Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2025 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Schedule of Components of Pretax Income (Loss) Attributable to Domestic and Foreign Operations |
The components of pretax income (loss) attributable to domestic and foreign operations are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
25,333 |
|
|
$ |
46,557 |
|
|
$ |
(80,486 |
) |
|
Foreign |
|
|
(3,804 |
) |
|
|
(2,243 |
) |
|
|
(4,061 |
) |
|
Pretax income (loss) |
|
$ |
21,529 |
|
|
$ |
44,314 |
|
|
$ |
(84,547 |
) |
|
|
| Schedule of Components of Income Tax Provision |
The Company’s income tax provision consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current provision: |
|
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
(919 |
) |
|
$ |
38,378 |
|
|
$ |
41,804 |
|
|
State |
|
|
2,263 |
|
|
|
5,217 |
|
|
|
10,053 |
|
|
Total current provision |
|
|
1,344 |
|
|
|
43,595 |
|
|
|
51,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred provision (benefit): |
|
|
|
|
|
|
|
|
|
|
Federal |
|
|
13,703 |
|
|
|
(24,566 |
) |
|
|
(36,253 |
) |
|
State |
|
|
4,794 |
|
|
|
(5,955 |
) |
|
|
(10,080 |
) |
|
Foreign |
|
|
1,338 |
|
|
|
115 |
|
|
|
(502 |
) |
|
Change in valuation allowance |
|
|
(1,338 |
) |
|
|
(115 |
) |
|
|
502 |
|
|
Total deferred expense (benefit) |
|
|
18,497 |
|
|
|
(30,521 |
) |
|
|
(46,333 |
) |
|
Total income tax provision |
|
$ |
19,841 |
|
|
$ |
13,074 |
|
|
$ |
5,524 |
|
|
|
| Schedule of Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate |
A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 is as follows (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
|
|
|
|
|
|
U.S. federal statutory tax rate |
$ |
4,521 |
|
|
|
21.0 |
% |
State and local income tax, net of federal (national) income tax effect (1) |
|
5,716 |
|
|
|
26.6 |
|
Foreign tax effects |
|
|
|
|
|
Foreign Jurisdiction (China) |
|
|
|
|
|
Adjustments to deferred attributes |
|
(781 |
) |
|
|
(3.6 |
) |
Changes in valuation allowance |
|
1,326 |
|
|
|
6.2 |
|
Other |
|
(234 |
) |
|
|
(1.1 |
) |
Foreign Jurisdiction (Cayman) |
|
|
|
|
|
Foreign tax rate differential |
|
481 |
|
|
|
2.2 |
|
Other foreign jurisdictions |
|
7 |
|
|
|
— |
|
Effects of changes in tax laws or rates enacted in the current period |
|
— |
|
|
|
— |
|
Effects of cross-border tax laws |
|
— |
|
|
|
— |
|
Tax credits |
|
|
|
|
|
Research and development tax credits |
|
(7,496 |
) |
|
|
(34.8 |
) |
Changes in valuation allowances |
|
— |
|
|
|
— |
|
Nontaxable or nondeductible items |
|
|
|
|
|
Executive compensation |
|
(4,489 |
) |
|
|
(20.8 |
) |
Stock-based compensation |
|
19,137 |
|
|
|
88.9 |
|
Transaction costs |
|
495 |
|
|
|
2.3 |
|
Meals and entertainment |
|
690 |
|
|
|
3.2 |
|
Other |
|
7 |
|
|
|
— |
|
Changes in unrecognized tax benefits |
|
699 |
|
|
|
3.2 |
|
Other adjustments |
|
(238 |
) |
|
|
(1.1 |
) |
Effective Tax Rate |
$ |
19,841 |
|
|
|
92.2 |
% |
(1) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in the category include Illinois, Pennsylvania, New Jersey, and Wisconsin. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate for the years ended December 31, 2024 and 2023 (in thousands, except percentages:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax provision (benefit) at statutory rate |
$ |
9,306 |
|
|
|
21.0 |
% |
|
$ |
(17,755 |
) |
|
|
21.0 |
% |
Executive compensation |
|
20,788 |
|
|
|
46.9 |
|
|
|
12,555 |
|
|
|
(14.8 |
) |
Stock-based compensation |
|
(11,386 |
) |
|
|
(25.7 |
) |
|
|
(3,844 |
) |
|
|
4.5 |
|
Research and experimentation credit |
|
(6,950 |
) |
|
|
(15.7 |
) |
|
|
(6,920 |
) |
|
|
8.2 |
|
Fair value of warrants |
|
(3,019 |
) |
|
|
(6.8 |
) |
|
|
3,170 |
|
|
|
(3.7 |
) |
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
16,255 |
|
|
|
(19.2 |
) |
Impact of foreign operations |
|
653 |
|
|
|
1.5 |
|
|
|
1,794 |
|
|
|
(2.1 |
) |
Valuation allowance |
|
(115 |
) |
|
|
(0.3 |
) |
|
|
502 |
|
|
|
(0.6 |
) |
State and local taxes-net of federal income tax effect |
|
(583 |
) |
|
|
(1.3 |
) |
|
|
(22 |
) |
|
|
0.0 |
|
Other nondeductible expenses |
|
2,195 |
|
|
|
5.0 |
|
|
|
836 |
|
|
|
(1.0 |
) |
Uncertain tax positions |
|
926 |
|
|
|
2.1 |
|
|
|
396 |
|
|
|
(0.5 |
) |
Foreign rate difference |
|
(67 |
) |
|
|
(0.2 |
) |
|
|
(164 |
) |
|
|
0.2 |
|
Other—net |
|
1,326 |
|
|
|
3.0 |
|
|
|
(1,279 |
) |
|
|
1.5 |
|
Income tax provision |
$ |
13,074 |
|
|
|
29.5 |
% |
|
$ |
5,524 |
|
|
|
(6.5 |
)% |
|
| Schedule of Cash Paid For Income Taxes, Net of Refunds Received, By Jurisdiction |
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 is as follows (in thousands):
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
|
|
|
|
|
|
Federal |
|
$ |
22,200 |
|
|
State |
|
|
6,395 |
|
|
Foreign |
|
|
— |
|
|
Income taxes paid, net of refunds |
|
$ |
28,595 |
|
|
|
| Schedule of Deferred Income Tax Assets and Liabilities |
The approximate income tax effect of each type of temporary difference giving rise to deferred income tax assets and liabilities as of December 31, 2025 and 2024 was as follows (in thousands):
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
|
2024 |
|
Deferred income tax assets: |
|
|
|
|
|
Stock-based compensation |
$ |
33,226 |
|
|
$ |
35,539 |
|
Capitalized R&E—net of amortization |
|
7,359 |
|
|
|
43,083 |
|
Operating lease liabilities |
|
14,454 |
|
|
|
13,142 |
|
Net operating losses—foreign |
|
12,266 |
|
|
|
10,468 |
|
Accrued compensation |
|
10,000 |
|
|
|
8,203 |
|
Sales allowances and doubtful accounts |
|
946 |
|
|
|
1,160 |
|
Research and experimental credit |
|
9,491 |
|
|
|
785 |
|
Net operating losses—domestic (federal) |
|
4,617 |
|
|
|
— |
|
Net operating losses—domestic (state) |
|
2,388 |
|
|
|
— |
|
Other |
|
3,262 |
|
|
|
1,563 |
|
Total deferred income tax assets |
|
98,009 |
|
|
|
113,943 |
|
Valuation allowance for deferred tax asset |
|
(12,266 |
) |
|
|
(10,468 |
) |
Net deferred income tax assets |
|
85,743 |
|
|
|
103,475 |
|
Deferred income tax liabilities: |
|
|
|
|
|
Intangible asset amortization |
|
258,315 |
|
|
|
234,362 |
|
Software, equipment and property depreciation and amortization |
|
6,165 |
|
|
|
16,813 |
|
Deferred contract costs |
|
11,880 |
|
|
|
10,149 |
|
Operating lease assets |
|
8,694 |
|
|
|
6,995 |
|
Total deferred income tax liabilities |
|
285,054 |
|
|
|
268,319 |
|
Net deferred income tax liabilities |
$ |
199,311 |
|
|
$ |
164,844 |
|
|
| Schedule of Change in Unrecognised Tax Benefits Excluding Interest and Penalties |
The change in unrecognized tax benefits excluding interest and penalties for the years ended December 31, 2025 and 2024 was as follows (in thousands):
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
|
2024 |
|
Balance at beginning of year |
$ |
6,192 |
|
|
$ |
4,415 |
|
Additions based on tax positions related to the current year |
|
1,628 |
|
|
|
1,700 |
|
Additions based on adjustments to tax positions related to prior years |
|
1,501 |
|
|
|
862 |
|
Reductions based on adjustments to tax positions related to prior years |
|
(470 |
) |
|
|
(221 |
) |
Reductions as a result of a lapse of statutes of limitations |
|
(798 |
) |
|
|
(564 |
) |
Balance at end of year |
$ |
8,053 |
|
|
$ |
6,192 |
|
|
| Summary of Major Jurisdictions Subject to Examination by the Relevant Tax Authorities and Open Tax Years |
With few US State exceptions, the major jurisdictions subject to examination by the relevant taxing authorities and open tax years, stated as the Company’s fiscal years, are as follows:
|
|
|
Jurisdiction |
|
Open Tax Years |
US Federal |
|
2022 - 2024 |
US States |
|
2022 - 2024 |
China |
|
2022 - 2024 |
Canada |
|
2022 |
|