Bumble Inc.BMBL
Bumble Inc. Income Taxes Disclosure
Note 4 - Income Taxes
U.S. and foreign (loss) earnings before income taxes and noncontrolling interests are as follows (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||
| U.S. | $ | (991,041) | $ | (835,757) | $ | (51,629) | |||||||||||
| Foreign | 130,065 | 90,511 | 56,931 | ||||||||||||||
| Total | $ | (860,976) | $ | (745,246) | $ | 5,302 | |||||||||||
The components of the income tax (benefit) provision are as follows (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||
| Current income tax (benefit) provision: | |||||||||||||||||
| Federal | $ | (10) | $ | (164) | $ | 426 | |||||||||||
| State | 304 | 571 | 285 | ||||||||||||||
| Foreign | 28,287 | 17,699 | 13,632 | ||||||||||||||
| Current income tax provision | $ | 28,581 | $ | 18,106 | $ | 14,343 | |||||||||||
| Deferred income tax (benefit) provision: | |||||||||||||||||
| Federal | $ | (553) | $ | (528) | $ | (344) | |||||||||||
| State | 56 | 20 | — | ||||||||||||||
| Foreign | 6,285 | 5,530 | (6,829) | ||||||||||||||
| Deferred income tax (benefit) provision | $ | 5,788 | $ | 5,022 | $ | (7,173) | |||||||||||
| Income tax provision | $ | 34,369 | $ | 23,128 | $ | 7,170 | |||||||||||
The Company recorded income tax expense of $34.4 million for the year ended December 31, 2025 compared to income tax expense of $23.1 million recorded for the year ended December 31, 2024. The increase in tax expense in the current year compared to 2024 is primarily attributable to higher foreign taxes resulting from a shift in the jurisdictional mix of earnings. The increase in tax expense in 2024 compared to 2023 is primarily attributable to the accrual of Pillar Two minimum taxes in certain foreign jurisdictions in 2024. In addition, the income tax expense for the current and prior years reported above, reflect the impact of the Company's assessment that it will not be able to realize the benefit of certain deferred tax assets for which a valuation allowance has been recorded.
Pillar Two Minimum Tax
On December 20, 2021, the Organization for Economic Cooperation and Development (“OECD”) released the Pillar Two model rules providing a framework for implementing a 15% minimum tax, also referred to as the Global Anti-Base Erosion ("GloBE") rules, on earnings of multinational companies with consolidated annual revenue exceeding €750 million. Pillar Two legislation has been enacted in certain jurisdictions where the Company operates, including the UK and certain EU member states, and is effective for the Company's financial year beginning January 1, 2024. The Company has performed an assessment of its exposure to Pillar Two income taxes, including its ability to qualify for transitional safe harbor relief under the GloBE rules. While the Company expects to qualify for transitional safe harbor relief in most jurisdictions in which it operates, there are a limited number of jurisdictions where the transitional safe harbor is not available, including for certain entities classified as “stateless” constituent entities under the Pillar Two model rules. The Company’s income tax provision for the year ended December 31, 2025 includes $12.6 million in accrued minimum taxes under Pillar Two (GloBE top up tax), which is based on currently enacted legislation and guidance. As of December 31, 2025, these accrued minimum taxes are included in “Other long-term liabilities” in the accompanying consolidated balance sheet and are payable in March 2027 with the filing of our GloBE return. The Company’s income tax provision for the year ended December 31, 2024 includes $12.6 million in accrued minimum taxes under Pillar Two, which is based on currently enacted legislation and guidance. As of December 31, 2025, these accrued minimum taxes are included in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheet and are payable in June 2026 with the filing of our initial GloBE return. The Company is monitoring the implementation of Pillar Two legislation (both proposed and enacted) by individual countries, including the release of administrative guidance on the application of the GloBE rules, and will continue to evaluate the potential impact to the Company’s financial position. On January 5, 2026, the OECD released Administrative Guidance containing the Side-by-Side agreement (“SbS System”) as part of a broader package of Administrative Guidance on Pillar Two. The SbS System introduces two new Pillar Two safe harbours: (i) the Side-by-Side Safe Harbour (“SbS SH”) for MNE Groups headquartered in jurisdictions with both eligible domestic and worldwide tax systems; and (ii) the Ultimate Parent Entity Safe Harbour (“UPE SH”) for MNE Groups with a UPE located in a
jurisdiction that has an eligible domestic tax system but not an eligible worldwide tax system. The Central Record for purposes of the Global Minimum Tax was updated on January 5, 2026 to reflect that the United States is an eligible jurisdiction for the SbS SH. We expect the SbS SH will have significant future impact to the Company and our Pillar Two computations, however, given the absence of implementing legislation as of December 31, 2025, no impact has been recorded for the year ended December 31, 2025. Accordingly, the Company is still evaluating the potential consequences of Pillar Two on its longer-term financial position.
The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Investment in partnership | $ | 333,106 | $ | 282,594 | |||||||
| Property and equipment | 101 | 122 | |||||||||
| Net operating loss carryforward | 141,589 | 116,609 | |||||||||
| Interest expense carryforward | 17,829 | 17,130 | |||||||||
| Tax receivable agreement | — | 47,193 | |||||||||
| Share-based compensation | 6,332 | 12,314 | |||||||||
| Foreign tax credit carryforward | 40,876 | 19,700 | |||||||||
| Other | 4,116 | 2,954 | |||||||||
| Total deferred tax assets | 543,949 | 498,616 | |||||||||
| Less: Valuation allowance | (530,839) | (477,612) | |||||||||
| Deferred tax assets, net of valuation allowance | $ | 13,110 | $ | 21,004 | |||||||
| Deferred tax liabilities: | |||||||||||
| Amortization | 1,999 | 5,481 | |||||||||
| Total deferred tax liabilities | 1,999 | 5,481 | |||||||||
| Deferred tax (liabilities) assets, net | $ | 11,111 | $ | 15,523 | |||||||
As of December 31, 2025, the Company had deferred tax assets related to federal, state and foreign net operating loss carryforwards of $126.8 million, $13.1 million, and $1.6 million, respectively. Both the federal and foreign net operating losses can be carried forward indefinitely. The state net operating losses generally expire between 2026 and 2045.
The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized. After consideration of all positive and negative evidence, the Company recorded a valuation allowance with respect to its U.S. federal and state deferred tax assets relating to the investment in partnership, net operating loss carryforwards, and interest expense carryforwards. The Company also recorded a valuation allowance against net operating loss carryforwards in certain foreign jurisdictions, which are not expected to be realized. The deferred tax asset related to the Tax Receivable Agreement has been entirely reversed as a result of the TRA Buyout, as further described in Note 5, Payable to Related Parties Pursuant to a Tax Receivable Agreement. During 2025, the Company's valuation allowance increased by $53.2 million due primarily to an increase in U.S. federal and state deferred tax assets generated during the year. During the year ended December 31, 2024, the Company's valuation allowance increased by $220.7 million due primarily to an increase in U.S. federal and state deferred tax assets generated during the year.
A reconciliation of the statutory federal tax rate to the effective tax rate for the year ended December 31, 2025 is as follows:
| Year Ended December 31, 2025 | |||||||||||
| (in thousands) | Total | % | |||||||||
| Income tax provision (benefit) at the U.S. federal statutory tax rate | $ | (180,805) | 21.0 | % | |||||||
| State taxes, net of federal benefit | 208 | — | % | ||||||||
| Foreign tax effects | |||||||||||
| United Kingdom | |||||||||||
| GloBE top-up tax | 12,627 | (1.5) | % | ||||||||
| Other | 7,006 | (0.8) | % | ||||||||
| Other foreign jurisdictions | 6,086 | (0.7) | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Foreign tax credits | (21,176) | 2.5 | % | ||||||||
| Changes in valuation allowances | 158,518 | (18.4) | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Noncontrolling interest | 48,185 | (5.6) | % | ||||||||
| Other | 3,938 | (0.5) | % | ||||||||
| Changes in unrecognized tax benefits | (218) | — | % | ||||||||
| Income tax provision at effective tax rate | $ | 34,369 | (4.0) | % | |||||||
A reconciliation of the statutory federal tax rate to the effective tax rate for the years ended December 31, 2024, and 2023, is as follows:
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | ||||||||||
| Income tax provision at the federal statutory tax rate | 21.0 | % | 21.0 | % | |||||||
| Nondeductible expenses | (0.1 | %) | 41.9 | % | |||||||
| State taxes, net of federal benefit | 1.7 | % | 16.0 | % | |||||||
| Non-controlling interest | (5.9 | %) | 6.3 | % | |||||||
| Effect of foreign taxes | (3.0 | %) | 122.8 | % | |||||||
| Share-based compensation | (1.3 | %) | 108.1 | % | |||||||
| Change in valuation allowance | (15.4) | % | (186.1) | % | |||||||
| Other | (0.1 | %) | 5.2 | % | |||||||
| Income tax provision at effective tax rate | (3.1 | %) | 135.2 | % | |||||||
Uncertain Tax Positions
The Company files income tax returns in each jurisdiction in which it operates, both domestically and internationally. Due to the complexity involved with certain tax matters, the Company has considered all relevant facts and circumstances for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company believes that there are no other jurisdictions in which the outcome of uncertain tax matters is likely to be material to its results of operations, financial position or cash flows. The Company further believes that it has made adequate provision for all income tax uncertainties.
A rollforward of unrecognized tax benefits, excluding accrued penalties and interest is as follows:
| (in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | ||||||||||||||
| Balance, beginning of the period | $ | 15,440 | $ | 14,892 | $ | 14,601 | |||||||||||
| Additions based on tax positions related to the current year | 17 | 10 | — | ||||||||||||||
| Additions based on tax positions related to the prior year | 11 | 538 | 291 | ||||||||||||||
| Reductions due to disposals | (291) | — | — | ||||||||||||||
| Currency translation adjustments | 59 | — | — | ||||||||||||||
| Balance, end of the period | $ | 15,236 | $ | 15,440 | $ | 14,892 | |||||||||||
Of the total amount of unrecognized tax benefits as of December 31, 2025, 2024, and 2023, $2.7 million, $2.9 million, and $2.4 million, respectively, would favorably impact the Company's effective tax rate if recognized.
Interest and penalties related to income tax matters are recorded within the “Income tax benefit (provision)” on the consolidated statements of operations. The total amount of unrecognized tax benefits, including accrued interest and penalties, at December 31, 2025, 2024, and 2023 was $15.3 million, $15.4 million, and $14.9 million, respectively, of which $2.8 million, $2.9 million, and $2.4 million is included in “Accrued expenses and other current liabilities”; and $12.5 million, $12.5 million ,and $12.5 million is a reduction of the Company’s deferred tax assets.
The Company currently files income tax returns in the U.S. and all foreign jurisdictions in which it has entities, which are periodically under audit by federal, state, and foreign tax authorities. These audits can involve complex matters that may require an extended period of time for resolution. The Company remains subject to U.S. federal and state income tax examinations for the tax years 2021 through 2025 and in the foreign jurisdictions in which it operates for varying periods from 2020 through 2025. The Company currently has income tax examinations open for the United Kingdom for 2020, 2021 and 2022. Additionally, Buzz Holdings L.P. and Bumble Inc. are under examination by the U.S. Internal Revenue Service for Tax Years 2021 and 2022.
Although the outcome of open tax audits is uncertain, in management’s opinion, adequate provisions for income taxes have been made. If actual outcomes differ materially from these estimates, they could have a material impact on our financial condition and results of operations. Differences between actual results and assumptions or changes in assumptions in future periods are recorded in the period they become known. To the extent additional information becomes available prior to resolution, such accruals are adjusted to reflect probable outcomes.
Cash paid for income taxes, net of refunds, for the year ended December 31, 2025 is as follows:
| Year Ended December 31, 2025 | |||||
| U.S. federal | $ | — | |||
| U.S. state | 166 | ||||
| Foreign: | |||||
| Brazil | 3,830 | ||||
| Germany | 920 | ||||
| United Kingdom | 9,077 | ||||
| Other foreign | (97) | ||||
| Total income taxes paid, net | $ | 13,896 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 16, 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.