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Income Taxes (Notes) | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Baldwin is the sole managing member of Baldwin Holdings, which is treated as a partnership for U.S. federal, state and local income tax purposes. As a partnership, Baldwin Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Baldwin Holdings is passed through to and included in the taxable income or loss of its partners, including Baldwin, on a pro rata basis. Baldwin is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to Baldwin’s allocable share of income of Baldwin Holdings. Loss before income taxes consisted of the following:
|  | For the Years Ended December 31,
(in thousands) |  | 2025 |  | 2024 |  | 2023
Domestic loss |  | $ | (51,758) |  |  | $ | (39,350) |  |  | $ | (162,734) |
Foreign loss |  | (667) |  |  | — |  |  | — |
Loss before income taxes |  | $ | (52,425) |  |  | $ | (39,350) |  |  | $ | (162,734) |
Components of income tax expense include the following:
|  | For the Years Ended December 31,
(in thousands) |  | 2025 |  | 2024 |  | 2023
Current |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | 19 |  |  | $ | 75 |
State and local |  | 1,729 |  |  | 1,712 |  |  | 1,250 |
Total current income tax expense |  | 1,729 |  |  | 1,731 |  |  | 1,325 |
Deferred |  |  |  |  |  |
Federal |  | — |  |  | — |  |  | (40) |
State and local |  | — |  |  | — |  |  | — |
Total deferred income tax expense |  | — |  |  | — |  |  | (40) |
Total income tax expense |  | $ | 1,729 |  |  | $ | 1,731 |  |  | $ | 1,285 |
The Company has adopted ASU 2023-09 using a prospective transition method. A reconciliation of the provision for income taxes with the U.S. federal statutory income tax rate is as follows:
|  | For the Year Ended December 31, 2025
(in thousands, except percentages) |  | Amount |  | Percent
Loss before income taxes |  | $ | (52,425) |  |  |
U.S. federal statutory income tax |  | (11,009) |  |  | 21.0 | %
Valuation allowance |  | 10,079 |  |  | (19.2) |
Noncontrolling interest |  | 4,372 |  |  | (8.3) |
Tax credits |  | (3,732) |  |  | 7.1 |
State and local income taxes, net of federal income tax effect(1) |  | 1,729 |  |  | (3.3) |
Nontaxable or nondeductible items |  | 150 |  |  | (0.3) |
Foreign tax effects |  | 140 |  |  | (0.3) |
Income tax expense |  | $ | 1,729 |  |  | (3.3) | %
__________ (1) State taxes in Texas and Tennessee made up the majority (greater than 50%) of the tax effect in this category. The following is a reconciliation of the U.S. federal statutory income tax rate to the Company's effective rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09.
|  | For the Years Ended December 31,
(in thousands, except percentages) |  | 2024 |  | 2023
Loss before income taxes |  | $ | (39,350) |  |  | $ | (162,734) |
Noncontrolling interest |  | 3,088 |  |  | 18,357 |
Tax at federal statutory rate (21%) |  | (8,263) |  |  | (34,593) |
Effect of: |  |  |  |
Valuation allowance |  | 4,878 |  |  | 20,574 |
True-up and adjustments |  | 4,463 |  |  | 128 |
State rate change |  | (3,517) |  |  | (479) |
State and local income tax |  | 1,310 |  |  | (5,799) |
Share-based compensation |  | (383) |  |  | 778 |
IRC 162(m) |  | 155 |  |  | 987 |
Other |  | — |  |  | 1,332 |
Income tax expense |  | $ | 1,731 |  |  | $ | 1,285 |
The following table summarizes the components of deferred tax assets and liabilities:
|  | December 31,
(in thousands) |  | 2025 |  | 2024
Deferred tax assets |  |  |  |
Investment in partnerships |  | $ | 124,101 |  |  | $ | 117,799 |
163(j) limitation carryforward |  | 46,601 |  |  | 36,005 |
Net operating loss |  | 33,159 |  |  | 12,260 |
R&D credit |  | 3,732 |  |  | — |
Capitalized transaction costs |  | 1,707 |  |  | 1,898 |
Charitable contributions |  | 1,404 |  |  | 1,107 |
Total deferred tax assets |  | 210,704 |  |  | 169,069 |
Less: valuation allowance |  | (210,704) |  |  | (169,069) |
Net deferred tax assets |  | $ | — |  |  | $ | — |
Deferred tax balances reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at the tax rates in effect when the temporary differences are expected to be recovered or settled. The Company assessed the future realization of the tax benefit of its existing deferred tax assets and concluded that it is more likely than not that all of the deferred tax assets will not be realized in the future. As a result, the Company recorded a valuation allowance of $210.7 million and $169.1 million against its deferred tax assets at December 31, 2025 and 2024, respectively. Net cash paid for income taxes consisted of the following:
(in thousands) |  | For the Year Ended December 31, 2025
Aggregated state and local jurisdictions |  | $ | 229 |
Disaggregated state and local jurisdictions: |  |
Texas |  | 1,165 |
Tennessee |  | 306 |
Cash paid for taxes |  | $ | 1,700 |
As of December 31, 2025, the Company has not recognized any uncertain tax positions, penalties, or interest as management has concluded that no such positions exist. The Company is subject to federal examination for tax years beginning with the year ended December 31, 2020 and state examination for tax years beginning with the year ended December 31, 2019. The Company is not currently subject to income tax audits in any U.S. or state jurisdictions for any tax year. In addition, all of our federal net operating losses and 163(j) interest expense limitations can be carried forward indefinitely while our state net operating losses will begin to expire in 2030. Tax Receivable Agreement Baldwin Holdings makes an election under Section 754 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”) effective for each taxable year in which a redemption or exchange of LLC Units and corresponding Class B common stock for shares of Class A common stock occurs. Exchanges result in tax basis adjustments to the assets of Baldwin Holdings, which produce favorable tax attributes and reduce the amount of tax that Baldwin is required to pay. The Company has determined that it is more likely than not that these benefits will not be realized. Baldwin is a party to the Tax Receivable Agreement with Baldwin Holdings’ LLC Members that provides for the payment by Baldwin to Baldwin Holdings’ LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that Baldwin actually realizes as a result of (i) any increase in tax basis in Baldwin Holdings assets resulting from (a) previous acquisitions by Baldwin of LLC Units from Baldwin Holdings’ LLC Members, (b) the acquisition of LLC Units from Baldwin Holdings’ LLC Members using the net proceeds from any future offering, (c) redemptions or exchanges by Baldwin Holdings’ LLC Members of LLC Units and the corresponding number of shares of Class B common stock for shares of Class A common stock or cash or (d) payments under the Tax Receivable Agreement, and (ii) tax benefits related to imputed interest resulting from payments made under the Tax Receivable Agreement. This payment obligation is an obligation of Baldwin and not of Baldwin Holdings. For purposes of the Tax Receivable Agreement, the cash tax savings in income tax will be computed by comparing the actual income tax liability of Baldwin (calculated with certain assumptions) to the amount of such taxes that Baldwin would have been required to pay had there been no increase to the tax basis of the assets of Baldwin Holdings as a result of the redemptions or exchanges and had Baldwin not entered into the Tax Receivable Agreement. Estimating the amount of payments that may be made under the Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. While the actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of redemptions or exchanges, the price of shares of our Class A common stock at the time of the redemption or exchange, the extent to which such redemptions or exchanges are taxable and the amount and timing of our income. The Company accounts for the effects of these increases in tax basis and associated payments under the Tax Receivable Agreement arising from future redemptions or exchanges as follows: •records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the redemption or exchange; •to the extent it is estimated that the Company will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance; and •records 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the Tax Receivable Agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additional paid-in capital. All of the effects of changes in any of our estimates after the date of the redemption or exchange will be included in net income. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income. As of December 31, 2025 and 2024, the Company has recorded a Tax Receivable Agreement liability of $4.5 million and $4.8 million, respectively, associated with the payments to be made to current or former Baldwin Holdings’ LLC Members subject to the Tax Receivable Agreement, which is included in accrued expenses and other current liabilities on the consolidated balance sheets.

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