Income Taxes |
3 Months Ended |
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Mar. 31, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
NOTE 7 — Income Taxes
For the three months ended March 31, 2025, and 2024, the Company recorded provisions for income taxes of $132 and $125 respectively. The Company’s effective income tax rate is 22.4% for the three months ended March 31, 2025, compared to negative 4.5% for the three months ended March 31, 2024. The Company’s effective tax rate for the three months ended March 31, 2025 differs from the tax rate for the three months ended March 31, 2024 due to the Company reporting consolidated pretax book income for the three months ended March 31, 2025, and a consolidated pretax book loss for the three months ended March 31, 2024, for which the Company could not report a tax benefit due to the Company’s full valuation allowance in the U.S.
The Company’s material income tax jurisdictions are the United States (federal and California), China and India. As a result of net operating loss and credit carryforwards, the Company is subject to audit for tax years 2017 and forward for federal and 2015 and forward for California purposes. The China and India tax years are open under the statute of limitations from 2014 and 2020, respectively, and forward.
The Company is subject to ongoing tax examinations of its tax returns by the Internal Revenue Service and other tax authorities in various jurisdictions. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of March 31, 2025, the gross amount of unrecognized tax benefits was approximately $1,506. If the Company’s estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period in which we determine the liabilities are no longer necessary. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.
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