Income Taxes |
6 Months Ended |
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Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Income tax expense for interim periods is computed using an estimated annual effective tax rate (“AETR”), applied to year to date ordinary income, adjusted for discrete items recognized in the period incurred. The Company’s operations are located in the United States, therefore, the tax footnote includes only federal and state domestic tax obligations. Income Tax Expense For the three and six months ended June 30, 2026, the Company recorded income tax expense of $5.6 million and $8.0 million, respectively. Qualitative Explanation of Effective Tax Rate Drivers The Company’s effective tax rate was 25.0% for both the three and six months ended June 30, 2026, compared to an effective tax rate for the three and six months ended June 30, 2025 of (64.8)% and (30.3)%, respectively. The change in the effective tax rate from the prior year second quarter was primarily attributable to the release of substantially all of the Company's valuation allowance during the second quarter of 2025, which reflected the Company's improved profitability. Deferred Income Taxes There were no material changes in the Company’s deferred tax assets or liabilities during the three and six months ended June 30, 2026, other than those resulting from normal interim period activity. Refer to the Company’s consolidated financial statements as of and for the year ended December 31, 2025 for additional information regarding the components of deferred tax assets and liabilities. Valuation Allowance As of June 30, 2026, the Company maintained a valuation allowance of approximately $0.2 million. The valuation allowance relates to a capital loss carryforward. Unrecognized Tax Benefits The amount of unrecognized tax benefits, that if recognized, would affect the annual effective tax rate was approximately $0.6 million and $1.3 million as of June 30, 2026 and December 31, 2025, respectively. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. For the three and six months ended June 30, 2026 and 2025, interest and penalties were not material. Income Taxes Paid Income taxes paid, net of refunds, during the three and six months ended June 30, 2026 were $1.0 million and $0.7 million, respectively, consisting entirely of state income taxes. Open Tax Years The Company remains subject to examination by U.S. federal and state taxing authorities generally for tax years 2017 through 2026. Management does not believe the resolution of any open matters will have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
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