Income Taxes

9 Months Ended

Sep. 30, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three months ended September 30, 2026 and 2025, the Company's income tax expense was $1,125,000 and $2,304,000, respectively, with an effective tax rate of 19.2% and 23.3%, respectively. For the nine months ended September 30, 2026 and 2025, the Company's income tax expense was $12,743,000 and $7,884,000, respectively, with an effective tax rate of 23.5% and 23.6%, respectively. For the three and nine months ended September 30, 2026, the Company's effective tax rate differed from the United States federal statutory rate of 21% primarily due to state taxes, the nontaxable noncontrolling interest income, and the stock compensation windfall benefit from stock options exercised. For the three and nine months ended September 30, 2025, the Company's effective tax rate differed from the United States federal statutory rate of 21% primarily due to state taxes, the nontaxable noncontrolling interest income, and research and development credits.

In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. Based upon the level of historical taxable income, at this time, the Company determined that sufficient positive evidence existed to conclude that it is more likely than not there will be full utilization of the deferred tax assets in each jurisdiction. As such, as of September 30, 2026, the Company did not record any valuation allowance.

On July 4, 2025, the President signed H.R.1, the One Big Beautiful Bill Act into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic research and development expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. These changes, primarily timing differences with no net impact, were incorporated in the income tax provision for both the period ended September 30, 2026 and 2025.

The Company remains subject to IRS examination for the 2024 through 2025 tax years. Additionally, the Company files multiple state and local income tax returns and remains subject to examination in various jurisdictions for the 2022 through 2025 tax years. The Company continues to work with the IRS relating to the 2016 and 2017 tax years and does not expect a material impact to the financial statements. In October 2025, the Company received a notice from the IRS that its 2023 federal income tax return was selected for examination. In October 2026, the IRS confirmed that the examination of the 2023 tax year has been completed with no adjustments. As of both September 30, 2026 and December 31, 2025, the Company did not have any unrecognized tax benefit.