XML 38 R25.htm IDEA: XBRL DOCUMENT v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The table below summarizes significant components of deferred tax assets and liabilities:
 December 31,
 20252024
Deferred tax assets  
Allowance for expected credit losses$15,196 $13,446 
Accrued vacation and bonus47,793 51,045 
Share-based compensation16,305 15,081 
Notes receivable from employees25,309 16,046 
Foreign net operating and capital loss carryforward31,762 20,411 
Foreign tax credit carryforward33,863 25,963 
Deferred compensation3,728 3,636 
Operating lease assets64,515 58,982 
Other, net7,243 6,773 
Total deferred tax assets245,714 211,383 
Deferred tax liabilities
Revenue recognition(3,461)(2,833)
Operating lease liabilities(49,134)(47,923)
Property and equipment, net(13,478)(9,831)
Goodwill and intangible assets(218,610)(212,595)
Total deferred tax liabilities(284,683)(273,182)
Foreign withholding tax(1,363)(1,538)
Valuation allowance(24,481)(9,612)
Net deferred tax liabilities$(64,813)$(72,949)
As of December 31, 2025, the Company had foreign tax credit carryforwards of $33.9 million, all of which will expire between 2031 and 2035. As of December 31, 2025, the Company had foreign net operating loss and capital loss carryforwards of $154.2 million, of which $22.9 million expires over the next 15 years and $131.3 million can be carried forward indefinitely.
The valuation allowance for foreign deferred tax assets was $24.5 million and $9.6 million as of December 31, 2025 and 2024, respectively. The historical profitability of each foreign entity is a factor in determining whether to establish or release a valuation allowance. Pre-tax operating losses on a three-year cumulative basis or lack of sustainable profitability are considered objectively verifiable evidence and will generally outweigh a projection of future taxable income. Certain foreign subsidiaries have experienced cumulative operating losses over a three-year period and, as a result, have recorded a valuation allowance against all or a portion of their deferred tax assets. Based on all available evidence, we have determined that it is more likely than not (defined as a likelihood of greater than 50%) that the deferred tax assets held by these entities will not be realized and, consequently, have recorded valuation allowances on these deferred tax assets.
Changes in the valuation allowance for deferred tax assets for the years ended December 31, 2025, 2024 and 2023 was as follows:
 Year Ended December 31,
 202520242023
Beginning Balance$(9,612)$(6,773)$(6,457)
(Charged) credited to provision for income taxes(14,362)(3,301)(540)
(Charged) credited to other comprehensive income and other(507)462 224 
Ending Balance$(24,481)$(9,612)$(6,773)
The table below summarizes the components of income before income tax provision from continuing operations:
 Year Ended December 31,
 202520242023
Domestic$308,824 $238,241 $247,381 
Foreign62,187 112,530 110,982 
Total$371,011 $350,771 $358,363 
The table below summarizes the components of income tax provision from continuing operations:
 Year Ended December 31,
 202520242023
Current   
Federal$24,600 $30,689 $28,463 
State22,933 18,242 18,878 
Foreign28,862 38,357 38,029 
 76,395 87,288 85,370 
Deferred
Federal19,714 (8,238)6,363 
State(3,235)(3,666)(3,514)
Foreign7,266 (4,701)(4,748)
 23,745 (16,605)(1,899)
Income tax provision
Federal44,314 22,451 34,826 
State19,698 14,576 15,364 
Foreign36,128 33,656 33,281 
$100,140 $70,683 $83,471 
The table below summarizes the components of cash paid for income taxes and tax credits, net of refunds for the year ended December 31, 2025, pursuant to the disclosure requirements of ASU 2023-09:
 
Year Ended
December 31, 2025
Federal$67,960 
State and Local21,477 
Foreign
Canada8,680 
Germany
Germany - Federal11,024 
Germany - Other11,679 
United Kingdom9,701 
Other13,836 
 54,920 
Total$144,357 
Our income tax provision from continuing operations resulted in effective tax rates that varied from the federal statutory income tax rate for the year ended December 31, 2025 as summarized below, pursuant to the disclosure requirements of ASU 2023-09:
 
Year Ended December 31, 2025
AmountPercent
Income tax expense at federal statutory rate$77,912 21.0%
Domestic federal
Tax credits(3,428)(0.9)%
Nontaxable and nondeductible items5,899 1.6%
Cross-border tax laws
Foreign tax credits(9,071)(2.4)%
Other(5,594)(1.5)%
Changes in valuation allowances136 —%
Excess net tax benefits on share-based payments(4,754)(1.3)%
Other386 0.1%
Domestic state and local tax effects, net of federal15,511 4.1%
Foreign tax effects
Germany
Trade taxes4,743 1.3%
Other(1,142)(0.3)%
France
Changes in valuation allowance7,304 2.0%
Other(308)(0.1)%
Other foreign jurisdictions12,523 3.4%
Worldwide changes in unrecognized tax benefits23 —%
Total$100,140 27.0%
In 2025, state and local tax in California, New York State, New York City and New Jersey make up the majority of the domestic state and local income taxes, net of federal category.
Our income tax provision from continuing operations resulted in effective tax rates that varied from the federal statutory income tax rate for the years ended December 31, 2024 and 2023 as summarized below:
 Year Ended December 31,
 20242023
Income tax expense at federal statutory rate$73,662 $75,256 
State income taxes, net of federal benefit13,508 12,562 
Detriment from foreign tax rates6,616 9,418 
Other expenses not deductible for tax purposes6,927 5,793 
Adjustment to reserve for uncertain tax positions348 (797)
Share-based compensation(17,079)(5,422)
U.S. foreign tax credits(12,315)(9,464)
Other adjustments, net(984)(3,875)
Income tax provision$70,683 $83,471 
The income tax provision for the years ended December 31, 2025 and 2024 was $100.1 million and $70.7 million, respectively. The increase in the income tax provision was primarily due to a less favorable tax benefit related to share-based compensation, resulting from fewer non-qualified stock option exercises and an increase in valuation allowances against certain foreign deferred tax assets as compared to the prior year.
We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many city, state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years prior to 2022. We are also no longer subject to state and local or foreign tax examinations by tax authorities for years prior to 2019.
Our liability for uncertain tax positions was $0.5 million and $0.7 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, our accrual for the payment of tax-related interest and penalties was not significant.
Recent Legislation
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA is expected to have immaterial impacts on the current and future year cash flows and effective tax rate.