v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 15. Income Taxes

The Company’s (loss) income before income taxes expense from its United States and foreign operations are as follows:

 

 

Year Ended December 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

United States

 

$

10.8

 

 

$

9.2

 

 

$

(3.0

)

Foreign

 

 

(32.4

)

 

 

(1.7

)

 

 

0.1

 

Total

 

$

(21.6

)

 

$

7.5

 

 

$

(2.9

)

The Company’s current and deferred income tax provision were as follows:

 

 

Year Ended December 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Current

 

 

 

 

 

 

 

 

 

Federal

 

$

0.3

 

 

$

3.3

 

 

$

2.4

 

State and local

 

 

0.4

 

 

 

0.1

 

 

 

1.6

 

Foreign

 

 

4.3

 

 

 

0.1

 

 

 

—

 

 

 

5.0

 

 

 

3.5

 

 

 

4.0

 

Deferred

 

 

 

 

 

 

 

 

 

Federal

 

 

1.6

 

 

 

0.8

 

 

 

1.8

 

State and local

 

 

1.0

 

 

 

0.9

 

 

 

(0.5

)

Foreign

 

 

1.5

 

 

 

0.1

 

 

 

—

 

 

 

4.1

 

 

 

1.8

 

 

 

1.3

 

Total provision for income taxes

 

$

9.1

 

 

$

5.3

 

 

$

5.3

 

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

 

 

Year Ended December 31,

 

(in millions)

 

2025 ($)

 

 

2025 (%)

 

Provision for income taxes at U.S. federal statutory rate

 

$

(4.6

)

 

 

21.0

%

State and local income taxes, net of federal benefit(1)

 

 

1.1

 

 

 

(5.1

)%

Foreign tax effects:

 

 

 

 

 

 

United Kingdom

 

 

 

 

 

 

Foreign rate differential

 

 

(0.9

)

 

 

4.2

%

Changes in valuation allowance

 

 

1.1

 

 

 

(5.1

)%

Nontaxable or nondeductible items:

 

 

 

 

 

 

Transaction costs and contingent consideration

 

 

9.1

 

 

 

(42.0

)%

RTP - Net Operating Loss

 

 

(0.3

)

 

 

1.4

%

Other

 

 

0.3

 

 

 

(1.4

)%

Canada

 

 

 

 

 

 

Foreign rate differential

 

 

(0.4

)

 

 

1.9

%

Provincial tax

 

 

1.5

 

 

 

(6.9

)%

Nontaxable or nondeductible items:

 

 

 

 

 

 

Transaction costs and contingent consideration

 

 

2.3

 

 

 

(10.6

)%

Effect of cross-border tax laws:

 

 

 

 

 

 

Global intangible income inclusion

 

 

2.6

 

 

 

(12.0

)%

Changes in valuation allowances

 

 

(6.0

)

 

 

27.8

%

Nontaxable or nondeductible items:

 

 

 

 

 

 

Stock-based compensation

 

 

2.9

 

 

 

(13.4

)%

Other

 

 

(0.2

)

 

 

0.9

%

Changes in unrecognized tax benefits

 

 

0.3

 

 

 

(1.4

)%

Other adjustments

 

 

0.3

 

 

 

(1.4

)%

Total tax provision and effective tax rate

 

$

9.1

 

 

 

(42.1

)%

 

(1)
State and local taxes in Florida, New York and New York City comprise the majority of this category.

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

 

 

Year Ended December 31,

 

(in millions)

 

2024

 

 

2023

 

(Loss) income before income taxes

 

$

7.5

 

 

$

(2.9

)

U.S. statutory tax rate

 

 

21.0

%

 

 

21.0

%

Taxes at the U.S. statutory rate

 

 

1.6

 

 

 

(0.6

)

Tax effected differences

 

 

 

 

 

 

State and local taxes, net of federal benefit

 

 

0.5

 

 

 

0.8

 

Share-based payments

 

 

4.6

 

 

 

0.3

 

Change in valuation allowance

 

 

(2.4

)

 

 

3.7

 

Return to provision adjustments

 

 

0.9

 

 

 

0.3

 

Change in tax rates

 

 

(0.6

)

 

 

0.5

 

Nondeductible expenses

 

 

0.7

 

 

 

0.4

 

Other, net

 

 

—

 

 

 

(0.1

)

Total provision for income taxes

 

$

5.3

 

 

$

5.3

 

The fluctuations of the Company’s income tax provision and effective tax rates between the years ended December 31, 2025, 2024 and 2023, are primarily attributable to changes in valuation allowances, state taxes, and global intangible low-taxed income inclusion.

The income tax effects of temporary differences between the book value and tax basis of assets and liabilities are as follows:

 

 

December 31,

 

(in millions)

 

2025

 

 

2024

 

Deferred tax assets

 

 

 

 

 

 

Net operating loss carryforwards

 

$

4.1

 

 

$

0.6

 

Deferred compensation

 

 

1.3

 

 

 

0.3

 

Stock-based compensation

 

 

4.9

 

 

 

5.7

 

Fixed asset depreciation

 

 

1.9

 

 

 

1.5

 

Lease liabilities

 

 

2.1

 

 

 

2.4

 

Accrued expenses

 

 

0.3

 

 

 

0.2

 

Section 163(j) interest carryover

 

 

18.7

 

 

 

14.9

 

Other assets

 

 

1.1

 

 

 

0.9

 

Total deferred tax assets

 

 

34.4

 

 

 

26.5

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

 

Right-of-use lease assets

 

 

(1.6

)

 

 

(1.6

)

Goodwill and intangible assets

 

 

(26.3

)

 

 

(0.5

)

Total deferred tax liabilities

 

 

(27.9

)

 

 

(2.1

)

 

 

 

 

 

 

 

Valuation allowance

 

 

(24.1

)

 

 

(29.3

)

Deferred tax liabilities, net

 

$

(17.6

)

 

$

(4.9

)

 

In assessing the realization of the deferred tax assets, the Company considers whether it is more likely than not that some portion of the deferred tax assets will not be realized. The Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. Due to lack of available sources of taxable income, the Company recorded a valuation allowance against a portion of its net deferred tax assets as sufficient uncertainty exists regarding the future realization of these assets. As of December 31, 2025 and 2024, the Company recorded a valuation allowance of $24.1 million and $29.3 million, respectively. The decrease in the valuation allowance was due to book-to-tax differences related to goodwill and intangible assets and stock-based compensation, which were offset by Section 163(j) interest carryover.

As of December 31, 2025 and 2024, the Company had U.S. federal net operating loss carryforwards on a gross-basis of $12.4 million and zero, respectively. As of December 31, 2025 and 2024, the Company had U.S. state net operating loss carryforwards on a gross-basis of $15.7 million and $6.3 million, respectively. The U.S. state net operating loss carryforward begins to expire in 2026. The Company does not have any income tax credit carryforwards.

The following table summarizes the changes to the gross unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023:

 

 

December 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Gross unrecognized tax benefits, beginning of period

 

$

1.5

 

 

$

—

 

 

$

—

 

Decreases related to prior year tax positions

 

 

(0.3

)

 

 

—

 

 

 

—

 

Increases related to current year tax positions

 

 

1.4

 

 

 

1.5

 

 

 

—

 

Gross unrecognized tax benefits, end of period

 

$

2.6

 

 

$

1.5

 

 

$

—

 

For the years ended December 31, 2025, 2024 and 2023, interest and penalties were not significant. The Company records interest and penalties on unrecognized tax benefits within the provision for income taxes in the consolidated statements of (loss) income.

As of December 31, 2025, the Company has $2.6 million of unrecognized tax benefits, which is included within other noncurrent liabilities in the consolidated balance sheets. As of December 31, 2025, none of the unrecognized tax benefits would impact the effective income tax rate if recognized.

The Company is subject to U.S. federal income tax and various state, local and foreign taxes in numerous jurisdictions. The Company’s federal tax returns for 2022 through 2025 years remain open for examination by the IRS. In most cases, the Company’s state tax returns for 2022 through 2025 remain open and are subject to income tax examinations by state taxing authorities.

The amount of cash income taxes paid by the Company was as follows:

 

 

Year Ended December 31,

 

(in millions)

 

2025

 

US Federal

 

$

4.0

 

State and local

 

 

 

Colorado

 

 

(0.3

)

Foreign

 

 

 

United Kingdom

 

 

0.7

 

Canada

 

 

0.3

 

South Africa

 

 

0.3

 

Total cash paid for income taxes, net of refunds

 

$

5.0

 

The amount of cash income taxes paid by the Company during the years ended December 31, 2024 and 2023 was $4.6 million and $6.9 million, respectively.