v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Loss before the provision for income taxes consists of the following (in thousands):
Years Ended December 31,
20252024
Domestic$(57,077)$(57,570)
Foreign3,700 1,676 
Total loss before provision for taxes$(53,377)$(55,894)
The components of income tax expense are as follows (in thousands):
Years Ended December 31,
20252024
Current:
Federal$— $— 
State45 53 
Foreign600 471 
Total current expense$645 $524 
Deferred:
Federal$(5)$7 
State5 8 
Foreign(19)(39)
Total deferred expense(19)(24)
Total income tax expense$626 $500 
The table below provides the updated requirements of ASU 2023-09 for 2025. See Notes to Financial Statements - Income Taxes for additional details on the adoption of ASU 2023-09. The effective tax rate differs from the federal statutory income tax rate applied to the loss before provision for income taxes and tax due to the following:
Year Ended December 31, 2025
$%
U.S. federal statutory tax rate$(11,209)21.0 %
State and local income taxes, net of federal(1)
50 (0.1)%
Foreign tax effects(203)0.4 %
Enactment of new tax laws— 0.0 %
Effect of cross-border tax laws
        Global Intangible Low-Tax Income199 (0.4)%
Tax credits(170)0.3 %
Valuation allowances8,273 (15.5)%
Nontaxable or nondeductible items
        Stock-based compensation(2)
2,936 (5.5)%
        Other269 (0.5)%
Changes in unrecognized tax benefits26 0.0 %
Other adjustments
        Expiring attributes559 (1.1)%
        Other(104)0.2 %
Total$626 (1.2)%
(1) State taxes in Texas made up the majority (greater than 50%) of the tax effect in this category.
(2) Includes amounts related to non-deductible stock-based compensation, including non-deductible executive compensation, in addition to excess tax benefits or shortfalls from stock-based compensation.

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 statutory federal income tax rate as follows:
Years Ended December 31,
20242023
Federal statutory rate21.0 %21.0 %
State taxes, net of federal benefit(0.1)%(0.1)%
Foreign earnings at different rates0.1 %(0.5)%
Tax credits1.3 %(0.9)%
Permanent differences(5.7)%(4.6)%
Prior year true-up(0.2)%0.6 %
Change in valuation allowance(16.8)%(16.4)%
Other rate impacts(0.5)%— %
Effective tax rate(0.9)%(0.9)%
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
Year Ended
December 31,
2025
Income taxes paid:
Federal$— 
State45 
Foreign:
Switzerland138 
France80 
United Kingdom 60 
Germany59 
Italy34 
Spain32 
Other20 
Total$468 
Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023 was $0.6 million and $0.5 million, respectively.
Deferred income taxes arise from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, as well as operating losses and tax credit carryforwards. Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as follows (in thousands):
December 31,
20252024
Deferred tax assets:
Net operating loss carryforwards$76,653 $65,515 
Tax credit carryforwards7,620 7,331 
Accruals and reserves1,401 1,993 
Depreciation380 303 
Intangible assets3,065 3,527 
   Right of use liability4,464 4,568 
   Capitalized research costs6,309 7,754 
 Other5,261 4,467 
Total deferred tax assets105,153 95,458 
Less: valuation allowance(100,491)(90,598)
Total deferred tax assets, net of valuation allowance$4,662 $4,860 
Deferred tax liabilities:
Right of use asset$(4,162)$(4,358)
Goodwill(569)(589)
Total deferred tax liabilities$(4,731)$(4,947)
Net deferred tax liabilities$(69)$(87)
The Company has established a full valuation allowance against its U.S. net deferred tax assets due to the uncertainty surrounding the realization of such assets. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the U.S. net deferred tax assets have been fully offset by a valuation allowance of $100.5 million as of December 31, 2025. The valuation allowance increased by $9.9 million and $11.2 million for the years ended December 31, 2025 and December 31, 2024, respectively.
As of December 31, 2025, the Company had a total net operating loss carryforwards for federal income tax purposes of approximately $330.3 million. For net operating loss carryforwards generated prior to 2018, if not utilized, these net federal operating loss carryforwards will begin to expire in 2026. The Company also had a state and city net operating loss carryforward of approximately $207.1 million which will begin to expire in 2026.
For tax years beginning on January 1, 2018 onwards, any federal net operating losses generated will be allowable for carry forward indefinitely, as opposed to the original expiration of 20 years. As of December 31, 2025, the Company had $262.4 million of federal net operating losses that can be carryforward indefinitely.
The Company also had federal and state research and development (“R&D”) tax credit carryforwards of approximately $4.6 million and $5.5 million, respectively. The federal tax R&D credit carryforwards will expire beginning in the year 2026 while the state tax credit carryforwards have no expiration date.
Utilization of the net operating loss carryforwards and R&D tax credit carryforwards may be subject to annual limitations due to the ownership change limitations provided by the Internal Revenue Code, as defined in Section 382, and other similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company completed a section 382 study for the year ended December 31, 2022 for which the Company had no change in ownership and do not expect any changes from that analysis through December 31, 2025. Additionally, based on the Company’s analysis, no further material net operating losses or credits have expired unused due to the section 382 limitations as of December 31, 2025.
Annually, the Company determines whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities in considering whether any tax benefit can be recorded in the consolidated financial statements. As of December 31, 2025, the Company had unrecognized tax benefits of approximately $9.1 million, none of which will affect the effective tax rate if recognized.
The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in thousands):
Balance at December 31, 2023$8,662 
Additions for tax positions related to prior year170 
Additions for tax positions related to current year40 
Balance at December 31, 2024$8,872 
Additions for tax positions related to prior year158 
Decreases for tax positions related to prior year(8)
Additions for tax positions related to current year51 
Balance at December 31, 2025$9,073 
It is the Company's policy to include penalties and interest expense related to income taxes as a component of other income, net and interest expense, respectively, as necessary.
The Company’s major tax jurisdictions are the United States and California, and Switzerland and Neuchâtel. The Company’s tax years will remain open for examination by the federal and state tax authorities from 2005 for federal and 1999 for states because of the net operating losses and R&D credit carryover. The Company does not have any tax audits or other issues pending.
Beginning in 2022, the Tax Cuts and Jobs Act (the "Tax Act") requires taxpayers to capitalize research and development expenses with amortization periods over five years for domestic research and developments costs and fifteen years for foreign research and development costs. The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025, and contains significant tax law changes, including allowing for the immediate expensing in 2025 and forward of domestic research and development costs. Because of the Company's valuation allowance on its deferred tax assets, the change did not impact the Company's financial statements.