Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. Income Taxes

The Company had an effective tax rate of (1.6)% and 20.6% for the three and nine months ended September 30, 2025, respectively, and 5.9% and (106.5)% for the three and nine months ended  September 30, 2024, respectively.

The change in effective tax rates for the three-month period ended September 30, 2025 as compared to the three-month period ended  September 30, 2024 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions and stock-based compensation.

The change in effective tax rates for the nine-month period ended September 30, 2025 as compared to the nine-month period ended  September 30, 2024 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions. 

The Company continues to evaluate the realizability of its deferred tax assets on a quarterly basis and will adjust such amounts in light of changing facts and circumstances. In making such an assessment, management would consider all available supporting data, including the level of historical taxable income, future reversals of existing temporary differences, tax planning strategies, and projected future taxable income.

ASC 740, Income Taxes, requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted. On July 4, 2025, H.R.1 - One Big Beautiful Bill Act (“OBBBA”) was enacted into law. In general, the OBBBA makes permanent key corporate tax elements of the Tax Cuts and Jobs Act and modifies certain international tax provisions. The main provision of the OBBBA that will materially impact our current and deferred income taxes in 2025 is the restoration of the ability to immediately expense domestic research and experimental expenditures. The Company will continue to analyze the provisions of the OBBBA for other impacts to its current and deferred income taxes in the fourth quarter.