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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s income before provision for income taxes consisted of the following:
| Year Ended December 31,
| 2025 |  | 2024
U.S. | $87,954 |  | $46,505
Foreign | 27,103 |  | 4,534
Income before provision for income taxes | $115,057 |  | $51,039
The following table summarizes the provision for income taxes:
| Year Ended December 31,
| 2025 |  | 2024
Current: |  |  |
Federal | $17,228 |  | $9,757
State | 4,306 |  | 2,931
Foreign | 4,427 |  | 952
Total current tax expense | 25,961 |  | 13,640
Deferred: |  |  |
Federal | (8,267) |  | (1,943)
State | (2,258) |  | (400)
Foreign | — |  | —
Total deferred income tax expense | $(10,525) |  | $(2,343)
Total income tax expense | $15,436 |  | $11,297
Effective tax rate | 13.4% |  | 22.1%
The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis beginning with the year ended December 31, 2025. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the statutory federal income tax amount and rate to our global effective tax amount and rate for the year ended December 31, 2025:
| Year Ended December 31, 2025
| Amount |  | Rate
Income tax expense computed at U.S. federal statutory rates | $24,162 |  | 21.0%
State income tax expense(1) | 4,191 |  | 3.6
Foreign tax effects: |  |  |
Bermuda | (4,427) |  | (3.8)
Other foreign jurisdictions | — |  | —
Effects of cross-border tax laws: |  |  |
Subpart F income inclusion | 4,427 |  | 3.8
Foreign tax credit | — |  | —
Other | — |  | —
Tax credits: |  |  |
Research and development credit | — |  | —
Changes in valuation allowances | — |  | —
Nontaxable or nondeductible items: |  |  |
IRC Section 162(m) executive compensation | 2,061 |  | 1.8
Tax status change of nontaxable entity | (9,722) |  | (8.4)
Nontaxable entity activity | (5,791) |  | (5.0)
Other | 323 |  | 0.3
Changes in unrecognized tax benefits | — |  | —
Other adjustments | 212 |  | 0.2
Income tax expense at global effective rate | $15,436 |  | 13.4%
(1)The state that contributes to the majority (greater than 50%) of the tax effect in this category is Florida. The following table presents the required disclosures prior to our adoption of ASU 2023-09 and reconciles the statutory federal income tax rate to the actual global effective tax rate for the year ended December 31, 2024:
| Year Ended December 31, 2024
| Amount |  | Rate
Income tax expense computed at U.S. federal statutory rates | $10,718 |  | 21.0%
State income tax expense | 1,840 |  | 3.6
Loss of partnerships and other pass-through entities | (1,851) |  | (3.6)
Nondeductible items | 37 |  | 0.1
Other | 553 |  | 1.1
Income tax expense at effective rate | $11,297 |  | 22.1%
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law. The Act made permanent key elements of the Tax Cuts and Jobs Act, including 100 percent bonus depreciation, domestic research cost expensing, increases the Advanced Manufacturing Investment Credit to 35 percent from 25 percent and modified to the international tax framework. The Act includes multiple effective dates, with certain provisions effective in 2025 and others phased in through 2027. We continue to evaluate the impact of the Act’s provisions that take effect in future years. In connection with the IPO in calendar year 2025, the Company converted its partnership structure into a corporate structure for income tax reporting purposes. For 2025, the Company plans to file two separate stand-alone federal income tax returns, one for the insurance subsidiary and one for the new parent and other single-member limited liability companies. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. The significant components of the Company’s deferred tax assets and liabilities were as follows:
| December 31,
| 2025 |  | 2024
Deferred tax assets |  |  |
Unpaid losses and loss adjustment expense | $900 |  | $671
Unearned premiums | 9,936 |  | 7,772
Net unrealized losses on investments | — |  | 118
Unearned revenue | 25,688 |  | —
Capital loss carryforward | — |  | 1
Change in ROU liabilities | 115 |  | —
Other | 203 |  | 12
Total deferred tax assets | 36,842 |  | 8,574
Valuation allowance | — |  | —
Net deferred tax assets | 36,842 |  | 8,574
Deferred tax liabilities: |  |  |
Deferred policy acquisition costs | (22,399) |  | (5,272)
Fixed assets | (1,408) |  | —
Excess ceding commission | (2,575) |  | (3,971)
Prepaid expenses | (472) |  | —
Policy acquisition costs | (592) |  | —
Net unrealized gains on investments | (649) |  | —
Accrued expenses | 51 |  | —
Change in ROU assets | (113) |  | —
Other | (49) |  | (453)
Total deferred tax liabilities | (28,206) |  | (9,696)
Net deferred tax liabilities | $8,636 |  | $(1,122)
At each balance sheet date, management assesses the need to establish a valuation allowance that reduces deferred income tax assets when it is more likely than not that all, or some portion, of the deferred income taxes will not be realized. A valuation allowance would be based on all available information including the Company’s assessment of uncertain tax positions and projections of future taxable income and capital gain from each tax-paying component in each jurisdiction, principally derived from business plans and available tax planning strategies. Management has reviewed all available evidence, both positive and negative, in determining the need for a valuation allowance with respect to the gross deferred tax assets. In determining the manner in which available evidence should be weighted, management has determined that the need for a valuation allowance is not warranted at this time. As of December 31, 2025 and December 31, 2024, the Company had no net operating loss carryforwards for tax purposes. Deferred tax assets are included within other long-term assets on the consolidated balance sheets. Deferred tax liabilities are included within other long-term liabilities on the consolidated balance sheets. Current income taxes payable of $2.5 million and $11.9 million are included in other current liabilities as of December 31, 2025 and December 31, 2024, respectively. The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as expenses in the accompanying consolidated statements of operations and comprehensive income. Accrued interest and penalties are included on the related tax liability line on the consolidated balance sheets. As of December 31, 2024, the Company had no unrecognized tax benefits. There were no changes in the Company’s unrecognized tax benefits during the years ended December 31, 2025 or December 31, 2024. The Company recorded accrued interest and penalties of $142 related to amended income tax return filings during calendar year 2025, and did not recognize any interest or penalties during the calendar year 2024 related to unrecognized tax benefits. The Company files income tax returns in U.S. federal and various state jurisdictions. With few exceptions, the Company is not subject to examinations by major tax jurisdictions for years ended December 31, 2022, and prior. Cash Taxes Paid The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025, and has included the following table as a result of adoption, which presents income taxes paid (net of refunds received) for the year ended December 31, 2025:
| Year Ended December 31, 2025
Federal | $27,685
State: |
Florida(1) | 7,615
Other states | 35
Foreign taxes: |
Bermuda | —
Total cash paid for income taxes | $35,335
(1)Florida is the only state that represents taxes paid that were greater than 5% of total taxes paid. The following table summarizes the income taxes paid for the year ended December 31,2024:
| Year Ended December 31, 2024
Cash paid during the year for: |
Income taxes, net of refunds | $1,000

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