AbCellera Biologics Inc.ABCL
AbCellera Biologics Inc. Income Taxes Disclosure
Income taxes
a. For financial reporting purposes, loss before income taxes includes the following components:
| December 31, | |||||||||||||||||
| 2023 | 2024 | 2025 | |||||||||||||||
| Canadian | $ | (146,322) | $ | (189,474) | $ | (188,462) | |||||||||||
| Foreign | (27,707) | (10,921) | 10,867 | ||||||||||||||
| Total | $ | (174,029) | $ | (200,395) | $ | (177,595) | |||||||||||
The recovery for income taxes consists of:
| December 31, | |||||||||||||||||
| 2023 | 2024 | 2025 | |||||||||||||||
| Current | |||||||||||||||||
| Canadian | $ | (29,591) | $ | (18,460) | $ | (30,044) | |||||||||||
| Foreign | — | 671 | (201) | ||||||||||||||
| (29,591) | (17,789) | (30,245) | |||||||||||||||
| Deferred and other | |||||||||||||||||
| Canadian | 4,526 | 749 | — | ||||||||||||||
| Foreign | (2,566) | (20,498) | (938) | ||||||||||||||
| 1,960 | (19,749) | (938) | |||||||||||||||
| Income tax recovery | $ | (27,631) | $ | (37,538) | $ | (31,183) | |||||||||||
| December 31, | |||||||||||||||||
| 2023 | 2024 | 2025 | |||||||||||||||
| Current tax recovery | $ | (29,591) | $ | (17,789) | $ | (30,245) | |||||||||||
| Deferred tax expense (recovery) | 1,960 | (19,749) | (938) | ||||||||||||||
| Total tax recovery | $ | (27,631) | $ | (37,538) | $ | (31,183) | |||||||||||
b. The consolidated effective income tax rate differs from the expected Canadian statutory tax rate.
We adopted ASU 2023-09 prospectively. See Note 3 for additional details on the adoption of ASU 2023-09. A reconciliation of the Canadian federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements for the year ended December 31, 2025 is as follows:
| Year ended December 31, 2025 | |||||||||||
| Loss before income taxes | $ | (177,595) | |||||||||
| Canadian Federal statutory income tax rate (i) | (44,399) | 25.0 | % | ||||||||
| Domestic Federal | |||||||||||
| Change due to SR&ED | (6,002) | 3.4 | % | ||||||||
| Changes in valuation allowance | 12,321 | (6.9) | % | ||||||||
| Stock-based compensation | 11,863 | (6.6) | % | ||||||||
| Other | 252 | (0.1) | % | ||||||||
| Provincial taxes net of Federal benefit (ii) | (1,134) | 0.6 | % | ||||||||
| Foreign Tax Effects | |||||||||||
| United States | |||||||||||
| Change in valuation allowance | (2,775) | 1.6 | % | ||||||||
| Other | 1,101 | (0.6) | % | ||||||||
| Other Foreign Jurisdictions | |||||||||||
| Change in valuation allowance and other | (2,410) | 1.2 | % | ||||||||
| Effective tax rate | $ | (31,183) | 17.5 | % | |||||||
(i)The federal tax rate of 25% which is the federal statutory rate of Canada, net of the general rate reduction.
(ii)Provincial taxes in British Columbia and Quebec contributed to the majority of the tax effect in this category.
Cash taxes paid net of refund received by the Company during 2025 in all jurisdictions was immaterial.
A reconciliation of the combined Canadian federal and provincial statutory income tax rates to our effective tax rate for the years ended December 31, 2023 and 2024 is as follows :
| December 31, | |||||||||||
| 2023 | 2024 | ||||||||||
| Net loss before income taxes | $ | (174,029) | $ | (200,395) | |||||||
| Combined statutory tax rate | 27 | % | 27 | % | |||||||
| Expected income tax recovery at statutory rates | (46,988) | (54,107) | |||||||||
| Stock-based compensation | 17,081 | 18,226 | |||||||||
| Change in valuation allowance | 11,485 | 15,205 | |||||||||
| Tax rate differential | (1,042) | 1,077 | |||||||||
| Prior year tax assessments and adjustments | (344) | 774 | |||||||||
| Change due to SR&ED | (7,428) | (8,224) | |||||||||
| Gain on contingent consideration | — | (12,771) | |||||||||
| Capital treatment of items | — | 2,205 | |||||||||
| Other | (395) | 77 | |||||||||
| Income tax recovery | $ | (27,631) | $ | (37,538) | |||||||
c. Deferred income tax assets (“DTAs”) and liabilities (“DTLs”) result from the temporary differences between assets and liabilities recognized for financial statement and income tax purposes. The significant components of the Company’s deferred income tax assets and liabilities were as follows:
| December 31, | |||||||||||
| 2024 | 2025 | ||||||||||
| Deferred tax assets | |||||||||||
| Government contributions | $ | 33,308 | $ | 36,928 | |||||||
| Operating lease liability | 15,648 | 38,662 | |||||||||
| Net operating losses carried forward | 15,631 | 2,130 | |||||||||
| Research and development expenditures and related credits | 33,566 | 56,049 | |||||||||
| Other | 5,388 | 1,064 | |||||||||
| 103,541 | 134,833 | ||||||||||
| Deferred tax liabilities | |||||||||||
| Property and equipment | $ | (20,777) | $ | (30,594) | |||||||
| Intangibles | (9,592) | (8,645) | |||||||||
| Operating lease right-of-use assets | (15,862) | (36,740) | |||||||||
| Other | (17,453) | (11,738) | |||||||||
| (63,684) | (87,717) | ||||||||||
| 39,857 | 47,116 | ||||||||||
| Less: valuation allowance | (49,909) | (56,231) | |||||||||
| Net deferred tax liability | (10,052) | (9,115) | |||||||||
| Deferred tax asset | — | — | |||||||||
| Deferred tax liability | (10,052) | (9,115) | |||||||||
| Net deferred tax liability | $ | (10,052) | $ | (9,115) | |||||||
d. The Company had $27.1 million and $51.1 million of net-operating losses and R&D expenditure pools, and $8.5 million and $24.0 million of tax carryforward credits to apply against future taxes in Canada as of December 31, 2024 and 2025, respectively.
e. The Company had operating losses carried forward related to U.S. operations of approximately $19.4 million, $17.9 million and $4.8 million as of December 31, 2023, 2024 and 2025, respectively.
U.S net-operating losses totaling $4.8 million may be carried forward indefinitely.
f. In Australia, the Company has immaterial tax carryforward credits.
g. As of December 31, 2025, the Company has immaterial accumulated undistributed earnings generated by foreign subsidiaries. The Company has not provided a deferred liability for the income taxes associated with its foreign investments because it is the Company’s intention to indefinitely reinvest in its foreign investments.
h. The Company did not realize any previously unrecognized tax benefits with respect to uncertain tax positions during the years ended December 31, 2023, 2024, and 2025. There were no unrecognized tax benefits with respect to uncertain tax positions for the years ended December 31, 2023, 2024 and 2025.
The Company is subject to taxation primarily in Canada, the United States, and Australia. Further, while the statute of limitations in each jurisdiction where an income tax return has been filed generally limits the examination period, the limitation period for examination by a jurisdiction may be extended under various provisions. Generally, tax years ranging from 2021 to 2025 remain open to income tax examination. Other than routine audits done by tax authorities, management is not aware of any other material income tax assessments arising from examinations currently in progress by any taxing jurisdiction.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 25, 2022 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.