CORCEPT THERAPEUTICS INCCORT
CORCEPT THERAPEUTICS INC Income Taxes Disclosure
Income Taxes
The domestic and foreign components of income (loss) before income taxes were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Domestic | $ | 62,911 | $ | 159,623 | $ | 125,691 | |||||||||||
| Foreign | 3,552 | 1,870 | (1,134) | ||||||||||||||
| Income before income taxes | $ | 66,463 | $ | 161,493 | $ | 124,557 | |||||||||||
The income tax (benefit) expense for the years ended December 31, 2025, 2024, and 2023 consisted of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| U.S. federal taxes: | |||||||||||||||||
| Current | $ | 2,332 | $ | 49,716 | $ | 40,265 | |||||||||||
| Deferred | (33,198) | (35,845) | (25,613) | ||||||||||||||
| Total U.S. federal tax (benefit) expense | (30,866) | 13,871 | 14,652 | ||||||||||||||
| State taxes: | |||||||||||||||||
| Current | 857 | 10,504 | 7,590 | ||||||||||||||
| Deferred | (3,514) | (3,783) | (2,645) | ||||||||||||||
| Total state tax (benefit) expense | (2,657) | 6,721 | 4,945 | ||||||||||||||
| Foreign taxes: | |||||||||||||||||
| Current | 1,158 | 256 | 56 | ||||||||||||||
| Deferred | (824) | (564) | (1,236) | ||||||||||||||
| Total foreign tax expense (benefit) | 334 | (308) | (1,180) | ||||||||||||||
| Total (benefit) provision for income taxes | $ | (33,189) | $ | 20,284 | $ | 18,417 | |||||||||||
On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act. Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. As a result of the enactment of the legislation, our current income taxes payable and deferred tax asset balances have been materially reduced in fiscal year 2025 as compared to prior year. This reduction is a result of our election to expense domestic research costs for tax purposes starting in 2025.
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. Significant components of our deferred tax assets are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | (in thousands) | ||||||||||
| Net operating losses | $ | 93,672 | $ | 3,470 | |||||||
| Capitalized research and patent costs | 757 | 293 | |||||||||
| Capitalized research expenditures | 25,810 | 93,010 | |||||||||
| Research credits | 30,357 | 13,326 | |||||||||
| Stock-based compensation costs | 27,841 | 25,295 | |||||||||
| Operating lease liability | 1,489 | 1,695 | |||||||||
| Accruals and Reserves | 10,343 | 10,358 | |||||||||
| Other | 233 | 2,228 | |||||||||
| Total deferred tax assets | 190,502 | 149,675 | |||||||||
| Valuation allowance | (20,926) | (17,460) | |||||||||
| Deferred tax liabilities | |||||||||||
| Operating lease right-of-use asset | (1,118) | (1,301) | |||||||||
| Other | (261) | — | |||||||||
| Total deferred tax liabilities | (1,379) | (1,301) | |||||||||
| Net deferred tax assets | $ | 168,197 | $ | 130,914 | |||||||
Each quarter, we assess the likelihood that we will generate sufficient taxable income to use our federal and state deferred tax assets. Except for the valuation allowances that offset the value of our California net deferred tax assets, we have determined that it is more likely than not we will realize the benefit related to all other deferred tax assets. To the extent we increase a valuation allowance, we will include an expense in the Consolidated Statement of Income in the period in which such determination is made.
The valuation allowance increased by $3.5 million, $1.5 million and $1.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, we had a federal net operating loss carryforwards of $397.8 million generated in 2025 that do not expire. We also had California net operating loss carryforwards of $63.3 million, which will begin to expire in the year 2033, and other state net operating loss generated in 2025 of $119.2 million that will expire at various dates in the future.
As of December 31, 2025, we also had federal and California research and development tax credits of $18.4 million and $25.2 million, respectively. The federal research credits will begin to expire in 2045 if not utilized and the California research credits have no expiration date.
As further described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, we have elected to prospectively adopt the guidance in ASU 2023-09. In accordance with the guidance in ASU No. 2023-09 the effective income tax rate for the year ended December 31, 2025, differs from the statutory federal income tax rate as follows:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
(in thousands, except percentages) | |||||||||||
| U.S. federal statutory tax rate | $ | 13,957 | 21.0 | % | |||||||
State and local income tax, net of federal (national) income tax effect(1) | (1,905) | (2.9) | % | ||||||||
| Foreign tax effects: | |||||||||||
| United Kingdom | |||||||||||
| Statutory tax rate difference between the United Kingdom and United States | 325 | 0.5 | % | ||||||||
| Share-based payment awards | (145) | (0.2) | % | ||||||||
| Tax credits: | |||||||||||
| Research and development credits | (14,748) | (22.2) | % | ||||||||
| Non-taxable or non-deductible items: | |||||||||||
| Stock-based compensation | (41,133) | (61.9) | % | ||||||||
| Non-deductible executive compensation | 8,487 | 12.8 | % | ||||||||
| Non-deductible meals and entertainment expenses | 1,012 | 1.5 | % | ||||||||
| Other | 99 | 0.1 | % | ||||||||
| Changes in unrecognized tax benefits | 799 | 1.2 | % | ||||||||
| Other adjustments | 63 | 0.1 | % | ||||||||
| Total income tax benefit | $ | (33,189) | (50.0) | % | |||||||
(1) State taxes in Florida, Maryland, Missouri, New Jersey, South Carolina, Tennessee, Utah, and Virginia made up the majority (greater than 50%) of the tax effect in this category | |||||||||||
As previously disclosed for the years ended December 31, 2024, and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differed from the statutory federal income tax rate as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| U.S. federal taxes at statutory rate | $ | 33,914 | $ | 26,157 | |||||||
| R&D and other credits | (16,002) | (11,508) | |||||||||
| State income taxes, net of federal benefit | 5,288 | 3,897 | |||||||||
| Non-deductible compensation | 4,431 | 3,295 | |||||||||
| Stock-based compensation | (8,464) | (2,951) | |||||||||
| Other | 1,117 | (473) | |||||||||
| Total | $ | 20,284 | $ | 18,417 | |||||||
We maintain liabilities for uncertain tax positions. The measurement of these liabilities involves considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other pertinent information.
The aggregate annual changes in the balance of gross unrecognized tax benefits are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Beginning balance | $ | 16,449 | $ | 13,022 | $ | 11,425 | |||||||||||
| Increase in tax positions for prior years | — | 86 | 112 | ||||||||||||||
| Decreases in tax positions for prior years | (13) | (399) | (205) | ||||||||||||||
| Decrease in tax positions for expirations of statute of limitations | (239) | — | (750) | ||||||||||||||
| Increase in tax positions for current year | 6,732 | 3,740 | 2,440 | ||||||||||||||
| Decrease in tax positions for current year | — | — | — | ||||||||||||||
| Ending balance | $ | 22,929 | $ | 16,449 | $ | 13,022 | |||||||||||
As of December 31, 2025, the amount of unrecognized tax benefits that would favorably impact the effective tax rate were approximately $16.6 million, and approximately $6.3 million of unrecognized tax benefits would be offset by a change in the valuation allowance. A valuation allowance is maintained on the remaining tax benefits related to California deferred tax assets and would not impact the effective tax rate. We had $2.3 million and $1.0 million of accrued interest and no accrued penalties related to unrecognized tax benefits as of December 31, 2025 and 2024, respectively. We had no or insignificant amounts of accrued interest and no accrued penalties related to unrecognized tax benefits as of December 31, 2023.
While we believe we have adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than the recorded position. Accordingly, our provisions on federal and state tax-related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved.
Our primary tax jurisdiction is the United States. For federal tax purposes, the years 2021 through 2025 remain open and subject to tax examination. For U.S. state tax purposes, the years 2004 through 2025 generally remain open and subject to tax examination by the appropriate state taxing authorities.
The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025:
| 2025 | |||||
| (in thousands) | |||||
| Federal | $ | 8,675 | |||
| U.S. State | |||||
| Missouri | 640 | ||||
| North Carolina | 391 | ||||
| Other | 3,350 | ||||
| Foreign | (87) | ||||
| Total | $ | 12,969 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 6, 2017 | |
| 2015 | Mar 10, 2016 | |
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.