Income Taxes

6 Months Ended

Jun. 30, 2026

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 June 30, 2026 and 2025 was 2.61% and 7.31%, respectively. The income tax provision ETR for the six months ended June 30, 2026 and 2025 was 7.68% and 7.16%, respectively. The decrease in the ETR for the three months ended June 30, 2026 and increase in ETR for the six months ended June 30, 2026, compared to the same periods in 2025, was primarily due to a decrease in pre-tax book income in the three and six months ended June 30, 2026 as compared to the income for the same periods in 2025.

The Company's ETR for the six months ended June 30, 2026 and 2025 remained below the U.S. federal statutory rate primarily due to the impact of the full valuation allowance. As of June 30, 2026, the Company maintains a valuation allowance against certain deferred tax assets, primarily related to net operating loss carryforwards and other deductible temporary differences. The realizability of deferred tax assets is assessed each reporting period based on all available positive and negative evidence.

The Company is now in a cumulative three-year income position, as some significant losses incurred in prior years are no longer included in the calculation and management currently forecasts profitability in subsequent quarters and cumulative pretax income for the full fiscal year. However, for the six months ended June 30, 2026, the Company incurred a pretax loss and continues to maintain a full valuation allowance.

While this positive evidence has not yet outweighed the historical negative evidence as of June 30, 2026, continued achievement of forecasted results could result in a partial or full release of the valuation allowance in a future interim period. Any such release, if recognized, could materially affect income tax expense and the effective tax rate.

As of June 30, 2026 and 2025, the Company had no uncertain tax positions or interest and penalties accrued related to income taxes.