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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Taxes  
Income Taxes

Note 8 — Income Taxes

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Income taxes are estimated for each of the jurisdictions in which the Company operates. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting

purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. Realization of net deferred tax assets is dependent on future taxable income.

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At the end of each interim reporting period, the effective tax rate is aligned with expectations for the full year. This estimate is used to determine the income tax provision on a year-to-date basis and may change in subsequent interim periods.

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Income before income taxes and income tax expense for the three and nine months ended September 30, 2025 and 2024 were as follows:

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Three months ended September 30,

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Nine months ended September 30,

 

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2025

    

2024

    

2025

    

2024

 

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(in thousands, except percentages)

 

Income before income taxes

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$

11,875

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$

24,658

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$

39,481

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$

64,479

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Income tax expense

 

$

1,279

 

$

2,707

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$

5,205

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$

5,730

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Effective tax rate

 

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10.77%

 

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10.98%

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13.18%

 

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8.89%

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The Company’s income tax expense for the three and nine months ended September 30, 2025 was $1.3 million and $5.2 million, respectively, compared to $2.7 million and $5.7 million, respectively, for the comparable prior period.

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For the three and nine months ended September 30, 2025, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Intangible Income and research and development tax credits. Additionally, the effective tax rate was also impacted by a discrete income tax expense resulting from the share-based compensation shortfall. For the three and nine months ended September 30, 2024, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Intangible Income and research and development tax credits. Additionally, the effective tax rate was lower than the U.S. statutory tax rate primarily relating to a discrete income tax benefit for share-based compensation windfall.

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The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025, which contains a broad range of tax law changes affecting businesses. The provisions of the OBBBA have different effective dates where some are effective in 2025 and others not until 2026. The Company continues to evaluate the full effects of the legislation. Based on our analysis, these impacts have not had a material effect on Company’s financial position, results of operations or cash flow in the current fiscal year. The provisions effective in 2025 have been reflected in the Company’s consolidated operating results for the three and nine months ended September 30, 2025.