Income Taxes and Tax Receivable Agreement |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2026 | |||
| Income Tax Disclosure [Abstract] | |||
| Income Taxes and Tax Receivable Agreement |
We are organized as a corporation for income tax purposes and are subject to federal, state and local taxes on our income, which is primarily sourced from our membership interest in Holdings held for any given reporting period. Holdings is a partnership for U.S. federal income tax purposes and, as a result, its members, including us, will pay income taxes with respect to their allocable shares of its taxable income. Accounting for income taxes for interim periods generally requires the provision for income taxes to be determined by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss before income taxes, excluding unusual or infrequently occurring discrete items, for the reporting period. For the three and six months ended June 30, 2026, our effective tax rates were 8.0% and 20.2%, respectively. The differences between our estimated annual effective income tax rate and the U.S. federal statutory rate were primarily attributable to the exclusion of income and related taxes associated with noncontrolling interests, partially offset by the tax effects of stock-based compensation. These effective tax rates were higher than the tax rates for the three and six months ended June 30, 2025, primarily because, prior to the initial public offering, we were organized as a pass through entity for U.S. federal income tax purposes and generally did not pay income taxes in most jurisdictions. On February 12, 2026, we recorded a net deferred tax asset of $101,302 primarily related to (i) the temporary difference between the book and tax basis of its investment in Holdings of $69,866 (ii) $19,423 of tax benefits from future deductions attributable to payments under the Tax Receivable Agreements, and (iii) $12,005 tax deductions for NOL carryovers as a result of the Blocker Companies merger. The initial deferred tax asset was recorded as an adjustment to additional paid-in capital in the condensed consolidated balance sheets. Additionally, and concurrent with the Transactions, we recorded a liability pursuant to the TRA of $172,344 and a corresponding reduction to additional paid-in capital. The net impact to additional paid-in capital was a reduction of $71,042 and is presented within our condensed consolidated statements of stockholders’ equity. In connection with the IPO and the Transactions, we entered into the TRA with the Continuing Equity Owners that provides for the payment by us to the Continuing Equity Owners of 85% of the benefits, that we realize, or are deemed to realize, as a result of our allocable share of existing tax basis acquired in the IPO and other tax benefits related to entering into the TRA. Secondary Offering On June 1, 2026, we completed a secondary offering that involved an exchange of LLC interests for an equal number of shares of Class A common stock. We recognized an additional liability for obligations under the TRA of $70,751 and a deferred tax asset of $75,250, the net effect of which was recorded as an adjustment to stockholders’ equity. |