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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

15. Income Taxes

During the three and nine months ended September 30, 2025, the Company recorded an income tax benefit of $0.2 million and income tax provision of $0.5 million, respectively, related to state taxes, which was calculated using the discrete year-to-date method. The income tax provision for the three and nine months ended September 30, 2024 was $1.3 million and $1.9 million, respectively. The

effective tax rate differs from the statutory tax rate of 21% primarily due to the existence of valuation allowances against net deferred tax assets and current liabilities resulting from the estimated state income tax liabilities.

Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and concluded, in accordance with the applicable accounting standards, that net deferred tax assets should be fully reserved.

The Company has assessed its position with regards to uncertainty in tax positions and has not recognized a liability for unrecognized tax benefits. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax (benefit) expense. During the nine months ended September 30, 2025, the Company recognized a de minimis amount of interest and penalties. The Company’s tax years since 2020 remain subject to examination by tax authorities.

In June 2024, California enacted Senate Bills 167 and 175 ("SB 167" and "SB 175"). SB 167 suspends the use of net operating losses ("NOLs") and limits the use of business credits to $5.0 million for the 2024-2026 tax years. Under SB 175, the NOL suspension and credit limitations will not apply for the 2025 and 2026 tax years if certain budget goals are met. Although the Company does not expect this legislation to have a material effect on its results of operations or cash flows, management continues to evaluate any potential impact.

On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes a broad range of tax reform provisions that may affect the Company's financial results. The OBBBA reinstates immediate deduction for domestic Research and Development ("R&D") expenses, reinstates elective 100% first-year bonus depreciation for qualified property, and changes the calculation of and the tax rate applicable on Foreign-derived Deduction Eligible Income and income from non-U.S. subsidiaries (Net CFC Tested Income), among other provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently evaluating the full extent of the impact of the OBBBA on its consolidated results of operations and financial position, however, does not expect the legislation to have a material impact on its income tax expense.