v3.26.1
10-K Income taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
In December 2023, the FASB issued ASU 2023-09, which enhances the disclosure requirements for income taxes. The Company adopted ASU 2023-09 on a prospective basis for the annual reporting period ended December 31, 2025.
Accordingly, the comparative prior period has not been recast to reflect the new disclosure requirements. See Note 3 — Significant accounting policies for further detail.
The Company’s Loss before provision for income taxes included the following components for the years ended December 31, 2025, 2024 and 2023:
Years Ended December 31,
2025
2024
2023
Domestic
$
(67,069)
$
(87,443)
$
(101,096)
Foreign
(11,145)
(25,915)
(28,375)
Total
$
(78,214)
$
(113,358)
$
(129,471)
The Company’s Provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following:
Years Ended December 31,
2025
2024
2023
Current:
Federal
$
138,070 
$
135,598 
$
119,555 
State
21,682 
15,540 
22,825 
Foreign
3,800 
1,884 
123 
Total current income tax expense
$
163,552 
$
153,022 
$
142,503 
Deferred:
Federal
$
(19,726)
$
(24,744)
$
(20,682)
State
(14,334)
(25,635)
(9,041)
Foreign
(5,803)
(4,392)
394 
Total deferred income tax expense
(39,863)
(54,771)
(29,329)
Provision for income taxes
$
123,689 
$
98,251 
$
113,174 
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the year ended December 31, 2025 is as follows:
Year Ended December 31, 2025
$
%
Benefit from income taxes computed using U.S. federal statutory income tax rate(1)
$
(16,416)
21 
%
State and local income tax, net of federal income tax effect(2)
7,562 
(10)
%
Impact of U.S. tax on foreign operations
1,632 
(2)
%
Foreign tax effects
1,022 
(1)
%
Effect of change in tax law or rates enacted in current period
(1,192)
2 
%
Share-based compensation
2,616 
(3)
%
Non-deductible expenses
3,117 
(4)
%
Increase in uncertain tax position(3)
97,843 
(125)
%
Increase in valuation allowance
31,759 
(41)
%
Penalties and interest
1,593 
(2)
%
Other
(5,847)
7 
%
Provision for income taxes
$
123,689 
(158)
%
(1) As the Company’s operations are primarily based in the U.S., the tax rate reconciliation has been prepared using the U.S. federal statutory tax rate of 21%.
(2) Primarily represents income tax expense generated in Pennsylvania, Maryland, Illinois and Florida.
(3) Primarily related to the Company's Section 280E Position.
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023 are as follows:
Years Ended December 31,
2024
2023
$
%
$
%
Benefit from income taxes computed using U.S. federal statutory income tax rate(1)
$
(23,805)
21 
%
(27,189)
21%
State and local income tax, net of federal income tax effect
(22,643)
20 
%
13,769
(11)%
Impact of foreign operations
706 
(1)
%
362
(1)%
Effect of change in tax law or rates enacted in current period
—
—%
—
—%
Share-based compensation
944 
(1)
%
2,033
(2)%
Non-deductible expenses
2,204 
(2)
%
11,641
(9)%
Increase in uncertain tax position
121,969 
(108)
%
59,364
(46)%
Increase in valuation allowance
15,424 
(14)
%
36,042
(28)%
Penalties and interest
16,216 
(14)
%
19,134
(15)%
Other
(12,764)
11 
%
(1,982)
2%
Provision for income taxes
$
98,251 
(87)
%
$
113,174 
(87)
%
(1) As the Company’s operations are primarily based in the U.S., the tax rate reconciliation has been prepared using the U.S. federal statutory tax rate of 21%.
Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended December 31, 2025 was as follows:
Year Ended
Jurisdiction:
December 31, 2025
Federal
$
9,575 
State
16,894 
Foreign
589 
Cash paid for income taxes, net of refunds received
$
27,058 
The components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:
As of
2025
2024
Deferred tax assets:
Net operating loss carryforward
$
218,402 
$
202,940 
163j interest carryovers
86,869 
71,132 
Stock compensation
14,773 
10,307 
Accrued and prepaid expenses
2,348 
2,088 
Other
165 
60 
Total deferred tax assets
322,557 
286,527 
Deferred tax liabilities:
Depreciation and amortization
(232,329)
(264,588)
Inventory
(2,746)
(1,904)
Total deferred tax liabilities
(235,075)
(266,492)
Valuation allowance(1)
(299,041)
(264,407)
Net deferred tax liabilities
$
(211,559)
$
(244,372)
(1) As of December 31, 2025 and 2024, the Company maintained a valuation allowance against deferred tax assets related to certain U.S. federal and state operations as well as its international operations in France, the U.K., Canada and Germany.
At December 31, 2025, the Company had federal and state tax loss carryforwards of $645.0 million, which expire between 2026 and 2044. At December 31, 2025 the Company had foreign tax loss carryforwards of $27.2 million, which will begin to expire starting 2035 through 2045. At December 31, 2025, the Company had federal and state tax loss carryforwards of
$681.5 million which will never expire. At December 31, 2025, the Company had foreign tax loss carryforwards of $93.1 million, which will never expire.
The Company accounts for the undistributed earnings of the Company as a temporary difference, except for the undistributed earnings of its foreign subsidiaries that are deemed to be indefinitely reinvested in foreign jurisdictions. The Company considers the earnings and profits of its foreign subsidiaries to be indefinitely reinvested. Determination of the amount of the unrecognized deferred tax liability is not practicable.
The following table summarizes the activity within the Company’s unrecognized tax benefits from continuing operations for the years ended December 31, 2025, 2024 and 2023:
Years ended December 31,
2025
2024
2023
Balance at beginning of the year
$
432,341 
$
56,931 
$
70,888
Additions based on tax positions related to the current year
119,792 
130,790 
8,313
Additions based on refunds requested but not yet received related to prior years
36,389 
91,645 
—
Additions based on refunds received related to prior years
16,176 
9,983 
—
Additions and subtractions for tax positions of prior years
(2,339)
164,249 
(896)
Subtractions based on acquisitions
— 
(10,348)
(485)
Lapse of statute of limitations
(14,533)
(10,909)
(20,889)
Balance at the end of the year
$
587,826 
$
432,341 
$
56,931
As of December 31, 2025 and 2024, $1.8 million and $13.1 million, respectively, of these unrecognized tax benefits were recorded as a result of acquisitions and are subject to indemnifications. As the Company has collateral and/or other deferred consideration sufficient to cover any potential resulting indemnification liability, the Company recognized a non- current tax receivable within Income tax receivable on the Consolidated Balance Sheets. As of December 31, 2025 and 2024, included in the balances of unrecognized tax benefits, is $586.0 million and $419.2 million, respectively, of unrecognized tax benefits that if recognized, would impact the Company’s effective tax rate.
As of December 31, 2025, the Company recognized accrued interest and penalties of $25.4 million and $69.8 million for its uncertain tax positions as a component of Provision for income taxes and Other long-term liabilities, respectively. As of December 31, 2024, the Company recognized accrued interest and penalties of $16.1 million, $4.9 million and $19.2 million as a component of Provision for income taxes, Income tax payable and Other long-term liabilities, respectively.
The Company files its income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and foreign taxing authorities, where applicable. As of December 31, 2025, the Company is under audit for years ranging from 2020 to 2023 by the IRS, a few U.S. states and in Canada. The statute of limitations for certain federal, state and foreign taxing jurisdictions are open from tax year 2020.
Global Minimum Tax Rules - Pillar Two
Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate, as described in the Global Anti-Base Erosion Model Rules (otherwise known as Pillar Two) issued by the Organization for Economic Co-operation and Development. Under Pillar Two, a minimum effective tax rate of 15% would apply to multinational companies with consolidated revenues above €750 million. Pillar Two became effective for fiscal years beginning on or after January 1, 2024, in several jurisdictions in which the Company operates. Upon enactment, Pillar Two did not have a material impact on the Company’s Consolidated Financial Statements, and there was no material impact to the Company’s consolidated financial position, results of operations or cash flows.