Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. The Company will adjust its liability for uncertain tax positions, if any, based on changes in facts and circumstances such as the closing of a tax audit or changes in estimates. The Company’s income tax provision may be impacted to the extent that the final outcome of these tax positions is different than the position taken.
The Company is subject to income taxes in the United States and Australia. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, the Company considers tax positions for which the ultimate tax determination is uncertain for the purpose of determining whether a reserve is required, despite the Company’s belief that the tax positions are fully supportable. To date the Company has not established a reserve provision because the Company believes that all tax positions are highly certain.
The following table summarizes our effective tax rate for the periods presented:
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Loss before income taxes $ (5,529) $ (73,688) $ (16,238) $ (88,836)
Benefit from (provision for) income taxes
 90 3,278 (395) 3,833
Effective tax rate 1.6% 4.4% (2.4)% 4.3%
For the three and nine months ended September 30, 2024, the Company utilized the discrete effective tax rate method, as allowed by ASC 740-270-30-18, to calculate its interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate yields an estimate that is not reliable and the actual effective rate for the year-to-date results represents the best estimate of the annual effective tax rate. The Company believes that the use of the estimated annual effective tax rate method is not reliable in situations where marginal projected ordinary annual income and significant permanent differences would result in wide variability in the estimated annual effective tax rate. The Company monitors its methodology each quarter to determine the best estimate of the annual effective tax rate. As a result of applying the discrete method approach, the Company recorded a year-to-date tax expense on its year-to-date pre-tax losses as of September 30, 2024.
For the three and nine months ended September 30, 2024, as compared to the same periods in the prior year, the Company’s effective tax rate changed due to higher income before income taxes in the U.S. and a full valuation allowance on the net deferred tax assets in Australia. The effective tax rate was lower than the U.S. statutory rate of 21.0% for the three and nine months ended September 30, 2024 primarily due to non-deductible permanent differences in the U.S. and a full valuation allowance on the net deferred tax assets in Australia.