v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of pretax income (loss) for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):
Year Ended December 31,
202520242023
United States$(65,613)$53,852 $16,285 
International20,157 (84,243)(59,711)
Income (loss) from continuing operations before provision (benefit) for income taxes
$(45,456)$(30,391)$(43,426)
The Provision (benefit) for income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following components (in thousands):
Year Ended December 31,
202520242023
Current taxes:
U.S. federal$4,630 $10,336 $1,305 
State1,251 2,577 2,094 
International32,676 8,572 4,374 
Total current taxes38,557 21,485 7,773 
Deferred taxes:
U.S. federal34 40 35 
State(7)46 106 
International(2,959)4,552 1,594 
Total deferred taxes(2,932)4,638 1,735 
Provision (benefit) for income taxes
$35,625 $26,123 $9,508 

For the year ended December 31, 2025, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The adoption resulted in enhanced income tax disclosures as presented below.
The items accounting for differences between the income tax provision (benefit) computed at the U.S. federal statutory rate and the Provision (benefit) for income taxes for the year ended December 31, 2025 were as follows (in thousands, except percentages):
Year Ended December 31,
2025
U.S. federal income tax rate (benefit) provision at statutory rate$(9,546)21.0 %
State income taxes, net of federal benefits (1)
2,002 (4.4)%
State tax credits2,100 (4.6)%
Change in valuation allowance - U.S. State(3,121)6.9 %
Foreign Tax Effects
France
Non-deductible stock-based compensation awards1,013 (2.2)%
Ireland
Change in valuation allowance3,277 (7.2)%
Non-deductible interest expense2,855 (6.3)%
Local statutory timing differences(2,503)5.5 %
Statutory rate difference between Ireland and the United States2,331 (5.1)%
FX on non-trade balances(1,030)2.3 %
Italy
Tax Assessment settlements25,259 (55.6)%
Change in valuation allowance1,892 (4.2)%
Deductible interest expense(1,690)3.7 %
Luxembourg
Effects of deferred rate change3,685 (8.1)%
Change in valuation allowance(3,677)8.1 %
Poland
Change in valuation allowance(1,258)2.8 %
United Kingdom
(Gain) loss on sale of subsidiaries(1,214)2.7 %
Group relief adjustment790 (1.7)%
Statutory rate difference between the UK and the United States433 (1.0)%
Foreign currency(52)0.1 %
Other(46)0.1 %
Change in valuation allowance - U.S. Federal(3,255)7.2 %
Nontaxable or Nondeductible Items
Convertible debt extinguishment17,024 (37.5)%
Subpart F Income2,419 (5.3)%
Non-deductible stock-based compensation expense2,091 (4.6)%
Non-deductible or non-taxable items68 (0.1)%
Changes in unrecognized tax benefits(4,222)9.3 %
Effective tax rate/Provision for income taxes$35,625 (78.4)%
(1)State taxes in New York, New Jersey, Illinois and Massachusetts made up the majority (greater than 50%) of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the items accounting for differences between the income tax provision (benefit) computed at the U.S. federal statutory rate and the Provision (benefit) for income taxes were as follows (in thousands):
Year Ended December 31,
2024
2023
U.S. federal income tax provision (benefit) at statutory rate$(6,382)$(9,120)
Foreign income and losses taxed at different rates (1)
8,348 6,842 
State income taxes, net of federal benefits, and state tax credits6,592 3,709 
Change in valuation allowances3,589 87,993 
Effect of income tax rate changes on deferred items449 (104)
Adjustments related to uncertain tax positions(1,133)(5,117)
Non-deductible stock-based compensation expense3,527 1,728 
Tax (windfalls)/shortfalls on stock-based compensation awards(370)1,606 
Federal research and development credits, net of adjustments— — 
Forgiveness of intercompany liabilities— (43)
Tax attribute expiration— — 
Asset impairments— (82,988)
Non-deductible or non-taxable items8,847 5,002 
Convertible debt payoff
2,656 — 
Provision (benefit) for income taxes$26,123 $9,508 
(1)Tax rates in foreign jurisdictions were generally lower than the U.S. federal statutory rate through December 31, 2025. This resulted in an adverse impact to the Provision (benefit) for income taxes in this rate reconciliation for the years ended December 31, 2025, 2024 and 2023 prior to the impact of valuation allowances, due to the net pretax losses from operations in certain foreign jurisdictions with lower tax rates.

Income taxes paid, net of refunds received, summarized by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 are as follows (in thousands):
Year Ended December 31,
2025
 United States - Federal $4,587 
 United States - State and Local 1,368 
 Foreign
Italy22,599 
United Kingdom6,020 
Czech Republic3,438 
Poland(1,585)
Other 344 
 Total income tax payments $36,771 
For the years ended December 31, 2024 and 2023, income taxes paid, net of refunds received were $15.5 million and $7.9 million.
The deferred income tax assets and liabilities consisted of the following components as of December 31, 2025 and 2024 (in thousands):
December 31,
20252024
Deferred tax assets:
Accrued expenses and other liabilities$33,620 $31,104 
Stock-based compensation9,436 2,584 
Net operating loss and tax credit carryforwards233,215 214,944 
Property, equipment and software, net8,984 14,022 
Intangible assets, net22,526 20,368 
Right-of-use assets
647 628 
Investments5,756 5,802 
Convertible senior notes5,487 2,047 
Unrealized foreign currency exchange losses264 1,510 
Capitalized research and development costs
14,278 16,259 
Other25 274 
Total deferred tax assets334,238 309,542 
Less: Valuation allowances(306,315)(286,827)
Deferred tax assets, net of valuation allowance27,923 22,715 
Deferred tax liabilities:
Prepaid expenses and other assets(14,052)(11,201)
Operating lease obligation
(46)(31)
Deferred revenue(6,242)(7,330)
Total deferred tax liabilities(20,340)(18,562)
Net deferred tax asset (liability)$7,583 $4,153 
We recognize deferred tax assets to the extent that they will be realizable through future reversals of existing taxable temporary differences, through taxable income in carryback years for the applicable jurisdictions or based on projections of future income for those jurisdictions that have achieved sustained profitability. In evaluating the need for a valuation allowance, management considers both positive and negative evidence that could affect its view of the future realization of deferred tax assets and places greater weight on recent and objectively verifiable current information.
For the years ended December 31, 2025 and 2024, we continue to maintain a valuation allowance against substantially all of our U.S. federal and state and foreign deferred tax assets.
Given the Company’s recent history of U.S. taxable earnings, we believe that there is a possibility that within the next twelve months sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the U.S. federal and state valuation allowance recorded will no longer be needed. The reversal would result in an income tax benefit for the quarterly and annual fiscal period in which the Company releases the valuation allowance. However, the exact timing and amount of the valuation allowance release, if at all, are subject to significant judgment and are dependent on the level of profitability and likelihood of future utilization of attributes that we are able to actually achieve.
We had $14.0 million of federal net operating loss carryforwards as of December 31, 2025 which will begin expiring in 2027. We had $33.5 million of state net operating loss carryforwards as of December 31, 2025, which will begin expiring in 2026. As of December 31, 2025, we had $972.4 million of foreign net operating loss carryforwards, a significant portion of which carry forward for an indefinite period.
We are subject to taxation in the United States, state jurisdictions and foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting
the more-likely-than-not criterion, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
The following table summarizes activity related to our gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year Ended December 31,
202520242023
Beginning Balance$22,424 $33,599 $39,172 
Increases related to prior year tax positions17,187 1,450 — 
Decreases related to prior year tax positions(762)(858)— 
Increases related to current year tax positions712 658 790 
Decreases based on settlements with taxing authorities(20,043)(1,965)— 
Decreases due to lapse of statute limitations(643)(10,234)(6,743)
Foreign currency translation878 (226)380 
Ending Balance$19,753 $22,424 $33,599 
The total amount of unrecognized tax benefits as of December 31, 2025, 2024 and 2023 that, if recognized, would affect the effective tax rate are $12.1 million, $11.9 million and $7.6 million, respectively.
We recognized $0.8 million of interest and penalties benefit and $0.7 million and $0.6 million of interest and penalties expense within Provision (benefit) for income taxes on our Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023. Total accrued interest and penalties as of December 31, 2025 and 2024 were $1.1 million and $1.9 million, respectively, and are included within Other non-current liabilities in our Consolidated Balance Sheets.
We are currently under audit by several foreign jurisdictions. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress and completion of those audits.
We are subject to claims for tax assessments by foreign jurisdictions. On August 5, 2025, Groupon S.r.l. and the Italian Tax Authority reached an agreement in principle to resolve the Italy 2012 and 2017 Assessments. On December 29, 2025, Groupon S.r.l. and the Italian tax authorities entered into a binding framework agreement that definitively resolves all outstanding tax disputes involving Groupon S.r.l. Under the terms of the agreement, the total settlement amount was approximately $25.3 million (€21.5 million). Of this amount, $10.4 million (€8.9 million) had previously been paid through installment plans. As a result, Groupon S.r.l. paid an additional $14.8 million (€12.6 million) in December 2025, representing the net amount due after accounting for the refund of prior payments. An immaterial additional amount was paid in the first quarter of 2026. Following these payments, the Company considers the matters covered by the Italy 2012 and 2017 Assessments to be effectively settled as of December 31, 2025, and the Company does not expect any further material obligations relating to these assessments.
In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. Additionally, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of December 31, 2025 and 2024 are immaterial, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation.
Enactment of the One Big Beautiful Bill Act
On July 4, 2025, the OBBB Act was enacted into law in the U.S. The OBBB Act introduces significant changes to the federal income tax code, including changes to the deductibility of R&D expenses, bonus depreciation, limitation on interest deductibility, international taxation and minimum tax rules.
We have included the impact of the OBBB Act in our financial statements as of December 31, 2025. This resulted in a benefit to our annual effective tax rate for the year ended December 31, 2025, primarily due to the elimination of the requirement to capitalize and amortize U.S. based R&D expenditures. The application of this provision resulted in favorable cash tax impacts for the 2025 tax year, as more R&D costs were deductible in the current period, reducing taxable income and current tax payments. In addition, the immediate deductibility of US based R&D expenditures reduced our US deferred tax assets that had been recorded under the prior rule requiring capitalization and amortization of those costs. This decrease was offset by a corresponding reduction in our valuation allowance.
We will continue to evaluate the implications of the OBBB Act, including potential state income tax conformity, and will adjust estimates and the impact to our income tax provision as additional guidance is issued.