Income Taxes

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 2025 and 2024 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Statutory tax rate		21.0	%		21.0	%		21.0	%		21.0	%
State taxes, net of federal benefit		6.1	%		6.0	%		6.1	%		6.0	%
Return to provision adjustments		4.4	%		(11.0	%)		1.1	%		(3.7	%)
IRC 987 regulations		—			—			(4.9	%)		—
Equity-based compensation		(0.3	%)		(0.3	%)		0.3	%		(1.7	%)
Uncertain tax position		1.7	%		4.2	%		3.0	%		4.4	%
Tax credits		(11.7	%)		(8.5	%)		(11.7	%)		(8.5	%)
Other		1.5	%		2.4	%		3.2	%		2.5	%
Effective tax rate		22.7	%		13.8	%		18.1	%		20.0	%

The return to provision adjustments and uncertain tax position recognized during the three and nine months ended September 30, 2025 and 2024 were primarily related to the Research & Experimentation (“R&E”) tax credits that were previously estimated prior to the 2024 and 2023 tax returns.

The ETR for the nine months ended September 30, 2025 includes 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 Section 987 (“IRC 987”) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). 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 and 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.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the “OB3 Act”). The OB3 Act made permanent changes to certain key elements of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), including 100% bonus depreciation, domestic research cost expensing, the business interest expense limitation, and the repeal of various clean energy tax credits. As a result, the OB3 Act impacted the Company’s income tax payables and deferred tax assets as of July 4, 2025, the date of enactment, via the reversal of approximately $32.0 million of deferred tax assets resulting from capitalized research expenses incurred through June 30, 2025. The reversal is reflected on the Company’s interim financial statements as of and for the quarter ended September 30, 2025 and the annual financial statements as of and for the year ended December 31, 2025. These capitalized research expenses are being electively recovered ratably over the 2025 and 2026 tax years as outlined in IRC 174A enacted via the OB3 Act.