Income Taxes

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s quarterly income tax provision is measured using an estimate of its consolidated annual effective tax rate, adjusted in the current period for discrete income tax items, within the periods presented.

For the three and six months ended June 30, 2025, income tax expense was $19.4 million and $33.0 million, respectively, resulting in an effective tax rate of 26.9% for each period. The effective tax rates for the three and six months ended June 30, 2025 differed from the 2025 statutory tax rate of 21% primarily due to state income taxes, net of federal income taxes, and certain unfavorable permanent book-tax differences due to meals and entertainment expenses and non-deductible employee compensation.

For the three and six months ended June 30, 2024, income tax expense was $13.6 million and $23.6 million, respectively, resulting in an effective tax rate of 25.9% and 26.0%, respectively. The effective tax rates for the three and six months ended June 30, 2024 differed from the 2024 statutory tax rate of 21% primarily due to state income taxes, net of federal income taxes, and certain unfavorable permanent book-tax differences due to economic market performance as well as meals and entertainment expenses.

The effective tax rates for the three and six months ended June 30, 2025 differed from the effective tax rates for the three and six months ended June 30, 2024 due to changes in the Company’s permanent book-tax differences between those periods, specifically increased permanent add-back for meals and entertainment expenses and non-deductible employee compensation.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA contains significant tax law changes with various effective dates affecting business taxpayers. Among the tax law changes that will impact the Company relate to the timing of certain tax deductions including depreciation expense, R&D expenditures and interest expense. The Company is still evaluating the impacts to its financial statements. The Company will account for the tax law changes in the third quarter of 2025.