XML 41 R24.htm IDEA: XBRL DOCUMENT v3.25.3
Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Taxes [Abstract]  
Income Taxes

17. Income Taxes

Effective Income Tax Rate – Three and Nine Months Ended September 30, 2025

The Company’s effective income tax rate during the three months ended September 30, 2025 was 33.3%, resulting in income tax expense of $9,816. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to non-deductible loss on extinguishment of the 2028 Notes and non-deductible executive compensation. These items were partly offset by a lower tax rate on foreign earnings.

The Company’s effective income tax rate during the nine months ended September 30, 2025 was 24.7%, resulting in income tax expense of $22,648. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to non-deductible loss on extinguishment of the 2028 Notes and non-deductible executive compensation. These items were partly offset by a lower tax rate on foreign earnings.

Effective Income Tax Rate – Three and Nine Months Ended September 30, 2024

The Company’s effective income tax rate during the three months ended September 30, 2024 was 216.0%, resulting in income tax expense of $8,351. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to non-deductible loss on extinguishment of the 2028 Notes, a non-deductible civil money penalty of $4,000 in connection with a settlement with the SEC regarding certain statements about the ESG screening process for three ETFs advised by WisdomTree Asset Management, Inc. (the “SEC ESG Settlement”) and non-deductible executive compensation. These items were partly offset by a lower tax rate on foreign earnings.

The Company’s effective income tax rate during the nine months ended September 30, 2024 was 35.6%, resulting in income tax expense of $21,819. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to non-deductible loss on extinguishment of the 2028 Notes, a non-deductible civil money penalty of $4,000 in connection with the SEC ESG Settlement and non-deductible executive compensation. These items were partly offset by a lower tax rate on foreign earnings.

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 nine months ended September 30, 2025:

  

Nine Months Ended

Sept. 30, 2025

United States - Federal  $5,876 
United States - State and local   2,595 
United Kingdom   11,208 
Other   320 
   $19,999 

Deferred Tax Assets

A summary of the components of the Company’s deferred tax assets at September 30, 2025 and December 31, 2024 is as follows:

   September 30,
2025		  December 31,
2024
Deferred tax assets:          
Capital losses  $6,760   $21,984 
Accrued expenses   5,006    6,465 
Stock-based compensation   2,373    2,843 
Acquisition-related costs.   1,080    
—
 
NOLs—Foreign   888    1,024 
Goodwill and intangible assets   562    705 
Operating lease liabilities   367    95 
Software capitalization   
—
    199 
Foreign currency translation adjustment   
—
    427 
Other   296    331 
Deferred tax assets   17,332    34,073 
Deferred tax liabilities:          
Software capitalization   891    
—
 
Foreign currency translation adjustment   732    
—
 
Fixed assets and prepaid assets   378    246 
Unrealized gains   566    76 
Right of use assets—operating leases   364    95 
Unremitted earnings—European subsidiaries   197    92 
Deferred tax liabilities   3,128    509 
Total deferred tax assets less deferred tax liabilities   14,204    33,564 
Less: Valuation allowance   (6,194)   (21,908)
Deferred tax assets, net  $8,010   $11,656 

Capital Losses – U.S.

The Company’s tax effected capital losses at September 30, 2025 were $6,760. These capital losses expire between the years 2025 and 2030. During the nine months ended September 30, 2025, tax effected capital losses in the amount of $15,294 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 $888 at September 30, 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 September 30, 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 September 30, 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 $197 and $92 at September 30, 2025 and December 31, 2024, respectively.

U.S. Tax Reform

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted, extending or modifying several provisions of the Tax Cuts and Jobs Act of 2017. The OBBBA left corporate income tax rates unchanged, but reinstated immediate expensing of domestic research and development expenditures, revised Section 163(j) interest limitations, expanded Section 162(m) aggregation rules, updated GILTI provisions and restored 100% bonus depreciation, among other changes.

While the OBBBA accelerated certain previously deferred tax deductions, it did not otherwise have a material impact on the Company’s financial statements.