Income Taxes

3 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company adjusts its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. The Company also records the tax effect of unusual or infrequently occurring discrete items.

The provision for income taxes is shown in the table below:

	Three Months Ended March 31,
	2026		2025
Income taxes	$	74	$	1,035
Income taxes on other income and expenses	1,391		1,703
Income tax expense	$	1,465	$	2,738

Income tax expense decreased $1.3 million for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in income tax expense for the three months ended March 31, 2026 is primarily due to the decrease in pre-tax operating income and partially offset by the increase in the effective tax rate.

The Company’s effective tax rate was 23.1% and 17.2% before discrete items as of March 31, 2026 and March 31, 2025, respectively. The increase in the effective tax rate was primarily due to the decrease in Tax Cuts and Jobs Act (TCJA) refunds of excess deferred federal income taxes.

On June 27, 2024, California Senate Bill 167 (SB 167) was enacted into law. SB 167 provides for a three-year suspension of net operating losses under the California Corporation tax. Among other things, this new law temporarily disallows the use of state net operating losses for years beginning in 2024 through 2026.

The Company had unrecognized tax benefits of approximately $20.3 million and $19.6 million as of March 31, 2026 and 2025, respectively. Included in the balance of unrecognized tax benefits as of March 31, 2026 and 2025, is $4.6 million and $5.6 million, respectively, of tax benefits that, if recognized, would result in an increase to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next 12 months.