Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes:

The components of the income tax provision (benefit) are as follows (in thousands):

	December 31,
	2025			2024			2023
Federal:
Current	$	1,597		$	(1,286	)	$	8,040
Deferred		39,835			(880	)		1,467
		41,432			(2,166	)		9,507
State:
Current		(2,739	)		1,144			770
Deferred		12,351			(1,250	)		1,772
		9,612			(106	)		2,542
Total	$	51,044		$	(2,272	)	$	12,049

The Company files its tax return on a consolidated basis with its subsidiaries, and its affiliated professional contractors file tax returns on an individual basis.

The effective tax rate was 23.6%, 2.2%, and (24.9)% for the years ended December 31, 2025, 2024 and 2023, respectively. The effective tax rate for the year ended December 31, 2024 includes $12.5 million of expense related to non-cash impairment charges related to goodwill. The effective tax rate for the year ended December 31, 2023 includes $17.8 million of expense related to non-cash impairment charges related to goodwill and a cost-method investment.

The differences between the effective rate and the United States federal income tax statutory rate are as follows:

	December 31, 2025(1)
	Amount			Percent
Tax at statutory rate	$	45,451			21.00	%
State income tax, net of federal benefit(2)		9,208			4.25
Non-deductible expenses
Executive compensation		3,317			1.53
Equity compensation adjustments		(662	)		(0.31	)
Other non-deductible expenses		451			0.21
Change in accrual estimates relating to      uncertain tax positions		(1,614	)		(0.75	)
Change in valuation allowance		(1,289	)		(0.60	)
Tax benefit related to divested operations		(3,969	)		(1.83	)
Other, net		151			0.08
Income tax provision and effective tax rate	$	51,044			23.58	%

(1) This table has been presented in conformity with new accounting guidance for income tax disclosures. See Note 2 - Summary of Significant Accounting Policies for more information.

(2) State taxes in Tennessee, California and Colorado made up the majority (greater than 50 percent) of the tax effect in this category.

	December 31,
	2024			2023
Tax at statutory rate		21.00	%		21.00	%
State income tax, net of federal benefit		3.26			2.79
Non-deductible expenses		(1.39	)		(4.43	)
Equity compensation adjustments		(1.80	)		(3.98	)
Change in accrual estimates relating to    uncertain tax positions		(0.22	)		0.67
Change in valuation allowance		(6.35	)		(13.82	)
Goodwill impairment		(12.38	)		(26.67	)
Other, net		0.12			(0.48	)
Effective tax rate		2.24	%		(24.92	)%

During the year ended December 31, 2025, the Company paid income taxes for all jurisdictions as follows:

	December 31,
	2025
Federal	321
State:
Texas		1,207
Other		187
State total		1,394
Total	$	1,715

During the years ended December 31, 2024 and 2023, the Company paid income taxes for all jurisdictions of $4.7 million and $30.8 million, respectively.

All of the Company’s deferred tax assets and liabilities are classified as long-term. The significant components of deferred income tax assets and liabilities are as follows (in thousands):

	December 31,
	2025			2024
Allowance for uncollectible accounts	$	6,512		$	122,742
Reserves and accruals		62,699			68,128
Stock-based compensation		2,567			1,691
Operating loss and other carryforwards		118,405			47,869
Capital loss carryforwards		14,146			412,392
Operating lease assets		9,694			12,332
Property and equipment		1,686			2,734
Other		1,232			914
Deferred tax assets before valuation    allowance		216,941			668,802
Less: Valuation allowance		(29,654	)		(425,395	)
Deferred tax assets, net of valuation    allowance		187,287			243,407
Gross deferred tax liabilities:
Amortization		(162,181	)		(161,983	)
Operating lease liabilities		(8,184	)		(9,687	)
Other		(24	)		(2,128	)
Total deferred tax liabilities		(170,389	)		(173,798	)
Net deferred tax assets	$	16,898		$	69,609

The Company’s net deferred tax assets were $16.9 million as of December 31, 2025, as compared to $69.6 million at December 31, 2024. The decrease in net deferred tax assets of $52.7 million during the year ended December 31, 2025 was primarily related to decreases for capital loss carryforwards of $398.2 million and allowance for uncollectible accounts of $116.2 million, partially offset by increases for changes in the valuation allowance of $395.7 million and operating loss carryforwards of $70.5 million. The changes in the valuation allowance of $395.7 million and capital loss carryforwards of $398.2 million both primarily related to the effect of expiring capital loss carryforwards.

For the year ended December 31, 2025, an income tax benefit of $0.8 million was recognized for windfalls associated with stock-based compensation. For the years ended December 31, 2024 and 2023, income tax expense of $1.8 million and $1.9 million, respectively, was recognized for excess tax deficiencies associated with stock-based compensation.

The Company has $59.3 million of capital loss carryforwards as of December 31, 2025, which expire in 2026 through 2029. As of December 31, 2025, management has determined that it is more likely than not that the tax benefits related to these carryforwards will not be realized and has recorded a full valuation allowance against the related deferred tax assets. Additionally, the Company had net operating loss carryforwards for federal and state tax purposes totaling $355.6 million, $72.3 million and $56.4 million at December 31, 2025, 2024 and 2023, respectively. With respect to the December 31, 2025 balance, $23.1 million expires at various times from 2033 through 2045, and $332.5 million does not expire.

As of December 31, 2025, 2024 and 2023, the Company’s liability for uncertain tax positions, excluding accrued interest and penalties, was $1.0 million, $2.4 million and $2.4 million, respectively. As of December 31, 2025, the Company had $1.0 million of uncertain tax positions that, if recognized, would favorably impact its effective tax rate.

The following table summarizes the activity related to the Company’s liability for uncertain tax positions for the years ended December 31, 2025, 2024 and 2023 (in thousands):

	Years Ended December 31,
	2025			2024			2023
Balance at beginning of year	$	2,402		$	2,449		$	2,838
(Decreases) increases related to prior year tax positions		—			(47	)		70
Increases related to current year tax    positions		—			—			200
Decreases related to lapse of statutes    of limitation		(1,379	)		—			(659	)
Balance at end of year	$	1,023		$	2,402		$	2,449

The Company includes interest and penalties related to income tax liabilities in income tax expense. During the year ended December 31, 2025, 2024 and 2023, the Company included $0.2 million, $0.3 million and $0.2 million, respectively, of interest and penalties in income tax expense. At December 31, 2025 and 2024, the Company's accrued liability for interest and penalties related to income tax liabilities totaled $0.3 million and $0.5 million, respectively.

The Company is currently subject to U.S. Federal and various state income tax examinations for the tax years 2022 through 2024.