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Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Taxes [Abstract]  
Income Taxes

18. Income Taxes

Effective Income Tax Rate – Three Months Ended March 31, 2025

The Company’s effective income tax rate during the three months ended March 31, 2025 was 18.9%, resulting in income tax expense of $5,739. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to tax windfalls associated with the vesting of stock-based compensation awards and a lower tax rate on foreign earnings. These items were partly offset by state and local income taxes.

Effective Income Tax Rate – Three Months Ended March 31, 2024

The Company’s effective income tax rate during the three months ended March 31, 2024 was 20.5%, resulting in income tax expense of $5,701. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to the decrease in the deferred tax asset valuation allowance on losses recognized on the Company’s financial instruments owned, tax windfalls associated with the vesting of stock-based compensation awards and a lower tax rate on foreign earnings. These items were partly offset by state and local income taxes.

Income Tax Payments

Disclosed below is a summary of income taxes paid by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the three months ended March 31, 2025:

  

Three Months
March 31, 2025

United States - Federal  $
—
 
United States - State and local   204 
United Kingdom   3,829 
Other   9 
   $4,042 

Deferred Tax Assets

A summary of the components of the Company’s deferred tax assets at March 31, 2025 and December 31, 2024 is as follows:

  March 31,
2025		  December 31,
2024
Deferred tax assets:          
Capital losses  $18,563   $21,984 
Accrued expenses   1,559    6,465 
Stock-based compensation   1,019    2,843 
NOLs—Foreign   998    1,024 
Interest carryforward.   856    
—
 
Goodwill and intangible assets   657    705 
Software capitalization   244    199 
Foreign currency translation adjustment   173    427 
Operating lease liabilities   38    95 
Other   326    331 
Deferred tax assets   24,433    34,073 
           
           
Deferred tax liabilities:          
Unremitted earnings—European subsidiaries   109    92 
Fixed assets and prepaid assets   101    246 
Unrealized gains   87    76 
Right of use assets—operating leases   38    95 
Deferred tax liabilities   335    509 
Total deferred tax assets less deferred tax liabilities   24,098    33,564 
Less: Valuation allowance   (18,476)   (21,908)
Deferred tax assets, net  $5,622   $11,656 

Capital Losses – U.S.

The Company’s tax effected capital losses at March 31, 2025 were $18,563. These capital losses expire between the years 2025 and 2030. During the three months ended March 31, 2025, tax effected capital losses in the amount of $3,460 expired.

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 $998 at March 31, 2025.

Valuation Allowance

The Company’s valuation allowance has been established on its net capital losses (net of unrealized gains), 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 March 31, 2025, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2020.

Uncertain Tax Positions

There were no unrecognized tax benefits at March 31, 2025 and December 31, 2024.

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 $109 and $92 at March 31, 2025 and December 31, 2024, respectively.