Traeger, Inc.COOK
Traeger, Inc. Income Taxes Disclosure
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The components of loss before income taxes were as follows for the fiscal periods indicated (in thousands):
| Year-ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (65,971) | $ | (35,546) | $ | (96,517) | |||||||||||
| Foreign | (53,351) | (418) | 14,100 | ||||||||||||||
Loss before provision (benefit) for income taxes | $ | (119,322) | $ | (35,964) | $ | (82,417) | |||||||||||
Provision (benefit) for income taxes consisted of the following components for the fiscal periods indicated (in thousands):
| Year-ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 46 | $ | 6 | $ | 12 | |||||||||||
| State | (53) | 36 | 95 | ||||||||||||||
| Foreign | 712 | (114) | 4,018 | ||||||||||||||
| Total current tax expense | $ | 705 | $ | (72) | $ | 4,125 | |||||||||||
| Deferred expense: | |||||||||||||||||
| Federal | $ | — | $ | — | $ | (26) | |||||||||||
| State | — | — | 26 | ||||||||||||||
| Foreign | (4,846) | (1,884) | (2,140) | ||||||||||||||
| Total deferred tax benefit | $ | (4,846) | $ | (1,884) | $ | (2,140) | |||||||||||
Provision (benefit) for income taxes | $ | (4,141) | $ | (1,956) | $ | 1,985 | |||||||||||
A reconciliation of the differences between the effective and statutory income tax rates after the adoption of ASU 2023-09 are as follows for the fiscal period indicated (dollars in thousands):
| Year-ended December 31, | |||||||||||
| 2025 | |||||||||||
| Federal statutory rate | $ | (25,058) | 21.0 | % | |||||||
State income taxes, net of federal benefit (1) | 89 | (0.1) | % | ||||||||
Foreign tax effects | |||||||||||
United Kingdom | |||||||||||
Rate differential | (557) | 0.5 | % | ||||||||
Goodwill impairment | 8,444 | (7.1) | % | ||||||||
Other | (1,319) | 1.1 | % | ||||||||
Other foreign jurisdictions | 380 | (0.3) | % | ||||||||
Effect of cross-border tax laws | |||||||||||
Global intangible low-taxed income | 192 | (0.2) | % | ||||||||
Tax Credits | |||||||||||
Research and development credits | (547) | 0.5 | % | ||||||||
Change in valuation allowance | 12,478 | (10.5) | % | ||||||||
Nontaxable and nondeductible items | |||||||||||
Stock-based compensation | 1,545 | (1.3) | % | ||||||||
Other | 907 | (0.8) | % | ||||||||
Changes in unrecognized tax benefits | 247 | (0.2) | % | ||||||||
Change in partnership investment | (1,089) | 0.9 | % | ||||||||
| Other | 147 | (0.1) | % | ||||||||
| $ | (4,141) | 3.4 | % | ||||||||
(1)The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Georgia, Illinois, New Jersey, and Texas.
A reconciliation of the differences between the effective and statutory income tax rates prior to the adoption of ASU 2023-09 are as follows for the fiscal periods indicated:
| Year-ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal statutory rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal benefit | 3.8 | 0.3 | |||||||||
| Foreign rate differential | (0.1) | (0.5) | |||||||||
Stock-based compensation | (5.5) | (15.3) | |||||||||
| Global intangible low-taxed income | (4.9) | (5.3) | |||||||||
| Non-deductible items | (2.9) | (2.3) | |||||||||
| Research and development credits | 3.0 | 1.0 | |||||||||
| Change in partnership investment | 3.1 | 15.7 | |||||||||
| Changes in valuation allowance | (22.5) | (25.6) | |||||||||
| Changes in tax rates | 0.3 | 0.5 | |||||||||
Return to provision | 7.6 | 3.2 | |||||||||
| Other | 2.6 | 4.9 | |||||||||
| 5.5 | % | (2.4) | % | ||||||||
The differences between the U.S. statutory rate and the Company’s effective tax rate for the years ended December 31, 2025, 2024, and 2023 are primarily due to the changes in valuation allowance, nondeductible goodwill impairment, state taxes, and stock-based compensation.
Cash paid for income taxes, net of refunds received, by jurisdiction after the adoption of ASU 2023-09 are as follows for the fiscal period indicated (in thousands):
| Year-ended December 31, | |||||
| 2025 | |||||
Federal | $ | — | |||
State | 108 | ||||
Foreign | |||||
United Kingdom | 2,605 | ||||
Canada | 570 | ||||
Other foreign jurisdictions | 119 | ||||
Income taxes paid, net of refunds | $ | 3,401 | |||
Cash paid for income taxes, net of refunds received, during the years ended December 31, 2024 and 2023 was $2.0 million and $3.1 million, respectively.
The amounts that comprised deferred income tax assets, net are as follows for the fiscal periods indicated (in thousands):
| Year-ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 44,616 | $ | 34,280 | |||||||
| Sec. 163(j) interest | 21,922 | 18,719 | |||||||||
| Tax credits | 3,753 | 2,882 | |||||||||
Stock-based compensation | — | 17 | |||||||||
| Property and equipment | 252 | 101 | |||||||||
| Operating lease liabilities | 29 | 35 | |||||||||
| Investments | 72,575 | 71,382 | |||||||||
| Other | 231 | 197 | |||||||||
| Less: valuation allowance | (141,360) | (127,347) | |||||||||
| Total deferred tax assets | $ | 2,018 | $ | 266 | |||||||
| Deferred tax liabilities: | |||||||||||
| Property and equipment | $ | — | $ | (971) | |||||||
| Intangible assets | (3,504) | (5,636) | |||||||||
| Operating right-of-use assets | (25) | (35) | |||||||||
| Total deferred tax liabilities | $ | (3,529) | $ | (6,642) | |||||||
Net deferred tax liability | $ | (1,511) | $ | (6,376) | |||||||
As of December 31, 2025, the Company has net operating loss carryforwards of approximately $162.3 million for federal income tax purposes, which will be available to offset future taxable income. Due to recent tax legislation, approximately $159.0 million of these net operating losses are eligible for indefinite carryforward, limited by certain taxable income limitations. The federal net operating losses will begin to expire in 2037 if not utilized. The Company is not aware of any restrictions or limitations on use of the net operating losses under Internal Revenue Code Section 382. The Company has net operating loss carryforwards of approximately $133.8 million for state income tax purposes, which will be available to offset future taxable income. The state net operating losses will begin to expire in 2026 if not utilized. Due to cumulative losses, the Company has recorded a valuation allowance against its net deferred tax assets as of December 31, 2025, 2024, and 2023, respectively.
The Company also has federal research and development tax credit carryforwards of $4.4 million and state research and development tax credit carryforwards of $1.1 million, which begin to expire in 2038 and 2032, respectively, if not utilized.
The Company annually conducts an analysis of its tax positions and does not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. A tax benefit is recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. For such positions, the largest benefit that has a greater than 50% likelihood of being realized upon settlement is recognized in the financial statements.
The following summarizes activity related to unrecognized tax benefits for the fiscal periods indicated (in thousands):
| Year-ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized benefit—beginning of the year | $ | 1,734 | $ | 1,419 | $ | 1,056 | |||||||||||
| Gross increases—current period positions | 209 | 262 | 184 | ||||||||||||||
Gross increases—prior period positions | 153 | 53 | 179 | ||||||||||||||
| Gross decreases—prior period positions | — | — | — | ||||||||||||||
| Unrecognized benefit—end of the year | $ | 2,096 | $ | 1,734 | $ | 1,419 | |||||||||||
The Company does not expect any significant change in its unrecognized tax benefits within the next 12 months. At December 31, 2025, the Company had $2.1 million of total unrecognized tax benefits recorded against research and development tax credit carryforwards, none of which would impact the effective tax rate if recognized.
The Company has elected to recognize interest and penalties related to uncertain tax positions as a component of interest expense from continuing operations in the accompanying consolidated statements of operations and comprehensive loss. No interest or penalties have been recorded through the year ended December 31, 2025.
The Company files tax returns in the United States and in various foreign and state jurisdictions. The Company is not currently under examination by any taxing jurisdiction as of December 31, 2025. With exception for years generating net operating loss carryforwards, the Company is no longer subject to U.S. federal, state, or local income tax examinations by tax authorities for years before 2021.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 29, 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.