Income taxes

9 Months Ended

Sep. 30, 2025

Income taxes

Income taxes

Note 8. Income taxes

On a quarterly basis, the Company estimates its effective tax rate for the full fiscal year and records a quarterly income tax provision based on the anticipated rate and adjusted for discrete taxable events that may occur in the quarter. As the year progresses, the Company will refine its estimate based on facts and circumstances by each tax jurisdiction.

Income tax benefit was $707 and $941, and the effective tax rate (ETR) was 20.90% and 20.05% for the three and nine months ended September 30, 2025, respectively. Our ETR is different from the expected tax rate due to state taxes, non-deductible items, research and development credits and excess tax expense associated with stock-based compensation items. The year-to-date rate includes the recognition of unfavorable discrete items.

For the three and nine months ended September 30, 2024, income tax expense was estimated at $100 and $2,532 and the ETR was 3.24% and 20.21%, respectively.

On July 4, 2025, U.S. enacted H.R. 1 “A bill to provide for reconciliation pursuant to Title II of H. Con. Res 14,” commonly referred to as the One Big Beautiful Bill Act. We have evaluated the provisions of H.R. 1 and concluded that they do not have a material impact on the Condensed Consolidated Financial Statements.

Uncertain Tax Positions

Based on the Company’s evaluation, there is one unrecognized tax benefit requiring recognition in its financial statements as of September 30, 2025. Any interest and penalties related to uncertain tax positions are recorded in income tax expense (benefit) on the Condensed Consolidated Statements of Comprehensive Income (Loss). The entire balance of unrecognized tax benefits as of September 30, 2025, if recognized, would affect the Company’s effective tax rate.

The Company files income tax returns in the United States federal jurisdiction and in various state and local jurisdictions. Federal tax returns for tax years beginning January 1, 2021, and state tax returns for the years beginning January 1, 2020, are open for examination.