Income Taxes

9 Months Ended

Sep. 30, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date income or loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate of 1.15% differs from the U.S. federal statutory rate of 21% primarily as a result of the change in the valuation allowance, nondeductible executive compensation, state taxes and other permanent differences.

As of December 31, 2025, the Company maintained a full valuation allowance on its deferred tax assets of $97.2 million. As of September 30, 2026, the Company concluded that it was appropriate to release substantially all of the valuation allowance against the deferred tax assets based on the conclusion that it is more likely than not that substantially all of deferred tax assets will be realized. Based on sustained profitability, including generating three-year cumulative income before taxes, adjusted for permanent differences, and the projections of future taxable income sufficient to utilize substantially all of the Company's federal and state net operating losses, the positive evidence supporting the release of substantially all of the valuation allowance outweighed the negative evidence supporting a full valuation allowance. During the three months ended September 30, 2026, the Company recognized a discrete income tax benefit of $89.4 million, primarily related to the release of substantially all of the Company's valuation allowance. The portion of the valuation allowance release attributable to 2026 income is recognized through the annual estimated effective tax rate. As of September 30, 2026, the Company maintains a valuation allowance of $4.0 million related to state net operating losses that are expected to expire prior to realization.

For the three and nine months ended September 30, 2026, the Company recognized income tax benefits of $89.4 million and $89.3 million, respectively, substantially all of which represented deferred income tax benefits related to the release of substantially of the valuation allowance.

During the three and nine months ended September 30, 2026, the Company has not recorded any uncertain tax positions and has not recognized interest or penalties in the condensed consolidated statements of comprehensive income.