v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes:
Income tax expense (benefit) and the effective tax rate for the three and six months ended June 30, 2026 and 2025 were as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Income before income taxes$25,595 $16,254 $91,236 $3,691 
Income tax expense (benefit)
$6,107 $(102)$23,240 $32 
Effective tax rate23.9 %(0.6)%25.5 %0.9 %

The effective tax rate for the three and six months ended June 30, 2026 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes. Income tax expense for the three and six months ended June 30, 2026 includes discrete tax expense of $1.2 million and $16.7 million, respectively, related to the gain on the sale of an equity investment, which was recognized in full during the six months ended June 30, 2026. The gain did not impact the Company's effective tax rate, as it was fully taxable and resulted in no permanent differences.

The effective tax rate for the three and six months ended June 30, 2025 differed from the U.S. federal statutory rate of 21% primarily due to the full valuation allowance in the prior year period.
At December 31, 2025, the Company concluded that it was appropriate to release a majority of the valuation allowance against the $71.4 million of deferred tax assets recorded as of that date based on the weight of available evidence, which now supports the conclusion that it is more likely than not that the majority of deferred tax assets will be realized. Based on sustained profitability, including generating three-year cumulative income before taxes of $76.9 million, excluding the gain in fiscal year 2024 on our equity investment, the significant deferred tax liabilities expected to reverse in future periods, and the projections of future taxable income sufficient to fully utilize the Company's federal and state NOLs, the positive evidence supporting the release of most of the valuation allowance outweighed the negative evidence supporting a full valuation allowance. As a result, we recognized a deferred income tax benefit of $68.8 million for the year ended December 31, 2025.

For the three months ended June 30, 2026, income tax expense was $6.1 million, of which $5.4 million represented deferred income tax expense. Income tax expense increased $6.2 million compared to the prior year period, primarily attributable to an increase in taxable income due to the gain on equity investment.
For the six months ended June 30, 2026, income tax expense was $23.2 million, of which $21.5 million represented deferred income tax expense. Income tax expense increased $23.2 million compared to the prior year period, primarily attributable to an increase in taxable income due to the gain on equity investment.