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INCOME TAXES | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Effective tax rate The Company determines the tax provision for interim periods using an estimate of our annual effective tax rate ("ETR") adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, we update our estimate of the annual ETR, and if our estimated annual ETR changes, we make a cumulative adjustment. If a reliable estimate of the annual ETR cannot be made, the actual ETR for the year to date may be the best estimate of the annual ETR. The Company recognized $(4.3) million and $(1.7) million of income tax benefit for the three and nine months ended September 30, 2025. On July 4, 2025, H.R. 1, or the “One Big Beautiful Bill Act” (“OBBBA”), was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses. The OBBBA reduced the Company’s 2025 expected current tax liability as a result of the ability to deduct domestic research and development expenses, resulting in a current tax benefit for each of the three and nine months ended September 30, 2025. The estimated effects of the OBBBA are reflected in the third quarter provision. Our estimated annual ETR, including discrete items, for the three months ended September 30, 2025, was (314.3)% compared to (473.5)% for the three months ended September 30, 2024. The primary contributing factors to the difference between the estimated annual ETR for the three months ended September 30, 2025 of (314.3)% and the statutory tax rate of 21%, is a decrease in the Company’s valuation allowance. Our estimated annual ETR, including discrete items, for the nine months ended September 30, 2025, was (24.0)% compared to (38.2)% for the nine months ended September 30, 2024. The primary contributing factors to the difference between the estimated annual ETR for the nine months ended September 30, 2025 of (24.0)% and the statutory tax rate of 21%, are a decrease in the Company’s valuation allowance as well as a benefit arising from a change in estimate related to finalizing the 2024 tax returns. Valuation allowance Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ending September 30, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are adjusted, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future growth.

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