significant provisions, including the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act. Additionally, the OBBBA contains changes to the capitalization of research and development expenses, accelerated fixed asset depreciation, and limitations on deductions for interest expense, among other provisions. The Company has evaluated the impact of the OBBBA on its financial statements and estimates the financial impact for the year ended December 31, 2025 to be approximately $4.4 million.
Further, legislation in foreign jurisdictions may be enacted, in continued response to the ongoing base erosion and profit-sharing (“BEPS”) project led by the Organization for Economic Cooperation and Development (“OECD”). The OECD released model rules related to a new 15% global minimum tax regime (“Pillar 2”). A number of the jurisdictions that the Company operates in have adopted some form of the model rules, which became effective beginning in 2024. The Pillar 2 rules are complex and provide for delays for implementing the tax during the early transition years, if certain conditions are met. The Company is calculating an immaterial expense related to Pillar 2 tax liability for the year ending December 31, 2025. Related changes in U.S. and non-U.S. jurisdictions could have an adverse effect on the Company’s effective tax rate. The Company will continue to monitor legislative activity across its U.S. and non-U.S. jurisdictions.