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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Taxes |
Income Taxes | 4.Income Taxes For the nine months ended September 30, 2025, the Company recorded an income tax provision of approximately $6.7 million. The provision primarily reflects Federal and State income tax expense on U.S. operations, the tax impact of IRS section 162(m) adjustments, deemed interest provision, and income tax expense attributable to the Company’s subsidiaries in foreign jurisdictions in accordance with applicable local tax regulations. The tax provision was partially offset by the favorable effect of stock-based compensation, the favorable impact of withholding taxes and the release of valuation allowances on deferred tax assets of one of the Company’s Canadian and the Company’s German subsidiary, resulting from improved expectations of future taxable income in those jurisdictions. Although the Company generated taxable income in the United States during the period, the related current tax liability was partially offset by the utilization of deferred tax assets arising from the net operating loss carryforwards (“NOLCOs”). The estimated effective tax rate applied to the nine-month period ended September 30, 2025 is higher than the U.S. federal statutory rate of 21% principally due to IRS section 162(m) adjustments, state income tax provisions, deemed interest and tax effect of foreign operations offset in part by the favorable effect of stock-based compensation, withholding taxes and a change in the valuation allowance. The estimated annual effective tax rate applied to the nine-month period ended September 30, 2024 differs from the U.S. federal statutory rate of 21% principally due to the release of the U.S. valuation allowance, state income taxes and provision on uncertain tax positions. The Company determined on March 31, 2025 that it was more likely than not that one of the Company’s subsidiaries in Canada would be able to realize the benefit of the deferred tax assets in Canada, resulting in the release of the valuation allowance. In reaching this determination, the Company considered the growing trend of profitability over the last three years in the Canadian subsidiary, as well as expectations regarding the generation of future taxable income. The Company determined on June 30, 2025 that it was more likely than not that the Company’s subsidiary in Germany would be able to realize the benefit of the deferred tax assets in Germany, resulting in the release of the valuation allowance. In reaching this determination, the Company considered the growing trend of profitability over the last three years in the German subsidiary, as well as expectations regarding the generation of future taxable income. Impact of Recent Tax Legislation On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, amending U.S. tax law in several areas, including domestic research and development deductibility and bonus depreciation. The Company has included the estimated effect of provisions relevant to the current quarter in its reported income tax expense for the three months ending September 30, 2025. Management is continuing to evaluate the OBBBA’s potential impact on future periods, particularly with respect to deferred tax assets and liabilities, the effective tax rate, and cash tax obligations. The Company will update its assessment as additional interpretive guidance or implementing regulations are issued. The reconciliations of the U.S. federal statutory rate with the Company’s effective tax rate for the nine months ended September 30, 2025 and 2024, respectively, are summarized in the table below: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Nine Months | ​
​ | ​ | Ended September 30, | ​
​ |  | 2025 |  | 2024 | ​
Federal income tax expense at statutory rate |  | 21.0 | % | 21.0 | %
Effect of: |  | ​ | ​ | ​ | ​
Section 162 (m) | ​ | 9.3 | ​ | - | ​
State income tax net of federal benefit | ​ | 2.9 | ​ | (4.5) | ​
Deemed interest | ​ | 2.8 | ​ | (0.9) | ​
Tax effects of foreign operations | ​ | 1.0 | ​ | 0.8 | ​
Foreign operations permanent differences - foreign exchange gains and losses | ​ | 0.5 | ​ | 0.3 | ​
GILTI provisions | ​ | 0.4 | ​ | 2.8 | ​
Change in unrecognized tax benefits (ASC 740) | ​ | 0.3 | ​ | (3.1) | ​
Return to provision true up | ​ | - | ​ | (1.4) | ​
Change in tax rates | ​ | (0.4) | ​ | - | ​
Foreign rate differential | ​ | (0.4) | ​ | (0.7) | ​
Change in valuation allowance | ​ | (1.2) | ​ | (54.6) | ​
Withholding tax | ​ | (2.1) | ​ | 0.8 | ​
Effect of stock-based compensation | ​ | (11.5) | ​ | (0.4) | ​
Other | ​ | (0.3) | ​ | 0.1 | ​
Effective tax rate | ​ | 22.3 | % | (39.8) | %
​ The following table presents a roll-forward of the Company’s unrecognized tax benefits and associated interest for the nine months ended September 30, 2025 (in thousands): ​
​ | ​ | ​ | ​
​ |  | Unrecognized
​ |  | Tax Benefits
Balance - January 1, 2025 | ​ | $ | 999
Increase for current period tax positions | ​ |  | 250
Decrease for prior year tax positions | ​ | ​ | (214)
Interest accrual | ​ |  | 44
Foreign currency remeasurement | ​ |  | (27)
Balance - September 30, 2025 | ​ | $ | 1,052
​

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