Cytek Biosciences, Inc.CTKB
Cytek Biosciences, Inc. Income Taxes Disclosure
Income taxes
For the years ended December 31, 2025, 2024, and 2023, income from continuing operations before taxes consisted of amounts related to U.S. operations and income associated with the Company’s foreign operations. The geographical breakdown of the Company’s loss before income taxes is as follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (44,492) | $ | (12,778) | $ | (16,899) | |||||||||||
| International | 14,650 | 7,078 | 1,190 | ||||||||||||||
| Loss before income taxes | $ | (29,841) | $ | (5,700) | $ | (15,709) | |||||||||||
Income tax expense attributable to income from continuing operations consists of (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provisions for income taxes: | |||||||||||||||||
| Federal | $ | (553) | $ | 2,237 | $ | 4,142 | |||||||||||
| State | 129 | 139 | 798 | ||||||||||||||
| Foreign | 3,565 | 830 | 1,528 | ||||||||||||||
| Total current | $ | 3,141 | $ | 3,206 | $ | 6,468 | |||||||||||
| Deferred tax expense (benefit): | |||||||||||||||||
| Federal | $ | 28,140 | $ | (2,551) | $ | (8,777) | |||||||||||
| State | 5,417 | (651) | (1,170) | ||||||||||||||
| Foreign | — | 316 | (82) | ||||||||||||||
| Total deferred tax expense (benefit) | $ | 33,557 | $ | (2,886) | $ | (10,029) | |||||||||||
| Total provision for (benefit from) income taxes | $ | 36,698 | $ | 320 | $ | (3,561) | |||||||||||
Tax rate reconciliation
The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate:
| 2025 | |||||||||||
| Amounts | Rate | ||||||||||
| U.S. federal statutory tax rate | $ | (6,267) | 21.0 | % | |||||||
| State and local income taxes, net of federal income tax effect* | 6,411 | (21.5) | |||||||||
| Foreign tax effects | |||||||||||
| China | |||||||||||
| Foreign income taxed at different rate | (712) | 2.4 | |||||||||
| Netherlands | |||||||||||
| Foreign income taxed at different rate | 58 | (0.2) | |||||||||
| Change in tax reserve | 650 | (2.2) | |||||||||
| Other countries | 180 | (0.6) | |||||||||
| Effect of cross-border tax laws | |||||||||||
| Global intangible low-taxed income | 4,391 | (14.7) | |||||||||
| Subpart F | 362 | (1.2) | |||||||||
| Tax Credits | (448) | 1.5 | |||||||||
| Changes in valuation allowances | 29,288 | (98.1) | |||||||||
| Nontaxable or nondeductible items | |||||||||||
| Stock-based compensation | 3,156 | (10.6) | |||||||||
| Other permanent differences | 269 | (0.9) | |||||||||
| Changes in unrecognized tax benefits | (562) | 1.9 | |||||||||
| Other reconciling items | (78) | 0.3 | |||||||||
| Total tax expense | $ | 36,698 | (123) | % | |||||||
*The majority of state income taxes estimated for 2025 are attributable to Texas.
The following table presents the required disclosures subsequent to our adoption of ASU 2023-09 for cash paid for income taxes, net of refunds received, by jurisdiction:
In thousands | 2025 | ||||
| US federal | $ | — | |||
| State | $ | 24 | |||
| Foreign | |||||
| China | $ | 1,346 | |||
| Netherlands | $ | 789 | |||
| Income taxes paid (net of refunds received) | $ | 2,159 | |||
The following table presents the required disclosures prior to our adoption of ASU 2023-09 and presents the differences between our provision for (benefit from) income taxes as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate as a percentage of loss before provision for (benefit from) income taxes (in percentages):
| 2024 | 2023 | ||||||||||
| U.S. federal tax benefit at statutory rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal benefit | 9.0 | 3.4 | |||||||||
| Foreign income taxed at different rates | 10.0 | (0.9) | |||||||||
| Foreign-derived intangible income deduction | (5.2) | 9.1 | |||||||||
| Research and development credits | 14.4 | 12.9 | |||||||||
| Tax impact of foreign earnings and losses | (2.0) | (1.4) | |||||||||
| Subpart F | 1.8 | (5.3) | |||||||||
| Stock-based compensation | (44.4) | (12.2) | |||||||||
| Other permanent adjustments | (2.2) | (0.8) | |||||||||
| Prior year true up due to tax rate change | — | 1.6 | |||||||||
| Change in valuation allowance, net | (9.3) | (6.5) | |||||||||
| Section 162(m) compensation | (2.7) | (0.7) | |||||||||
| Foreign tax credit | 4.2 | 2.1 | |||||||||
| Other | — | 0.4 | |||||||||
| Effective tax rate | (5.4) | % | 22.7 | % | |||||||
Significant components of deferred taxes
The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are presented below (in thousands):
| 2025 | 2024 | ||||||||||
| Deferred tax assets | |||||||||||
| Net operating loss carryforwards | $ | 6,384 | $ | 1,610 | |||||||
| Foreign tax credit carryforward | 1,474 | 1,190 | |||||||||
| Research and development credit carryforward | 3,113 | 2,201 | |||||||||
| Stock based compensation | 4,908 | 4,473 | |||||||||
| Legal settlement | 1,837 | 2,461 | |||||||||
| Deferred revenue | 6,702 | 6,460 | |||||||||
| Research and development capitalization | 9,284 | 13,287 | |||||||||
| Inventory reserve | 1,386 | 1,736 | |||||||||
| Accrued bonus | 1,564 | 1,477 | |||||||||
| Lease liability | 3,547 | 2,362 | |||||||||
| Other accruals | 1,621 | 1,497 | |||||||||
| Gross deferred tax assets | 41,820 | 38,754 | |||||||||
| Valuation allowance | (38,565) | (2,800) | |||||||||
| Net deferred tax assets | $ | 3,255 | $ | 35,954 | |||||||
| Deferred tax liabilities | |||||||||||
| ROU assets | $ | (3,265) | $ | (2,107) | |||||||
| Depreciation and amortization | (172) | (473) | |||||||||
| Net deferred tax liabilities | $ | (3,437) | $ | (2,580) | |||||||
| Net deferred tax assets (liabilities) | $ | (182) | $ | 33,374 | |||||||
The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets.
As of December 31, 2025, the Company maintained a valuation allowance against all deferred tax assets as Management believes these are not more likely than not to be realized. The Company will continue to reassess the valuation allowance quarterly and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.
As of December 31, 2025, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $19.2 million and $11.1 million, respectively. Federal net operating losses do not expire, while state net operating losses begin expiring in 2040.
As of December 31, 2025 and 2024, the Company had state tax credit carryforwards of $4.8 million and $4.0 million, respectively, to offset future tax liability. The credit carryforwards are not subject to expiration. As of December 31, 2025 and 2024, the Company had foreign tax credit for Cytek (Shanghai) Biosciences Co., Ltd of $1.5 million and $1.2 million, respectively, which begins to expire in 2027 if not utilized.
Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by net operating loss carryforwards and tax credit carryforwards after a greater than 50% change in control in ownership. California has similar rules. The Company had performed a Section 382 analysis and determined that its capitalization resulted in such a change in prior year. Utilization of the net operating loss carryforwards and tax credit carryforwards had been subject to the annual limitations under IRC Section 382 and similar state provisions. The annual limitation may result in the expiration of the state net operating loss carryforwards before utilization.
Uncertain Tax Positions
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits as of the beginning of the year | $ | 3,599 | $ | 3,635 | $ | 2,235 | |||||||||||
| Increase (decrease) related to prior year tax provisions | 53 | (897) | 217 | ||||||||||||||
| Increase related to current year tax provisions | 513 | 861 | 1,183 | ||||||||||||||
| Decrease for settlement or statute | $ | (637) | $ | — | $ | — | |||||||||||
| Unrecognized tax benefits as of the end of the year | $ | 3,528 | $ | 3,599 | $ | 3,635 | |||||||||||
The Company accounts for uncertain tax positions under ASC 740. As of December 31, 2025, 2024 and 2023, there was approximately $3.5 million, $3.6 million and $3.6 million of unrecognized tax benefits, respectively. Of the unrecognized tax benefits, $3.1 million, $3.3 million and $3.4 million represents the amount that if recognized, would favorably affect the effective income tax rate in 2025, 2024 and 2023, respectively.
The Company files income tax returns in U.S. federal jurisdiction, various U.S. state jurisdictions and foreign jurisdictions. The U.S., state and foreign jurisdictions have statutes of limitations that generally range from three to five years. The Company’s federal, state and foreign income tax returns are subject to examination unless the statutes of limitations close. The Company is not currently under examination for federal, state or foreign income tax purposes.
As of December 31, 2025, the Company’s management asserted that it was their intent to indefinitely reinvest unremitted foreign earnings for all its foreign entities.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 17, 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.