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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
(Loss) income before benefit from (provision for) income taxes consists of the following (in thousands):
Years Ended December 31,
202420232022
Domestic$(499,680)$(608,134)$692,445 
Foreign(23,425)(20,060)61,835 
Total (loss) income before benefit from (provision for) income taxes$(523,105)$(628,194)$754,280 
The components of benefit from (provision for) income taxes consist of the following (in thousands):
Years Ended December 31,
202420232022
Current:
Federal$(965)$12,774 $(238,550)
State1,254 (685)(2,432)
Foreign(2,093)(75)(12,647)
(1,804)12,014 (253,629)
Deferred:
Federal2,105 406 15,186 
State900 598 — 
Foreign(56)59 — 
2,949 1,063 15,186 
Benefit from (provision for) income taxes$1,145 $13,077 $(238,443)
A reconciliation between the U.S. federal statutory income tax rate and the reported effective income tax rate is as follows:
Years Ended December 31,
202420232022
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
Foreign tax at less than federal statutory rate(0.1)— (0.3)
State taxes, net of federal benefit(0.7)5.3 0.1 
Research and development tax credit2.4 2.4 (2.0)
Permanent items(2.4)(1.6)(7.4)
Changes in valuation allowance(18.5)(24.2)21.1 
Other(1.5)(0.8)(0.9)
Effective income tax rate0.2 %2.1 %31.6 %
The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities as of December 31, 2024, and 2023, are related to the following (in thousands):
December 31,
20242023
Deferred tax assets:
Net operating loss carryforwards$180,130 $138,257 
Capitalized research and development175,835 136,962 
Intangible assets40,593 19,060 
Research and development tax credit carryforward30,549 17,917 
Equity compensations23,776 34,875 
Lease liabilities20,502 29,047 
Reserves and accruals7,543 21,745 
Valuation allowance(453,394)(356,833)
Deferred tax assets25,534 41,030 
Deferred tax liabilities:
ROU assets(12,219)(16,536)
Property and equipment(10,628)(19,610)
Unrealized gain on investments— (1,190)
IPR&D(1,928)(5,884)
Deferred tax liabilities(24,775)(43,220)
Net deferred tax assets (liabilities)$759 $(2,190)
Although the Company has taxable income for the years ended December 31, 2022, and 2021, it has otherwise incurred accumulated tax losses since inception. Based on the available objective evidence, the Company cannot conclude it is more likely than not that the deferred tax assets will be fully realizable. Accordingly, the Company has provided a valuation allowance against its deferred tax assets. For the year ended December 31, 2024, the Company recorded a valuation allowance increase of $96.6 million. As of December 31, 2024, the Company has net operating loss carryforwards of $645.3 million for federal purposes and $450.2 million for state tax purposes. If not utilized, these carryforwards will begin to expire in 2036 for federal and in 2037 for state tax purposes. As of December 31, 2024, the Company also has net operating loss carryforwards of $31.9 million for Australian tax purposes, which have an indefinite carryforward period, and $29.5 million net operating loss carryforwards for Swiss tax purposes, which have a seven-year carryforward period.
Under the Tax Reform Act of 1986, the amounts of and benefits from net operating loss carryforwards may be impaired or limited in certain circumstances. Events which cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. The Company completed its Section 382 analysis as of December 31, 2024, and based on this analysis, it does not expect that the annual limitations will significantly impact its ability to utilize its net operating loss or tax credit carryforwards prior to expiration.
As of December 31, 2024, the Company has research and development tax credit carryforwards of $11.6 million and $26.5 million for federal and state tax purposes, respectively. If not utilized, the federal carryforward will expire in various amounts beginning in 2036. The California credits can be carried forward indefinitely.
The Tax Cuts and Jobs Act of 2017 subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred.
Uncertain Tax Positions
As of December 31, 2024, and 2023, the Company had an unrecognized tax benefit balance of $17.9 million and $13.6 million, respectively, primarily related to transfer pricing and research and development tax credits. A portion of the unrecognized tax benefits as of December 31, 2024, if recognized, would increase the Company’s effective tax rate by 1.8%. Other unrecognized tax benefits as of December 31, 2024, if recognized, would be in the form of net operating loss and tax credit carryforwards, which attract a full valuation allowance offset, and would not impact the Company’s effective tax rate. There are no provisions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. Because the statute of limitations does not expire until after the net operating loss and credit carryforwards are actually used, the statutes are still open on calendar years ending December 31, 2017 and forward for federal and state purposes.
The Company recognized $1.0 million expense for interest and penalties related to uncertain tax positions during 2024, all of which was recorded as accrued and other liabilities as of December 31, 2024. The Company files U.S. federal, state, Switzerland and Australia tax returns. The Company’s tax years remain open for all years. As of December 31, 2024, the Company was not under examination by the Internal Revenue Service or any state or foreign tax jurisdiction.
A reconciliation of the beginning and ending amounts of the liability for uncertain tax positions is as follows (in thousands):
Years Ended December 31,
202420232022
Gross unrecognized tax benefits at January 1$13,583 $10,638 $7,422 
Addition for tax positions taken in the prior years2,014 29 — 
Reduction for tax positions taken in the prior years(20)— (12)
Addition for tax positions taken in current year2,369 2,916 3,228 
Gross unrecognized tax benefits at December 31$17,946 $13,583 $10,638