Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 – INCOME TAXES

A reconciliation of the Company’s statutory rate to the effective tax rate (the “ETR”) for the three months ended March 31, 2025 and 2024 is as follows:

	Three Months Ended March 31,
	2025			2024
Statutory tax rate		21.0	%		21.0	%
State taxes, net of federal benefit		6.0	%		6.0	%
Section 987 regulations		(14.8	%)		—
Equity-based compensation		1.5	%		(5.4	%)
Uncertain tax position		3.9	%		2.5	%
Tax credits		(11.3	%)		(6.7	%)
Other		4.2	%		3.0	%
Effective tax rate		10.5	%		20.4	%

The decrease in the Company’s ETR was primarily due to an income tax benefit recognized in the first quarter of 2025 from tax planning implemented in connection with the “transitional rules” governing unrealized foreign exchange gains and losses derived from translation of the operations, assets and liabilities of non-U.S. qualified subsidiaries provided by recently finalized U.S. federal tax regulations under Internal Revenue Code Section 987 (“IRC 987”). The regulations under IRC 987 are effective for the Company for tax years beginning after December 31, 2024 and require computation of a pre-transition foreign currency gain or loss to be included in the determination of future taxable income or loss and an analysis of the various elections available to taxpayers. Based on the Company’s current analysis of the regulations and the available election to amortize its pre-2025 cumulative unrealized foreign exchange gains & losses impacting U.S. taxation of foreign earnings under Subpart F of the Internal Revenue Code, the Company recognized a non-cash deferred income tax benefit of $4.5 million related to its election to amortize its pre-transition foreign currency losses against taxable income over ten years.