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Accounting for Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Accounting for Income Taxes Accounting for Income Taxes
The table below presents the Company’s income tax (expense) benefit and applicable effective tax rate for the following periods:
For the three months ended June 30,For the six months ended June 30,
2026202520262025
Income tax (expense) benefit$(282)$2,697 $(172)$4,003 
Effective tax rate(0.7)%10.0 %(0.1)%10.0 %

The primary differences between the Company's effective tax rate and the U.S. federal statutory tax rate are changes in the valuation allowance, research and development tax credits and related carryforwards, and stock-based compensation. The increase in the valuation allowance for the three months ended June 30, 2026 compared to three months ended June 30,
2025 was primarily attributable to additional deferred tax assets generated from capitalization of research and development expenditures under Section 174, research and development credit carryforwards, purchase accounting adjustments associated with the Solestial acquisition, stock-based compensation, and Section 162(m)-related contra-deferred tax assets arising from stock-based compensation and accrued bonus expenses. The increase in the valuation allowance for the six months ended June 30, 2026 compared to six months ended June 30, 2025, was primarily attributable to additional deferred tax assets generated from capitalization of research and development expenditures under Section 174, research and development credit carryforwards, purchase accounting adjustments associated with the Orbion and Solestial acquisitions, stock-based compensation, and Section 162(m)-related contra-deferred tax assets arising from stock-based compensation and accrued bonus expenses. The Company’s effective tax rate continues to differ significantly from the statutory rate as a result of the full valuation allowance maintained against substantially all U.S. federal and state deferred tax assets.

Tax Receivable Agreement

Prior to the consummation of the IPO, the Company entered into a tax receivable agreement (“TRA”) with equity holders of Holdings and holders of Class P Units (such holders and any transferee or successors being the “TRA Holders”). The TRA requires the Company to make payments to the TRA Holders (or their transferees or successors) in an amount equal to 85% of certain tax savings (or expected tax savings) in respect of certain tax attributes of the Company. Such tax benefits consist primarily of net operating loss carryforwards and research and development credit carryforwards. As of June 30, 2026, the realization of those benefits is uncertain, and as such, the Company does not believe payment of TRA benefits is probable. Accordingly, the Company does not anticipate recording the TRA liability until such time as payments become probable. As of June 30, 2026, the Company estimates the TRA attributes were approximately $347.0 million.

In the event of a change in control, material breach or the Company’s election to terminate the TRA early, the Company would be required to make an immediate cash payment equal to the anticipated future tax benefits that are the subject of the TRA discounted in accordance with the TRA. The early termination liability is calculated based on a discounted calculation of tax attributes using an interest rate equal to 100 basis points above SOFR. The Company estimates the early termination liability to be approximately $261.0 million as of June 30, 2026.