v3.26.3
Income Taxes
 9 Months Ended
Sep. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

5. Income Taxes

The Company calculates income taxes at the end of each reporting period based on the estimated effective tax rate for the full year, adjusted for any discrete events which are recorded in the period they occur. Cumulative adjustments to the tax provision are recorded in the reporting period in which a change in the estimated annual effective tax rate is determined. The Company’s income tax expense and effective tax rate are presented below:

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(in thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Income tax (benefit) expense

 

$

(594

)

 

$

14,610

 

 

$

56,190

 

 

$

63,956

 

Effective tax rate

 

 

(2.7

%)

 

 

34.5

%

 

 

20.7

%

 

 

26.3

%

The Company’s effective tax rate for the three months ended September 30, 2026 differs from the U.S. statutory rate of 21% primarily due to a partial release of the valuation allowance related to losses on its investment in equity securities, partially offset by the non-deductible change in fair value of contingent consideration and non-deductible milestone payments.

The Company’s effective tax rate for the nine months ended September 30, 2026 differs from the U.S. statutory rate of 21% primarily due to a partial release of the valuation allowance related to losses on its investment in equity securities and the non-taxable change in fair value of contingent consideration, partially offset by state income taxes.