v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Taxes [Abstract]  
Income Taxes

Note 17. Income Taxes
 

The following table presents components of loss before provision for (benefit from) income taxes for the periods presented (in thousands):

   
Year Ended December 31,
  
   
2025
    
2024
    
2023
  
United States
   $
(368,311
)
   $
(275,057
)
   $
(571,265
)
International
    
2,347
      
1,174
      
1,692
  
Loss before provision for (benefit from) income taxes
   $
(365,964
)
   $
(273,883
)
   $
(569,573
)


Provision for (benefit from) income taxes for the periods presented consisted of (in thousands):

   
Year Ended December 31,
  
   
2025
    
2024
    
2023
  
Current:
                  
U.S. federal
  
$
—
    
$
—
    
$
(150
)
U.S. state
    
11
      
—
      
(56
)
Foreign
    
327
      
(161
)
    
1,966
  
Total current:
    
338
      
(161
)
    
1,760
  
Deferred:
      —
                  
U.S. federal
    
—
      
(431
)
    
(43
)
U.S. state
    
—
      
(151
)
    
(21
)
Total deferred:
    
—
      
(582
)
    
(64
)
Total provision for (benefit from) income taxes
  
$
338
    
$
(743
)
  
$
1,696
  
 

As previously disclosed for the years ended December 31, 2024 and December 31, 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
 
   
Year Ended December 31,
   
2024
    
2023
  
U.S. federal provision at statutory rate
    
21.0
%
    
21.0
%
State income taxes
    
5.6
   
5.2
Foreign taxes
    
0.1
   
(0.1
)
Tax credits
    
0.9
   
1.0
Fair value of financial instruments
    
0.1
   
0.1
Stock-based compensation expense
    
(6.9
)
    
(3.7
)
Executive compensation
    
(2.0
)
    
(0.5
)
Other permanent items
    
0.0
      
(0.2
)
Unrecognized tax benefits
    
0.0
      
0.3
Change in valuation allowance
    
(18.5
)
    
(23.4
)
Effective tax rate
    
0.3
%
    
(0.3
%)
 

The following table presents a reconciliation of the statutory federal rate and our effective tax rate (after the adoption of ASU 2023-09):

   
Year ended December 31, 2025
  
   
Amount
    
Percentage
  
Income taxes (benefit) at statutory federal rate
    
(76,852
)
    
21.0
%
State and local taxes, net of federal income tax effect (1)
    
11
      
0.0
%
Foreign tax effects:
                
Other Foreign
    
(166
)
    
0.1
%
Effect of cross-border tax laws:
                
Global intangible low-taxed income
    
1,029
      
(0.3
)%
Tax credits:
                
R&D Credit
    
(1,479
)
    
0.4
%
Changes in valuation allowance (2)
    
73,860
      
(20.2
)%
Nontaxable or nondeductible items:
                
Excess Tax (Benefit) or Deficit on Stock Awards
    
7,272
      
(2.0
)%
Deferred Compensation FV Adjustment
    
(6,023
)
    
1.7
%
Other Nontaxable or Nondeductible Items
    
2,421
      
(0.7
)%
Changes in unrecognized tax benefits
    
296
      
(0.1
)%
Other Adjustments:
                
Other Adjustments
    
(31
)
    
0.0
%
Provision / (benefit) for income taxes
    
338
      
(0.1
)%

(1)
 The state jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California and New Jersey.

(2)
In 2024, the change in valuation allowance related to the state jurisdictions was included in the change in valuation allowance. In 2025, this amount is net in the State and local taxes.
 

The Company’s deferred income tax assets and liabilities as of December 31, 2025 and 2024 were as follows (in thousands):

   
Year Ended December 31,
  
   
2025
    
2024
  
Deferred tax assets:
            
Net operating loss carry forward
  
$
354,545
    
$
246,178
  
Capital Loss
     2,092       —  
Tax credits
    
30,765
      
29,595
  
Accruals and reserves
    
2,505
      
881
  
Stock-based compensation expense
    
2,520
      
6,134
  
Lease liability (ASC 842)
    
4,057
      
8,666
  
Section 174 R&D capitalization
    
64,179
      
101,876
  
Inventory reserves
    
21,279
      
9,113
  
Depreciation and amortization
    
18,138
      
15,380
  
Basis difference on debt obligation
    
20,237
      
9,692
  
Deferred interest expense
    
9,097
      
3,698
  
Unrealized Gain
    
3,546
      
3,451
  
Other
    
—
      
515
  
Total deferred tax assets
    
532,960
      
435,179
  
Valuation allowance
    
(528,953
)
    
(427,222
)
Total deferred tax asset
    
4,007
   
7,957
  
Deferred tax liabilities:
                
Other
    
378
      
—
  
ROU asset (ASC 842)
    
3,629
      
7,957
  
Total deferred tax liabilities
    
4,007
   
7,957
  
Net deferred tax assets (liabilities)
  
$
—
    
$
—
  


The amounts of cash income taxes paid by the Company were as follows:

 
  
Year ended
December 31, 2025
  
Federal
  
$
—
  
State
    
—
  
Massachusetts
     3  
New Jersey
     12  
Other states
     —  
Foreign:
        
Israel
    
44
  
India
    
208
  
Germany
    
185
  
Other Foreign
    
27
  
Total
  
$
479
  


The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. Due to the history of losses incurred by the Company, management believes it is not more likely than not that substantially all of the U.S. domestic deferred tax assets can be realized. Accordingly, the Company established and recorded a full valuation allowance on its U.S. domestic net deferred tax assets of $529.0 million and $427.2 million as of December 31, 2025 and 2024, respectively. The valuation allowance increased by $101.7 million in 2025.
 

No deferred tax liabilities for foreign withholding taxes have been recorded relating to the earnings of the Company’s foreign subsidiaries since all such earnings are intended to be indefinitely reinvested.
 

Utilization of the net operating loss and tax credit carryforwards is subject to a substantial annual limitation due to the “ownership change” limitations provided by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“IRC”) and other similar state provisions. Any annual limitation may result in the expiration of net operating loss and tax credit carryforwards before utilization. As of December 31, 2025, the Company had $1.3 billion of U.S. federal net operating loss carryforwards available to reduce future taxable income, of which $1.2 billion will be carried forward indefinitely for U.S. federal tax purposes. The federal net operating loss carryforwards, if not utilized, will begin to expire in 2035. The Company also has $1.2 billion of U.S. state net operating loss carryforwards. State net operating loss carryforward, if not utilized, will begin to expire on various dates starting 2028.
 

The Company also has federal and state research and development (“R&D”) tax credit carryforwards of $31.2 million and $7.3 million, respectively, as of December 31, 2025. The federal research credit carryforwards will begin expiring in 2036 unless previously utilized. A portion of the state research credit carryforwards will begin expiring in 2026 and the California research credits do not expire.
 

On July 4, 2025, the current administration signed the One Big Beautiful Bill Act (“OBBBA”), which includes comprehensive U.S. corporate tax legislation. The legislation includes the modification and permanent extension of prior tax law under the Tax Cuts and Jobs Act and the introduction of new provisions such as permanently reinstating the immediate deduction of domestic specified research and experimental expenditures, permanent changes in the limitations for deducting business interest expense and permanently restoring bonus depreciation allowances. Due to our valuation allowance on deferred tax assets, this tax law change did not result in a material impact to our consolidated financial statements.


A reconciliation of the beginning and ending amount of unrecognized tax benefits as follows:
   
December 31,
  
   
2025
    
2024
  
Beginning at December 31, 2024
  
$
7,474
    
$
6,828
  
Prior Year Additions
    
—
      
70
  
Reversal of Prior Year Positions
    
(106
)
    
(677
)
Current Year Additions
    
404
      
1,253
  
Ending Balance at December 31, 2025
  
$
7,772
    
$
7,474
  
 

The Company has considered the amounts and probabilities of the outcomes that can be realized upon ultimate settlement with the tax authorities and determined unrecognized tax benefits primarily related to credits should be established as noted in the summary roll forward above. Our unrecognized gross tax benefits would not reduce the annual effective tax rate if recognized because we have recorded a valuation allowance on our deferred tax assets.
 

As of December 31, 2025, the Company does not believe that it is reasonably possible that its unrecognized tax benefits would significantly change in the following 12 months.  Our policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on its consolidated balance sheet. To date, we have not recognized any interest and penalties in its consolidated statements of operations, nor has it accrued for or made payments for interest and penalties.