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Income Taxes
 6 Months Ended
Jun. 30, 2024
Income Taxes [Abstract]  
Income Taxes

21. Income Taxes

Effective Income Tax Rate – Three and Six Months Ended June 30, 2024

The Company’s effective income tax rate during the three months ended June 30, 2024 was 26.3%, resulting in income tax expense of $7,767. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to non-deductible executive compensation, an increase in the deferred tax asset valuation allowance on losses recognized on the Company’s investments and state and local income taxes. These items were partly offset by a lower tax rate on foreign earnings.

The Company’s effective income tax rate during the six months ended June 30, 2024 was 23.5% resulting in income tax expense of $13,468. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to non-deductible executive compensation and state and local income taxes. These items were partly offset by a lower tax rate on foreign earnings and tax windfalls associated with the vesting of stock-based compensation awards.

Effective Income Tax Rate – Three and Six Months Ended June 30, 2023

The Company’s effective income tax rate during the three months ended June 30, 2023 was 6.1%, resulting in income tax expense of $3,555. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a non-taxable gain on revaluation/termination of deferred consideration—gold payments and a decrease in the deferred tax asset valuation allowance on losses recognized on the Company’s investments. These items were partly offset by non-deductible executive compensation.

The Company’s effective income tax rate during the six months ended June 30, 2023 was 6.5%, resulting in income tax expense of $4,938. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a non-taxable gain on revaluation/termination of deferred consideration—gold payments, a $1,353 reduction in unrecognized tax benefits (including interest and penalties) and a lower tax rate on foreign earnings. These items were partly offset by a non-deductible loss on extinguishment of our convertible notes, non-deductible executive compensation and an increase in the deferred tax asset valuation allowance on losses recognized on our investments.

Deferred Tax Assets

A summary of the components of the Company’s deferred tax assets at June 30, 2024 and December 31, 2023 is as follows:

  

June 30,
2024

 

December 31,
2023

Deferred tax assets:          
Capital losses  $22,380   $22,489 
Accrued expenses   3,120    6,000 
Stock-based compensation   1,517    2,468 
NOLs—Foreign   1,327    1,502 
Goodwill and intangible assets   800    895 
Unrealized losses   278    335 
Foreign currency translation adjustment   247    146 
Operating lease liabilities   206    96 
Software capitalization   113    52 
NOLs—U.S.   
—
    127 
Other   411    349 
Total deferred tax assets   30,399    34,459 
Deferred tax liabilities:          
Fixed assets and prepaid assets   568    296 
Unremitted earnings—European subsidiaries   181    186 
Right of use assets—operating leases   206    96 
Total deferred tax liabilities:   955    578 
Total deferred tax assets less deferred tax liabilities   29,444    33,881 
Less: Valuation allowance   (22,658)   (22,824)
Deferred tax assets, net  $6,786   $11,057 

Capital Losses – U.S.

The Company’s tax effected capital losses at June 30, 2024 were $22,380. These capital losses expire between the years 2024 and 2029.

Net Operating Losses – Europe

One of the Company’s European subsidiaries generated net operating losses (“NOLs”) outside the U.S. These tax effected NOLs, all of which are carried forward indefinitely, were $1,327 at June 30, 2024.

Valuation Allowance

The Company’s valuation allowance has been established on its net capital losses, as it is more-likely-than-not that these deferred tax assets will not be realized.

Income Tax Examinations

The Company is subject to U.S. federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions. As of June 30, 2024, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2019.

Undistributed Earnings of Foreign Subsidiaries

ASC 740-30 Income Taxes provides guidance that U.S. companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested. The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $181 and $186 at June 30, 2024 and December 31, 2023, respectively.