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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 14. Income Taxes
The components of income before income tax provision, based on tax jurisdiction, consisted of the following (in thousands):
Year Ended December 31,
202520242023
Income before income taxes:
Domestic$(404,885)$(251,969)$(197,304)
Foreign789 3,143 2,842 
Total$(404,096)$(248,826)$(194,462)
The Company applied the intra-period tax allocation rules to allocate income taxes between continuing operations, discontinued operations, and other comprehensive income as prescribed by U.S. GAAP, where the tax effect of income (loss) before income taxes is computed without regard to the tax effects of income (loss) before income taxes from the other categories. Income tax expense (benefit) from continuing operations consisted of the following (in thousands):
Year Ended December 31,
202520242023
Current:
Federal$— $(109)$119 
State766 91 1,382 
Foreign725 1,254 893 
1,491 1,236 2,394 
Deferred:
Federal(546)849 (1,070)
State690 (492)(399)
Foreign(384)(142)(134)
(240)215 (1,603)
Income tax expense (benefit)$1,251 $1,451 $791 
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows (in thousands):
Year Ended December 31, 2025
$%
U.S. federal statutory tax $(84,860)21%
State and local income taxes, net of federal income tax effect(1)
1,363 — %
Foreign tax effects162 — %
Effect of cross-border tax laws16 — %
Tax credits
Changes in valuation allowances71,916 (18)%
Nontaxable or nondeductible items
Goodwill impairment4,928 (1)%
Stock Based Compensation4,413 (1)%
Other2,187 (1)%
Changes in unrecognized tax benefits34 — %
Other adjustments1,092 — %
Income tax expense (benefit)$1,251 — %
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(1)State taxes in Florida and Kentucky made up the majority (greater than 50%) of the tax effect in this category.
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows (in thousands):
Year Ended December 31,
20242023
Computed tax at U.S. federal statutory rate of 21%
$(52,253)$(40,837)
Increase (decrease) in taxes resulting from:
Foreign rate differential446 162 
State taxes, net of federal impact(404)713 
Stock-based compensation6,900 (6,366)
Nondeductible compensation1,919 5,430 
Permanent differences101 424 
Valuation allowance46,629 40,240 
Other, net(1,887)1,025 
Income tax expense (benefit)$1,451 $791 
The net deferred tax liability comprises the tax effect of temporary differences between U.S. GAAP and tax reporting related to the recognition of income and expenses. The net deferred income tax liabilities are included in other
liabilities in the consolidated balance sheets. Components of the net deferred tax liability consisted of the following (in thousands):
December 31,
20252024
Deferred income tax assets:
Net operating and capital losses$477,990 $404,964 
Accrued expenses13,509 20,692 
Transaction costs559 710 
Stock-based compensation14,462 14,329 
Lease liabilities891 2,703 
Fixed assets5,416 — 
Intangible assets390 — 
Other, net37 3,856 
Total deferred income tax assets$513,254 $447,254 
Deferred income tax liabilities:
ROU assets$(890)$(2,606)
Intangible assets(253)(3,114)
Investments in marketable securities(1,175)(1,603)
Investments in partnerships and affiliates(8,101)(12,985)
Other, net(408)— 
Total deferred income tax liabilities$(10,827)$(20,308)
Valuation allowance(503,962)(428,717)
Net deferred income tax liabilities$(1,535)$(1,771)
The Company regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance when it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. In making this assessment, the Company is required to consider all available positive and negative evidence to determine whether, based on such evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized in future periods. As of December 31, 2025 and 2024, the Company believed that it is more likely than not that its deferred tax assets in excess of deferred tax liabilities will not be realized. Accordingly, the Company has provided a valuation allowance of $504.0 million and $428.7 million on the Company’s deferred tax assets as of December 31, 2025 and 2024, respectively. The increase in valuation allowance of $75.3 million recorded in current year activities is primarily attributable to current year losses. The net deferred tax liability as of December 31, 2025 principally relates to deferred tax liabilities associated with long-term investments in partnerships and affiliates, which are expected to reverse against net operating losses which can only offset 80% of taxable income. The Company evaluated the impact of goodwill impairment on tax-deductible goodwill and determined that it did not materially impact the tax provision due to a full valuation allowance on its United States federal and state net deferred tax assets.
As of December 31, 2025, the Company has federal, state, and foreign net operating losses of $2.0 billion, $1.2 billion, and $0.3 million, respectively. As of December 31, 2024, the Company has federal and state operating losses of $1.7 billion and $1.1 billion, respectively. As of December 31, 2025, $1.9 billion of the total federal net operating losses are carried forward as indefinite-lived net operating losses. The remaining net operating losses are carried forward and will expire beginning in 2027 if unutilized. Utilization of these operating loss carryforwards may be subject to an annual limitation based on changes in ownership, as defined by Section 382 of the Internal Revenue Code of 1986, as amended. As of December 31, 2025, $51.4 million and $52.1 million of the Company’s federal and state net operating loss carryforward, respectively, are attributable to prior acquisition transactions and are subject to Section 382 limitations. The Company’s analysis indicates that none of the acquired net operating loss carryforwards will expire unutilized solely as a result of the Section 382 limitations.
Unrecognized Tax Benefits
As of December 31, 2025, the Company had unrecognized tax benefits of $5.4 million, $1.0 million of which, if recognized, would impact its effective tax rate. As of December 31, 2024, the Company had unrecognized tax benefits of $5.3 million, $1.0 million of which, if recognized, would impact its effective tax rate. As of December 31, 2023, the Company had unrecognized tax benefits of $5.5 million, $1.0 million of which, if recognized, would impact its effective tax rate.
The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):
December 31,
202520242023
Balance at beginning of the year$5,343 $5,471 $5,212 
Additions related to current year acquisition— — 722 
Additions related to current year tax positions37 192 79 
Reductions related to settlements with taxing authorities— (320)(542)
Balance at end of the year$5,380 $5,343 $5,471 
As of December 31, 2025, the Company recorded a liability for unrecognized tax benefit of $1.0 million. As of December 31, 2024, the Company recorded a liability for unrecognized tax benefit of $1.0 million. As of December 31, 2023, the Company recorded a liability for unrecognized tax benefit of $1.4 million, inclusive of $0.8 million of accrued interest and penalties. During the year ended December 31, 2024, the Company reversed $0.3 million of tax liability, $0.2 million of accrued interest, and $0.1 million of penalties on unrecognized tax benefits due to payments of an amended state return related to the period ended June 30, 2016 and statute of limitation release on state return related to period ended June 30, 2015. During the year ended December 31, 2023, the Company reversed $0.5 million of tax liability, $0.2 million of accrued interest, and $0.2 million of penalties on unrecognized tax benefits due to payments of an amended state return related to the period ended June 30, 2016.
The Company operates in several taxing jurisdictions, including U.S. federal, multiple U.S. states, and foreign jurisdictions. The statute of limitations has expired for all tax years prior to 2022 for federal, prior to 2021 for various state tax purposes, and prior to 2020 for non-U.S. jurisdictions. However, the net operating loss generated on the Company’s federal and state tax returns in prior years may be subject to adjustments by the federal and state tax authorities.
For additional information regarding income taxes and unrecognized tax benefits related to discontinued operations, see Note 19.
As of December 31, 2025 and 2024, the Company has unremitted earnings from subsidiaries outside of the U.S. on which no deferred tax liability has been recorded. The Company’s intention is to indefinitely reinvest these earnings outside the United States. Upon distribution of those earnings in the form of a dividend or otherwise, the Company would be subject to both state income taxes and withholding taxes payable to various foreign countries. The amounts of such tax liabilities that might be payable upon repatriation of foreign earnings are not material.
For the year ended December 31, 2025, income taxes paid by (refunded to) the Company consisted of the following (in thousands):
Federal$— 
State
Kentucky256 
North Carolina(124)
Pennsylvania(698)
Tennessee225 
All other41 
Foreign
India857 
All other19 
Income taxes paid (refunded), net$576 
For the years ended December 31, 2024 and 2023, the Company paid income taxes of $1.8 million and $5.4 million, respectively.
On October 8, 2021, the Organization for Economic Cooperation and Development (“OECD”) released the Pillar Two model rules introducing a 15% global minimum tax under the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting. In December 2022, the European Union (“EU”) Member States formally adopted the EU Pillar Two Framework (“Pillar Two Framework”). Certain countries have enacted this tax law change, with an effective date starting January 1, 2024 and January 1, 2025, for certain aspects of the directive. The Company considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and concluded there was no material impact to its tax provision for 2025.