INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| INCOME TAXES | |
| INCOME TAXES | NOTE 14. INCOME TAXES The Company generally calculates its provision for income taxes during each interim reporting period on the basis of an estimated annual effective tax rate adjusted for tax items that are discrete to each period. However, when a reliable estimate cannot be made, the Company computes its provision for income taxes using the actual effective tax rate (discrete method) for the year-to-date period. For the three and six months ended June 30, 2026, small changes in estimated annual pretax income (loss) by legal entity can produce a significant variance in the annual effective tax rate. This variability produces an unreliable estimate of the income tax expense. As a result, in accordance with ASC 740, the Company has computed its benefit from income taxes for the three and six months ended June 30, 2026 by applying the actual effective tax rate to the pretax loss for the six month period. For the three and six months ended June 30, 2025, the Company used the estimated annual effective tax rate method to compute tax benefit. The Company recorded a tax benefit of $1.4 million and $2.0 million for the three and six months ended June 30, 2026, which resulted in effective tax rates of 2.82% and 1.58%, respectively. The Company recorded tax expense of $2.0 million and $0.2 million for the three and six months ended June 30, 2025 respectively, which resulted in effective tax rates of -1.81% and -0.1%, respectively. The effective tax rate is different from the U.S. statutory rate of 21% due to the full valuation allowance against tax losses in the U.S. The income tax benefit and expense for the periods presented for 2026 and 2025, respectively, primarily relate to operations in the UK and realization of related deferred taxes. As of June 30, 2026, the Company continued to maintain its full valuation allowance against U.S. federal and state net deferred tax assets as it expected to be in a cumulative loss position and does not have sufficient positive evidence to support the realizability of its U.S. net deferred tax assets. |