Amylyx Pharmaceuticals, Inc. Income Taxes Disclosure
12. Income Taxes
The components of net loss before the provision for income taxes are as follows:
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
U.S. |
|
$ |
(144,577 |
) |
|
$ |
(301,757 |
) |
Non-U.S. |
|
|
(112 |
) |
|
|
(379 |
) |
Loss before income taxes |
|
$ |
(144,689 |
) |
|
$ |
(302,136 |
) |
The (benefit) provision for income taxes is as follows:
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Current income tax provision |
|
|
|
|
|
|
||
U.S. - Federal |
|
$ |
— |
|
|
$ |
130 |
|
U.S. - State |
|
|
46 |
|
|
|
23 |
|
Non-U.S. |
|
|
— |
|
|
|
(770 |
) |
|
|
$ |
46 |
|
|
$ |
(617 |
) |
Deferred income tax provision |
|
|
|
|
|
|
||
Non-U.S. |
|
$ |
— |
|
|
$ |
224 |
|
Provision (benefit) for income taxes |
|
$ |
46 |
|
|
$ |
(393 |
) |
A reconciliation of the Company’s effective income tax rate to the U.S. statutory federal income tax rate of 21% for the years ended December 31, 2025 and 2024 is as follows:
|
|
Year Ended |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
U.S. federal statutory tax rate |
|
$ |
(30,384 |
) |
|
|
21.0 |
% |
|
$ |
(63,449 |
) |
|
|
21.0 |
% |
State and local income taxes, net of federal income tax |
|
|
37 |
|
|
|
(0.0 |
)% |
|
|
18 |
|
|
|
(0.1 |
)% |
Foreign tax effects (aggregate) |
|
|
— |
|
|
|
— |
% |
|
|
(430 |
) |
|
|
0.1 |
% |
Tax credits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development tax credits |
|
|
(2,726 |
) |
|
|
1.9 |
% |
|
|
(7,053 |
) |
|
|
2.3 |
% |
Changes in valuation allowance |
|
|
28,332 |
|
|
|
(19.6 |
)% |
|
|
64,916 |
|
|
|
(21.4 |
)% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation |
|
|
1,670 |
|
|
|
(1.2 |
)% |
|
|
4,047 |
|
|
|
(1.3 |
)% |
Executive compensation |
|
|
2,971 |
|
|
|
(2.1 |
)% |
|
|
2,557 |
|
|
|
(0.8 |
)% |
Other |
|
|
146 |
|
|
|
(0.1 |
)% |
|
|
(999 |
) |
|
|
0.3 |
% |
Effective income tax rate |
|
$ |
46 |
|
|
|
(0.0 |
)% |
|
$ |
(393 |
) |
|
|
0.1 |
% |
(1) State taxes in Illinois contributed to the majority of the tax effect in this category.
Deferred tax assets and liabilities were as follows:
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Deferred tax assets: |
|
|
|
|
|
|
||
Federal net operating loss carryforwards |
|
$ |
76,043 |
|
|
$ |
55,174 |
|
State net operating loss carryforwards |
|
|
19,576 |
|
|
|
7,881 |
|
Capitalized research and development costs |
|
|
67,557 |
|
|
|
61,280 |
|
Tax credits |
|
|
18,705 |
|
|
|
16,005 |
|
Stock Based Compensation |
|
|
4,221 |
|
|
|
3,396 |
|
Intangibles |
|
|
7,526 |
|
|
|
7,507 |
|
Accruals and other |
|
|
7,396 |
|
|
|
7,906 |
|
Total deferred tax assets |
|
$ |
201,024 |
|
|
$ |
159,149 |
|
Valuation allowance |
|
|
(199,595 |
) |
|
|
(158,542 |
) |
Net total deferred tax assets |
|
$ |
1,429 |
|
|
$ |
607 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Other |
|
|
(1,429 |
) |
|
|
(607 |
) |
Total deferred tax liabilities |
|
$ |
(1,429 |
) |
|
$ |
(607 |
) |
Net deferred tax assets |
|
$ |
— |
|
|
$ |
— |
|
On a periodic basis the Company reassess the valuation allowance that has been established, weighing all positive and negative evidence. As of December 31, 2025, the Company maintained a full valuation against net deferred tax assets.
As of December 31, 2025 and 2024, the Company had federal NOL loss carryforwards of approximately $362.1 million and $262.7 million, respectively, and state NOL loss carryforwards of approximately $306.5 million and $126.9 million, respectively, which are available to reduce future taxable income. All U.S. federal NOL carryforwards as of December 31, 2025 carry forward indefinitely. Of the $306.5 million state NOL carryforwards, $201.0 million relate to Massachusetts and begin to expire in 2040. As of December 31, 2025 and 2024, the Company also had federal tax credits of $16.1 million and $13.4 million, respectively, and state tax credits of $3.3 million. The tax credit carryforwards will expire at various dates beginning in 2035.
The utilization of NOL and tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the IRC. No ownership changes have occurred that would impact the Company’s overall ability to utilize NOL carryforwards and research and development tax credit carryforwards but application of IRC sections 382 and 383 may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income.
The following table reflects the roll-forward of the Company’s valuation allowance for the years ended December 31, 2025 and 2024:
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Valuation allowance at beginning of year |
|
$ |
158,542 |
|
|
$ |
83,922 |
|
Increases (decreases) recorded to income tax provision |
|
|
41,053 |
|
|
|
74,620 |
|
Valuation allowance at end of year |
|
$ |
199,595 |
|
|
$ |
158,542 |
|
The increase in the valuation allowance recorded during the year was primarily due to the increase in net operating loss generated by the Company in 2025 and required capitalization of research and development costs.
The Company accounts for uncertainty in income taxes under the provisions of ASC 740 which defines the thresholds for recognizing the benefits of tax return positions in the consolidated financial statements as “more likely than not” to be sustained by the taxing authority. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Balance at beginning of the period |
|
$ |
3,762 |
|
|
$ |
2,209 |
|
(Decreases) Increases related to tax positions taken during prior years |
|
|
(169 |
) |
|
|
55 |
|
Increases related to tax positions taken during the current year |
|
|
725 |
|
|
|
1,498 |
|
Balance at end of the period |
|
$ |
4,318 |
|
|
$ |
3,762 |
|
The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. All uncertain tax benefits, if recognized, would impact the effective tax rate if recognized, offset by changes to the Company’s valuation allowance which also would impact the effective tax rate. The Company accrues interest and penalties related to unrecognized tax benefits as a component of its provision for income taxes. The Company did not recognize any material interest or penalties related to uncertain tax positions during the years ended December 31, 2025 and 2024.
The Company files U.S. federal, foreign and state income tax returns in various jurisdictions. The status of limitations varies by jurisdiction. There are currently no federal or state audits or examinations in process.
Cash paid for income taxes, net of refunds received, by jurisdiction for the years ended December 31, 2025 and 2024 is as follows:
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
US Federal |
|
$ |
(96 |
) |
|
$ |
— |
|
US state and local |
|
|
|
|
|
|
||
Florida |
|
* |
|
|
|
52 |
|
|
Illinois |
|
|
(281 |
) |
|
* |
|
|
Texas |
|
* |
|
|
|
140 |
|
|
Other |
|
|
(21 |
) |
|
|
2 |
|
Foreign |
|
|
|
|
|
|
||
Canada |
|
|
(223 |
) |
|
|
62 |
|
Germany |
|
* |
|
|
|
35 |
|
|
Ireland |
|
* |
|
|
|
(61 |
) |
|
Netherlands |
|
|
(546 |
) |
|
|
(56 |
) |
Switzerland |
|
* |
|
|
|
57 |
|
|
United Kingdom |
|
|
78 |
|
|
* |
|
|
Other |
|
|
51 |
|
|
|
4 |
|
Total income taxes paid, net of refunds received |
|
$ |
(1,038 |
) |
|
$ |
235 |
|
* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 3, 2026 | Showing above |
| 2024 | Mar 4, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Mar 13, 2023 | |
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.