Income Taxes

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

Income Tax Expense

For the three months ended September 30, 2025, the Company recorded an income tax expense of $5.2 million (2024 — $2.4 million). The Company’s effective tax rate of 18.7% for the three months ended September 30, 2025 reflects the geographic allocation of income earned in taxing jurisdictions and reflects a decrease in the valuation allowance.

For the nine months ended September 30, 2025, the Company recorded an income tax expense of $13.7 million (2024 — tax expense of $3.5 million). The Company’s effective tax rate of 24.1% for the nine months ended September 30, 2025, reflects the geographic allocation of income earned in taxing jurisdictions and also reflects a decrease in the valuation allowance, withholding taxes and a tax benefit related to share-based compensation.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted, introducing substantial changes to U.S. tax law that will take effect for the Company beginning in fiscal year 2026. Key provisions of the Act include revisions to Interest Deductibility (IRC §163(j)), Bonus Depreciation, and Section §179. The Company is currently evaluating the Act’s potential impact on its Consolidated Financial Statements and will update its assessment as further guidance becomes available.

As of September 30, 2025, the Company’s Condensed Consolidated Balance Sheets included net deferred income tax assets of $12.7 million (December 31, 2024 — $14.5 million). Realization of net deferred tax assets is dependent upon generation of sufficient taxable income in future years to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of September 30, 2025, the Company’s Condensed Consolidated Balance Sheets also included deferred tax liabilities of $12.5 million (December 31, 2024 — $12.5 million) primarily related to foreign withholding taxes associated with the remaining balance of non-repatriated historical earnings that will not be indefinitely reinvested outside of Canada.