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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

The following are domestic and foreign components of the Company’s income (loss) before income taxes (in thousands):

			Year Ended December 31,
			2025						2024						2023
Domestic			$	(31,096)					$	(5,205)					$	67,643
Foreign			478						(1,292)						2,907
Income (loss) before income taxes			$	(30,618)					$	(6,497)					$	70,550

Schedule of Components of Income Tax Expense (Benefit)

The components of the Company's income tax expense are as follows (in thousands):

			Year Ended December 31,
			2025						2024						2023
Current:
Federal			$	305					$	17,461					$	30,124
State and local			1,940						3,448						8,498
Foreign			1,974						1,250						801
Total current income tax expense			4,219						22,159						39,423
Deferred:
Federal			(1,561)						(15,054)						(14,866)
State and local			(707)						(2,126)						(2,414)
Foreign			425						1,378						(691)
Total deferred income tax benefit			(1,843)						(15,802)						(17,971)
Total income tax expense			$	2,376					$	6,357					$	21,452

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the income taxes computed at the U.S. federal statutory tax rate of 21% to the income tax expense for the year ended December 31, 2025 subsequent to the adoption of ASU 2023-09 is as follows (in thousands):

See Note 2 for further information on the Company’s prospective adoption of ASU 2023-09.

			Year Ended December 31,
			2025
			$						%
U.S. federal statutory income tax rate			$	(6,435)					21.0		%
State and local income taxes, net of federal income tax effect (1)			113						(0.4)
Foreign tax effects
Israel
Tax audit adjustments			(357)						1.2
Stock-based compensation			1,140						(3.7)
Change in valuation allowance			1,616						(5.3)
Other			127						(0.4)
United Kingdom
Deferred tax adjustment			1,943						(6.3)
Change in valuation allowance			(1,943)						6.3
Other			154						(0.5)
Other foreign			398						(1.3)
Effects of cross-border tax laws
Foreign derived intangible income deduction			398						(1.3)
Other			(19)						0.1
Tax credits
Research & development credits			(3,742)						12.2
Non-taxable or non-deductible items
Stock-based compensation			3,859						(12.6)
Officers compensation limitation			2,291						(7.5)
Other non-deductible expenses			949						(3.1)
Changes in unrecognized tax benefits			2,304						(7.5)
Other			(420)						1.3
Income tax expense			$	2,376					(7.8)		%

____________

(1) State taxes in California, Illinois, New Hampshire, New Jersey, and New York made up the majority (greater than 50%) of the tax effect in this category.

A reconciliation of the income taxes computed at the U.S. federal statutory tax rate of 21% to the income tax expense for the years ended December 31, 2024 and 2023 prior to the adoption of ASU 2023-09, and as previously disclosed in prior years, is as follows (in thousands):

			Year Ended December 31,
			2024						2023
U.S. federal statutory income tax rate			$	(1,380)					$	14,816
State and local income taxes, net of federal benefit			1,669						5,002
Foreign derived intangible income deduction			(645)						(1,110)
Foreign rate differential			(21)						(1,872)
Stock-based compensation			6,266						7,931
Officers compensation limitation			1,322						2,356
Non-deductible expenses			974						909
Tax credits			(6,635)						(9,189)
Uncertain tax positions			793						1,449
Change in valuation allowance			3,519						2,282
Return to provision			(154)						(1,532)
Other			649						410
Income tax expense			$	6,357					$	21,452

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows (in thousands):

			Year Ended December 31,
			2025						2024
Deferred income tax assets:
Net operating loss carryforwards			$	41,104					$	2,659
Stock-based compensation			2,772						3,517
Accrued expenses			6,476						5,225
Tax credit carryforwards			21,093						17,421
Capitalized development			26,451						65,678
Operating lease liabilities			3,298						2,281
Total deferred tax assets			101,194						96,781
Less valuation allowance			(20,215)						(18,792)
Net deferred tax assets			80,979						77,989
Deferred tax liabilities:
Property and equipment			(522)						(357)
Operating lease right-of-use assets			(2,477)						(1,502)
Intangible assets and goodwill			(1,226)						(1,337)
Unremitted earnings of foreign subsidiaries			(1,260)						(1,047)
Deferred commissions			(1,715)						(1,823)
Other			(131)						(118)
Total deferred tax liabilities			(7,331)						(6,184)
Total net deferred tax assets			$	73,648					$	71,805

Schedule of Valuation Allowance

The change in the valuation allowance was comprised of the following (in thousands):

			Year Ended December 31,
			2025						2024						2023
Valuation allowance, at beginning of year			$	18,792					$	14,935					$	12,748
Increase in valuation allowance recorded through earnings			3,366						3,520						2,281
Decrease in valuation allowance recorded through earnings			(1,943)						—						—
Increase in valuation allowance recorded through purchase accounting			—						337						—
Decrease in valuation allowance recorded through other comprehensive income			—						—						(94)
Valuation allowance, at end of year			$	20,215					$	18,792					$	14,935

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands):

			Year Ended December 31,
			2025						2024						2023
Unrecognized tax benefit, beginning of year:			$	26,787					$	24,330					$	17,077
Gross increases - tax positions in prior year			563						1,075						3,912
Gross increases - tax positions in current year			1,881						2,056						3,341
Gross decreases - tax positions in prior year			(666)						(674)						—
Gross decreases - settlements in current year			(640)						—						—
Unrecognized tax benefit, end of year			$	27,925					$	26,787					$	24,330

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

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