Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 8. Income Taxes The Company utilized a discrete effective tax rate method, as allowed by ASC 740, Income Taxes (“ASC 740”) to calculate taxes for the three and six months ended June 30, 2026. The Company determined that small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate (”AETR”), and therefore, the AETR method would not provide a reliable estimate. The Company utilized an estimated annual effective rate for the three and six months ended June 30, 2025. The Company’s income tax expense (benefit) for the three and six months ended June 30, 2026 was $(0.1) million and $0.2 million, respectively, resulting in an effective tax rate of 0.2% and (0.4)%, respectively. The effective tax rate differs from the U.S. federal statutory rate due to income attributable to noncontrolling interest, income attributable to nontaxable entities, nondeductible stock compensation and changes in the valuation allowance. The Company had an immaterial amount of income tax expense for the three and six months ended June 30, 2025, resulting in an effective tax rate of (0.0)% and (0.0)%, respectively. Effective tax rates differ from the U.S. federal statutory rate of 21.0 percent due to income attributable to nontaxable entities. OpCo and the majority of its subsidiaries are limited liability companies treated as partnerships or disregarded entities for U.S. federal income tax purposes and, therefore, have not been subject to U.S. federal income tax at an entity level. As a result, the consolidated net income (loss) in our historical financial statements for periods prior to the IPO does not reflect the tax expense (benefit) we would have incurred if we were subject to U.S. federal income tax at an entity level during those periods. OpCo continues to be treated as a partnership for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax. Instead, taxable income is allocated to OpCo’s members, including the Company, and any taxable income of OpCo is reported in the respective tax returns of its members. Two of OpCo’s subsidiaries were taxed as corporations both before and after the IPO and thus income tax expense has been recorded prior to and after the IPO. The Company has a full valuation allowance recorded against its net deferred tax assets. Desert Ram South has recorded a deferred tax liability related to its taxable temporary differences. As the Company’s legal entity structure does not permit Desert Ram South to file a consolidated federal income tax return with the Company, the Company’s deferred tax assets may not be offset against Desert Ram South’s deferred tax liability. |