v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of income (loss) before income taxes are as follows (in thousands):

Year Ended December 31,
202520242023
Domestic
$46,258 $84,676 $84,170 
Foreign
842 (1,405)894 
Income before income taxes
$47,100 $83,271 $85,064 

The provision (benefit) for income taxes consists of the following (in thousands):
Year Ended December 31,
202520242023
Current tax provision:
Federal$5,830 $17,086 $18,590 
State3,060 7,252 9,050 
Foreign340 560 532 
Total Current9,230 24,898 28,172 
Deferred tax benefit:
Federal3,715 (112)(1,811)
State1,239 (305)(806)
Foreign
245 (31)(6)
Total deferred5,199 (448)(2,623)
Total tax provision$14,429 $24,450 $25,549 

A reconciliation between the income tax provision at the U.S. statutory tax rate and the Company’s income tax provision on the consolidated statements of income and comprehensive income is below (in thousands):

Year Ended December 31,
202520242023
Income before income taxes$47,100 $83,271 $85,064 
U.S. statutory tax rate21%21%21%
Income tax expense at statutory rate9,891 17,487 17,863 
State and local income taxes, net of federal income tax effect (1)
3,396 7.2 %5,488 6.6 %6,513 7.7 %
Foreign tax effects
455 1.0 %871 1.0 %480 0.6 %
Non-taxable or Non-deductible items:
   Share-based compensation expenses
553 1.2 %(683)(0.8)%(1,126)(1.3)%
   Non-deductible officer compensation expenses
487 1.0 %1,188 1.4 %1,817 2.1 %
   Non-taxable gain contingency
(693)(1.5)%— — %— — %
   Other Non-deductible expenses
325 0.7 %87 0.1 %2 — %
Other adjustments
15 — %12 — %— — %
Total tax provision$14,429 30.6 %$24,450 29.4 %$25,549 30.0 %
(1) State taxes in Florida, New York, California, and New York City make up the majority (greater than 50 percent) of the effect of this category.

As presented in the income tax reconciliation above, the tax provision recognized on the consolidated statements of income and comprehensive income was impacted by state taxes, non-deductible officer compensation, share-based compensation tax benefits, non-taxable gain contingencies from La Nacional, and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or
lower than the U.S. statutory rate. The Company is also subject to tax in various U.S. state and foreign jurisdictions. Changes in the annual allocation and apportionment of the Company’s activity amongst these jurisdictions results in changes to the blended tax rate utilized to measure the Company’s deferred tax assets and liabilities.

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company’s assets and liabilities. The following table outlines the principal components of the deferred tax assets and liabilities (in thousands):
December 31,
20252024
Deferred tax assets:
U.S. federal and state net operating losses$2,434 $2,809 
Foreign net operating losses8,415 7,132 
Allowance for credit losses1,421 1,131 
Share-based compensation1,943 1,280 
Accrued compensation479 642 
Deferred revenue75 848 
Transaction costs
3,422 493 
Lease liabilities6,057 6,793 
Other1,139 989 
Total deferred tax assets25,385 22,117 
Valuation allowance(8,042)(6,537)
Total deferred tax assets, net of valuation allowance
17,343 15,580 
Deferred tax liabilities:
Depreciation(11,892)(3,542)
Right-of-use assets(4,426)(4,967)
Intangible amortization(6,397)(7,321)
Total deferred tax liabilities(22,715)(15,830)
Net deferred tax liability$(5,372)$(250)

At December 31, 2025, the Company had pre-tax federal, state and foreign net operating loss carryforwards of approximately $10.8 million, $5.5 million and $37.7 million, respectively, which are available to reduce future taxable income. With certain exceptions, these net operating loss carryforwards will expire from 2031 through 2037 for federal losses, from 2029 through 2038 for state losses, and from 2038 through 2045 for foreign losses. In addition, $32.3 million of the foreign net operating loss carryforwards in our European jurisdictions carryforward indefinitely. Utilization of the Company’s net operating loss carryforwards is subject to an annual limitation under Internal Revenue Code Section 382. The Company has recorded a deferred tax asset for only the portion of its net operating loss carryforward that it expects to realize before expiration.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for the years prior to 2022. However, the Company has certain net operating loss carryforwards from tax years 2010 through 2017 that are subject to examination. As of December 31, 2025 and 2024, the Company did not have any amounts accrued for interest and penalties or recorded for uncertain tax positions.

At December 31, 2025 and 2024, after consideration of all evidence, both positive and negative, management has determined that no valuation allowance is required on the Company’s U.S. deferred tax assets. However, a valuation allowance of $8.0 million and $6.5 million as of December 31, 2025 and 2024, respectively, has been recorded on deferred tax assets associated with foreign net operating loss carryforwards. The valuation allowance increased by $1.5 million and $0.7 million during the years ended December 31, 2025 and 2024, respectively.
Cash paid for income taxes, net of refunds received, by jurisdiction for the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands):

Year ended December 31,
202520242023
Federal
$10,662 $17,050 $13,665 
State:
   California
748 1,227 1,198 
   Florida
1,181 1,978 2,580 
   New York
2,167 1,297 982 
   Other States
2,328 3,039 3,078 
Foreign
803 — — 
   Cash paid for income taxes, net of refunds received
$17,889 $24,591 $21,503