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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On a quarterly basis, the Company computes an estimated annual effective tax rate considering ordinary income and related income tax (benefit) expense. Ordinary income refers to income before income tax (benefit) expense excluding significant, unusual or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs. Through March 31, 2025, the Company maintained a full valuation allowance against its deferred tax assets due to significant negative evidence, about realizability of the assets, including cumulative losses and substantial doubt about its ability to continue as a going concern. Due to the successful refinancing of its debt in July 2025, the Company concluded that substantial doubt about its ability to continue as a going concern no longer exists. After evaluating all available evidence, including the alleviation of substantial doubt about the Company’s ability to continue as a going concern, recent and forecasted earnings, historical performance, and the Company’s improved financial condition, management determined that it is more likely than not that its deferred tax assets will be realized. As a result, the Company released an additional $29.2 million of the valuation allowance in the second quarter of 2025 and recognized an additional $7.0 million tax benefit in the third quarter of 2025. As of September 30, 2025 and December 31, 2024, the Company had net deferred tax assets (liabilities) of $19.5 million and $(1.6) million, respectively. The effective tax rate for the three and nine months ended September 30, 2025 was (3.3)% and (21.3)%, respectively, compared to an effective tax rate for the three and nine months ended September 30, 2024 of 1.6% and 2.9%. The negative effective tax rates in 2025 reflect the impact of the valuation allowance reversal. The Company did not pay any income taxes during the three months ended September 30, 2025, and paid approximately $8.1 million in income taxes during the nine months ended September 30, 2025. Recent Tax Legislation The One, Big, Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025. The Act contains significant tax law changes with various effective dates affecting business taxpayers. Among the tax law changes that will impact the Company relate to the timing of certain tax deductions including depreciation expense, research and development (“R&D”) expenditures and interest expense. The Company implemented the provisions of the Act in the third quarter of 2025. As a result, the Company recognized incremental tax timing benefits primarily related to the restoration of 100% bonus depreciation and the ability to immediately expense R&D costs under Section 174. These changes affected the mix between current and deferred taxes but did not have a material impact on the Company’s overall income tax expense for the quarter.

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