Income taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes | Income taxes The Company accounts for income taxes under ASC Topic 740 – Income Taxes. Under this standard, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company’s tax provision for interim periods is determined using an estimate of the annual effective income tax rate, adjusted for discrete items, if any, that occur in the relevant period. The income tax benefit of $42.3 million for the six months ended June 30, 2026 resulted in an effective income tax rate of negative 1056.7%. Included in the $42.3 million of tax benefit was a discrete tax benefit of $42.4 million related to the release of the Company's valuation allowance. The Company’s projected effective income tax rate excluding the impact, if any, of discrete items is 4.6%, which is lower than the U.S. federal statutory rate of 21% primarily due to the decrease in the valuation allowance on deferred tax assets related to the forecasted current year utilization offset by non-deductible executive compensation and state taxes. The Company acquired the remaining equity of PanTHERA, a Canadian corporation, on April 4, 2025. The Company's projected effective income tax rate is 0% with respect to its Canadian jurisdiction, primarily due to research and development credits. The Company monitors the realizability of its deferred tax assets, taking into consideration all relevant factors at each reporting period. As of June 30, 2026, based on the relevant weight of positive and negative evidence, including the Company's sustained profitability in recent years in addition to expected future taxable earnings, the Company concluded it is more likely than not that certain U.S. federal and state deferred tax assets are realizable. The Company in turn released $42.4 million of its valuation allowance associated with the U.S. federal and state deferred tax assets, except for those related to capital loss carryforwards and capital loss generating deferred tax assets. The Company continues to maintain a full valuation allowance of $3.5 million against the capital loss tax attributes as of June 30, 2026 due to the conclusion they are not more likely than not to be realized as these assets can only be utilized against future capital gains. The Company is subject to income taxes in the U.S. and in Canada. Significant judgment is required in determining its provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against its net deferred tax assets that are not more likely than not to be realized. The determination of the realizability of deferred tax assets requires significant judgment in assessing the likelihood of future tax consequences. The Company relies on its assessment of projected future results of business operations, which includes uncertainty in future operating results, variable conditions impacting its ability to forecast future taxable income, and changes in business that may affect the existence and magnitude of future taxable income. The Company's valuation allowance assessment is based on the best estimate of future results considering all available information. The Company previously maintained a full valuation allowance against its U.S. federal and state deferred tax assets due to historical cumulative losses and uncertainty regarding the realization of such assets. The Company will continue to evaluate all available evidence each reporting period and may adjust the valuation allowance in future periods if estimates of future taxable income or other relevant factors change.
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