Income Taxes

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We have historically computed our interim provision for income taxes by applying the estimated annual effective tax rate to year-to-date income before income tax and adjusted the provision for discrete tax items recorded in the period (“annual effective tax rate method”). The interim provision for income taxes and estimated annual effective tax rate are subject to volatility due to several factors, including changes in our earnings, changes to our valuation allowance, material discrete tax items and the effects of tax law changes. For the three and nine months ended September 30, 2025, we determined the best estimate of the annual effective tax rate was the year-to-date effective tax rate which was applied to year-to-date income to estimate the interim provision for income taxes.

For the three months ended September 30, 2025, we recognized an insignificant income tax benefit, resulting in an effective tax rate of 0.2%, as compared to income tax expense of $0.7 million and an effective tax rate of 32.4%, for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we recognized tax expense $0.1 million, resulting in an effective tax rate of (2.1)%, as compared to income tax expense of $4.6 million and an effective tax rate of 32.6% for the nine months ended September 30, 2024.

The decrease in the effective tax rate for both the three and nine months ended September 30, 2025 compared to the same periods in 2024 was primarily due to the impact of changes in our valuation allowance and lower income before income taxes.

On July 4, 2025, the U.S. tax legislation known as the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA includes tax reform provisions that amend, eliminate and extend many of the tax rules under the 2017 Tax Cuts and Jobs Act. While the OBBBA has not had a material impact on our results of operations, we will monitor developments and evaluate any potential future impacts.