CODEXIS, INC.CDXS
CODEXIS, INC. Income Taxes Disclosure
Income Taxes
Our loss before provision for income taxes were as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (43,908) | $ | (65,231) | $ | (76,169) | |||||||||||
| Foreign | (19) | (11) | (2) | ||||||||||||||
| Loss before provision for income taxes | $ | (43,927) | $ | (65,242) | $ | (76,171) | |||||||||||
The tax provision for the years ended December 31, 2025 and 2024 consists primarily of taxes attributable to foreign operations. The tax provision for the year ended December 31, 2023 consists primarily of current year state and foreign income taxes. The components of the provision for income taxes are as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision: | |||||||||||||||||
| State | $ | 7 | $ | (6) | $ | 27 | |||||||||||
| Foreign | 43 | 42 | 42 | ||||||||||||||
| Total current provision | 50 | 36 | 69 | ||||||||||||||
| Deferred benefit: | |||||||||||||||||
| Foreign | (3) | (2) | — | ||||||||||||||
| Total deferred benefit | (3) | (2) | — | ||||||||||||||
| Provision for income taxes | $ | 47 | $ | 34 | $ | 69 | |||||||||||
As further described in Note 2, “Summary of Significant Accounting Policies”, we have elected to prospectively adopt the guidance in ASU No. 2023-09. The following table is a reconciliation of the U.S. federal statutory rate of 21% to our effective rate for the year ended December 31, 2025 in accordance with the guidance in ASU No. 2023-09 (in thousands, except percentages):
| Year Ended December 31, 2025 | |||||||||||||||||
| $ | % | ||||||||||||||||
| Provision for income taxes at U.S. federal statutory rate | $ | (9,225) | 21.00 | % | |||||||||||||
| State and local income taxes, net of federal | — | — | |||||||||||||||
| Foreign tax effects | 2 | — | |||||||||||||||
| Tax credits | (1,295) | 2.95 | |||||||||||||||
| Changes in valuation allowance | 7,494 | (17.06) | |||||||||||||||
| Nontaxable or nondeductible items: | |||||||||||||||||
| Stock-based compensation | 2,645 | (6.02) | |||||||||||||||
| Others | 242 | (0.55) | |||||||||||||||
| Changes in unrecognized tax benefits | 180 | (0.41) | |||||||||||||||
| Other adjustments | 4 | (0.02) | |||||||||||||||
| Provision for income taxes | $ | 47 | (0.11) | % | |||||||||||||
The following table is a reconciliation of the provision for income taxes calculated at the statutory rate to our provision for income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU No. 2023-09 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Tax benefit at federal statutory rate | $ | (13,701) | $ | (15,995) | |||||||||||||
| State taxes | (3,133) | (2,208) | |||||||||||||||
| Research and development credits | (419) | (925) | |||||||||||||||
| Foreign operations taxed at different rates | — | — | |||||||||||||||
| Stock-based compensation | 1,930 | 1,967 | |||||||||||||||
| Other nondeductible items | (108) | 438 | |||||||||||||||
| Executive compensation | 306 | 152 | |||||||||||||||
| Change in valuation allowance | 15,159 | 16,640 | |||||||||||||||
| Provision for income taxes | $ | 34 | $ | 69 | |||||||||||||
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.
Significant components of our deferred tax assets and liabilities are as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | 101,027 | $ | 82,925 | |||||||
| Credits | 19,682 | 17,660 | |||||||||
| Deferred revenues | 256 | 48 | |||||||||
| Stock-based compensation | 3,187 | 4,786 | |||||||||
| Reserves and accruals | 2,506 | 2,650 | |||||||||
| Property and Equipment | 131 | 830 | |||||||||
| Intangible assets | 57 | 244 | |||||||||
| Capital losses | 453 | 452 | |||||||||
| R&D Capitalization | 20,637 | 28,471 | |||||||||
| Unrealized gain/loss | 3 | 2 | |||||||||
| Interest carryforward | 399 | — | |||||||||
| Lease liability | 8,474 | 7,445 | |||||||||
| Other assets | 4,788 | 4,362 | |||||||||
| Total deferred tax assets: | 161,600 | 149,875 | |||||||||
| Valuation allowance | (153,803) | (142,994) | |||||||||
| Deferred tax liabilities: | |||||||||||
| Right-of-use assets | (7,808) | (6,895) | |||||||||
| Total deferred tax liabilities: | (7,808) | (6,895) | |||||||||
| Net deferred tax liabilities | $ | (11) | $ | (14) | |||||||
ASC 740 requires that the tax benefit of NOLs, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized and, accordingly, has provided a valuation allowance against our deferred tax assets. Accordingly, the net deferred tax assets in all our jurisdictions have been fully reserved by a valuation allowance. The net valuation allowance increased by $10.8 million during the year ended December 31, 2025, increased by $15.2 million during the year ended December 31, 2024, and increased by $16.7 million during the year ended December 31, 2023. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced.
The following table sets forth our federal, state and foreign NOL carryforwards and federal research and development tax credits as of December 31, 2025 (in thousands):
| December 31, 2025 | |||||||||||
| Amount | Expiration Years | ||||||||||
| Net operating losses, federal | $ | 182,918 | 2026-2037 | ||||||||
| Net operating losses, federal | $ | 237,257 | Do not expire | ||||||||
| Net operating losses, state | $ | 196,540 | 2028-2045 | ||||||||
| Tax credits, federal | $ | 21,388 | 2025-2045 | ||||||||
| Tax credits, state | $ | 22,978 | Do not expire | ||||||||
Current U.S. federal and California tax laws include substantial restrictions on the utilization of NOLs and tax credit carryforwards in the event of an ownership change of a corporation. Accordingly, the Company's ability to utilize NOLs and tax credit carryforwards may be limited as a result of such ownership changes. We performed an analysis in 2025 and determined that there was not a limitation that would result in the expiration of carryforwards before they are utilized.
We apply the provisions of ASC 740 to account for uncertain income taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
We recognize interest and penalties as a component of our income tax expense. Total interest and penalties recognized in the consolidated statements of operations were $42 thousand, $42 thousand and $42 thousand in 2025, 2024 and 2023, respectively. Total penalties and interest recognized in the consolidated balance sheet was $0.7 million, $0.6 million and $0.6 million as of December 31, 2025, 2024 and 2023, respectively. The total unrecognized tax benefits that, if recognized currently, would impact our company’s effective tax rate were $0.3 million as of December 31, 2025, 2024 and 2023. We are not subject to examination by United States federal or state tax authorities for years prior to 2002 and foreign tax authorities for years prior to 2014. Our 2023 U.S. federal tax return is under audit by the Internal Revenue Service, and we will adjust our federal R&D credits based on the outcome of the investigation.| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | 21,618 | $ | 20,204 | $ | 18,571 | |||||||||||
| Additions based on tax positions related to current year | 2,243 | 1,332 | 2,164 | ||||||||||||||
| Additions to tax position of prior years | 138 | 82 | — | ||||||||||||||
| Reductions to tax position of prior years | (130) | — | (531) | ||||||||||||||
| Balance at end of year | $ | 23,869 | $ | 21,618 | $ | 20,204 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 28, 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.