Blaize Holdings, Inc.BZAI
Blaize Holdings, Inc. Income Taxes Disclosure
Note 7. Income Taxes
The following table sets forth the domestic and foreign components of the Company’s loss before income taxes:
| For the Year Ended December 31, | ||||||||||||||
| (Amounts in thousands) | 2025 | 2024 | ||||||||||||
| U.S. | $ | (209,230) | $ | (64,690) | ||||||||||
| Foreign | 2,543 | 2,543 | ||||||||||||
| Loss before income taxes | $ | (206,687) | $ | (62,147) | ||||||||||
The components of the Company’s provision for (benefit from) income taxes are set forth as follows:
| For the Year Ended December 31, | ||||||||||||||
| (Amounts in thousands) | 2025 | 2024 | ||||||||||||
| Current: | ||||||||||||||
| U.S. Federal | $ | — | $ | (256) | ||||||||||
| U.S. States | 1 | 1 | ||||||||||||
| Foreign | 584 | 427 | ||||||||||||
| Total current | 585 | 172 | ||||||||||||
Deferred (1): | ||||||||||||||
| Foreign | (368) | (1,124) | ||||||||||||
| Total deferred | (368) | (1,124) | ||||||||||||
| Total provision for (benefit from) for income taxes | $ | 217 | $ | (952) | ||||||||||
(1) Deferred income taxes were comprised solely of foreign taxes as of December 31, 2025 and 2024.
The reconciliation of the Company’s tax provision at the U.S. federal statutory rate to the Company’s provision for income taxes for the year ended December 31, 2025 is set forth as follows:
| For the Year Ended December 31, 2025 | ||||||||||||||
| (Amounts in thousands) | Amount | Percent | ||||||||||||
| Pre-tax book loss | $ | (206,687) | ||||||||||||
| Provision at U.S. federal statutory rate | (43,404) | 21.0% | ||||||||||||
| U.S.: | ||||||||||||||
State and Local (1) | (294) | 0.1% | ||||||||||||
| Federal: | ||||||||||||||
| Effect of cross-border tax laws | 893 | (0.4)% | ||||||||||||
| Tax credits | (1,157) | 0.6% | ||||||||||||
| Change in valuation allowance | 17,842 | (8.6)% | ||||||||||||
| Non-taxable or non-deductible items: | ||||||||||||||
| Transaction costs | 2,529 | (1.2)% | ||||||||||||
| Change in fair value of Legacy Blaize convertible notes and warrants and Polar warrants | 46,604 | (22.7)% | ||||||||||||
| Change in fair value of other earnout shares | (24,594) | 12.0% | ||||||||||||
| Other non-taxable or non-deductible items | 1,272 | (0.6)% | ||||||||||||
| Foreign: | ||||||||||||||
| Other foreign jurisdictions | (616) | 0.3% | ||||||||||||
| Changes in unrecognized tax benefits | 1,142 | (0.6)% | ||||||||||||
| Provision for income taxes | $ | 217 | (0.1)% | |||||||||||
(1) For the year ended December 31, 2025, California state taxes made up more than 50% of the tax effect in this category.
The reconciliation of the Company’s tax provision at the U.S. federal statutory rate to the Company’s provision for income taxes for the year ended December 31, 2024 is set forth as follows:
| For the Year Ended December 31, 2024 | ||||||||||||||
| (Amounts in thousands) | Amount | Percent | ||||||||||||
| Pre-tax book loss | $ | (62,147) | ||||||||||||
| Provision at U.S. federal statutory rate | (13,049) | 21.0% | ||||||||||||
| State taxes, net of federal benefit | 1 | —% | ||||||||||||
| Gain on remeasurement of warranty liability | 3,302 | (5.3)% | ||||||||||||
| Other permanent differences | 802 | (1.3)% | ||||||||||||
| Return to accrual adjustment | (896) | 1.4% | ||||||||||||
| Foreign tax rate differential | 195 | (0.3)% | ||||||||||||
| Tax credits | (1,211) | 2.0% | ||||||||||||
| Uncertain tax position | 410 | (0.7)% | ||||||||||||
| Deferred only adjustment to beginning deferred balances | (799) | 1.3% | ||||||||||||
| Valuation allowance | 10,290 | (16.6)% | ||||||||||||
| Other, net | 3 | —% | ||||||||||||
| Provision for income taxes | $ | (952) | 1.5% | |||||||||||
The components of the Company’s deferred tax assets as of December 31, 2025 and 2024 are set forth as follows:
| As of December 31, | ||||||||||||||
| (Amounts in thousands) | 2025 | 2024 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| Net operating loss carryforwards | $ | 68,847 | $ | 55,739 | ||||||||||
| Tax credit | 6,500 | 5,678 | ||||||||||||
| Other reserves and accrued expenses | 1,401 | 1,178 | ||||||||||||
| Operating lease liabilities | 34 | 80 | ||||||||||||
| Depreciation | 498 | 440 | ||||||||||||
| Share-based compensation | 6,966 | 1,519 | ||||||||||||
| Capitalized research and development (Section 174) | 17,767 | 13,423 | ||||||||||||
| Other | 649 | 3 | ||||||||||||
| Total deferred tax asset | 102,662 | 78,060 | ||||||||||||
| Valuation allowance | (100,506) | (75,826) | ||||||||||||
| Net deferred income tax assets | 2,156 | 2,234 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Right-of-use assets | (33) | (77) | ||||||||||||
| Total deferred tax liabilities | (33) | (77) | ||||||||||||
| Deferred income tax assets | $ | 2,123 | $ | 2,157 | ||||||||||
In determining the need for a valuation allowance, the Company weighs both positive and negative evidence in the various jurisdictions in which it operates to determine whether it is more likely than not that its deferred tax assets are recoverable. In assessing the ultimate realizability of its net deferred tax assets, the Company considers all available evidence, including cumulative losses and expected future losses and, as such, management does not believe it is more likely than not that the deferred tax assets will be realized. Accordingly, a full valuation allowance has been established in the U.S. and the Philippines. The valuation allowance as of December 31, 2025 and 2024 was $100.5 million and $75.8 million, respectively. The increase of $24.7 million in the Company’s valuation allowance as of December 31, 2025 compared to December 31, 2024 was due to increases in deferred taxes during the year ended December 31, 2025.
As of December 31, 2025, the Company had U.S. federal and U.S. state net operating loss carryforwards of $256.6 million and $213.8 million, respectively. The U.S. federal and U.S. state net operating loss carryforwards will begin to expire in 2030. As of December 31, 2025, the Company had U.S. federal research and development tax credit carryforwards of $6.8 million and U.S. state research and development tax credit carryforwards of $5.1 million. The U.S. federal research and development tax credit carryforwards will begin to expire in the year 2035 and the U.S. state research and development tax credit carryforwards, all of which are in the state of California, do not expire. As of December 31, 2025, the Company had foreign tax credit carryforwards of $1.1 million available to offset future income taxes payable in India.
During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax examinations.
The following table sets forth a reconciliation of the total amounts of unrecognized tax benefits, excluded from the Company’s consolidated balance sheets, as the Company’s ability to realize these potential benefits is restricted:
| As of and for the Year Ended December 31, | ||||||||||||||
| (Amounts in thousands) | 2025 | 2024 | ||||||||||||
| Balance at beginning of period | $ | 5,000 | $ | 4,283 | ||||||||||
| Additions based on tax positions taken related to prior years | — | 12 | ||||||||||||
| Additions based on tax positions taken related to current period | 1,346 | 705 | ||||||||||||
| Reductions for tax positions related to prior year | (116) | — | ||||||||||||
| Balance at end of period | $ | 6,230 | $ | 5,000 | ||||||||||
The amount of unrecognized tax benefits is not expected to significantly change over the next twelve months. No amounts, outside of the valuation allowance, would impact the Company’s effective tax rate on continuing operations. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of the provision for income taxes, as necessary. Management determined that no accrual for penalties and interest expense related to income taxes was required as of December 31, 2025.
The Company’s primary tax jurisdictions are the U.S., California, United Kingdom and India. All tax years since inception remain open to examination by the U.S. authority as a result of the net operating losses and credit carryforwards. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from three to four years. The Company is not currently under income tax examinations in any federal, state, local or foreign jurisdiction.
On July 4, 2025, the law formally titled “An Act to Provide for the Reconciliation Pursuant to Title II of H. Con. Res. 14” (commonly referred to as “OBBBA”) was signed into law. Per the OBBBA, 100% bonus depreciation has been reinstated for all fixed assets placed in service after January 19, 2025. As such, 100% depreciation for tax purposes was taken on all current year additions, in the amount of $0.2 million. The OBBBA did not have a material effect on the Company’s effective income tax rates for the year ended December 31, 2025 and is not expected to have a material effect in future years.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
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.