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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the Company’s income (loss) before provision for income taxes are as follows (in thousands):
Year Ended December 31,
202520242023
U.S.$105,078 $113,045 $136,498 
Foreign(134,295)(363,621)40,659 
Income (loss) before provision for income taxes$(29,217)$(250,576)$177,157 

The provision for income taxes charged to operations consists of the following (in thousands):
Year Ended December 31,
202520242023
Current expense (benefit):
U.S. Federal$15,364 $21,686 $26,592 
U.S. State4,741 2,707 5,678 
Spain(536)986 1,507 
Other Countries254 2,089 15,002 
19,823 27,468 48,779 
Deferred expense (benefit):
U.S. Federal4,615 (1,361)942 
U.S. State(778)(406)(327)
Spain(617)(2,849)(2,989)
Other Countries(25)(33,034)(6,488)
3,195 (37,650)(8,862)
Total income tax expense (benefit)$23,018 $(10,182)$39,917 
Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):
December 31,
20252024
Deferred tax assets:
Bad debts$782 $143 
Inventories5,404 5,439 
Accrued warranties7,720 4,753 
Accrued compensation818 496 
Net operating loss16,124 4,247 
Equity-based compensation4,026 2,769 
Lease liabilities24,110 4,982 
Premium on capped call13,197 7,777 
Capitalized R&D expenses(391)6,405 
Other8,477 5,244 
Deferred tax assets80,267 42,255 
Valuation allowance(22,020)(11,181)
Deferred tax assets, net58,247 31,074 
Deferred tax liabilities:
Property, plant, and equipment(7,050)(2,349)
Intangible assets(25,275)(28,450)
ROU assets(24,090)(3,919)
Deferred tax liabilities(56,415)(34,718)
Deferred tax asset (liability), net$1,832 $(3,644)
A reconciliation of income tax expense computed at the federal statutory rate to the actual income tax expense at the Company’s effective rate is as follows (in thousands):
Year Ended December 31,
2025
%
2024
%
2023
%
Adjusted pre-tax book (loss) income$(29,217)$(250,576)$177,157 
Federal statutory tax rate(6,136)21.0 %(52,621)21.0 %37,204 21.0 %
State and local income taxes2,968 (10.2)%1,732 (0.7)%4,150 2.3 %
Foreign tax effects17,047 (58.4)%35,929 (14.3)%(2,650)(1.5)%
Brazil(3,567)12.2 %35,831 (14.3)%3,420 1.9 %
Tax rate differential(3,894)13.3 %(14,311)5.7 %3,143 1.8 %
Non-deductible goodwill— — %49,560 (19.8)%— — %
Non-deductible expenses327 (1.1)%582 (0.2)%277 0.2 %
South Africa(437)1.5 %(53)— %(148)(0.1)%
Spain21,204 (72.6)%975 (0.4)%(5,438)(3.1)%
Non-deductible goodwill21,538 (73.7)%— — %— — %
Other(334)1.1 %975 (0.4)%(5,438)(3.1)%
All others(153)0.5 %(824)0.3 %(484)(0.3)%
Valuation allowances9,660 (33.1)%7,760 (3.1)%911 0.5 %
Brazil10,183 (34.9)%7,760 (3.1)%911 0.5 %
South Africa(523)1.8 %— — %— — %
R&D credits(816)2.8 %(3,623)1.5 %(407)(0.2)%
Uncertain tax positions122 (0.4)%714 (0.3)%— — %
Non-taxable or non-deductible items668 (2.3)%(9)— %377 0.2 %
Investment tax credits included in Cost of product and service revenue(1,812)6.2 %(931)0.4 %— — %
Compensation1,508 (5.2)%945 (0.4)%(414)(0.2)%
Contingent consideration761 (2.6)%26 — %622 0.3 %
Non-deductible expenses211 (0.7)%(49)— %169 0.1 %
Other adjustments(495)1.7 %(64)— %332 0.2 %
Total$23,018 (78.8)%$(10,182)4.1 %$39,917 22.5 %

During the years ended December 31, 2025 and 2024, the Company recorded impairment charges of $102.6 million and $236.0 million, respectively, related to goodwill. During the fourth quarter of 2025, the Company also recorded an inventory valuation charge of $29.5 million related to the phase-out of the H250 product line that was not compatible with SmarTrack® to focus on a SmarTrack®-compatible version introduced in 2024. During 2024, the Company recorded an impairment of $91.9 million related to long-lived assets.

The goodwill impairment charges are non-deductible for income tax purposes, resulting in permanent differences. The inventory valuation charge and the long-lived assets impairment resulted in taxable and deductible temporary differences, which were offset by a corresponding change in the valuation allowance against deferred tax assets of $9.5 million and $7.2 million for the years ended December 31, 2025 and 2024, respectively. See Note 7 – Goodwill, Long-Lived Assets, and Other Intangible Assets for additional information.
On June 27, 2025, the Company issued aggregate principal amount of $345 million of its 2.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”). In connection with the offering, the Company entered into capped call transactions, as discussed in Note 10 – Debt. For U.S. federal income tax purposes, the Company made an election under Treasury Regulation section §1.1275-6 to integrate the 2031 Convertible Notes and the capped call. As a result of this election, the Company recognized tax deductible original issue discount (“OID”) of approximately $35.1 million, which is being amortized over the life of the term of the notes. The cost of the call premium was recorded as a reduction to Additional paid-in capital. Because the premium is deductible for tax purposes but recorded in equity for book purposes, a taxable temporary difference exists. Accordingly, the Company recorded a deferred tax asset (“DTA”) of $8.6 million related to this difference, with the initial recognition recorded to APIC for the tax effect of the OID. The DTA will be reduced annually as the tax amortization of the premium/OID is recognized. A similar DTA was recorded during 2021 in connection with the completion of the $425 million private offering ($375 million and $50 million, respectively), of the Company’s 1.00% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”).

As of December 31, 2025, the Company has federal income tax net operating loss (“NOL”) carryforwards of approximately $6.8 million, fully offset by a valuation allowance and immaterial state income tax NOL carryforwards. The Company also has approximately $43.4 million of foreign NOL carryforwards offset by a valuation allowance.

Realization of deferred tax assets is dependent upon generating sufficient taxable income of the appropriate type and in the appropriate jurisdictions. In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. It is not more likely than not that deferred tax assets from certain U.S. Federal, state and foreign operations would be realized due to type and location of future earnings. As a result, the Company has a valuation allowance of $22.0 million and $11.2 million for the years ended December 31, 2025 and 2024.

ASC 740 addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. In accordance with ASC 740, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company’s assessments of its tax positions in accordance with ASC 740 did not result in changes that had a material impact on results of operations, financial condition or liquidity. As of December 31, 2025, 2024 and 2023, the Company had unrecognized income tax benefits of $0.8 million, $0.7 million and zero, respectively, of which the entirety would reduce our income tax provision, if recognized within the next twelve months. The Company does not expect any significant changes to the unrecognized tax benefits within the next twelve months.
A reconciliation of the unrecognized tax benefits included within Other long-term liabilities in the consolidated statements of operations is as follows (in thousands):
Year Ended December 31,
202520242023
Unrecognized tax benefits – January 1$714 $— $— 
Gross increases – tax positions in prior period— 533 — 
Gross decreases – tax positions in prior period— — — 
Gross increases – tax positions in current period122 181 — 
Settlement— — — 
Lapse of statute of limitations— — — 
Unrecognized tax benefits – December 31$836 $714 $— 

The Company files income tax returns in the U.S. federal jurisdiction, in multiple U.S. states, as well as in non-U.S. jurisdictions. Through global expansion and the acquisition of STI, the Company has a significant presence in Spain and Brazil. The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities. The Company is not subject to U.S. federal, state and non-U.S. income tax examinations by tax authorities for years before 2021. There are currently no income tax audits in any material jurisdictions.

During 2025, the Company’s state tax liability increased due to the APA Acquisition, which added new combined and separate state filing requirements and expanded the Company’s presence in existing states. In addition, the Company experienced higher sales in certain states independent of the APA Acquisition. Collectively, these factors resulted in an increase in the Company’s state effective tax rate of approximately 0.85%.

The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Repatriation of funds could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or state income taxes and the impact of foreign currency movements. At December 31, 2025, management believed that sufficient liquidity was available in the U.S. The Company may consider repatriating certain funds from its non-U.S. subsidiaries that are not needed to finance local operations; however, any repatriation activities are not expected to result in a significant incremental tax liability to the Company.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025. Certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. Due to the effective tax rates in which the Company operates, the Company meets certain safe harbor tests. As a result, there was no tax impact of Pillar Two for the years ended December 31, 2025 and 2024.

The Company accounts for the 45X Credit under IAS 20 as a reduction to Cost of product and service revenue with a corresponding reduction to Income tax payable. The reduction to Cost of product and service revenue of $8.6 million for the year ended December 31, 2025, from the 45X Credit related to parts manufactured by the Company, is excluded from Federal and state income taxes.