CoreWeave, Inc.CRWV
CoreWeave, Inc. Income Taxes Disclosure
Income Taxes
The components of the loss before income taxes were as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (1,118) | $ | (743) | $ | (558) | |||||||||||
| Foreign | (97) | (1) | — | ||||||||||||||
Loss before income taxes | $ | (1,215) | $ | (744) | $ | (558) | |||||||||||
The provision for (benefit from) income taxes consisted of the following (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| State | $ | — | $ | 6 | $ | — | |||||||||||
Foreign | 5 | — | — | ||||||||||||||
Total current income tax expense (benefit) | 5 | 6 | — | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (38) | 109 | 36 | ||||||||||||||
| State | (4) | 3 | — | ||||||||||||||
Foreign | (11) | 1 | — | ||||||||||||||
Total deferred income tax expense (benefit) | (53) | 113 | 36 | ||||||||||||||
| Total provision for (benefit from) income taxes | $ | (48) | $ | 119 | $ | 36 | |||||||||||
The following table presents the reconciliation of the statutory federal income tax rate to the Company's effective tax rate for the year ended December 31, 2025, updated for the adoption of ASU No. 2023-09 (in millions, except percentages):
Year Ended December 31, | ||||||||||||||
| 2025 | Percentage | |||||||||||||
Tax at statutory rate | $ | (255) | 21 | % | ||||||||||
| Foreign tax effects | 13 | (1) | % | |||||||||||
Tax credits (1) | (55) | 4 | % | |||||||||||
Changes in valuation allowance (2) | 378 | (31) | % | |||||||||||
| Nontaxable or nondeductible items: | ||||||||||||||
Stock-based compensation | (140) | 11 | % | |||||||||||
Other nontaxable or nondeductible items | (5) | 1 | % | |||||||||||
| Changes in unrecognized tax benefits | 16 | (1) | % | |||||||||||
Provision for (benefit from) income taxes | (48) | 4 | % | |||||||||||
(1) Generally comprised of U.S. federal R&D tax credits.
(2) Includes the impacts of the enactment of OBBBA.
The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate, prior to the application of ASU No. 2023-09:
Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
U.S. federal tax benefit at statutory rate | 21.0 | % | 21.0 | % | |||||||
State income taxes, net of federal benefit | 0.1 | 0.1 | |||||||||
Stock-based compensation | 1.9 | 0.5 | |||||||||
Foreign tax rate differential | (0.1) | — | |||||||||
Convertible interest | (0.2) | (0.2) | |||||||||
Change in valuation allowance, net | (17.5) | (7.7) | |||||||||
Derivative liabilities | (21.4) | (20.2) | |||||||||
General business credit - federal | 0.3 | 0.2 | |||||||||
Other | (0.2) | (0.1) | |||||||||
Effective tax rate | (16.1) | % | (6.4) | % | |||||||
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 Company's deferred tax assets and liabilities as of December 31, 2025 and 2024, were as follows (in millions):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | 971 | $ | 767 | |||||||
| Lease liabilities | 2,065 | 540 | |||||||||
Deferred revenue | 768 | 309 | |||||||||
| Other | 217 | 103 | |||||||||
| Total deferred tax assets | 4,021 | 1,719 | |||||||||
| Valuation allowance | (636) | (181) | |||||||||
| Deferred tax assets, net of valuation allowance | 3,385 | 1,538 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Property and equipment | (1,330) | (1,147) | |||||||||
| Intangible assets | (46) | (1) | |||||||||
| Operating and financing ROU assets | (2,112) | (539) | |||||||||
| Total deferred tax liabilities | (3,488) | (1,687) | |||||||||
| Net deferred tax liabilities, net of valuation allowance | $ | (103) | $ | (149) | |||||||
ASC 740, Income Taxes, requires that the tax benefit of net operating losses ("NOL"), 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 the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, a valuation allowance has been provided by the Company against federal and state deferred tax assets.
In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law in the United States. The legislation introduces several measures, including the permanent extension of select provisions from the Tax Cuts and Jobs Act, revisions to the international tax framework, and the reinstatement of favorable tax treatment for certain business-related items. OBBBA contains multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable to the year ended December 31, 2025. The Company will continue to evaluate the impact of these provisions on the year ended December 31, 2026 and subsequent consolidated financial statements.
The valuation allowance increased by $455 million, $133 million and $44 million during the years ended December 31, 2025, 2024, and 2023, respectively.
As of December 31, 2025 and 2024, the Company had $4.3 billion and $3.6 billion, respectively, in federal NOL carryforwards to offset future taxable income, almost all of which can be carried forward indefinitely. As of December 31, 2025 and 2024, the Company had state NOL carryforwards of $905 million and $61 million, respectively, of which $266 million and $30 million, respectively, can be carried forward indefinitely. If the NOL carryforwards are not utilized, $639 million and $31 million, respectively, will expire in varying amounts between the years 2032 and 2044.
As of December 31, 2025 and 2024, the Company had $63 million and $15 million, respectively, of federal tax credit carryforwards available to offset future taxable income. As of December 31, 2025, the Company had $13 million of state tax credit carryforwards available to offset future taxable income. State tax credit carryforwards available to offset future income as of December 31, 2024 were not material.
A limitation may apply to the use of the net operating loss and credit carryforwards, under provisions of the Internal Revenue Code of 1986, as amended, and similar state tax provisions that are applicable if the Company experiences an "ownership change under Section 382." For example, an ownership change may occur as a result of the issuance of new equity or certain shareholder transactions. Should these limitations apply, the carryforwards would be subject to an annual limitation, resulting in a potential reduction in the gross deferred tax assets before considering the valuation allowance.
The Company experienced a Section 382 ownership change during the years ended December 31, 2024 and 2023, and determined that these changes did not materially impact the availability of its NOL carryforwards for use in the future.
Gross unrecognized tax benefits related to uncertain tax positions as of December 31, 2025 was $22 million. If these amounts were recognized, $19 million would affect the Company's effective tax rate. Unrecognized tax benefits of the years ended December 31, 2024 and 2023 were not material.
The change in the balance of unrecognized tax benefits was not material in the years ended December 31, 2025, 2024, and 2023.
The Company is subject to income taxes in the United States, California, and other various domestic and international jurisdictions. The Company is currently under federal audit for 2023.
Due to differing interpretations of tax laws and regulations, tax authorities may dispute the Company's tax filing positions. The Company periodically evaluates the exposures associated with tax filing positions and will reserve amounts, if needed, for adjustments that may result from tax examinations.
The amounts of cash income taxes paid (refunded) by the Company were as follows (in millions):
Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
State and local | $ | (1) | $ | 14 | $ | — | |||||||||||
| Income taxes, net of amounts refunded | $ | (1) | $ | 14 | $ | — | |||||||||||
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.