Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 9 — Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, (“ASC 740”), which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Effective income tax rates for interim periods are based upon the Company’s current estimated annual tax rate, which varies based upon the Company’s estimate of taxable earnings or loss and the mix of taxable earnings or loss in the various states in which the Company operates. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior period as discrete items in the interim period in which the event occurs.
As of March 31, 2026 and December 31, 2025, management determined there continues to be sufficient positive evidence that it is more likely than not that the net deferred tax asset (other than foreign net operation losses) is realizable.
The Company recorded a benefit for income taxes of $1.6 million and a provision for income tax of $0.1 million for the three months ended March 31, 2026 and 2025, respectively.
The effective tax rates for the three months ended March 31, 2026 and 2025 were 37.9% and (4.5%), respectively. The increase in the effective tax rate for the three months ended March 31, 2026 compared to the prior period was primarily attributable to projected full year income and a decrease in the estimated tax credits that are expected to be generated and utilized in proportion to the amount of pretax profit.
The effective tax rate differs from the U.S. federal statutory rate for the three months ended March 31, 2026, primarily due to nondeductible expenses, state income taxes and the favorable impact of tax credits.
As of March 31, 2026, the Company’s U.S. federal and certain state tax returns remain subject to examination, beginning with those filed for the year ended December 31, 2018. |