Exodus Movement, Inc.EXOD
Exodus Movement, Inc. Income Taxes Disclosure
Income Taxes
The (loss) income before income tax (benefit) expense for the years ended December 31, 2025 and 2024, are as follows:
(in thousands) | 2025 | 2024 | |
(Loss) income before income taxes | |||
Domestic | $(20,239) | $130,872 | |
Foreign | (413) | (14) | |
Total (loss) income before income taxes | (20,652) | 130,858 |
The current and deferred tax components of the income tax provision for the years ended December 31, 2025 and 2024, are
as follows:
(in thousands) | 2025 | 2024 | |
Current tax expense (benefit) | |||
U.S. Federal | 455 | (37) | |
State | 47 | 13 | |
Total | 502 | (24) | |
Deferred tax (benefit) expense | |||
U.S. Federal | (9,446) | 17,447 | |
State | (355) | 477 | |
Total | (9,801) | 17,924 | |
Total tax (benefit) expense | |||
U.S. Federal | (8,991) | 17,410 | |
State | (308) | 490 | |
Income tax (benefit) expense | $(9,299) | $17,900 |
The reconciliation of the U.S. federal statutory income tax rate to the Company's effective income tax rate as of
December 31, 2025 and 2024, was as follows:
(dollars in thousands) | December 31, 2025 | December 31, 2024 | ||||
Amount | % | Amount | % | |||
Domestic federal statutory rate | $(4,337) | 21.0% | $27,480 | 21.0% | ||
Effect of cross border tax laws: | ||||||
Foreign derived intangible income deduction | (673) | 3.3 | (185) | (0.1) | ||
Other | 4 | (0.1) | — | * | ||
Tax credits: | ||||||
Research and development tax credits | (905) | 4.4 | (133) | (0.1) | ||
Nontaxable or nondeductible items: | ||||||
Share-based compensation | (10,390) | 50.3 | (11,570) | (8.8) | ||
Non-deductible executive compensation | 5,235 | (25.3) | 1,738 | 1.3 | ||
Lobbying | 378 | (1.8) | — | * | ||
Penalties | 519 | (2.5) | — | * | ||
Transaction costs | 1,368 | (6.6) | — | * | ||
Other | 36 | (0.2) | 17 | * | ||
Domestic state and local income tax (benefit) expense - net of federal (benefit) expense | (309) | 1.5 | 491 | 0.3 | ||
Foreign tax effects | 100 | (0.5) | 3 | * | ||
Uncertain tax positions | (343) | 1.7 | — | * | ||
Other | 18 | (0.2) | 59 | * | ||
Effective tax rate | $(9,299) | 45.0% | $17,900 | 13.6% | ||
*Percentage variances not considered meaningful.
Effective Tax Rate
Income tax benefit was $9.3 million in 2025 compared to an expense of $17.9 million for the same period in 2024. The
effective tax rate during 2025 was 45.0% compared to 13.6% in 2024. In 2025 and 2024, state and local income taxes in
California and Nebraska comprise the majority of the domestic state and local income taxes, net of federal tax. For the year
ended December 31, 2025, the change from the statutory tax rate to the effective rate was primarily due to a benefit related
to stock option exercises net of non-deductible executive compensation, U.S. Foreign Derived Intangible Income and
research and development tax credits partially offset by nondeductible expenses. For the year ended December 31, 2024,
the change from the statutory tax rate to the effective rate was primarily due to a benefit related to stock option exercises,
net of non-deductible executive compensation, and U.S. Foreign Derived Intangible Income partially offset by change in
valuation allowance.
Significant components of deferred tax assets and liabilities as of December 31, 2025 and 2024, were as follows:
(in thousands) | December 31, 2025 | December 31, 2024 | |
Deferred tax assets | |||
Intangible assets | $5,282 | $1,551 | |
Share-based compensation | 2,430 | 1,501 | |
Net operating loss carryforward | 1,409 | 459 | |
Federal tax credit carry forwards | 457 | — | |
Other | 109 | — | |
Less: valuation allowance | (321) | (448) | |
Total deferred tax assets | $9,366 | $3,063 | |
Deferred tax liabilities | |||
Unrealized gain on digital assets | (20,656) | (24,297) | |
Prepaid expenses | (640) | (511) | |
Fixed assets | (61) | (34) | |
Total deferred tax liabilities | (21,357) | (24,842) | |
Net deferred tax liabilities | $(11,991) | $(21,779) |
Valuation Allowance
At each reporting date, management considers new evidence, both positive and negative, that could affect its view of the
future realization of deferred tax assets. On the basis of this evaluation, only the portion of the deferred tax asset that is
more likely than not to be realized was recognized. However, if the Company is not able to generate sufficient taxable
income through the reversal of deferred tax liabilities or from its operations in the future, then a valuation allowance to
reduce the Company’s deferred tax assets may be required, which would increase the Company’s expenses in the period
the allowance is recognized. As of December 31, 2025, the Company’s US net deferred tax liability was primarily
comprised of basis differences in digital assets partially offset by deferred tax assets related to intangible assets, net
operating loss carryforwards, tax credit carryforwards and share-based compensation. Reversals of deferred tax liabilities
are available to utilize US deferred tax assets. Based upon the historical cumulative income of its foreign subsidiaries,
management does not expect to realize the full benefit of this deferred tax asset before it will expire. A valuation allowance
of $0.3 million and $0.4 million was reflected against the Company’s gross deferred tax asset balance related to foreign net
operating losses as of December 31, 2025 and 2024, respectively.
On July 4, 2025, One Big Beautiful Bill Act ("OBBB") was signed into law in the United States. OBBB includes
significant changes to U.S. federal tax law, such as an elective deduction for domestic research and experimental
expenditures, and changes to the tax rate on income from non-U.S. sources and subsidiaries. OBBB did not have a material
impact on our current year effective tax rate. The OBBB allowed for the acceleration of deductions in 2025 with a
corresponding reduction of deferred tax assets.
As of December 31, 2025, Exodus had federal and state net operating losses of $5.0 million and $0.3 million, respectively.
The federal net operating loss carries forward indefinitely. Generally, California, Nebraska and other U.S. states have a
twenty-year carryforward for net operating losses. Exodus had federal R&D tax credit carryforward of $0.5 million. If not
utilized, the federal R&D credits will expire in in 2045. For the year ended December 31, 2025, Exodus had foreign net
operating loss carryforwards of $2.5 million which, if unused, will expire in various years beginning 2027.
Open Periods
Exodus is subject to taxation in the United States, Canada, Netherlands, Italy and Switzerland. As of December 31, 2025,
tax years 2022 to 2025 are subject to examination by tax authorities. With limited exceptions as of December 31, 2025,
Exodus is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2022.
Uncertain Tax Positions
A reconciliation of unrecognized tax benefits was as follows:
(in thousands) | December 31, 2025 | December 31, 2024 | |
Balance - beginning of period | $344 | $412 | |
Additions for tax positions of prior years | — | 40 | |
Lapse of statute of limitations | (344) | (108) | |
Balance - end of period | $— | $344 |
The liability for uncertain tax position is a component of other long-term liabilities. As of December 31, 2025, there were
no unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. As of December 31, 2024, there
were $0.3 million of unrecognized tax benefits that would affect the effective tax rate if recognized. The Company
recognizes interest and penalties related to unrecognized tax benefits in income tax (benefit) expense. During the year
ended December 31, 2025, the Company did not recognize interest and penalties. During the year ended December 31,
2024, the Company recognized less than $0.1 million in interest and penalties.
Supplemental Disclosure of Income Taxes Paid
Cash paid for income taxes consisted of the following:
(in thousands) | December 31, 2025 | December 31, 2024 | |
United States | $4 | $5,379 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
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.