Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company is subject to income tax in multiple jurisdictions and the use of estimates is required to determine the provision for income taxes. For the three months ended March 31, 2025 and 2024, the Company recorded an income tax provision of $2.4 million and $2.5 million, respectively. The income tax provision is based on the estimated annual effective tax rate for the year applied to pre-tax income. The effective income tax rate for the three months ended March 31, 2025 was 39.9 percent compared to 31.8 percent in the same period of the prior year. The effective tax rate increased by 8.1 percent for the three months ended March 31, 2025 when compared to the same period in 2024, primarily due to a one-time release of tax reserves arising from a successful audit closure in 2024 that did not repeat in 2025.

The effective income tax rate for the three months ended March 31, 2025 differs from the U.S. federal statutory rate of 21.0 percent due to various factors, including operating in multiple state and foreign jurisdictions partially offset by tax credits for which the Company qualifies.

The Company had unrecognized tax benefits totaling $3.5 million as of March 31, 2025 and $3.4 million as of December 31, 2024, respectively, that if recognized would result in a reduction of the Company’s effective tax rate. The liabilities are classified as other long-term liabilities in the accompanying consolidated balance sheets. The Company recognizes interest and penalties related to income tax matters in income tax expense and reports the liability in current or long-term income taxes payable as appropriate.