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INCOME TAXES
 9 Months Ended
Sep. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income (loss) before income taxes and income tax expense are as follows (dollar amounts in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2026202520262025
Income (loss) before income taxes:
   Domestic$32,472 $10,497 $42,585 $16,956 
   Foreign(3,658)(973)(6,218)(653)
Total income before income taxes$28,814 $9,524 $36,367 $16,303 
Income tax expense$(293)$(4,092)$(277)$(10,906)
Effective tax rate1 %43 %1 %67 %
The Company’s income tax expense represents the estimated annual effective tax rate applied to the year-to-date operating results, adjusted for certain discrete tax items.
The Company’s effective tax rate for the three months ended September 30, 2026 was primarily impacted by a $5.2 million discrete tax benefit associated with the utilization of U.S. capital loss carryforwards to offset the capital gain
recognized in connection with the divestiture of the Company’s iovera° business during the third quarter of 2026. In connection with the closing of the Divestiture on July 31, 2026, the parties agreed to treat the transaction as a deemed asset sale for U.S. federal income tax purposes through an election under Section 338(h)(10) of the Internal Revenue Code. For more information on the Divestiture, see Note 3, iovera° Divestiture.
The Company’s effective tax rate for the nine months ended September 30, 2026 was primarily impacted by a $6.4 million discrete tax benefit recognized in the second quarter of 2026 related to the realizability of deferred tax assets in its U.K. operations, primarily related to fixed asset temporary differences, as well as research and development credits recorded for the nine months ended September 30, 2026. Based on all available positive and negative evidence, the Company concluded that realization of the U.K. deferred tax assets was more likely than not and reduced the related valuation allowance accordingly.
The Company’s effective tax rate for the three and nine months ended September 30, 2025 was primarily impacted by costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance, partially offset by tax credits.
As of both September 30, 2026 and December 31, 2025, the Company had an income taxes payable balance of $6.1 million that was included in other liabilities within the condensed consolidated balance sheet, related to unrecognized tax benefits. As of September 30, 2026 and December 31, 2025, the Company had $1.9 million and less than $0.1 million of current income taxes payable, respectively, that was included in accrued expenses within the condensed consolidated balance sheet.
As of September 30, 2026 and December 31, 2025, the Company had income taxes receivable and prepaid income taxes of $8.0 million and $8.2 million, respectively, which were included in prepaid expenses and other current assets within the condensed consolidated balance sheet. The balances include a $4.6 million tax refund claim for estimated federal taxes made prior to the July 2025 enactment of federal legislation known as the One Big Beautiful Bill Act (the “OBBBA”).
U.S. Tax Reform
The OBBBA resulted in changes to U.S. federal income tax law. Significant provisions of the OBBBA include the permanent extension of certain provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. In accordance with ASC 740, Income Taxes, the Company was required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring its estimated U.S. deferred tax assets and liabilities. The Company had $124.6 million of a gross deferred tax asset attributed to unamortized U.S. capitalized research and development costs as of December 31, 2024, of which $62.3 million will be deductible on both its 2025 and 2026 income tax returns. There are no other material impacts to the Company related to the enactment of the OBBBA.