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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Loss before income taxes for the years ended December 31, 2025, and 2024 are as follows (in thousands):
Year Ended December 31,
20252024
Domestic$(64,550)$(98,413)
Foreign1,238 1,905 
Total$(63,312)$(96,508)
The components of income tax expense are as follows (in thousands):
Year Ended December 31,
20252024
Current:
Federal$(3,457)$— 
State70 34 
Foreign187 314 
Total current (benefit) expense(3,200)348 
Deferred:
Federal— 135 
State— — 
Foreign265 54 
Total deferred expense265 189 
Total income tax (benefit) expense
$(2,935)$537 
A reconciliation between the U.S. federal statutory rate and the Company’s effective tax rate for tax year 2025 after the adoption of ASU 2023-09 is as follows (in thousands, except percentages):
Year Ended December 31,
2025
Tax at U.S. federal statutory tax rate$(13,296)21.0 %
State and local income taxes, net of federal income tax effect*57 (0.1)%
Foreign tax effects455 (0.7)%
Effects of cross-border tax laws
  Global intangible low-taxed income 195 (0.3)%
  Subpart F income2 — %
Tax credits
  Research and development credits4,069 (6.4)%
Changes in Valuation Allowances8,932 (14.1)%
Nontaxable or deductible items
  Stock-based and non-deductible employee compensation (1,221)1.9 %
  Other258 (0.4)%
Changes in unrecognized tax benefits(1,359)2.1 %
Other
  2017 and 2018 IRS examination resolution(3,720)5.9 %
  Return-to-provision adjustment2,695 (4.3)%
  Other(2)— %
Total tax provision (benefit)$(2,935)4.6 %
*State taxes in Massachusetts for 2025 made up the majority (greater than 50%) of the tax effect in this category.
A reconciliation between the U.S. federal statutory rate and the Company’s effective tax rate for the tax year 2024 prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31,
2024
Tax at U.S. federal statutory rate$(20,267)21.0 %
State income taxes, net of federal benefit23 — %
Stock-based compensation7,213 (7.5)%
Foreign rate differential10 — %
Fair value changes - warrants(22)— %
Valuation allowance13,174 (13.7)%
Non-deductible expenses39 — %
Other367 (0.4)%
Total tax provision$537 (0.6)%

Significant components of the Company’s deferred tax assets and liabilities for federal, state and foreign income taxes are as follows (in thousands):

Year Ended December 31,

20252024
Deferred tax assets:
Net operating loss carryforwards$242,635 $200,050 
Credits7,637 9,863 
Stock-based compensation601 2,118 
Accruals and reserves4,121 4,296 
Deferred revenue4,284 5,163 
Fixed assets— 1,689 
Operating lease liability3,947 5,086 
Capitalized research and development expenditures8,092 37,291 
Gross deferred tax assets271,317 265,556 
Valuation allowance(266,186)(259,698)
Net deferred tax assets5,131 5,858 
Deferred tax liabilities:
Fixed assets(227)— 
Intangible property(1,823)(3,022)
Operating lease, right of use assets(3,081)(2,571)
Gross deferred tax liabilities(5,131)(5,593)
Net deferred tax assets$— $265 
Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active foreign operations. The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs. The Company has not recorded a deferred tax liability on the undistributed earnings of non-U.S. subsidiaries.
The Company has established a full valuation allowance of $266.2 million and $259.7 million for the years ended December 31, 2025 and 2024, respectively, against its U.S. Federal, state and foreign deferred tax assets. The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of its U.S. Federal, state, and foreign deferred tax assets can be realized as of December 31, 2025. Accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.
The valuation allowance on the Company’s net deferred taxes increased by $6.5 million during the year ended December 31, 2025 as compared to a decrease of $45.3 million during the year ended December 31, 2024. The current year increase in valuation allowance is primarily attributable to the generation of net operating losses. The prior year decrease in valuation allowance is primarily attributable to the generation of net operating losses and capitalization of research and development expenditures.
As of December 31, 2025, the Company had federal net operating loss carryforwards and state net operating loss carryforwards of approximately $1.1 billion and $458.2 million, respectively. As of December 31, 2025, federal net operating loss carryforwards generated after December 31, 2017 will be carried forward indefinitely and the state net operating loss carryforward begins expiring in 2028 through 2045. As of December 31, 2025, the amount of federal net operating loss that does not expire is $1.1 billion.
As of December 31, 2025, the Company had federal and state research and development credit carryforwards of approximately $0.9 million and $12.8 million, respectively. As of December 31, 2025 the federal credits will expire starting in 2035, if not utilized and state credits carryforward indefinitely.
The Tax Reform Act of 1986 and similar state legislation impose substantial restrictions on the utilization of the net operating losses and tax credit carryforwards in the event there is a change in ownership as provided by Section 382 and Section 383 of the Internal Revenue Code and similar state provisions. We have completed an analysis of Section 382 ownership changes in our stock through February 10, 2023 and have concluded that we have experienced ownership changes that will result in limitations in our ability to use certain of our tax credit carryforwards. The Company may experience ownership changes in the future as a result of future transactions in our stock. If it is determined that we undergo one or more ownership changes in the future, then our ability to utilize our U.S. Federal and state net operating loss carryforwards or other tax attributes may be limited or eliminated.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted. The OBBBA provides for significant U.S. tax law changes and modifications including making permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The enactment of OBBBA resulted in an immaterial impact on the income tax provision due to the Company’s valuation allowance and the Company does not expect that portions of OBBBA with future effective dates will have a material impact.
Net cash paid (refunds received) for income taxes consisted of the following (in thousands):
Year Ended December 31,
2025
U.S. Federal$(857)
U.S. state and local jurisdictions22 
Foreign
  United Kingdom(282)
  China263 
  Netherlands180 
  Canada(61)
  Other50 
Net cash paid (refunds received) for income taxes$(685)
The amount of cash income taxes paid by the Company during the year ended December 31, 2024 was $0.4 million.
The balance of gross unrecognized tax benefits as of December 31, 2025, and 2024 was $23.4 million and $24.8 million, respectively. Out of the total unrecognized tax benefits, $0.5 million at December 31, 2025, if recognized, would impact our effective tax rate in the period of recognition. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December 31, 2025 and 2024, the Company has accrued immaterial interest and penalties related to uncertain tax positions. The following table sets forth the change in the uncertain tax positions for the years ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31,
20252024
Balance at the beginning of the year$24,755 $24,755 
Decreases:
For prior years’ tax positions(1,355)— 
Balance at the end of the year$23,400 $24,755 
The Company files income tax returns in the U.S. for Federal, California, and other U.S. states, as well as miscellaneous foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. The earliest year open for examination is the 2016 tax year. During the year ended December 31, 2025, the Company reached a resolution of its IRS examination for the 2017 and 2018 tax years and the Company recorded a refund receivable of $3.0 million. The Company does not believe it is reasonably possible that the Company’s unrecognized tax benefits will materially change in the next 12 months. All of the net operating losses and research and development credit carry-forwards that may be used in future years are still subject to inquiry given that the statute of limitation for these items would begin in the year of the utilization.

Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active foreign operations. The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs. The Company has not recorded a deferred tax liability on the undistributed earnings of non-U.S. subsidiaries.