Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
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, 2024, 2023, and 2022.
The reconciliations of the effective tax rate from the federal statutory rate were as follows:
Twelve Months Ended
December 31,
2024 2023 2022
Federal statutory tax rate
 21.0  % 21.0  % 21.0  %
Stock-based compensation
 2.0  (1.8) (0.2)
Research and development credits
 5.0  3.7  1.5 
Liability classified financial instruments (0.7) (0.5) 1.4 
Adjustments of prior years' taxes 4.6  (2.7) — 
Goodwill impairment —  —  (13.6)
Other
 (0.5) (0.3) (0.1)
Change in valuation allowance
 (31.4) (19.4) (10.0)
Effective tax rate
 —  % —  % —  %
The components of deferred tax assets and liabilities were as follows (in millions):
As of
December 31, 2024 December 31, 2023
Deferred tax assets:
Net operating losses
 $ 592  $ 404 
Tax credits
 178  122 
Stock-based compensation
 5  8 
Capitalized R&D 312  222 
Lease liability
 26  26 
Other
 21  16 
Deferred tax assets, gross
 1,134  798 
Valuation allowance
 (1,037) (726)
Deferred tax assets, net of valuation allowance
 97  72 
Deferred tax liabilities:
Depreciation and amortization
 (67) (47)
Right of use asset
 (25) (26)
Other
 (9) (3)
Deferred tax liabilities
 (101) (76)
Deferred tax liabilities, net
 $ (4) $ (4)
As of December 31, 2024, federal and state net operating losses were $2,029 million and $2,715 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, 2024, federal research and development credits were $174 million, which will begin to expire in 2037 and state research and development credits were $49 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,
2024 2023 2022
Valuation allowance at beginning of period
 $ 726  $ 542  $ 331 
Change in deferred tax asset positions
 311  184  211 
Valuation allowance at end of period
 $ 1,037  $ 726  $ 542 
The components of changes in unrecognized tax benefits were as follows (in millions):
Twelve Months Ended
December 31,
2024 2023 2022
Unrecognized tax benefits at beginning of period
 $ 31  $ 21  $ 18 
Increases related to tax positions taken during a prior year
 2  1  1 
Increases related to tax positions taken during the current year
 12  9  8 
Decreases related to tax positions taken during a prior year
 —  —  (6)
Unrecognized tax benefits at end of period
 $ 45  $ 31  $ 21 
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, 2024, 2023 and 2022.
The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. None of the unrecognized tax benefits, if recognized, would have a material effect on the effective tax rate.
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.