Income Taxes |
6 Months Ended |
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Jun. 30, 2022 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company recorded a provision for income taxes of $2.6 million and a benefit from income taxes of $5.7 million for the three months ended June 30, 2022 and 2021, respectively, and a provision for income taxes of $4.6 million and a benefit from income taxes of $2.6 million for the six months ended June 30, 2022 and 2021, respectively. The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which it conducts business. The Company’s effective tax rate as of June 30, 2022 differs from the U.S. statutory rate primarily due to foreign income taxed at different rates, foreign withholding taxes, and valuation allowances recorded on its losses from the U.S., U.K., and other jurisdictions. The provision for income taxes increased by $8.2 million and $7.2 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 primarily due to the revaluation of the Company’s United Kingdom (“U.K.”) deferred tax assets as a result of a change in the U.K. corporate tax rate enacted in June 2021. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. The Company assesses its ability to realize the deferred tax assets on a quarterly basis, and it establishes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. The Company weighs all available positive and negative evidence, including its earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies. For example, due to the weight of objectively verifiable negative evidence, including its history of U.S. and U.K. net operating tax losses, the Company believes that it is more likely than not that its U.S. and U.K. deferred tax assets will not be fully realized. Accordingly, the Company has maintained a full valuation allowance on its U.S. and U.K. deferred tax assets as of June 30, 2022. Provisions enacted in the 2017 Tax Cuts and Jobs Act related to the capitalization for tax purposes of research and experimental (“R&E”) expenditures became effective on January 1, 2022. Beginning January 1, 2022, all U.S. and non-U.S. based R&E expenditures must be capitalized and amortized over five and fifteen years, respectively. The U.S. Congress is considering legislation that would defer the amortization requirement to future periods. However, there is no assurance that the provision will be deferred, repealed or otherwise modified. The effect of the requirement did not have a material impact on our income tax provision.
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