v3.25.4

Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Schedule of Income (Loss) from Operations Before Income Taxes | The provision for income taxes is based on income before provision for income taxes as follows (in thousands):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
U.S. | $ | 1,571,743 |  |  | $ | 401,760 |  |  | $ | 1,084,254 |
Non-U.S. | 92,708 |  |  | (85,130) |  |  | (250,039) |
Income before provision for income taxes | $ | 1,664,451 |  |  | $ | 316,630 |  |  | $ | 834,215 |
Schedule of (Benefit) Provision for Income Taxes | Our provision for income taxes consists of the following (in thousands):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
Federal | $ | 80,508 |  | $ | 322,682 |  | $ | 344,407
State | 42,998 |  | 43,955 |  | 48,106
Foreign | 6,610 |  | 2,931 |  | 3,001
| 130,116 |  | 369,568 |  | 395,514
Deferred: |  |  |  |  |
Federal | 240,361 |  |  | (106,549) |  | (139,468)
State | 7,072 |  |  | 21,824 |  | (19,625) |
Foreign | 252 |  |  | (828) |  |  | 195 |
| 247,685 |  |  | (85,553) |  |  | (158,898) |
Total provision for income taxes | $ | 377,801 |  |  | $ | 284,015 |  |  | $ | 236,616 |
Schedule of Income Taxes Paid, Net of (Refunds) Received | Income taxes paid, net of (refunds) received, consisted of the following for the year ended December 31, 2025 (in thousands):
| Year Ended December 31,
| 2025
Federal | $ | 178,100 |
State |
Kentucky | 20,798
Tennessee | (10,836)
All other states | 19,345
Foreign | 4,771 |
Total income taxes paid | $ | 212,178 |
Schedule of Reconciliation of Income Taxes at the U.S. Federal Statutory Rate to the (Benefit) Provision for Income Taxes | A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is as follows (in thousands):
| Year Ended December 31, 2025
| $ |  | %
U.S. federal statutory rate | $ | 349,535 |  | 21.0 | %
State and local income taxes, net of federal benefit(1) | 36,394 |  | 2.2 | %
Foreign tax effects | (12,607) |  | (0.8)%
Effects of changes in tax laws or rates enacted in the current period | (49,289) |  |  | (3.0) | %
Effect of cross-border tax laws |  |  |
Foreign-derived intangible income | (34,240) |  |  | (2.1)%
Tax Credits |  |  |
Research and development tax credits | (59,998) |  |  | (3.6)%
Changes in valuation allowances | 123,243 |  |  | 7.4%
Nontaxable or nondeductible items | 13,528 |  | 0.8%
Changes in unrecognized tax benefits | 14,208 |  | 0.9%
Other adjustments | (2,973) |  | (0.1)%
Effective income tax rate | $ | 377,801 |  |  | 22.7%
1 State taxes in Kentucky, California, and Delaware made up the majority (greater than 50%) of the tax effect in this category. Our effective tax rate for the year ended December 31, 2025 was higher than the U.S. statutory rate primarily due to state income taxes and an increase in our valuation allowance against certain U.S. deferred tax assets. This was partially offset by tax rate benefits associated with research and development and orphan drug tax credit generations, the foreign derived intangible income deduction and the enactment of U.S. tax legislation discussed below. As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the U.S. statutory federal income tax rate as follows (in thousands):
|  |  | Year Ended December 31,
|  |  | 2024 |  | 2023
Provision at U.S. federal statutory rate |  |  | $ | 66,492 |  |  | $ | 175,185
State and local income taxes |  |  | 51,753 |  |  | 21,145
Foreign tax rate differential |  |  | 61,026 |  | (96,434)
Income tax credits |  |  | (70,989) |  |  | (1,433,507) |
Change in valuation allowance |  |  | 21,425 |  | 1,572,951 |
Change in uncertain tax positions |  |  | 6,418 |  | 5,943
Foreign-derived intangible income |  |  | (31,786) |  |  | (32,891) |
Stock based compensation |  |  | 25,647 |  | 20,971 |
Acquisitions accounted for as research and development expenses |  |  | 149,287 |  | 4,200 |
Other |  |  | 4,742 |  | (947)
Provision for income taxes |  |  | $ | 284,015 |  | $ | 236,616
Schedule of Significant Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2025 |  | 2024
Deferred tax assets: |  |  |
Net operating loss carry forwards | $ | 304,075 |  |  | $ | 315,969 |
Income tax credits | 1,482,932 |  |  | 1,398,495 |
Capitalized research and development | 554,454 |  |  | 648,989 |
Deferred revenue and accruals | 96,463 |  |  | 190,446 |
Non-cash compensation | 92,482 |  |  | 100,788 |
Acquisition-related contingent consideration | 17,426 |  |  | 27,796 |
Intangibles, net | 219,005 |  |  | 229,741 |
Long term investments | 2,889 |  |  | 6,697 |
Other | 24,582 |  |  | 20,814 |
Total gross deferred tax assets | 2,794,308 |  |  | 2,939,735 |
Less valuation allowance for deferred tax assets | (2,266,136) |  |  | (2,139,673) |
Net deferred tax assets | $ | 528,172 |  |  | $ | 800,062 |
Deferred tax liabilities: |  |  |
Property and equipment | $ | (7,046) |  |  | $ | (30,676) |
Other | (5,832) |  |  | (7,315) |
Total gross deferred tax liabilities | (12,878) |  |  | (37,991) |
Net deferred tax assets | $ | 515,294 |  |  | $ | 762,071 |
Schedule of Operating Loss Carryforwards | As of December 31, 2025, we had NOL carryforwards, research and development credit carryforwards and foreign income tax credit carryforwards as follows (in thousands):
| Amount |  | Expiring if not utilized
Net operating loss carryforwards |  |  |
Federal | $ | 72,370 |  | Indefinite
State | 926,027 |  | 2027 through 2045; indefinite
Foreign | 1,743,380 |  | 2026 through 2041; indefinite
Research and development credit carryforwards |  |  |
Federal | $ | 9,431 |  | 2039 through 2044
State | 14,310 |  | 2026 through 2043
Swiss income tax credit carryforwards | 1,469,989 |  | 2028
Schedule of Unrecognized Tax Benefits | The following table summarizes the gross amounts of unrecognized tax benefits (in thousands):
| Year Ended December 31,
| 2025 |  | 2024
Balance at beginning of year | $ | 87,723 |  | $ | 69,145
Additions related to prior periods tax positions | 3,539 |  | 9,173
Reductions related to prior periods tax positions | (2,226) |  |  | (2,014) |
Additions related to current period tax positions | 8,749 |  | 5,939
Additions related to acquisitions | — |  | 9,114
Settlements | (24) |  |  | (71) |
Reductions due to lapse of applicable statute of limitations | (333) |  |  | (3,538) |
Currency translation adjustment | 173 |  |  | (25)
Balance at end of year | $ | 97,601 |  | $ | 87,723

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-9 + Details
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