v3.25.4

Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of loss before the provision for income taxes are as follows (in thousands):
|  |  |  |  |  | Years Ended December 31,
|  |  |  |  |  | 2025 |  | 2024 |  | 2023
United States |  |  |  |  |  | $ | (91,633) |  |  | $ | (29,969) |  |  | $ | (310,243) |
Foreign |  |  |  |  |  | 7,229 |  |  | 3,612 |  |  | 4,200 |
Total |  |  |  |  |  | $ | (84,404) |  |  | $ | (26,357) |  |  | $ | (306,043) |
The provision for income taxes consists of the following (in thousands):
|  |  |  |  |  | Years Ended December 31,
|  |  |  |  |  | 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |  |  |  |  |  |
Federal |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  |  |  |  | 241 |  |  | (13) |  |  | 246 |
Foreign |  |  |  |  |  | 2,387 |  |  | 1,182 |  |  | 1,640 |
Total current |  |  |  |  |  | 2,628 |  |  | 1,169 |  |  | 1,886 |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  |  |  |  | — |  |  | — |  |  | — |
State |  |  |  |  |  | — |  |  | — |  |  | — |
Foreign |  |  |  |  |  | 108 |  |  | (323) |  |  | 8 |
Total deferred |  |  |  |  |  | 108 |  |  | (323) |  |  | 8 |
Total provision for income taxes |  |  |  |  |  | $ | 2,736 |  |  | $ | 846 |  |  | $ | 1,894 |
A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate is as follows (in thousands):
| Years Ended December 31,
| 2025 |  | 2024 |  | 2023
| Amounts | % |  | Amounts | % |  | Amounts | %
U.S. federal statutory income tax rate | $ | (17,725) |  | 21.0 | % |  | $ | (5,534) |  | 21.0 | % |  | $ | (64,270) |  | 21.0 | %
Domestic federal |  |  |  |  |  |  |  |
Tax credits |  |  |  |  |  |  |  |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |
Non-deductible compensation | 15,113 |  | (17.9) | % |  | 4,654 |  | (17.7) | % |  | 6,295 |  | (2.1) | %
ISO/ESPP disqualifying dispositions | (6,544) |  | 7.8 | % |  | (221) |  | 0.8 | % |  | (316) |  | 0.1 | %
Loss on debt borrowings | 16,724 |  | (19.8) | % |  | 5,458 |  | (20.7) | % |  | — |  | — | %
Loss on SK Equity Transaction | — |  | — | % |  | — |  | — | % |  | 11,811 |  | (3.9) | %
Other nontaxable or nondeductible items | 601 |  | (0.7) | % |  | 403 |  | (1.5) | % |  | 654 |  | (0.2) | %
Excess tax (benefits)/deficits of stock-based compensation | (31,552) |  | 37.4 | % |  | 5,992 |  | (22.7) | % |  | 1,828 |  | (0.6) | %
Cross-border tax laws |  |  |  |  |  |  |  |
Global intangible low-taxed income | — |  | — | % |  | 428 |  | (1.6) | % |  | 86 |  | — | %
Changes in valuation allowance | 25,008 |  | (29.6) | % |  | (10,288) |  | 39.0 | % |  | 43,271 |  | (14.1) | %
Other |  |  |  |  |  |  |  |
Tax on noncontrolling interest | (272) |  | 0.3 | % |  | (425) |  | 1.6 | % |  | 1,222 |  | (0.4) | %
Domestic state and local income taxes, net of federal effect | 241 |  | (0.3) | % |  | (13) |  | — | % |  | 246 |  | (0.1) | %
Foreign tax effects |  |  |  |  |  |  |  |
India |  |  |  |  |  |  |  |
Statutory tax rate difference between India and U.S. | 182 |  | (0.2) | % |  | 290 |  | (1.1) | % |  | 18 |  | — | %
Prior Year return-to-provision true-up | 375 |  | (0.4) | % |  | 56 |  | (0.2) | % |  | 239 |  | (0.1) | %
Other | 14 |  | — | % |  | (68) |  | 0.3 | % |  | (58) |  | — | %
Japan |  |  |  |  |  |  |  |
Change in valuation allowance | (407) |  | 0.5 | % |  | (1,090) |  | 4.1 | % |  | 240 |  | (0.1) | %
Prior Year return-to-provision true-up | 367 |  | (0.4) | % |  | 1,034 |  | (3.9) | % |  | — |  | — | %
Other | 51 |  | (0.1) | % |  | 188 |  | (0.7) | % |  | 13 |  | — | %
Korea |  |  |  |  |  |  |  |
Statutory tax rate difference between Korea and U.S. | 496 |  | (0.6) | % |  | 329 |  | (1.2) | % |  | 243 |  | (0.1) | %
Prior Year return-to-provision true-up | (56) |  | 0.1 | % |  | (287) |  | 1.1 | % |  | (222) |  | 0.1 | %
Other | 51 |  | (0.1) | % |  | (25) |  | 0.1 | % |  | 26 |  | — | %
Other foreign jurisdictions | 69 |  | (0.1) | % |  | (35) |  | 0.1 | % |  | 568 |  | (0.2) | %
Provision for income taxes/Effective tax rate | $ | 2,736 |  | (3.2) | % |  | $ | 846 |  | (3.2) | % |  | $ | 1,894 |  | (0.6) | %
1 For the year ended December 31, 2025, state taxes in Massachusetts and West Virginia comprise the majority of the state and local income taxes, net of federal effect category. For the year ended December 31, 2024, state taxes in Massachusetts and New York comprise the majority of the state and local income taxes, net of federal effect category. For the year ended December 31, 2023, state taxes in Oregon and New Jersey comprise the majority of the state and local income taxes, net of federal effect category. 2 None of the remaining foreign jurisdictions for which there are foreign tax effects reconciling items meet the 5% threshold in any of the years presented. There are no additional reconciling items by nature in any of the remaining foreign jurisdictions that meet the 5% threshold in any of the years presented. On July 4, 2025, the OBBBA was signed into law. The legislation includes a broad range of tax reform provisions affecting businesses including, but not limited to, the reinstatement of 100% bonus depreciation, immediate expensing of domestic research and development costs, and revisions to the U.S. taxation of profits derived from international operations. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have assessed the effects of the new tax legislation, including immediate expensing of domestic research and development expenditures, and the results have been reflected in this Annual Report on Form 10-K. For the year ended December 31, 2025, we recognized a provision for income taxes of $2.7 million on a pre-tax loss of $84.4 million, for an effective tax rate of (3.2)%. For the year ended December 31, 2024, we recognized a provision for income taxes of $0.8 million on a pre-tax loss of $26.4 million, for an effective tax rate of (3.2)%. For the year ended December 31, 2023, we recognized a provision for income taxes of $1.9 million on a pre-tax loss of $306.0 million, for an effective tax rate of (0.6)%. The effective tax rate for 2025, 2024 and 2023, is lower than the statutory federal tax rate primarily due to a full valuation allowance against U.S. deferred tax assets. A reconciliation of the income tax paid table by jurisdictions is as follows (in thousands):
|  |  |  |  |  | Years Ended December 31,
|  |  |  |  |  | 2025 |  | 2024 |  | 2023
Income Taxes paid (net of refunds) |  |  |  |  |  |  |  |  |  |
U.S. federal |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
U.S. state and local |  |  |  |  |  |  |  |  |  |
Connecticut |  |  |  |  |  | * |  | * |  | 94 |
Oregon |  |  |  |  |  | * |  | * |  | 160 |
New York |  |  |  |  |  | 89 |  |  | * |  | *
Other |  |  |  |  |  | 90 |  |  | 86 |  |  | 67 |
|  |  |  |  |  | 179 |  |  | 86 |  |  | 322 |
Foreign |  |  |  |  |  |  |  |  |  |
India |  |  |  |  |  | 906 |  |  | 357 |  |  | 380 |
Korea |  |  |  |  |  | 342 |  |  | 825 |  |  | 677 |
Japan |  |  |  |  |  | * |  | * |  | *
Taiwan |  |  |  |  |  | 173 |  |  | * |  | *
Other |  |  |  |  |  | 106 |  |  | 156 |  |  | 76 |
|  |  |  |  |  | 1,527 |  |  | 1,338 |  |  | 1,133 |
Total |  |  |  |  |  | $ | 1,706 |  |  | $ | 1,424 |  |  | $ | 1,455 |
* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold Significant components of our deferred tax assets and liabilities consist of the following (in thousands):
|  |  |  |  |  | December 31,
|  |  |  |  |  | 2025 |  | 2024
Tax credits and net operating loss carryforwards |  |  |  |  |  | $ | 623,907 |  |  | $ | 604,681 |
Lease liabilities |  |  |  |  |  | 104,672 |  |  | 103,313 |
Research and development expenditures capitalization |  |  |  |  |  | 63,373 |  |  | 71,229 |
Accruals and reserves |  |  |  |  |  | 61,781 |  |  | 29,509 |
Disallowed Interest expenses |  |  |  |  |  | 26,078 |  |  | 27,873 |
Stock-based compensation |  |  |  |  |  | 20,969 |  |  | 18,808 |
Depreciation and amortization |  |  |  |  |  | 11,256 |  |  | 14,131 |
Investment in partnerships |  |  |  |  |  | 11,173 |  |  | — |
Deferred revenue |  |  |  |  |  | 9,963 |  |  | 9,603 |
Other items—deferred tax assets |  |  |  |  |  | 7,098 |  |  | 2,544 |
Gross deferred tax assets |  |  |  |  |  | 940,270 |  |  | 881,691 |
Valuation allowance |  |  |  |  |  | (872,631) |  |  | (816,257) |
Net deferred tax assets |  |  |  |  |  | 67,639 |  |  | 65,434 |
Right-of-use assets and leased assets |  |  |  |  |  | (59,835) |  |  | (60,043) |
Capitalized Commission |  |  |  |  |  | (6,024) |  |  | (3,503) |
Gross deferred tax liabilities |  |  |  |  |  | (65,859) |  |  | (63,546) |
Net deferred tax asset |  |  |  |  |  | $ | 1,780 |  |  | $ | 1,888 |
Income taxes are recorded using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (or loss) in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, is not more-likely-than-not to be realized. Management believes that, based on available evidence, both positive and negative, it is not more likely than not that the net U.S. deferred tax assets will be utilized. As a result, a full valuation allowance for U.S. deferred tax assets has been recorded. The valuation allowance for deferred tax assets was $872.6 million and $816.3 million as of December 31, 2025 and 2024, respectively. The net change in the total valuation allowance for the years ended December 31, 2025 and 2024, was an increase of $56.4 million and a decrease of $15.3 million, respectively. At December 31, 2025, we had federal and California net operating loss carryforwards of $2.3 billion and $1.5 billion, respectively, to reduce future taxable income. The expiration of federal and California net operating loss carryforwards is summarized as follows (in billions):
|  | Federal |  | California
Expire in 2026 - 2030 |  | $ | 0.4 |  |  | $ | 0.3 |
Expire in 2031 - 2035 |  | 1.0 |  |  | 0.6 |
Expire beginning in 2035 |  | 0.2 |  |  | 0.5 |
Carryforward indefinitely |  | 0.6 |  |  | — |
Total |  | $ | 2.3 |  |  | $ | 1.5 |
At December 31, 2025, we also had other state net operating loss carryforwards of $523.5 million, that begin to expire in fiscal year 2026, and Japanese net operating loss carryforwards of $7.0 million, that will begin to expire in fiscal 2027. In addition, at December 31, 2025, we had approximately $47.9 million of federal research credit, $6.6 million of federal investment tax credit, and $21.8 million of state research credit carryforwards. The expiration of the federal and California credit carryforwards is summarized as follows (in millions):
|  | Federal |  | California
Expire in 2026 - 2030 |  | $ | 6.3 |  |  | $ | — |
Expire in 2031 - 2035 |  | 11.7 |  |  | — |
Expire beginning in 2035 |  | 36.5 |  |  | — |
Carryforward indefinitely |  | — |  |  | 21.8 |
Total |  | $ | 54.5 |  |  | $ | 21.8 |
We have not reflected deferred tax assets for the federal and state research credit carryforwards as the entire amount of the carryforwards represents unrecognized tax benefits. Internal Revenue Code Section 382 (“Section 382”) limits the use of net operating loss and tax credit carryforwards in certain situations in which changes occur in our capital stock ownership. Any annual limitation may result in the expiration of net operating losses and credits before utilization. If we should have an ownership change, as defined by the tax law, utilization of the net operating loss and credit carryforwards could be significantly reduced. Based on our analysis, Section 382 limitations will not have a material impact on our net operating loss and credit carryforwards related to any ownership changes. During the year ended December 31, 2025, the amount of uncertain tax positions increased by $6.3 million. A reconciliation of the beginning and ending amounts of unrecognized tax benefits were as follows (in thousands):
|  |  |  |  |  | Years Ended December 31,
|  |  |  |  |  | 2025 |  | 2024 |  | 2023
Unrecognized tax benefits beginning balance |  |  |  |  |  | $ | 63,951 |  |  | $ | 58,157 |  |  | $ | 48,389 |
Gross decrease for tax positions of prior year |  |  |  |  |  | (326) |  |  | (145) |  |  | (152) |
Gross increase for tax positions of prior year |  |  |  |  |  | — |  |  | — |  |  | 1,307 |
Gross increase for tax positions of current year |  |  |  |  |  | 6,655 |  |  | 5,939 |  |  | 8,613 |
Unrecognized tax benefits end balance |  |  |  |  |  | $ | 70,280 |  |  | $ | 63,951 |  |  | $ | 58,157 |
If fully recognized in the future, there would be no impact to the effective tax rate, and $65.1 million would result in adjustments to the valuation allowance. Interest and penalties, to the extent there are any, would be included in income tax expense. There were no material interest or penalties accrued during or for the years ended December 31, 2025 and 2024. We are subject to taxation in the U.S. and various state and foreign jurisdictions. All of our tax years will remain open for examination by federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses and tax credits. There are currently no pending income tax examinations in the U.S.. We currently have an Indian income tax examination in progress. Although the timing of the resolution of income tax examination is highly uncertain, we believe the final determination will not have a material impact to our financial position. The Tax Cuts and Jobs Act of 2017 (“Tax Act”) includes a provision referred to as Global Intangible Low-Taxed Income (“GILTI”) which generally imposes a tax on foreign income in excess of a deemed return on tangible assets. Guidance issued by the Financial Accounting Standards Board in January 2018 allows companies to make an accounting policy election to either (i) account for GILTI as a component of tax expense in the period in which the tax is incurred (“period cost method”), or (ii) account for GILTI in the measurement of deferred taxes (“deferred method”). We elected to account for the tax effects of this provision using the period cost method. On August 16, 2022, the U.S. government enacted the IRA, which established a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022. The enactment of the IRA did not have a material impact on our tax expense for the years ended December 31, 2025 and 2024. The OBBBA extended key provisions of the 2017 Tax Act and modified various federal clean energy tax provisions of the IRA. Under the OBBBA, fuel cell property is eligible for a 30% ITC for projects beginning construction after December 31, 2025 under Section 48E. We also retain the 30% ITC and additional 10% bonus credits for domestic content and energy communities for qualified fuel cell projects that properly utilize safe harbor equipment purchased in 2024, provided such equipment is placed in service by December 31, 2028. The OBBBA reinstituted accelerated depreciation for property purchased and placed in service after January 19, 2025, including fuel cell property that begins construction after December 31, 2026. The OBBBA also introduced “Foreign Entity of Concern” restrictions for Section 48E credits and restored expensing of domestic research expenditures for years beginning after December 31, 2024. The addition of the 30% ITC for fuel cell projects beginning construction after December 31, 2025 is expected to have a favorable impact on the continued adoption of our Energy Server systems and financial results. The accumulated undistributed foreign earnings of the Company as of December 31, 2025, have been subject to either the deemed one-time mandatory repatriation under the Tax Act or the current year income inclusion under GILTI regime for U.S. tax purposes. If we were to make actual distributions of some or all of these earnings, including earnings accumulated after December 31, 2017, we would generally incur no additional U.S. income tax but could incur U.S. state income tax and foreign withholding taxes. We have not accrued for these potential U.S. state income tax and foreign withholding taxes because we intend to indefinitely reinvest our foreign earnings in our international operations.

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