v3.26.1
Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

Note 6. Income Taxes

The following table summarizes our effective tax rate for the periods presented (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2026

 

 

2025

 

Income before income taxes

 

$

18,467

 

 

$

15,581

 

Provision for income taxes

 

 

4,709

 

 

 

4,175

 

Effective tax rate

 

 

25.5

%

 

 

26.8

%

 

The decrease in the effective tax rate for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to the prior year increase in valuation allowance against deferred tax assets, which did not recur in the current period.

In October 2021, the Organization for Economic Co-operation and Development, or OECD, issued a statement updating and finalizing the key components of the two-pillar plan on global tax reform, intended to be effective on January 1, 2024. Pillar One focuses on nexus and profit allocation. Pillar Two provides for a global minimum effective corporate tax rate of 15%, applied on a jurisdiction-by-jurisdiction basis. While the U.S. has not adopted the Pillar Two rules, various other governments around the world are enacting legislation. Although these rules are not currently applicable to us, we operate in participating countries that have implemented or are expected to implement these rules. On January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that would exempt electing U.S.-parented multinational entities from the fifteen percent global minimum tax for taxable years beginning on or after January 1, 2026. We continue to evaluate the impact of these tax developments and those under other OECD and non-U.S. rules as new guidance and regulations are published and become applicable. Further, legislation commonly known as the One Big Beautiful Bill Act enacted in July 2025 modified certain tax provisions that had an impact on our tax liability and financial condition.