Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Taxes | |
| Income Taxes | 12. Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes. Income tax expense for interim periods is based on the estimated annual effective tax rate (“AETR”), applied to year‑to‑date pre‑tax income, adjusted for discrete items recognized in the period in which they occur. During the three months ended March 31, 2026, we recorded an income tax provision of $3.9 million, resulting in an effective tax rate of 6.9%, that includes the effects of various permanent book-to-tax adjustments, state/local taxes and partial release of valuation allowance. During the three months ended March 31, 2025, we recorded no income tax provision, resulting in an effective tax rate of 0%. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and tax basis of assets and liabilities. Management assesses the realizability of deferred tax assets each reporting period based on all available positive and negative evidence, including historical operating results, projections of future taxable income, and the timing of the reversal of existing temporary differences. We are currently projecting future taxable income associated with the commercial launch of YUTREPIA in June of 2025 and our broader operating plan. While these developments represent positive evidence, management has concluded that such evidence was not sufficient as of the interim reporting date to support a full release of the valuation allowance. Management will continue to evaluate the realizability of its deferred tax assets in future periods. If sustained profitability and other positive evidence are demonstrated, we may release all or a portion of the valuation allowance in a future quarter, which would result in the recognition of a corresponding income tax benefit in the period of release. There have been no significant changes in uncertain tax positions during the three months ended March 31 2026. |