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INCOME TAXES
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The following table sets forth a summary of our income tax and effective tax rate (in thousands, except for percentages):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(Loss) income before income taxes$(3,054)$23,857 $(62,484)$(29,770)
(Benefit from) provision for income taxes(298,433)3,352 (296,577)5,689 
The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate and, if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment to tax expense or benefit in the period.
The Company recorded (benefit from) provision for income taxes of $(298.4) million and $3.4 million for the three months ended June 30, 2026 and 2025, respectively, and $(296.6) million and $5.7 million for the six months ended June 30, 2026 and 2025, respectively. For the three and six months ended June 30, 2026, the effective tax rate differs from the U.S. statutory tax rate primarily due to a $289.1 million discrete tax benefit resulting from the release of the valuation allowance on the Company's U.S. federal and state deferred tax assets.
The Company historically maintained a full valuation allowance for its U.S. deferred tax assets, including federal and state net operating loss carryforwards (“NOLs”). In evaluating the recoverability of these deferred tax assets as of June 30, 2026, the Company considered all available positive and negative evidence related to the likelihood of realization to determine whether it is more-likely-than-not that some or all of the deferred tax assets will be realized.
Following the effectiveness of the Company’s Form S-1 registration statement on June 30, 2026, and the concurrent automatic conversion of the outstanding convertible notes into common stock, the Company’s historical liquidity constraints were resolved, entirely alleviating the previous going concern qualification. Furthermore, as of June 30, 2026, the Company is in a 12-quarter cumulative income position based on its U.S. pre-tax book income adjusted for permanent book-to-tax differences. This 12-quarter cumulative income position, combined with the resolution of the Company’s going concern qualification, is considered significant positive evidence that is both objective and verifiable. The historical income position provides evidence to place greater reliance on projections of future profit as a source of income. Furthermore, current-year profitability and corresponding positive taxable income in the U.S., along with projections of future profit, provide strong positive evidence for the realization of the Company’s deferred tax assets in the United States.
Based on the weight of all available evidence, the Company concluded that the positive evidence outweighed the negative evidence, and it is more-likely-than-not that the majority of its domestic tax attributes are realizable. Accordingly, the Company released $289.1 million of its U.S. valuation allowance during the
three months ended June 30, 2026, resulting in the recognition of a material discrete income tax benefit for the period.
The Company continues to maintain a valuation allowance against certain definite-lived federal credits that are forecasted to expire unutilized due to estimated annual utilization caps under Internal Revenue Code Sections 382 and 383 resulting from the ownership change triggered by the IPO. The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis.