GoodRx Holdings, Inc.GDRX
GoodRx Holdings, Inc. Income Taxes Disclosure
Income Taxes
The components of our income taxes are as follows:
Year Ended December 31, | |||||
(in thousands) | 2025 | 2024 | 2023 | ||
Current | |||||
Federal | $2,457 | $23,155 | $16,588 | ||
State | 3,571 | 3,829 | 2,270 | ||
Total current income tax expense | 6,028 | 26,984 | 18,858 | ||
Deferred | |||||
Federal | 19,442 | (9,415) | (41,856) | ||
State | 629 | (2,499) | (23,706) | ||
Total deferred income tax expense (benefit) | 20,071 | (11,914) | (65,562) | ||
Total | |||||
Federal | 21,899 | 13,740 | (25,268) | ||
State | 4,200 | 1,330 | (21,436) | ||
Total income tax expense (benefit) | $26,099 | $15,070 | $(46,704) | ||
The following is a reconciliation of the U.S. federal statutory rate of 21.0% to our effective income tax rate:
Year Ended December 31, | |||||||||||
(dollars in thousands) | 2025 | 2024 | 2023 | ||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||
U.S. federal statutory income tax rate | $11,873 | 21.0% | $6,607 | 21.0% | $(11,670) | 21.0% | |||||
State and local income taxes, net of federal income tax effect (1) | 2,948 | 5.2% | 1,162 | 3.7% | (16,829) | 30.3% | |||||
Effect of changes in tax laws or rates enacted in the current period | 761 | 1.3% | — | — | — | — | |||||
Research and development tax credits | (1,606) | (2.8%) | (1,855) | (5.9%) | 1,673 | (3.0%) | |||||
Changes in valuation allowance | 1,224 | 2.2% | 533 | 1.7% | (36,323) | 65.4% | |||||
Nontaxable or nondeductible items | |||||||||||
Nondeductible officers' compensation | 1,722 | 3.0% | 6,997 | 22.2% | 10,641 | (19.1%) | |||||
Excess tax related to stock-based compensation | 7,548 | 13.4% | 3,163 | 10.1% | 6,131 | (11.0%) | |||||
Other | 893 | 1.6% | 776 | 2.5% | 729 | (1.3%) | |||||
Changes in unrecognized tax benefits | 750 | 1.3% | (2,309) | (7.3%) | (1,009) | 1.8% | |||||
Other adjustments | (14) | 0.0% | (4) | 0.0% | (47) | 0.1% | |||||
Total income tax expense (benefit) | $26,099 | 46.2% | $15,070 | 47.9% | $(46,704) | 84.0% | |||||
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(1)The states that contribute to the majority (greater than 50%) of the tax effect in this category include California,
Florida, Georgia, Illinois, Michigan, Minnesota, New Jersey, New York, Pennsylvania, and Texas for 2025;
California, Illinois, New Jersey, New York, Pennsylvania, and Texas for 2024; and California for 2023.
Deferred tax assets, net consist of the following:
December 31, | |||
(in thousands) | 2025 | 2024 | |
Deferred tax assets | |||
Other assets (1) | $7,026 | $10,961 | |
Operating lease liabilities | 13,340 | 12,599 | |
Stock-based compensation | 13,849 | 12,254 | |
Research and development credits, net of reserves | 14,369 | 13,319 | |
Capitalized research and development expenditures | 5,833 | 27,289 | |
Intangible assets | 7,100 | 5,762 | |
Accrued legal settlement | 7,472 | 6,830 | |
Net operating losses | 10,320 | 9,966 | |
Total deferred tax assets | 79,309 | 98,980 | |
Valuation allowance | (10,024) | (8,670) | |
Deferred tax assets, net of valuation allowance | 69,285 | 90,310 | |
Deferred tax liabilities | |||
Other liabilities | (439) | (340) | |
Operating lease right-of-use assets, net | (7,022) | (6,774) | |
Property and equipment | (1,798) | (2,379) | |
Insurance recovery receivable | (2,915) | (3,635) | |
Total deferred tax liabilities | (12,174) | (13,128) | |
Total deferred tax assets, net | $57,111 | $77,182 |
____________________________________________________
(1)Certain prior period amounts have been reclassified to conform to current period presentation. These
reclassifications had no impact on previously reported total deferred tax assets.
The components of income taxes paid, net of refunds received are as follows:
Year Ended December 31, | |||||
(in thousands) | 2025 | 2024 | 2023 | ||
Federal | $9,000 | $21,519 | $13,901 | ||
State and local (1) | 4,127 | 2,104 | 3,342 | ||
Total income taxes paid, net of refunds received | $13,127 | $23,623 | $17,243 | ||
_____________________________________________________
(1)State and local income taxes paid to any jurisdiction did not exceed 5% of total income taxes paid, net of refunds
received.
On July 4, 2025, H.R. 1, titled "A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14," commonly
referred to as the One Big Beautiful Bill Act ("OBBBA") was enacted. The OBBBA contains several changes to corporate
taxation including, but not limited to, capitalization of research and development expenses, limitations on deductions for
interest expense and accelerated fixed asset depreciation. We completed our assessment of the impact from the OBBBA
and recorded the effects to our income tax expense for the year ended December 31, 2025. Specifically, the tax effects were
principally a timing difference between current and deferred taxes due to our election to deduct 2025 domestic research and
development expenditures as incurred and to amortize previously capitalized and unamortized domestic research and
development expenditures over two years. OBBBA did not have a material impact on our 2025 effective income tax rate.
We recognized total excess tax expense of $8.8 million, $3.7 million, and $7.1 million associated with equity award
exercises and vesting in income tax (expense) benefit for the years ended December 31, 2025, 2024, and 2023,
respectively.
We consider all available positive and negative evidence in our assessment of the recoverability of our net deferred tax
assets each reporting period. In 2021, we had cumulative three-year pre-tax losses adjusted for permanent book to tax
adjustments principally from substantial excess tax benefits realized in 2021 and 2020 and thus recognized a full valuation
allowance against our net deferred tax assets in excess of amortizable goodwill which we maintained through the end of
2022. During 2023, we determined that a valuation allowance against the majority of our net deferred tax assets was no
longer required primarily due to sustained tax profitability (pre-tax earnings or loss adjusted by permanent book to tax
differences), which was objective and verifiable evidence, and anticipated future earnings. As a result, we released
$54.6 million of our valuation allowance and recognized it as an income tax benefit in the consolidated statement of
operations for the year ended December 31, 2023.
As of December 31, 2025 and 2024, our valuation allowance is attributable to certain capital and standalone tax filings'
net deferred tax assets which are not more likely than not to be realized in the future. Our judgment regarding the need for a
valuation allowance may reasonably change in future reporting periods due to many factors, including changes in the level
of tax profitability that we achieve, changes in tax laws or regulations, and price fluctuations of our Class A common stock
and its related future tax effects from our outstanding equity awards.
At December 31, 2025, we had U.S. federal net operating loss carryforwards ("NOLs") of $21.3 million available to
reduce future federal income taxes which are carried over indefinitely but utilization is subject to an 80% taxable income
limitation. At December 31, 2025, we also had state NOLs of $123.3 million available to reduce future state income taxes
which will expire in varying amounts beginning 2029. Additionally, as of December 31, 2025, we had state research tax
credits carryforwards of $25.5 million, $25.4 million of which generally may be carried forward indefinitely.
At December 31, 2025, tax years 2022 and forward were subject to examination by the Internal Revenue Service
(“IRS”), and tax years 2021 and forward were subject to examination by the various state taxing jurisdictions in which we are
subject to tax. At December 31, 2025, we were not subject to any federal or state income tax audits.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
(in thousands) | |
Gross unrecognized tax benefits at December 31, 2022 | $14,698 |
Increases related to prior year tax positions | 409 |
Increases related to current year tax positions | 746 |
Decreases related to prior year tax positions | (1,080) |
Lapse of statute of limitations | (576) |
Gross unrecognized tax benefits at December 31, 2023 | 14,197 |
Increases related to prior year tax positions | 70 |
Increases related to current year tax positions | 1,642 |
Lapse of statute of limitations | (2,479) |
Gross unrecognized tax benefits at December 31, 2024 | 13,430 |
Increases related to prior year tax positions | 405 |
Increases related to current year tax positions | 1,468 |
Decreases related to prior year tax positions | (64) |
Lapse of statute of limitations | (5) |
Gross unrecognized tax benefits at December 31, 2025 | $15,234 |
As of December 31, 2025, we had gross unrecognized tax benefits of approximately $15.2 million, $13.4 million of
which, if recognized, would impact our effective tax rate.
As of December 31, 2025 and 2024, accrued interest and penalties related to uncertain tax positions were not material.
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.