v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
There is no current or deferred income tax expense or benefit for the years ended December 31, 2025, 2024, and 2023. Income taxes paid were not significant for the years ended December 31, 2025, 2024, and 2023.
The reconciliations of the effective tax rate from the federal statutory rate were as follows:
Twelve Months Ended
December 31,
202520242023
Amount
Percent
Amount
Percent
Amount
Percent
U.S federal statutory tax rate
$(171)21.0 %$(157)21.0 %$(167)21.0 %
Federal research and development credits
(74)9.1 (57)7.6 (42)5.3 
Nontaxable or nondeductible items
Stock-based compensation
(30)3.7 (15)2.0 14 (1.8)
Other
7 (0.9)6 (0.8)6 (0.8)
Change in unrecognized tax benefits
15 (1.8)11 (1.5)8 (1.0)
Change in federal valuation allowance
253 (31.1)212 (28.3)181 (22.7)
Effective tax rate
$— — %$— — %$— — %
The components of deferred tax assets and liabilities were as follows (in millions):
As of
December 31, 2025December 31, 2024
Deferred tax assets:
Net operating losses
$724 $592 
Tax credits
249 178 
Stock-based compensation
6 5 
Capitalized R&D386 312 
Lease liability
18 26 
Other
24 21 
Deferred tax assets, gross
1,407 1,134 
Valuation allowance
(1,297)(1,037)
Deferred tax assets, net of valuation allowance
110 97 
Deferred tax liabilities:
Depreciation and amortization
(87)(67)
Right of use asset
(18)(25)
Other
(9)(9)
Deferred tax liabilities
(114)(101)
Deferred tax liabilities, net
$(4)$(4)
As of December 31, 2025, federal and state net operating losses were $2,688 million and $3,142 million, respectively. If not utilized, the federal and state net operating loss carryforwards will begin to expire starting in 2036 and 2029, respectively. Federal and similar state provisions limit the use of net operating losses and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. Certain acquired net operating losses and tax credits are subject to limitations.
As of December 31, 2025, federal research and development credits were $248 million, which will begin to expire in 2037 and state research and development credits were $63 million, which will begin to expire in 2032.
Assessing the realizability of deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. The Company has evaluated the criteria for realization of deferred tax assets and, as a result, has determined that certain deferred tax assets are not realizable.
The components of changes in the valuation allowance were as follows (in millions):
Twelve Months Ended
December 31,
202520242023
Valuation allowance at beginning of period
$1,037 $726 $542 
Change in deferred tax asset positions
260 311 184 
Valuation allowance at end of period
$1,297 $1,037 $726 
The components of changes in unrecognized tax benefits were as follows (in millions):
Twelve Months Ended
December 31,
202520242023
Unrecognized tax benefits at beginning of period
$45 $31 $21 
Increases related to tax positions taken during a prior year
2 2 1 
Increases related to tax positions taken during the current year
15 12 9 
Unrecognized tax benefits at end of period
$62 $45 $31 
The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes. Amounts accrued for interest and penalties were not significant during the twelve months ended December 31, 2025, 2024 and 2023.
The Company files U.S. federal and state income tax returns. The Company is not currently under examination by income tax authorities in any jurisdiction. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses or credits.