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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Taxes [Abstract] |
Income Taxes | 17. Income Taxes The components of net loss before income taxes are as follows (in thousands):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
United States | $ | (110,784) |  | $ | (96,422) |  | $ | (95,634)
Foreign |  | (6,083) |  |  | 49 |  |  | 526
Net loss before income taxes | $ | (116,867) |  | $ | (96,373) |  | $ | (95,108)
For the years ended December 31, 2025, 2024 and 2023, the Company did no t record any federal or state provision for income tax expense. For the years ended December 31, 2025, 2024 and 2023, the Company recorded an income tax (provision) benefit of $76,000, $(53,000) and $(547,000), respectively, from foreign jurisdictions. As described in Note 2, Summary of Significant Accounting Policies, the Company has elected to prospectively adopt ASU 2023-09. The following table is a reconciliation of the total income tax expense computed at the U.S. federal statutory rate of 21% to the Company’s total income tax expense for the year ended December 31, 2025, in accordance with ASU 2023-09 (in thousands): ‎
| Year Ended December 31, 2025
|  | Amount |  |  | Percentage
U.S. federal statutory rate | $ | (24,542) |  |  | 21.0%
Foreign tax effects |  | 1,201 |  |  | -1.0%
Tax credits: |  |  |  |  |
R&D credits |  | (382) |  |  | 0.3%
Change in valuation allowance |  | 6,316 |  |  | -5.4%
Nontaxable or nondeductible items: |  |  |  |  |
Write-off of intercompany payable |  | 4,759 |  |  | -4.1%
Mark-to-market on warrant and derivative |  | 7,683 |  |  | -6.5%
Nondeductible executive compensation |  | 1,239 |  |  | -1.1%
Other nondeductible items |  | 2,621 |  |  | -2.2%
Other |  | 1,029 |  |  | -0.9%
Provision for income taxes | $ | (76) |  |  | 0.1%
The following table presents a reconciliation of the statutory federal rate and the Company’s effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to ASU 2023-09 (in thousands):
| Year Ended December 31,
| 2024 |  | 2023
Tax at federal statutory rate | $ | (20,027) |  | $ | (20,003)
State taxes, net of federal benefit |  | (2,247) |  |  | (4,032)
Change in valuation allowance |  | 16,563 |  |  | 20,418
Stock-based compensation |  | 1,706 |  |  | 3,722
Mark-to-market on warrant and derivative |  | 3,482 |  |  | 1,075
R&D credits |  | (281) |  |  | (391)
Foreign rate differential |  | 41 |  |  | (50)
Other |  | 816 |  |  | (192)
Provision for income taxes | $ | 53 |  | $ | 547
Significant components of the net deferred tax assets for federal and state income taxes are as follows (in thousands):
| Year Ended December 31,
| 2025 |  | 2024
Deferred tax assets: |  |  |  |  |
Net operating loss carryforwards | $ | 154,356 |  | $ | 143,066
Research and development credits |  | 7,628 |  |  | 7,111
Stock-based compensation |  | 1,586 |  |  | 1,611
Interest limitation |  | 10,651 |  |  | 8,964
Accruals and reserves |  | 5,370 |  |  | 9,502
Fixed asset and intangible asset basis |  | 3,654 |  |  | 4,615
Operating lease liabilities |  | 5,386 |  |  | 5,955
Research and development capitalization |  | 15,408 |  |  | 20,675
Total deferred tax assets |  | 204,039 |  |  | 201,499
Deferred tax liabilities: |  |  |  |  |
Capitalized contract costs |  | (2,704) |  |  | (1,556)
Operating lease right-of-use assets |  | (4,256) |  |  | (4,653)
Other |  | (109) |  |  | (66)
Total deferred tax liabilities |  | (7,069) |  |  | (6,275)
Deferred tax assets, net |  | 196,970 |  |  | 195,224
Valuation allowance |  | (196,784) |  |  | (195,224)
Net deferred taxes | $ | 186 |  | $ | —
As the Company has incurred annual net operating losses since inception, a full valuation allowance is provided against U.S. net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets. The U.S. valuation allowance increased by $1.6 million, $16.8 million and $20.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The following table summarizes the activity related to the valuation allowance for deferred tax assets as follows (in thousands):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Balance at beginning of period | $ | 195,224 |  | $ | 178,406 |  | $ | 157,982
Additions |  | 5,346 |  |  | 16,818 |  |  | 20,424
Deductions |  | (3,786) |  |  | — |  |  | —
Balance at end of period | $ | 196,784 |  | $ | 195,224 |  | $ | 178,406
As of December 31, 2025, the Company had net operating loss carryforwards of approximately $609.9 million and $467.4 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. Of these amounts, $422.9 million of federal net operating losses are carried forward indefinitely, and are limited to offset 80% of future taxable income. The remaining federal net operating losses will expire starting in 2030. State net operating losses will expire starting in 2026. Utilization of net operating loss carryforwards may be subject to an annual limitation in certain situations where changes occur in the stock ownership of a company. A Section 382 study of the Company’s historic ownership changes through December 31, 2025 was completed, and the Company determined that certain loss and credit carryforwards are subject to annual limitations under Section 382. The majority of the Company’s tax attributes are expected to be fully available and no longer subject to these annual limitations by 2029, and no tax attributes were identified as being permanently disallowed as a result of Section 382. The Company also had federal and California research and development credit carryforwards of approximately $10.2 million and $7.4 million, respectively, as of December 31, 2025. The federal credits will expire starting in 2030, if not utilized. The California credits have no expiration date. Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active foreign operations. The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs. The Company has no t recorded a deferred tax liability on the undistributed earnings of non-U.S. subsidiaries. The foreign withholding taxes would not have a material impact on the Company’s financial position and results of operation. As of December 31, 2025, 2024 and 2023, the Company had $1.1 million. $1.1 million and $0.6 million, respectively, in unremitted earnings that were indefinitely reinvested related to its consolidated foreign subsidiaries. The Company’s gross unrecognized tax benefits as of December 31, 2025, 2024 and 2023 was $9.2 million, $8.6 million and $8.2 million, respectively, all of which would affect the Company’s income tax expense if recognized before consideration of the Company’s valuation allowance. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of provision for income taxes, in which none was incurred during the years ended December 31, 2025, 2024 and 2023. The following table summarizes the activity related to unrecognized tax benefits as follows (in thousands):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Balance at beginning of period | $ | 8,597 |  | $ | 8,188 |  | $ | 7,371
Increase related to current year tax positions |  | 552 |  |  | 558 |  |  | 817
Changes related to prior tax positions |  | 75 |  |  | (149) |  |  | —
Balance at end of period | $ | 9,224 |  | $ | 8,597 |  | $ | 8,188
The Company did no t pay any income taxes during the year ended December 31, 2025. The cash paid (refunded) for income taxes during the years ended December 31, 2024 and 2023 was $(72,000) and $405,000, respectively. The Company files income tax returns in the U.S. federal jurisdiction, various state and certain foreign jurisdictions. In the normal course of business, the Company is subject to examination by their respective taxing authorities. The Company had been selected for audit by the Internal Revenue Service for its 2022 tax year. The examination was closed during 2025 with no tax adjustments. The statute of limitations remains effectively open for the U.S. federal and state tax jurisdictions for all tax years from 2010 through 2025. Tax years outside the normal statute of limitations remain open to examination by tax authorities due to tax attributes generated in earlier years which have been carried forward and may be examined and adjusted in subsequent years when utilized. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States which contains a broad range of tax reform provisions affecting businesses. The provisions of the OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025.

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