Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

6.INCOME TAXES

The following table presents the U.S. and non‑U.S. components of income (loss) before income tax expense:

	For the Year Ended December 31,
	2024		2023		2022
U.S.	$	185,957	$	(24,267)	$	164,623
Non-U.S.		10,055		(4,880)		51,697
Income (loss) before income taxes	$	196,012	$	(29,147)	$	216,320

The current and deferred components of the income tax provision for the years ended December 31, 2024, 2023 and 2022 are as follows:

	For the Year Ended December 31,
	2024		2023		2022
Current income taxes:
Federal	$	1,055	$	1,425	$	8,659
State and Local		3,565		(183)		6,290
Foreign		4,833		1,419		5,901
Deferred income taxes:
Federal	$	34,473	$	(2,471)	$	20,308
State and Local		5,673		(125)		4,788
Foreign		(5,078)		(1,696)		1,692
Total	$	44,521	$	(1,631)	$	47,638

The total provision for income taxes differs from the amount which would be computed by applying the appropriate statutory rate to income before income taxes as follows:

	For the Year Ended December 31,
	2024		2023		2022
Reconciliation of federal statutory tax rates
U.S. statutory tax rate	21.0	%	21.0	%	21.0	%
Increase (decrease) due to state and local taxes	4.0	%	1.3	%	2.3	%
Rate benefit as a U.S. limited partnership/flow through	-1.7	%	-1.8	%	-1.8	%
Excess tax benefit from equity compensation delivery	-5.0	%	9.2	%	-2.6	%
Foreign taxes	0.4	%	3.3	%	0.8	%
Non-deductible expenses	3.8	%	-20.2	%	1.9	%
Regulatory settlements	0.0	%	-6.7	%	0.0	%
Return to provision	0.5	%	-4.0	%	1.1	%
Other	-0.3	%	3.4	%	-0.8	%
Effective income tax rate	22.7	%	5.5	%	21.9	%

Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years.

The significant components of deferred tax assets and liabilities included on the Company’s consolidated statements of financial condition are as follows:

	For the Year Ended December 31,
	2024		2023
Net operating loss	$	35,222	$	40,140
Step-up in tax basis in Group LP assets		309,285		332,261
Deferred compensation		81,564		75,168
Lease liability		50,922		49,505
Other		2,319		7,869
Net deferred tax asset before valuation allowance		479,312		504,943
Valuation allowance on NOL and other		(15,475)		(14,870)
Deferred tax asset	$	463,837	$	490,073
Right-of-use asset	$	(41,012)	$	(39,409)
Other		(12,313)		(13,426)
Deferred tax liability	$	(53,325)	$	(52,835)
Net deferred tax asset	$	410,512	$	437,238

The Company recorded a decrease in the net deferred tax asset of $26,726 for the year ended December 31, 2024, which was primarily attributable to current year amortization of the tax basis in Group LP assets, partially offset by an increase in the step-up in tax basis in Group LP assets in connection with the exchanges of Group LP partnership units for Class A common stock during 2024.

As of December 31, 2024, the Company had accumulated net operating loss carryforwards related to its operations of approximately $142,423 for which it has recorded a deferred tax asset of $35,222. All of the $142,423 in operating losses (or $35,222 of the deferred tax asset) has an indefinite life.

The Company’s operations are generally comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities generally represent obligations of their interest holders. The Company is subject to certain foreign, state and local entity-level taxes (for example, the New York City Unincorporated Business Tax ("UBT")). In addition, the Company is subject to U.S. corporate federal, state and local income tax on its allocable share of results of operations from Group LP.

Group LP was selected for examination by the Internal Revenue Service in 2023 for the tax year ended December 31, 2020. The Company’s tax years for 2023, 2022, 2021, and 2020 are generally subject to examination by the tax authorities. Tax examinations are monitored on an ongoing basis and adjustments to tax liabilities are made as appropriate.

The Company has no unrecognized tax benefits for the periods ended December 31, 2024, 2023 and 2022.

Additionally, the Organization for Economic Cooperation and Development ("OECD") reached agreement among various countries, including the European Union member states, to establish a 15% minimum tax on certain multinational companies, commonly called “Pillar Two”. Many countries continue to announce changes in their tax laws and regulations to implement the OECD Pillar Two framework. The impact of Pillar Two is not significant for the Company in 2024. The Company will continue to monitor and evaluate Pillar Two as new legislation and guidance become available.