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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | 9. Income Taxes The (benefit) provision for income taxes includes estimated federal, state and foreign income taxes. The (benefit) provision for income taxes and the effective income tax rates were as follows (dollars in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
(Benefit) provision for income taxes |  | $ | (4,988 | ) |  | $ | (2,455 | ) |  | $ | 3,278 |  |  | $ | 2,832 |
Effective income tax rate |  |  | (21.4 | )% |  |  | (27.0 | )% |  |  | 4.4 | % |  |  | (222.8 | )%
The effective tax rates differ from the statutory tax rates for the three and nine months ended September 30, 2025 and 2024 primarily due to the Company’s full valuation allowance position against net domestic deferred tax assets. The provision for income taxes for the three and nine months ended September 30, 2025 and 2024 included estimated federal, state, and foreign income taxes in jurisdictions in which the Company does not have sufficient tax attributes. As of September 30, 2025, the Company had a valuation allowance of app roximately $61,546,000 against all net domestic deferred tax assets, for which realization cannot be considered more likely than not at this time. Management assesses the need for the valuation allowance on a quarterly basis. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance. Despite recent positive operating results, the Company faces uncertainties in forecasting its operating results due to the unpredictability of customer orders in certain markets, product transitions, new program introductions and adoption times of new technology offerings. This operating uncertainty also makes it difficult to predict the availability and utilization of tax benefits over the next several years. As a result, management has concluded, as of September 30, 2025, it is more likely than not the Company’s net domestic deferred tax assets will not be realized, and a full valuation allowance against all net domestic deferred tax assets is still warranted as of September 30, 2025. The valuation allowance against these deferred tax assets may require adjustment in the future based on changes in the mix of temporary differences, changes in tax laws, and operating performance. If the positive operating results continue, the Company’s concerns about industry uncertainty, product transitions, new program introductions and adoption times of new technology offerings are resolved, and the Company believes future taxable income can be more reliably forecasted, the Company may release all or a portion of the valuation allowance in the near-term. Certain state tax credits, though, will likely never be released by the valuation allowance. If and when the Company determines the valuation allowance should be released (i.e., reduced), the adjustment would result in a tax benefit reported in that period’s Consolidated Statements of Operations, the effect of which would be an increase in reported net income. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The Company continues to evaluate the impact of the OBBBA on its consolidated financial statements, including the key corporate tax provisions related to the restoration of 100% bonus depreciation and immediate expensing for domestic research and experimental expenditures. In accordance with Accounting Standards Codification ("ASC") 740, the effects of the new tax provisions of the OBBBA have been recognized in this Quarterly Report on Form 10-Q for the period ended September 30, 2025. The benefits related to the immediate expensing for domestic research and experimental expenditures, combined with the Company's domestic valuation allowance position, resulted in an income tax benefit for the three months ended September 30, 2025 and a reduction to the Company's effective tax rate for the nine months ended September 30, 2025.

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