v3.26.1
Income Tax Expense (Benefit)
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Tax Expense (Benefit) Income Tax Expense (Benefit)
The following table provides information regarding the Company's income tax expense (benefit) for the three months ended March 31, 2026 and 2025 (dollars in thousands):
Three Months Ended
March 31,
20262025
(unaudited)
Income tax expense (benefit)$(3,657)$5,996 
Effective tax rate61.5 %(102.8)%

Income tax expense (benefit) was a benefit of $3.7 million (61.5% effective tax rate) for the three months ended March 31, 2026, as compared to an income tax expense of $6.0 million ((102.8)% effective tax rate) for the three months ended March 31, 2025. The change in income tax expense (benefit) and effective income tax rate was primarily due to an increase in forecasted full year pre-tax earnings (losses) and an increase in non-deductible expenditures for the three months ended March 31, 2026, as compared to the same period in 2025.

The Company's effective income tax rate for the three months ended March 31, 2026 varies from the statutory federal tax rate in the United States (U.S. federal tax rate) of 21% primarily due to the effects of non-deductible executive compensation, non-deductible payments related to contingent consideration, and state taxes. The Company's effective income tax rate for the three months ended March 31, 2025 vary from the statutory U.S. federal tax rate primarily due to the impact of recurring permanent differences on a forecasted near break-even loss.
The annual forecasted earnings represent the Company's best estimate as of March 31, 2026 and 2025, are subject to change and could have a material impact on the effective tax rate in subsequent periods. ASC 740, Income Taxes (ASC 740), requires the Company to estimate the annual effective income tax rate for the full year and apply it to pre-tax income (loss) for each interim period, taking into account year-to-date amounts and projected results for the full year.