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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of income (loss) before provision for income taxes and the provision for income taxes were as follows (in millions):
| Fiscal Year Ended December 31, 2025 |  | Fiscal Year Ended December 31, 2024 |  | Fiscal Year Ended December 31, 2023
United States | $ | (15.2) |  |  | $ | (71.8) |  |  | $ | (125.0) |
Foreign | 47.9 |  |  | 37.9 |  |  | 19.7 |
Net income (loss) before provision/(benefit) from income taxes | $ | 32.7 |  |  | $ | (33.9) |  |  | $ | (105.3) |
Income tax provision/(benefit): |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 1.7 |  |  | $ | 3.1 |  |  | $ | 8.6 |
State and local | 2.8 |  |  | 2.6 |  |  | 2.0 |
Foreign | 20.7 |  |  | 20.8 |  |  | 13.7 |
Total current provision/(benefit) | $ | 25.2 |  |  | $ | 26.5 |  |  | $ | 24.3 |
Deferred: |  |  |  |  |
Federal | $ | (16.3) |  |  | $ | (11.0) |  |  | $ | (17.6) |
State and local | — |  |  | (2.3) |  |  | (5.5) |
Foreign | (6.0) |  |  | (10.5) |  |  | (7.8) |
Total deferred provision/(benefit) | $ | (22.3) |  |  | $ | (23.8) |  |  | $ | (30.9) |
Total provision/(benefit) from income taxes | $ | 2.9 |  |  | $ | 2.7 |  |  | $ | (6.6) |
The table below provides the updated requirements of ASU 2023-09 for 2025. See Note 1, Nature of Business and Summary of Significant Accounting Policies for additional details on the adoption of ASU 2023-09. The provision (benefit) for income taxes differs from the amount computed by applying the U.S. Federal statutory income tax rate to income before provision for income taxes as follows (amounts in millions):
| Fiscal Year Ended December 31, 2025
| Amount |  | Percent
U.S. Federal statutory tax rate | $ | 6.9 |  |  | 21.0 | %
State and local taxes, net of federal impact (1) | 0.5 |  |  | 1.5 | %
Foreign tax effects |  |  |
Belgium | 0.4 |  |  | 1.2 | %
Canada |  |  |
Effect of statutory rate difference | (1.1) |  |  | (3.4) | %
Local income tax effect | 2.0 |  |  | 6.1 | %
Other | 0.1 |  |  | 0.3 | %
France |  |  |
Effect of statutory rate difference | 0.6 |  |  | 1.8 | %
Research and development incentives | (0.6) |  |  | (1.8) | %
Other | 0.7 |  |  | 2.1 | %
Germany |  |  |
Effect of statutory rate difference | (0.5) |  |  | (1.5) | %
Local income tax effect | 1.8 |  |  | 5.5 | %
Other | (0.2) |  |  | (0.6) | %
United Kingdom |  |  |
Change in valuation allowance | 1.4 |  |  | 4.3 | %
Other foreign jurisdictions | — |  |  | — | %
Effect of changes in tax laws or rates enacted in the current period | — |  |  | — | %
Effect of cross-border tax laws |  |  |
Global intangible low-taxed income, net of foreign tax credits | 1.4 |  |  | 4.3 | %
Subpart F income, net of foreign tax credits | 0.4 |  |  | 1.2 | %
Foreign-derived intangible income | (0.8) |  |  | (2.4) | %
Research and development tax credits | (0.9) |  |  | (2.8) | %
Change in valuation allowance | (13.9) |  |  | (42.5) | %
Nontaxable or nondeductible items |  |  |
Transaction costs | 2.1 |  |  | 6.4 | %
Stock-based compensation | 1.6 |  |  | 4.9 | %
Other | 0.1 |  |  | 0.5 | %
Changes in unrecognized tax benefits | 0.9 |  |  | 2.8 | %
Total effective income tax rate | $ | 2.9 |  |  | 8.9 | %
(1) State taxes in California, Florida, Maryland, Pennsylvania, and Tennessee contributed to the majority (greater than 50%) of the tax effect in this category for 2025. As previously disclosed for the years ended December 31, 2024, and 2023, prior to the adoption of ASU 2023-09, the provision (benefit) for income taxes differs from the amount computed by applying the U.S. Federal statutory income tax rate to loss before provision for income taxes as follows:
| Fiscal Year Ended December 31, 2024 |  | Fiscal Year Ended December 31, 2023
Income tax at U.S. Federal statutory rate | 21.0 | % |  | 21.0 | %
State and local taxes, net of federal impact | 3.0 | % |  | 2.4 | %
Foreign tax rate differential | (7.1) | % |  | (1.5) | %
U.S. tax on foreign earnings, net of foreign tax credits | (9.6) | % |  | (2.2) | %
State and local tax legislative changes | — | % |  | 1.3 | %
Research and development tax credits | 3.7 | % |  | 1.7 | %
U.S. foreign derived intangible income deduction | 7.5 | % |  | 3.5 | %
Change in valuation allowance | (13.4) | % |  | (9.0) | %
Unrecognized tax benefits | 1.1 | % |  | (2.2) | %
Stock-based compensation expense | (6.3) | % |  | (3.4) | %
Warrant liability change in fair value | (3.4) | % |  | (5.5) | %
Impact of foreign exchange | 1.6 | % |  | (0.1) | %
Non-deductible compensation | (5.1) | % |  | — | %
Other | (0.9) | % |  | 0.3 | %
Total effective income tax rate | (7.9) | % |  | 6.3 | %
As of December 31, 2025, we continue to assert indefinite reinvestment of undistributed earnings of our subsidiaries outside the U.S. It is not practical for us to determine the amount of the unrecognized deferred tax liability for federal, state, foreign or withholding taxes on other earnings and profits that are indefinitely reinvested due to complexities associated with our organizational structure; reorganizations and acquisitions which occurred during the year; changes in U.S. federal and state tax laws due to the enactment of the One Big Beautiful Bill Act (OBBBA); local law restrictions that may apply to a portion of such earnings; and various tax planning alternatives we could employ if we repatriated these earnings. The OECD (Organization for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar Two) and many countries have incorporated Pillar Two model rule concepts into their domestic laws. Pillar Two legislation is effective for the Company for the year ended December 31, 2025. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. For the year ended December 31, 2025, the impact of Pillar Two on our consolidated financial statements was not material. The components of the Company’s net deferred tax assets and liabilities consist of the following (in millions):
| December 31, 2025 |  | December 31, 2024
Deferred tax assets: |  |  |
Net operating losses, tax credit carryforwards, and other | $ | 23.1 |  |  | $ | 13.5 |
Compensation and employee benefits | 9.7 |  |  | 7.6 |
Capitalized inventory and reserves | 11.3 |  |  | 8.5 |
Deferred and other revenue differences | 9.5 |  |  | 7.4 |
Interest carryforwards | 41.9 |  |  | 31.2 |
Other reserves and accrued expenses | 6.5 |  |  | 5.3 |
Lease liabilities | 8.6 |  |  | 8.4 |
Derivatives | 9.5 |  |  | 1.8 |
Other assets | 2.1 |  |  | 1.6 |
Capitalized research and development | 8.1 |  |  | 12.4 |
Total gross deferred tax assets | 130.3 |  |  | 97.7 |
Less: valuation allowance | (32.0) |  |  | (32.9) |
Total deferred tax assets | $ | 98.3 |  |  | $ | 64.8 |
Deferred tax liabilities: |  |  |
Purchased technologies and other intangibles | $ | (128.8) |  |  | $ | (92.7) |
Deferred and other revenue differences | (12.5) |  |  | (9.0) |
Property, plant and equipment | (8.9) |  |  | (10.0) |
Lease right of use assets | (7.9) |  |  | (7.6) |
Other liabilities | (10.2) |  |  | (6.6) |
Total gross deferred tax liabilities | (168.3) |  |  | (125.9) |
Net deferred tax liabilities | $ | (70.0) |  |  | $ | (61.1) |
The amount of cash taxes paid for income tax is as follows (in millions):
| Fiscal Year Ended December 31, 2025
Cash paid during the period for income taxes, net of refunds:
U.S. Federal | $ | 1.2 |
U.S. State | 1.2 |
Foreign |
France | 11.9 |
Canada | 7.6 |
Belgium | 1.8 |
Germany | 1.5 |
Other foreign jurisdictions | 1.8 |
Total | $ | 27.0 |
Management regularly evaluates the recoverability of deferred tax assets and recognizes the tax benefit only if reassessment demonstrates that they are more likely than not realizable. At such time, if it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be adjusted. In assessing the need for a valuation allowance, management considers all available evidence, both positive and negative, including reversals of existing temporary differences; historical levels of income; expectations and risks associated with estimates of future taxable income; and any ongoing tax planning strategies. At December 31, 2025, the Company evaluated the realizability of the deferred tax assets and concluded that a valuation allowance of $32.0 million, mostly relating to interest carryforwards and non-U.S. net operating losses, should continue to be recorded. At December 31, 2024, the valuation allowance was $32.9 million, mostly relating to interest carryforwards and non-U.S. net operating losses. At December 31, 2023, the valuation allowance was $30.0 million, mostly relating to interest carryforwards and non-U.S. net operating losses.
(in millions) | Fiscal Year Ended December 31, 2025 |  | Fiscal Year Ended December 31, 2024 |  | Fiscal Year Ended December 31, 2023
Balance, beginning of period | $ | 32.9 |  |  | $ | 30.0 |  |  | $ | 23.9 |
Increases from business combinations | 0.1 |  |  | — |  |  | — |
Other increases | 1.8 |  |  | 10.0 |  |  | 9.8 |
Other decreases | (2.8) |  |  | (7.1) |  |  | (3.7) |
Balance, end of period | $ | 32.0 |  |  | $ | 32.9 |  |  | $ | 30.0 |
For the year ended December 31, 2025, the Company decreased the valuation allowance due to a change in the realizability of interest carryforwards in the U.S., a portion of which was recognized in continuing operations offset by an increase in the valuation allowance recognized in additional paid-in capital. Additionally, the Company increased the valuation allowance due to additional net operating losses in the U.K. For the year ended December 31, 2024, the Company increased the valuation allowance by $2.9 million primarily related to an increase in interest carryforwards and a decrease in tax credits in the U.S. For the year ended December 31, 2023, the Company increased the valuation allowance by $6.1 million primarily related to interest and capital loss carryforwards in the U.S. As of December 31, 2025, the Company had U.S. federal, U.S. state, and non-U.S. net operating loss carryforwards of $36.6 million, $42.5 million, and $42.9 million, respectively. The U.S. federal net operating loss has an indefinite carryover period. A majority of the U.S. state net operating losses will continue to expire in years ending December 31, 2026 through 2044. Materially, the foreign net operating losses have an indefinite carryover period. As of December 31, 2025, the Company had U.S. federal and state tax credit carryforwards of $0.6 million available to offset future U.S. federal and state income taxes payable. U.S. federal and state tax credit carryforwards will expire in years ending December 31, 2026 through 2044. The ability to utilize U.S. federal and state attributes may be limited under Section 382 of the Internal Revenue Code, in the event of an "ownership change." An "ownership change" is defined by Section 382 as a cumulative change in ownership of the Company of more than 50% within a three-year period. Section 382 imposes an annual limitation on the amount of post-ownership change taxable income that may be offset with pre-ownership change net operating losses or income tax liability that may be offset with pre-ownership change tax credit carryforwards of the loss corporation experiencing the ownership change. As a result of the Paragon acquisition, pre-ownership attributes including net operating losses and interest carryforwards are subject to the limitations of Section 382 of the Internal Revenue Code and similar state tax laws. As of December 31, 2025, the Company does not expect the use of U.S. federal and state attributes to be restricted. The Company continues to monitor the impact of the ownership change on attributes as future changes in the business could further limit the use of these attributes. As of December 31, 2025, the Company had $8.0 million of unrecognized tax benefits related to uncertain tax positions, all of which would affect its effective tax rate if recognized. As of December 31, 2024, the Company had $7.5 million of unrecognized tax benefits related to uncertain tax positions, all of which would affect its effective tax rate if recognized. As of December 31, 2023, the Company had $8.4 million of unrecognized tax benefits related to uncertain tax positions, all of which would affect its effective tax rate if recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
| Fiscal Year Ended December 31, 2025 |  | Fiscal Year Ended December 31, 2024 |  | Fiscal Year Ended December 31, 2023
Balance, beginning of period | $ | 7.5 |  |  | $ | 8.4 |  |  | $ | 6.9 |
Current year additions to positions | 1.0 |  |  | 1.0 |  |  | 2.7 |
Additions from business combinations | 0.2 |  |  | — |  |  | — |
Lapse of applicable statute of limitations | (0.1) |  |  | (0.1) |  |  | (0.2) |
Reductions to prior year positions | (0.6) |  |  | (1.8) |  |  | (1.0) |
Foreign currency translation adjustments | — |  |  | — |  |  | — |
Balance, end of period | $ | 8.0 |  |  | $ | 7.5 |  |  | $ | 8.4 |
The Company has recorded $6.7 million, $6.3 million, and $7.1 million of unrecognized tax benefits as non-current income taxes payable as of December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The Company has also recorded $1.3 million, $1.2 million, and $1.3 million of unrecognized tax benefits as a reduction of deferred income taxes, non-current in the accompanying consolidated balance sheets at December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. Accrued interest and penalties as of December 31, 2025, December 31, 2024, and December 31, 2023, were approximately $1.9 million, $1.7 million, and $1.2 million, respectively. The ultimate amount and timing of any future cash settlements cannot be predicted with reasonable certainty. The Company conducts business globally and, as a result, one or more of its subsidiaries files U.S. federal and state income tax returns and income tax returns in other foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United Kingdom, France, Germany, Canada, and the United States. With the exception of a few insignificant jurisdictions, the Company is no longer subject to U.S. federal or non-U.S. income tax examinations for years prior to June 30, 2018. The Company is no longer subject to U.S. state and local income tax examinations for years prior to the 2007 tax year. In many cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by tax authorities. The following describes open tax years by major tax jurisdictions as of December 31, 2025:
| Years Open
Jurisdiction: |
Canada | 2020 – 2025
France | 2023 – 2025
Germany | 2020 – 2025
United Kingdom | 2023 – 2025
United States—Federal | 2017 – 2025
United States—State | 2007 – 2025

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