Income Taxes

12 Months Ended

Dec. 31, 2025

The components of income before taxes for the years ended December 31, 2025 and 2024 were as follows:


(in thousands)	2025		2024
United States	$	162,263	$	64,783
International	628		2,534
Total	$	162,891	$	67,317

The components of income tax expense (benefit) for the years ended December 31, 2025 and 2024 were as follows:


(in thousands)	2025		2024
Current tax expense
Federal	$	19,877	$	2,869
Foreign	295		832
State	6,299		1,999
Total current tax expense	26,471		5,700
Deferred tax expense
Federal	3,830		(13,418)
Foreign	(19)		(20)
State	(521)		(3,467)
Total deferred tax expense	3,290		(16,905)
Income tax expense (benefit)	$	29,761	$	(11,205)

The components of the net deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:


(in thousands)	2025		2024
Deferred tax assets:
Net operating loss carryforwards	$	816	$	7,928
Allowance for credit losses	10,130		7,691
Equity based compensation	767		865
Research and experimental expenditures	479		735
Lease liability	217		246
Credit carryforwards	433		61
Accruals	1,697		1,668
Nondeductible interest	—		2,070
Other	6		7
Total deferred tax assets	14,545		21,271
Valuation allowance	—		(3,742)
Deferred tax liabilities:
Depreciation and amortization	(599)		(395)
Right-of-use asset	(181)		(229)
Prepaids	(150)		—
Total deferred tax liabilities	(930)		(624)
Net deferred tax asset	$	13,615	$	16,905

The Company has elected to prospectively adopt the guidance in ASU No, 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures. The reconciliation of the federal statutory income tax rate to the Company's provision for income taxes for the year ended December 31, 2025 in accordance with the guidance in ASU No. 2023-09 is as follows:


	2025
(in thousands, except percentages)	Amount		Rate
U.S. federal statutory income tax rate	$	34,207	21.0	%
State and local income taxes (net of federal effect)1	4,459		2.7	%
Tax credits
Research credits	(2,314)		(1.4)	%
Tax effects of equity based compensation	(5,653)		(3.5)	%
Nontaxable and nondeductible items	(1,020)		(0.6)	%
Other reconciling items	82		0.1	%
Effective income tax rate	$	29,761	18.3	%

1. State taxes from California, Illinois, New Jersey, New York, Pennsylvania and Georgia made up the majority (greater than 50%) of the tax effect in this category.

The reconciliation of the federal statutory income tax rate to the Company’s provision for income taxes for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows:


	2024
Computed "expected" tax benefit	21.0	%
State income tax benefit, net of federal tax effect	3.5
Nondeductible equity based compensation	(1.8)
Other permanent differences	1.2
Change in valuation allowance	(41.9)
Foreign rate differentials and other	1.4
Income tax benefit	(16.6)	%

As of December 31, 2025, we had state tax effected net operating loss and credit carryforwards of approximately $0.8 million and $0.4 million, respectively. The state net operating losses will begin to expire in 2033. The state credit carryforwards will begin to expire in 2036.

Management assesses the available positive and negative evidence to estimate where sufficient future taxable income will be generated to permit use of existing deferred tax assets. During the year ended December 31, 2024, we identified significant pieces of positive evidence, including our three-year cumulative taxable income, which is objective and verifiable, and consideration of our expected future taxable income. Based on our assessment, we concluded as of December 31, 2024 that it was more likely than not that our U.S. federal, state, and foreign deferred tax assets are realizable, and as a result do not hold a valuation allowance against U.S. federal, state, and foreign deferred tax assets. We maintain this position as of December 31, 2025.

As of December 31, 2025, we maintained a valuation allowance of $0 recorded against foreign deferred tax assets. The change in valuation allowance was ($3.7) million and ($28.7) million for the years ended December 31, 2025 and 2024, respectively.

We file income tax returns in U.S. federal and state jurisdictions, Canada, and certain countries in Europe. We do not believe a material uncertain tax position exists as of December 31, 2025. We recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense (benefit). As of December 31, 2025, we had no accrued interest and penalties. We are subject to exam for tax periods after 2021 with limited exceptions.

We have determined that our foreign earnings are expected to be indefinitely reinvested in the foreseeable future, and therefore, no deferred tax liability has been recognized on these earnings. The amount of the unrecognized tax liability is not significant.

- Definition

The entire disclosure for income tax.

+ References

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-Topic 942
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

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