Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Loss Before Provision for Income Taxes

The loss before provision for income taxes for the Company’s operations was as follows (in thousands):


	Year Ended December 31,
	2025		2024		2023
United States	$	(226,958)	$	(78,156)	$	(135,411)
Foreign	26,686		(13,714)		(84,843)
Loss before provision for income taxes	$	(200,272)	$	(91,870)	$	(220,254)

Schedule of Components of Income Tax Expense

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


	Year Ended December 31,
	2025		2024		2023
Current:
Federal	$	461	$	636	$	308
State	27		1,143		345
Foreign	3,950		2,376		1,704
Total current tax expense	4,438		4,155		2,357
Deferred:
Federal	—		—		—
State	—		—		—
Foreign	—		—		—
Total deferred income tax benefit	—		—		—
Income tax expense	$	4,438	$	4,155	$	2,357

Schedule of Effective Income Tax Rate Reconciliation

The expense for income taxes reconciles to the amount computed by applying the federal statutory rate to loss before taxes as follows (in thousands):


	Year Ended December 31, 2025
	$		%
Income tax benefit at federal statutory rate (1)	$	(42,057)	21.00	%
State income tax, net of federal benefit(2)	(1,038)		0.52	%
Foreign tax effects
Switzerland
Foreign rate differential	(3,041)		1.52	%
Changes in valuation allowance	(7,037)		3.51	%


Other tax effects	166		(0.08)	%
Other foreign jurisdictions	(1,722)		0.86	%
Effect of changes in tax laws or rates enacted in the current period	—		—	%
Effect of cross-border tax laws
Subpart F income inclusion	348		(0.17)	%
Tax credits
Research and development credits	(10,370)		5.18	%
Foreign tax credits	(2,667)		1.33	%
Changes in valuation allowance	54,580		(27.25)	%
Nontaxable or nondeductible items
Non-deductible stock-based compensation	3,952		(1.97)	%

Other non-deductible and non-taxable	(103)		0.05	%
Other
Stock-based compensation - (windfall) shortfall	11,542		(5.76)	%

Net impact on liquidation of foreign subsidiary	(17,262)		8.62	%
Other	1,850		(0.94)	%
Changes in unrecognized tax benefits	17,297		(8.64)	%
Income tax expense	$	4,438	(2.22)	%


	Year Ended December 31,
		2024		2023
Income tax benefit at federal statutory rate (1)		$	(19,293)	$	(46,253)
State income tax, net of federal benefit		(1,444)		(1,313)
Convertible debt repurchase transaction		1,658		—

Research and development credits		(7,865)		(6,283)
Section 382 limitation		—		(5)
Stock-based compensation		5,772		14,904
Officers' compensation		1,043		1,547
Recognition of acquired deferred tax assets		—		(5,048)
Acquired IPR&D expenses		—		14,938
Cross-border tax impacts		(1,422)		(307)
Foreign rate differential		2,075		7
Other		1,159		1,374
Change in valuation allowance		22,472		28,796
Income tax expense		$	4,155	$	2,357

(1)For the years ended December 31, 2025, 2024 and 2023, the U.S. federal statutory tax rate was 21%.

(2)The state of California comprises greater than 50% of our state tax benefit.

Schedule of Cash Income Taxes Paid

The amounts of cash income taxes paid, net of refunds received, by the Company are as follows:


	Year Ended December 31,
	2025
Federal	$	2,246
State
Illinois	353
Other states	775
Foreign
Netherlands	1,541
Other foreign	141
Total cash paid in income taxes, net of refunds received	$	5,056

Schedule of Deferred Tax Assets and Liabilities


	December 31,
	2025		2024
Deferred tax assets:
Net operating loss (NOL) carryforwards	$	62,970	$	40,536
Research and development tax credits carryforwards	56,670		32,298
Capitalized research and development expenses	57,122		74,974
Accrued compensation	31,339		38,053
Lease liabilities	31,996		29,165
Warranty reserve	13,096		12,222
Intangible assets	30,390		—
Other	13,771		8,610
Total deferred tax assets	297,354		235,858
Deferred tax liabilities:
Fixed assets	(4,185)		(5,485)
Operating lease right-of-use assets	(22,887)		(19,792)
Other	—		(218)
Total deferred tax liabilities	(27,072)		(25,495)
Less valuation allowance	(270,282)		(210,363)
Net deferred tax assets	$	—	$	—

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits at the beginning and end of the years ended December 31, 2025, 2024 and 2023 (in thousands):


	Year Ended December 31,
	2025		2024		2023
Gross unrecognized tax benefits at the beginning of the year	$	27,474	$	21,527	$	16,986
Increases related to current year positions	49,606		5,947		3,961
Increases (decreases) related to prior year positions	(8,941)		—		580
Gross unrecognized tax benefits at the end of the year	$	68,139	$	27,474	$	21,527

TANDEM DIABETES CARE INC 10-K