Income Taxes |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | 9. Income Taxes The Company’s effective tax rates on pre-tax income were 38.3% and (57.9)% for the three months ended September 30, 2025 and 2024, respectively, and 34.0% and 24.0% for the nine months ended September 30, 2025 and 2024, respectively. The increase in the Company’s effective tax rate for the three months and nine months ended September 30, 2025, compared to the prior year related to limitations on deductibility of executive compensation and non-deductible acquisition-related costs, decreased deductibility of stock-based compensation realized upon certain stock option exercises and restricted stock unit vesting and increased state tax expenses related to the acquisition of Arroweye. For the nine months ended September 30, 2025 and 2024, the effective tax rates differ from the U.S. federal statutory income tax rate as follows:
As part of the acquisition of Arroweye completed on May 6, 2025, the Company acquired net operating loss (NOL) carryforwards of over $86.1 million, net of a valuation allowance of $55.7 million. The utilization of these NOLs will be subject to applicable limitations and include both NOLs with a 20-year carryover period ($72.4 million), as well as NOLs with no expiration period ($13.7 million). During the nine months ended September 30, 2025, the Company utilized $2.9 million of these NOL carryforwards to offset a portion of its taxable income for the period. The remaining unutilized DTA, net of valuation allowance, specifically related to acquired NOLs is $6.0 million, which the Company expects to use in future periods, subject to applicable limitations. |
|||||||||||||||||||||||||||||||||||||||||||||||||||