Income Taxes

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate ("ETR"), adjusted for discrete items, if any, that arise during the period. In calculating the provision for interim income taxes, an estimated annual ETR is applied to year-to-date ordinary income. At the end of each interim period, the Company updates its estimate of the annual ETR expected to be applicable for the full fiscal year.

The income tax provision ETR for the three months ended September 30, 2025 and 2024 was (4.63)% and 0.83%, respectively, and for the nine months ended September 30, 2025 and 2024 was (3.97)% and (0.79)%, respectively. The decrease in the ETR for the three months ended September 30, 2025, compared to the same period in 2024, was primarily due to the passage of the One Big Beautiful Bill Act in July of 2025 which reduced the overall tax expense. The increase in the ETR for the nine months ended September 30, 2025, compared to the same period in 2024, was primarily due to higher federal and state income taxes resulting from higher pre-tax income.

The Company's ETR for the three and nine months ended September 30, 2025 and 2024 remained below the U.S. federal statutory rate primarily due to the impact of the full valuation allowance. Based upon the Company’s historical operating losses, despite the reported positive pre-tax income during the three and nine months ended September 30, 2025, management concluded that the evidence of recent profitability was not yet sufficient to overcome the negative evidence of cumulative losses in recent years. As a result, the Company has provided a valuation allowance against the deferred tax assets that will not be realized as of September 30, 2025 and 2024.

As of September 30, 2025 and 2024, the Company has no uncertain tax positions or interest and penalties accrued related to income taxes.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act") was signed into law. The Act makes permanent key elements of the U.S. Tax Cuts and Jobs Act of 2017, including bonus depreciation and domestic research cost expensing, and interest deductibility. The Company is currently evaluating the impact of the Act upon our future effective tax rate, tax liabilities, and cash taxes.