v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax expense are as follows (in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
2025202420252024
Federal income tax expense$157 $— $165 $— 
State income tax expense (benefit)2,394 3 2,403 (228)
Foreign income tax (benefit) expense(551)378 (1,024)591 
$2,000 $381 $1,544 $363 
During the three months ended June 30, 2025 and 2024, the Company recorded income tax expense of $2.0 million and $0.4 million, respectively. During the six months ended June 30, 2025 and 2024, the Company recorded income tax expense of $1.5 million and $0.4 million, respectively. The net tax expense increase in both periods is largely due to recording an uncertain tax position for certain tax matters, including penalties and interest.
Income tax expense reflects taxes due to the taxing authorities and the tax effects of temporary differences between the basis of assets and liabilities recognized for financial reporting and tax purposes, and net operating loss and tax credit carryforwards. The significant components of the Company's total deferred tax asset as of June 30, 2025 and at December 31, 2024 relate to the tax effects of the basis difference of acquired intangible assets.
A valuation allowance is recorded to the extent it is more likely than not that some portion or all of the deferred tax assets will not be realized. A full valuation allowance was recorded on the Company’s U.S. and U.K. deferred tax assets as of June 30, 2025 and December 31, 2024.
As of December 31, 2024 and June 30, 2025, uncertain tax positions were approximately $0.0 million and $2.5 million. The Company’s uncertain tax position relates to U.S. federal and other jurisdictions. Due to various factors, including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. Any assessments or settlements could result in changes to our contingencies related to positions on prior years’ tax filings.
On July 4, 2025, Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which includes several changes to the Internal Revenue Code which may result in changes to the Company’s income tax expense. The Company is currently evaluating the impacts of the OBBBA but does not believe that changes in tax law will materially affect the Company’s operating performance or financial position.