Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate ("ETR"), adjusted for discrete items, if any, that arise during the period. In calculating the provision for interim income taxes, an estimated annual ETR is applied to year-to-date ordinary income. At the end of each interim period, the Company updates its estimate of the annual ETR expected to be applicable for the full fiscal year. The income tax provision ETR for the three months ended March 31, 2026 and 2025 was 5.07% and 6.68%, respectively. The decrease in the ETR for the three months ended March 31, 2026, compared to the same period in 2025, was primarily due to lower state income taxes. As of March 31, 2026, the Company maintains a valuation allowance against certain deferred tax assets, primarily related to net operating loss carryforwards and other deductible temporary differences. The realizability of deferred tax assets is assessed each reporting period based on all available positive and negative evidence. For the three months ended March 31, 2026, the Company incurred a pretax loss and remains in a cumulative loss position. However, management currently forecasts profitability in subsequent quarters and cumulative pretax income for the full fiscal year. Improved operating performance expected in future periods represents positive evidence that may, if sustained, support the realization of certain deferred tax assets. While this positive evidence has not yet outweighed the historical negative evidence as of March 31, 2026, continued achievement of forecasted results could result in a partial or full release of the valuation allowance in a future interim period. Any such release, if recognized, could materially affect income tax expense and the effective tax rate. The Company's ETR for the three months ended March 31, 2026 and 2025 remained below the U.S. federal statutory rate primarily due to the impact of the full valuation allowance. Based upon the Company’s historical operating losses, management concluded that the evidence of recent profitability was not yet sufficient to overcome the negative evidence of cumulative losses in recent years, therefore, the Company has provided a valuation allowance against the deferred tax assets that will not be realized as of March 31, 2026 and 2025. As of March 31, 2026 and 2025, the Company has no uncertain tax positions or interest and penalties accrued related to income taxes.
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