Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 14. Income Taxes

Components of Income Before Taxes

For financial reporting purposes, income before income taxes includes the following components (in thousands):

	Year ended December 31,
	2024			2023			2022
Domestic	$	(152,496	)	$	(149,540	)	$	(147,314	)
Foreign		406			207			9
Income (loss) before income taxes	$	(152,090	)	$	(149,333	)	$	(147,305	)

Components of Tax Expense

The components of income tax expense are as follows (in thousands):

	Year ended December 31,
	2024		2023
Current:
Federal	$	—	$	—
State		—		—
Foreign		171		—
Total Current		171		—
Deferred:
Federal		—		—
State		—		—
Foreign		—		—
Total Deferred	$	—	$	—

Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate of 21% is as follows:

	Year ended December 31,
	2024			2023			2022
U.S. federal provision at statutory rate		21.0	%		21.0	%		21.0	%
Tax credits		2.6	%		3.0	%		2.7	%
Stock-based compensation		(2.2	)%		(2.7	)%		1.9	%
Section 162(m)		(0.7	)%		(0.1	)%		(0.6	)%
Change in valuation allowance		(20.2	)%		(19.6	)%		(25.1	)%
Other		(0.5	)%		(1.6	)%		0.1	%
Effective tax rate		0.0	%		0.0	%		0.0	%

The Company’s effective tax rates differ from the federal statutory rate primarily due to the change in valuation allowance.

Deferred Taxes

The Company’s deferred income tax assets and liabilities as of December 31, 2024 and 2023 were as follows (in thousands):

	Year ended December 31,
	2024			2023
Deferred tax assets:
Net operating loss carry forward	$	79,991		$	62,346
Tax credits		24,293			18,261
Intangibles		3,535			3,499
Other		(1	)		28
Stock-based compensation		1,880			1,998
Lease liability		827			1,542
Research and development costs		47,018			33,341
Fixed assets		37			—
Accruals and reserves		1,384			1,364
Total deferred tax assets before valuation allowance		158,964			122,379
Valuation allowance		(158,121	)		(120,779	)
Total deferred tax assets		843			1,600
Deferred tax liabilities:
Right of use assets		(843	)		(1,528	)
Fixed assets		—			(72	)
Total deferred tax liabilities		(843	)		(1,600	)
Net deferred tax assets (liabilities)	$	—		$	—

The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. Due to the losses the Company generated in the current and prior years; the Company believes it is not more likely than not that all of the deferred tax assets can be realized. Accordingly, the Company established and recorded a full valuation allowance on its net deferred tax assets of $158.1 million as of December 31, 2024 and a net valuation allowance on its deferred tax assets of $120.8 million as of December 31, 2023. The valuation allowance increased by $37.3 million for the year ended December 31, 2024.

As a result of the Tax Cuts and Jobs Act (the “Tax Act”), foreign accumulated earnings that were subject to the mandatory transition tax as of December 31, 2017, can be repatriated to the U.S. without incurring further U.S. federal tax. The Tax Act moves towards a modified territorial tax system through the provision of a 100% dividend received deduction for the foreign-source portions of dividends received from controlled foreign subsidiaries. As a result, the Company continues to evaluate the indefinite reinvestment assertions with regards to unremitted earnings for our foreign subsidiaries. As of December 31, 2024 the total undistributed earnings of the Company’s foreign subsidiaries were approximately $0.2 million. The Company has asserted its intention to indefinitely reinvest the undistributed earnings of foreign subsidiaries. The unrecognized deferred tax liability on the portion of the undistributed earnings considered indefinitely reinvested is not material.

As of December 31, 2024, the Company had $308.7 million of U.S. federal and $230.5 million of state net operating loss carryforwards available to reduce future taxable income, of which $305.5 million will be carried forward indefinitely for U.S. federal tax purposes and the remainder of losses will expire beginning in 2036 for federal and 2031 for state tax purposes.

The Company also has federal and California research and development tax credit carryforwards of $27.7 million and $18.0 million, respectively. The federal research credit carryforwards will expire in 2036 and California research credits can be carried forward indefinitely.

The federal and state net operating loss carryforwards may be subject to significant limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and similar provisions under state law. The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used

in any given year in the event of special occurrences, including significant ownership changes. The Company has completed analysis as of December 31, 2024 and doesn’t expect any net operating loss carryforwards or tax credit carryforwards to expire due to a limitation.

Unrecognized Tax Benefits

The Company accrues for uncertain tax positions identified, which are not deemed more likely than not to be sustained if challenged, and recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company has not accrued any interest on uncertain tax benefits associated with unrecognized tax benefits and had immaterial cumulative interest and penalties as of December 31, 2024, 2023 and 2022.

The Company does not expect that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):

	Year ended December 31,
	2024		2023		2022
Unrecognized tax benefits as of the beginning of the year	$	13,809	$	8,872	$	4,702
Increase related to prior year tax provisions		111		—		(100	)
Decrease related to prior year tax provisions		—		—		—
Increase related to current year tax provisions		4,397		4,937		4,270
Statue lapse		—		—		—
Unrecognized tax benefits as of the end of the year	$	18,317	$	13,809	$	8,872

There are no amounts included in the balance of unrecognized tax benefits as of December 31, 2024, 2023 and 2022, that, if recognized, would affect the effective tax rate.

The Company’s major tax jurisdictions are the United States, various states and India. Due to the net operating loss carryforward since inception, all tax years are open for examination. There have been no examinations of the Company’s income tax returns by any tax authority.