Enovix CorpENVX
Enovix Corp Income Taxes Disclosure
Income Tax
Net loss before income taxes was attributable to the following geographic locations for the fiscal years 2025, 2024 and 2023 (in thousands).
Fiscal Years | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (152,092) | $ | (219,494) | $ | (207,948) | |||||||||||
| Foreign | (5,827) | (4,432) | (6,817) | ||||||||||||||
| Net loss before income taxes | $ | (157,919) | $ | (223,926) | $ | (214,765) | |||||||||||
During the fiscal year 2025, we recorded a tax provision benefit on foreign jurisdictions as we generated income from certain foreign entities, partially offset by losses from our subsidiary in South Korea. There was no provision for income taxes recorded on U.S. pre-tax loss as we generated net operating losses and a full valuation allowance was recorded against all U.S. federal and state net deferred tax assets.
The following table summarizes the provision (benefit) for income taxes (in thousands).
| Fiscal Years | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Foreign | $ | 61 | $ | 1,305 | $ | 180 | |||||||||||
| Total current | 61 | 1,305 | 180 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Foreign | (1,373) | (2,697) | (813) | ||||||||||||||
| Total deferred | (1,373) | (2,697) | (813) | ||||||||||||||
| Total provision | $ | (1,312) | $ | (1,392) | $ | (633) | |||||||||||
The table below provides the updated requirements of ASU 2023-09 for fiscal year 2025. The income tax benefit (expense) differs from the amount computed by the U.S. federal statutory rate of 21% to income (loss) before income taxes as follows ( in thousands):
Fiscal Year Ended December 28, 2025 | |||||||||||
| Pre-tax book loss | $ | (157,919) | |||||||||
| Provision at US federal statutory rate | (33,165) | 21.0 | % | ||||||||
| Foreign tax effects | |||||||||||
| Korea | |||||||||||
| Bargain purchase gain | (1,708) | 1.1 | % | ||||||||
| Other | 762 | (0.5 | %) | ||||||||
| Other foreign jurisdictions | 860 | (0.5 | %) | ||||||||
| Tax credits | |||||||||||
| Research and development credit | (5,246) | 3.3 | % | ||||||||
| Change in valuation allowance | 37,791 | (23.9 | %) | ||||||||
| Non-taxable or non-deductible items | |||||||||||
| Warrant liability | (4,585) | 2.9 | % | ||||||||
| Interest expense | 1,937 | (1.2 | %) | ||||||||
| Non-deductible compensation | 2,537 | (1.6 | %) | ||||||||
| Other | 166 | (0.1 | %) | ||||||||
| Other adjustment | (661) | 0.4 | % | ||||||||
| Effective tax rate | $ | (1,312) | 0.8 | % | |||||||
A reconciliation of the U.S. federal statutory income tax rates to our effective tax rate for the years ended December 29, 2024 and December 31, 2023 is as follows:
| December 29, 2024 | December 31, 2023 | ||||||||||
| Federal statutory tax rate | 21.0 | % | 21.0 | % | |||||||
| State and local income taxes, net of federal benefit | 6.0 | % | 5.8 | % | |||||||
| Non-deductible warrant expense | 1.1 | % | 0.6 | % | |||||||
| Federal tax credits | 4.3 | % | 3.8 | % | |||||||
| Stock-based compensation expense | (0.4 | %) | (3.3 | %) | |||||||
| Impact of changes in valuation allowance | (28.7 | %) | (26.6 | %) | |||||||
| Uncertain position | (2.1 | %) | (1.9 | %) | |||||||
| Rate change | (0.1 | %) | 1.2 | % | |||||||
| Other | (0.5 | %) | (0.3 | %) | |||||||
| Effective tax rate | 0.6 | % | 0.3 | % | |||||||
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the fiscal year ended December 28, 2025 (in thousands).
| Fiscal Year Ended December 28, 2025 | |||||
| Federal | $ | — | |||
| State | — | ||||
Foreign: | |||||
Malaysia | 1,005 | ||||
India | 129 | ||||
| Cash paid for income taxes, net of refunds received | $ | 1,134 | |||
The following table shows the components of deferred tax assets (liabilities) as of December 28, 2025 and December 29, 2024.
| December 28, 2025 | December 29, 2024 | ||||||||||
| Gross deferred tax assets: | |||||||||||
| Capitalized research and experimental expenses | $ | 32,129 | $ | 42,300 | |||||||
| Credit carryovers | 24,711 | 16,141 | |||||||||
| Net operating losses | 182,713 | 164,279 | |||||||||
| Other | 4,750 | 8,396 | |||||||||
| Total gross deferred tax assets | 244,303 | 231,116 | |||||||||
| Valuation allowance | (242,932) | (228,473) | |||||||||
| Total deferred tax assets, net of valuation allowance | 1,371 | 2,643 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Intangible assets | (9,533) | (9,585) | |||||||||
| Right-of-use asset | (950) | (1,445) | |||||||||
| Other | (7) | (397) | |||||||||
| Total deferred tax liabilities | (10,490) | (11,427) | |||||||||
| Net deferred tax liabilities | $ | (9,119) | $ | (8,784) | |||||||
As of December 28, 2025, we had $351.9 million of state loss carryovers, $746.4 million of federal loss carryovers, and $5.3 million of foreign loss carryovers that could be utilized to reduce the tax liabilities of future years. The tax-effected loss carryovers were $31.1 million for state before federal effect, $156.7 million for federal and $1.4 million for foreign as of December 28, 2025. We also had $24.7 million of state research and development (“R&D”) tax credit carryovers, $28.5 million of federal R&D tax credit carryovers and $0.7 million of foreign R&D tax credit carryovers as of December 28, 2025.
The state losses expire between 2028 and 2045. Approximately $127.9 million of the federal losses expire between 2026 and 2037 and $618.5 million of the remainder do not expire. The foreign losses expire between 2037 and 2039. The federal credit carryovers expire between 2027 and 2045. The state credit carryovers do not expire. The foreign credit carryovers begin to expire in 2031.
Utilization of net operating losses and tax credit carryforwards are subject to certain limitations under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, due to historical changes in our ownership, as defined in current income tax regulations. A portion of the carryforwards will expire before being applied to reduce future income tax liabilities.
Valuation allowances are recorded when necessary to reduce deferred tax assets to the amount expected to be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust the valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
As of December 28, 2025, we recognized a full valuation allowance against the U.S. federal and state net deferred tax assets, including operating loss carryovers and credit carryovers. We evaluated the realizability of the net deferred tax assets based on all available evidence, both positive and negative, which existed as of December 28, 2025. Our conclusion to maintain a full valuation allowance against the U.S. federal and state net deferred tax assets was based upon the assessment of our ability to generate sufficient future taxable income in future periods.
The following table presents the valuation allowance activities for fiscal years 2025, 2024 and 2023 (in thousands).
| Fiscal Years | |||||||||||||||||
| December 28, 2025 | December 29, 2024 | December 31, 2023 | |||||||||||||||
| Balance at beginning of fiscal year | $ | 228,473 | $ | 164,207 | $ | 107,057 | |||||||||||
| Additions | 14,459 | 65,565 | 57,150 | ||||||||||||||
| Deductions | — | (1,299) | — | ||||||||||||||
| Balance at end of fiscal year | $ | 242,932 | $ | 228,473 | $ | 164,207 | |||||||||||
The following table summarizes the activities related to unrecognized tax benefits for the fiscal years 2025, 2024 and 2023 (in thousands).
| Fiscal Years | |||||||||||||||||
| December 28, 2025 | December 29, 2024 | December 31, 2023 | |||||||||||||||
| Balance at beginning of fiscal year | $ | 17,413 | $ | 12,163 | $ | 4,428 | |||||||||||
| Increases related to current year tax positions | 9,180 | 5,187 | 4,543 | ||||||||||||||
| Increases related to the prior year tax positions | — | 63 | 3,192 | ||||||||||||||
| Balance at end of fiscal year | $ | 26,593 | $ | 17,413 | $ | 12,163 | |||||||||||
As of December 28, 2025 and December 29, 2024, none of the amounts of unrecognized tax benefits would favorably affect the effective income tax rate in future periods if recognized, since the tax benefits would increase a deferred tax asset that is currently offset by a full valuation allowance.
For the fiscal years 2025, 2024 and 2023, no interest expense was recognized relating to income tax liabilities. There were no accrued interest or penalties related to income tax liabilities as of December 28, 2025 and December 29, 2024.
We file income tax returns in the U.S. federal jurisdiction and in the California, Arizona, Florida and Virginia state jurisdiction. In the normal course of business, we are subject to examination by taxing authorities in the U.S. We are also subject to income taxes in several foreign jurisdictions. We are not currently under examination by any taxing authority. The Company’s federal and state net operating loss carryforwards were generated during tax years 2006 through current fiscal year 2025, and accordingly, such tax years remain open to federal and state tax examination.
As of December 28, 2025, we maintain our prior indefinite reinvestment assertion on undistributed earnings related to foreign subsidiaries. Accordingly, no deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation as those earnings continue to be indefinitely reinvested. If the earnings were to be distributed, the unrecognized deferred tax liability would be immaterial.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Mar 1, 2023 | |
| 2022 | Mar 25, 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.