Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income Tax Expense

Our effective income tax rate was a tax expense of 41% and 52% for the three months ended March 31, 2024 and 2023, respectively. Our income tax rate for the three months ended March 31, 2024 and 2023 was primarily impacted by changes in our valuation allowance against our net deferred tax assets, non-deductible executive compensation, the foreign derived intangible income deduction, the research and development tax credit, changes in our uncertain tax position liabilities, and tax shortfalls on stock compensation.

Deferred Income Taxes

We generate deferred tax assets primarily as a result of finance and operating leases, net operating losses, excess interest carryforward, change in contingent consideration, accrued compensation, and stock compensation. Our deferred tax liabilities are primarily comprised of intangible assets acquired in previous years, finance and operating leases, and unrealized gains and losses.

We maintained a net deferred tax liability of $21.7 million and $20.8 million as of March 31, 2024 and December 31, 2023, respectively. Our valuation allowance against our deferred tax assets was $28.2 million and $32.9 million as of March 31, 2024 and December 31, 2023, respectively, primarily related to net operating loss carryforwards, disallowed excess interest carryforwards, change in contingent consideration, and capitalized research and development expenses.