v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The Company had pre-tax income (loss) as follows:
SuccessorPredecessor
 Year Ended December 31, 2025July 30 through December 31, 2024January 1 through July 29, 2024Year Ended December 31, 2023
Domestic$(138,276)$(128,633)$(30,305)$(38,505)
Foreign40,104 17,925 17,845 34,225 
Total pre-tax income (loss)$(98,172)$(110,708)$(12,460)$(4,280)
The provision for income taxes consists of the following:
SuccessorPredecessor
 Year Ended December 31, 2025July 30 through December 31, 2024January 1 through July 29, 2024Year Ended December 31, 2023
Current  
Federal$(222)$(248)$— $8,058 
State(263)908 879 2,564 
Foreign22,219 8,099 11,397 15,130 
Total current tax provision$21,734 $8,759 $12,276 $25,752 
Deferred  
Federal$(24,964)$(9,634)$(5,868)$(14,912)
State570 (1,246)(1,506)(2,215)
Foreign(8,396)(3,135)(1,659)(6,616)
Total deferred tax provision$(32,790)$(14,015)$(9,033)$(23,743)
Net deferred tax provision$(32,790)$(14,015)$(9,033)$(23,743)
Provision (benefit) for income taxes$(11,056)$(5,256)$3,243 $2,009 
A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:
Year Ended December 31, 2025
AmountPercentage
U.S. Federal Statutory Tax Rate$(20,616)21.00 %
State and local income taxes, net of federal income tax effect (1)495 (0.50)%
Foreign tax effects
Canada
Non-deductible expenses1,181 (1.20)%
Withholding tax5,694 (5.80)%
Foreign rate differential 1,128 (1.15)%
Other(2,131)2.17 %
Other jurisdictions1,329 (1.35)%
Effect of cross-border tax laws59 (0.06)%
Nontaxable or nondeductible items
Meals and entertainment2,153 (2.19)%
Transaction costs1,331 (1.36)%
Other (422)0.43 %
Tax credits
R&D tax credits(2,213)2.25 %
Changes in unrecognized tax benefits(121)0.12 %
Other adjustments1,077 (1.10)%
Total $(11,056)11.26 %
(1) State taxes in California, Florida, Illinois, Louisiana, Massachusetts, Missouri, Minnesota, Pennsylvania, and Texas made up the majority (greater than 50 percent) of the tax effect in this category.
The income tax benefit of $11.1 million for the year is less than the statutory rate primarily drive by non-deductible expenses, impacts of foreign tax rates and withholding taxes. These are partially offset by R&D tax credits generated during the year.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income as follows:
SuccessorPredecessor
 July 30 through December 31, 2024January 1 through July 29, 2024Year Ended December 31, 2023
 AmountPercentAmountPercentAmountPercent
Federal income tax provision at statutory tax rate(23,249)21%(2,617)21%(898)21%
State income taxes, net of federal benefit(260)—%(1,436)12%283 (7%)
Foreign tax rate differential842 (1%)1,522 (12%)1,097 (26%)
Permanent differences— —%(315)2%504 (12%)
Meals and entertainment673 (1%)877 (7%)1,496 (35%)
Goodwill— —%— —%(576)14%
Transaction costs2,730 (2%)(5,154)41%— —%
Stock compensation14,705 (13%)172 (1%)309 (7%)
Bonus— —%(2,185)17%— —%
State rate deferred benefit— —%— —%(557)13%
Foreign deferred rate change— —%— —%40 (1%)
Foreign WHT— —%— —%— —%
Change in valuation allowance— —%12,596 (101%)— —%
Other(697)1%(217)1%311 (7%)
Provision (benefit) for income taxes$(5,256)5%$3,243 (27%)$2,009 (47%)
A reconciliation of cash paid for taxes is as follows:
Year Ended December 31, 2025
Amount
Federal$419 
State
Louisiana1,347 
Other1,933 
Foreign
Canada18,561 
Alberta4,106 
Other1,402 
Total $27,768 
Global Intangible Low Taxed Income (“GILTI”) is a tax on income that is earned by certain foreign affiliates owned by a U.S. shareholder. GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. The Company has determined that due to the statutory high tax exception related to foreign earnings, there was no impact of GILTI for the years ended December 31, 2024 (Successor) and 2023 (Predecessor) and $0.1 million for the period ended December 31, 2025.
Deferred income tax attributes resulting from differences between financial accounting and income tax bases of assets and liabilities are as follows:
Successor
 December 31, 2025December 31, 2024
Deferred income tax assets  
Net operating loss carryforward$38,394 $16,183 
Allowance for doubtful accounts2,674 1,030 
Accrued expenses3,791 1,852 
IRC Sec 163(j) interest carryforward45,863 29,839 
Deferred share based compensation10,012 398 
Pension and workers compensation1,084 1,087 
Accrued compensation3,936 1,875 
Tax credits3,082 1,082 
Lease liabilities
15,251 7,555 
IRC Sec 174 capitalized costs26,173 1,250 
Other4,095 1,356 
Gross deferred income tax assets$154,355 $63,507 
Deferred income tax liabilities  
Right-of-use assets
(15,256)(7,808)
Property and equipment(33,990)(27,520)
Goodwill and other intangibles(322,132)(178,086)
Other(4,414)— 
Total deferred income tax liabilities(375,792)(213,414)
Valuation allowance(80)— 
Net deferred income taxes$(221,517)$(149,907)
At December 31, 2025 the Company’s net deferred income tax balance within the consolidated balance sheet consisted of long-term deferred tax assets of approximately $1.4 million and long term deferred tax liabilities of approximately $223.0 million. At December 31, 2024, the balance consisted of long term deferred tax assets of approximately $0.8 million and long term deferred tax liabilities of approximately $150.7 million.
The Company evaluated and considered all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for its deferred tax assets was needed. The deferred tax assets are composed principally of net operating loss carryforwards and 163(j) interest limitation carryforwards. Based on available evidence, the Company recorded a valuation allowance of $12.6 million as of July 29, 2024. As a result of the Admiral acquisition and the new basis of accounting, the Company assessed and determined a valuation allowance was not necessary in the Successor period. The release of the $12.6 million allowance had no impact on the Predecessor or Successor provision (benefit) for income taxes. We will continue to monitor the evidence and the realizability of our deferred tax assets in future periods. Should evidence regarding the realizability of our deferred tax assets change at a future point in time, we will adjust the valuation allowance as required.
At December 31, 2025 and 2024, the Company had U.S. federal income tax net operating losses (“NOLs”) of approximately $160.3 million and $67.9 million, respectively. The federal NOLs do not expire as they have an indefinite carryforward period. At December 31, 2025 and 2024, the Company had U.S. state income tax NOLs of approximately $92.3 million and $14.9 million, respectively, of which $33.6 million have an indefinite carryforward period and remainder will begin to expire in 2026. In addition, the Company had foreign NOLs of approximately $2.1 million and $1.6 million at December 31, 2025 and 2024, respectively, which will begin to expire in 2028. The Company had U.S. interest expense carryforwards of $191.6 million and $132.2 million at December 31, 2025 and 2024, respectively, which can be carried forward indefinitely.
For U.S. federal tax purposes, the tax years 2022 and after remain open and subject to examination. For most U.S. state tax purposes, tax years 2021 and after remain open and subject to examination. For Canadian federal tax purposes, tax years 2021 and after remain subject to examination.
The Company provides for income and withholding taxes on previously unremitted foreign earnings of certain foreign subsidiaries. At December 31, 2025, the Company had accrued a deferred tax liability of $1.8 million of withholding taxes that would be due upon the distribution of such earnings from the non-U.S. subsidiaries to the U.S.
The Company has unrecognized tax benefits of $8.4 million at December 31, 2025 and $4.8 million at December 31, 2024. The following table summarizes the change in the Company’s unrecognized tax benefits, excluding interest and penalties:
SuccessorPredecessor
Year Ended December 31, 2025July 30 through December 31, 2024January 1 through July 29, 2024
Balance, beginning of period
$4,828 $13,976 $15,667 
Additions for tax positions related to the current year480 — — 
Additions for tax positions from prior years3,694 — — 
Statutes of limitations expirations(563)(9,148)(1,691)
Balance, end of period
$8,439 $4,828 $13,976 
At November 14, 2022, the Company recorded a $14.5 million unrecognized tax benefit on its balance sheet as long-term tax payable related to the pre-acquisition tax exposures on Versa, a prior year acquisition. The Company is fully indemnified for any future realization of the liability through escrow funding and, as such, has also recorded a long-term asset of $14.5 million. On July 29, 2024, the Company released $1.7 million of the unrecognized tax benefit as a result of the expiration of the statue of limitations. In addition, on December 31, 2024 the Company released an additional $8.4 million of the unrecognized tax benefit related to Versa also as a result of the expiration of the statute of limitations. The corresponding long-term asset of $14.5 million was also reduced by $1.7 million and $8.4 million for the corresponding periods, respectively. In addition, the Company reduced the reserve by an additional $0.7 million as a result of the expiration of the statute of limitations on state tax returns as of December 31, 2024. At August 4, 2025, the Company recorded a $3.7 million unrecognized tax benefit related to pre-acquisition tax exposures of NV5. On December 31, 2025, the Company recorded an additional $0.4 million of unrecognized tax benefits for the current year and released $0.6 million as a result of the expiration of the statue of limitations. The Company classifies interest and penalties related to unrecognized tax benefits as a component of income tax expense, which was not significant during the Successor period ending December 31, 2024 and the Predecessor period ending December 31, 2023, respectively.
The Organization for Economic Co-operation and Development (“OECD”) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with rules effective beginning in 2024 and expanding in 2025. Several jurisdictions in which the Company operates have enacted Pillar 2 legislation, while others continue to advance implementation; the U.S. has not adopted the rules. On January 5, 2026, the OECD/G20 released the Side-by-Side package, which provides administrative simplifications and new safe harbors, including exemptions from two of the three top-up taxes for qualifying U.S. parented groups and an extension of the Transitional Country-by-Country Reporting Safe Harbor through 2027. The Company is monitoring these developments and evaluating potential impacts. Based on current information, the Company has considered Pillar 2 tax within the provision for income taxes and does not expect Pillar 2 to have a material effect on its effective tax rate or consolidated financial statements.
On July 4, 2025, the “One Big Beautiful Bill Act” was enacted into law. The legislation includes changes to federal tax law, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation and more favorable rules for determining the limitation on business interest expense, among other changes. The legislation is reflected in the annual effective rate and the cash tax position of the Company. The legislation resulted in a reduction in cash tax paid in 2025 and no material impact on the annual effective rate.