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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 16 - INCOME TAXES

The components of our income (loss) before income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows:
(in thousands)202520242023
Income (loss) before income taxes:
Domestic$13,858 $(160,709)$(239,971)
Foreign35,734 (89,287)(122,341)
Total$49,592 $(249,996)$(362,312)

The components of income tax provision for the years ended December 31, 2025, 2024 and 2023 are as follows:

(in thousands)202520242023
Current:
U.S. federal$— $24 $135 
State99 301 (50)
Foreign14,867 2,820 1,686 
Total$14,966 $3,145 $1,771 
Deferred:
U.S. federal$838 $— $— 
State— — — 
Foreign(933)(952)(2,412)
Total(95)(952)(2,412)
Total income tax provision (benefit)
$14,871 $2,193 $(641)

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, cash paid for income taxes (net of refunds) during the year ended December 31, 2025, consisted of the following:
(in thousands)2025
Federal
$799 
State:
Other (a)
492 
Total State
492 
Foreign:
Germany
2,431 
Korea
1,860 
Netherlands
1,723 
China
559 
Mexico
522 
Other (a)
1,247 
Total Foreign
8,342 
Cash paid for income taxes (net of refunds)
$9,633 
(a) The amount of income taxes paid during the year does not meet the 5% disaggregation threshold and is included in Other.

Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023, was $5.5 million and $3.9 million respectively.
The components of our net deferred income tax assets and net deferred income tax (liabilities) at December 31, 2025 and 2024 as follows:

(in thousands)20252024
Deferred income tax assets:
Intangible assets$11,860 $15,685 
Stock options and restricted stock awards1,666 3,032 
Reserves and allowances4,511 6,879 
Net operating loss carryforwards79,161 59,641 
Tax credit carryforwards32,287 31,326 
Accrued liabilities2,235 2,681 
Deferred revenue1,055 2,176 
Lease tax assets12,248 17,498 
Research expenditures capitalization31,905 44,773 
Other5,607 3,236 
Valuation allowance(170,425)(168,299)
Total deferred income tax assets$12,110 $18,628 
Deferred income tax liabilities:
Intangible assets$1,171 $2,081 
Property and equipment710 2,352 
Lease tax liabilities10,182 14,159 
Other— 49 
Total deferred income tax liabilities$12,063 $18,641 
Net deferred income tax asset (liability)
$47 $(13)

At December 31, 2025, $79.2 million of our deferred income tax assets was attributable to $475.4 million of gross net operating loss carryforwards, which consisted of $111.0 million of loss carryforwards for U.S. federal income tax purposes, $175.1 million of loss carryforwards for U.S. state income tax purposes and $189.3 million of loss carryforwards for foreign income tax purposes.

The net operating loss carryforwards for U.S. federal income tax purposes do not expire. The net operating loss carryforwards for U.S. state income tax purposes began to expire in 2025. In addition, certain net loss carryforwards for foreign income tax purposes begin to expire in 2026 and certain other loss carryforwards for foreign purposes do not expire.

At December 31, 2025, tax credit carryforwards deferred assets of $32.3 million consisted of $22.4 million of research and experimentation credit carryforwards for U.S. federal income tax purposes, $5.9 million of research and experimentation tax credit carryforwards for U.S. state income tax purposes, and $4.0 million of foreign tax credits for U.S. federal income tax purposes. We have recorded a valuation allowance related to the U.S. federal and state tax credits.

During the year ended December 31, 2025, management reevaluated its assertion regarding the indefinite reinvestment of earnings generated by certain foreign subsidiaries. Historically, the Company had asserted that these undistributed foreign earnings would be indefinitely reinvested, and accordingly, no deferred tax liability had been recorded on the associated outside basis differences. As a result of changes in business plans and capital allocation strategies, including updated cash flow projections and anticipated funding needs in the parent jurisdiction, management determined that it can no longer assert indefinite reinvestment for a portion of these foreign earnings. Accordingly, as of December 31, 2025, we recorded the deferred tax liability related to undistributed earnings of foreign subsidiaries of $0.8 million.
Including interest and penalties, the total net decrease of our unrecognized benefits is $2.1 million for the year ended December 31, 2025. The decrease was primarily related to the lapse of statute for certain credits. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $2.6 million. We include interest and penalties in the consolidated financial statements as a component of income tax expense.

Unrecognized Tax Benefits(1)
(in thousands)202520242023
Balance at January 1$(16,413)$(18,604)$(17,150)
Increases related to prior year tax positions(240)(1,170)(99)
Decreases related to prior year tax positions106 4,337 107 
Decreases related to prior year tax positions as a result of lapse of statute3,170 — 271 
Decreases related to settlement— — — 
Increases related to current year tax positions(933)(976)(1,733)
Increases related to acquired tax positions— — — 
Decreases related to acquired tax positions— — — 
Balance at December 31$(14,310)$(16,413)$(18,604)
(1) The unrecognized tax benefit balance as of December 31, 2025, 2024, and 2023 includes $0.5 million, $1.3 million, and $0.3 million of interest and penalty, respectively.

Tax years 2021 through 2024 remain subject to examination by the U.S. Internal Revenue Service. State income tax returns are generally subject to examination for a period of three to four years after filing the respective tax returns. The tax years 2020 through 2024 remain open to examination by the various foreign taxing jurisdictions to which the Company is subject.

The following presents the changes in the balance of our deferred income tax asset valuation allowance:
Year EndedItemBalance at beginning of yearAdditions (reductions) charged to expense
Other(1)
Balance at end of year
2025Deferred income tax asset valuation allowance$168,299 $(1,915)$4,041 $170,425 
2024Deferred income tax asset valuation allowance$125,533 $43,365 $(599)$168,299 
2023Deferred income tax asset valuation allowance$100,694 $23,606 $1,233 $125,533 
(1) The Other portion of changes to our valuation allowance consists primarily of the impact of acquisitions and changes in foreign currency translation rates.

In 2025, we recorded a full valuation allowance for Oqton Belgium and a partial valuation allowance for 3D Systems SA. In 2024, we recorded full valuation allowances for 3DSystems GmbH and Kumovis GmbH. In addition, we released a valuation allowance for Oqton Belgium. In 2023, we recorded full valuation allowances for Wematter and Layerwise. All of which are foreign subsidiaries of the Company. We continue to review results of operations and forecast estimates to determine if it is more likely than not that the deferred tax assets will be realized.
The overall effective tax rate differs from the statutory federal tax rate for the years ended December 31, 2025 as follows:

(in thousands)AmountPercent
Tax provision based on the federal statutory rate$10,414 21.0 %
State and local income taxes(1)
79 0.2 %
Foreign tax effects
Belgium
Foreign income tax rate differential(779)(1.6)%
Changes in valuation allowances6,738 13.6 %
Deferred adjustments(2,289)(4.6)%
Other(588)(1.2)%
Germany
Changes in valuation allowances(1,874)(3.8)%
Other145 0.3 %
Netherlands
Changes in valuation allowances1,623 3.3 %
Other(344)(0.7)%
Switzerland
Changes in valuation allowances1,708 3.4 %
Tax-deductible goodwill(1,985)(4.0)%
Other(409)(0.8)%
Other foreign jurisdictions3,924 7.9 %
Effect of cross-border tax laws
Global intangible low-taxed income inclusion5,980 12.1 %
Subpart F income inclusion725 1.5 %
Tax credits
Research and development tax credits(3,593)(7.2)%
Expired foreign tax credits3,253 6.6 %
Changes in valuation allowances(9,951)(20.1)%
Nontaxable or nondeductible items
Employee share-based payments2,483 5.0 %
Equity method investment(827)(1.7)%
Impairment of investments1,338 2.7 %
Unremitted foreign earnings838 1.7 %
Deferred adjustments559 1.1 %
Payable adjustments(637)(1.3)%
Other791 1.6 %
Changes in unrecognized tax benefits(2,451)(4.9)%
Total
$14,871 30.0 %
(1) In 2025, state taxes in California, New York, New Jersey, New York City, and Michigan made up the majority (greater than 50%) of the tax effect in this category.

The difference between our effective tax rate and the federal statutory rate for 2025 was 9.0 percentage points. The difference in the effective rate is primarily due to the global intangible low-taxed income inclusion ("GLTI").
The overall effective tax rate differs from the statutory federal tax rate for the years ended December 31, 2024, and 2023 are as follows:
% of Pretax (Loss) Income
20242023
Tax provision based on the federal statutory rate21.0 %21.0 %
Increase in valuation allowances(17.3)(6.5)
Change in carryforward attributes— — 
Global intangible low-taxed income inclusion— (0.4)
Non-deductible expenses— — 
Non-deductible earnout expense— 1.0 
Goodwill impairment charge
(8.7)(14.6)
Foreign income tax rate differential0.2 0.5 
Deemed income related to foreign operations(0.6)(0.3)
Tax rate change(0.1)— 
Employee share-based payments(0.3)(0.5)
Other(0.3)(0.7)
Deferred and payable adjustments1.3 (1.3)
Non-deductible penalties— — 
State taxes, net of federal benefit, before valuation allowance1.2 0.7 
Return-to-provision adjustments(0.5)0.2 
Other tax credits2.0 1.1 
Uncertain tax positions and audit settlements1.3 — 
Effective tax rate(0.8)%0.2 %

The difference between our effective tax rate for 2024 and 2023 and the federal statutory rate was 21.8 and 20.8 percentage points, respectively. The difference in the effective rate is primarily due to the net increase in valuation allowances and non-deductible goodwill impairment charges.