Nurix Therapeutics, Inc.NRIX
Nurix Therapeutics, Inc. Income Taxes Disclosure
Income Taxes
For the years ended November 30, 2025 and 2024, the Company recorded an income tax provision of $760,000 and $270,000, respectively. For the year ended November 30, 2023, the Company did not record any current income tax expense or provision. The Company has generated net operating losses (NOLs) since inception and has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.
Loss before provision for income taxes includes the following component (in thousands):
| November 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (263,697) | $ | (193,299) | $ | (143,948) | |||||||||||
| $ | (263,697) | $ | (193,299) | $ | (143,948) | ||||||||||||
The provision for income taxes consists of the following (in thousands):
| November 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | — | $ | 270 | $ | — | |||||||||||
| State | 760 | — | — | ||||||||||||||
| Total provision for income taxes | $ | 760 | $ | 270 | $ | — | |||||||||||
The effective tax rate differs from the federal statutory rate as follows:
| November 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
| State income tax rate | 11.4 | (4.9) | 14.1 | ||||||||||||||
| Research and development tax credits | 5.0 | 4.1 | 4.8 | ||||||||||||||
| Stock-based compensation | (1.2) | (1.5) | (4.2) | ||||||||||||||
| Change in valuation allowance | (36.4) | (18.6) | (35.6) | ||||||||||||||
| Other | 0.2 | (0.1) | (0.1) | ||||||||||||||
| Total | — | % | — | % | — | % | |||||||||||
Deferred Tax Assets and Liabilities
Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets for federal and state income taxes are as follows (in thousands):
| Year ended November 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 106,447 | $ | 91,786 | |||||||
| Research and development tax credits | 66,580 | 48,307 | |||||||||
| Deferred revenue | 9,308 | 12,683 | |||||||||
| Stock-based compensation | 9,316 | 5,310 | |||||||||
| Accrued expenses and other liabilities | 5,263 | 3,199 | |||||||||
| Operating lease liabilities | 15,917 | 6,125 | |||||||||
| Capitalized research and experimental expenses | 132,844 | 65,729 | |||||||||
| Gross deferred tax assets | 345,675 | 233,139 | |||||||||
| Valuation allowance | (331,247) | (227,050) | |||||||||
| Total deferred tax assets | 14,428 | 6,089 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Operating lease right-of-use assets | (14,428) | (6,089) | |||||||||
| Total deferred tax liabilities | (14,428) | (6,089) | |||||||||
| Net deferred tax assets | $ | — | $ | — | |||||||
Realization of the deferred tax assets is dependent upon future taxable income, the amount, if any, and timing of which are uncertain. The Company has established a valuation allowance to offset deferred tax assets as of November 30, 2025 and 2024 due to the uncertainty of realizing future tax benefits from its NOL carryforwards and other deferred tax assets. The valuation allowance increased by $104.2 million to $331.2 million during the year ended November 30, 2025, primarily related to an increase on the deferred tax asset for research and development (R&D) credits, NOL carryforwards and Section 174 research and development capitalization. The valuation allowance increased by $33.3 million to $227.1 million during the year ended November 30, 2024, primarily related to an increase on the deferred tax asset for R&D credits, NOL carryforwards and Section 174 research and development capitalization.
As of November 30, 2025, the Company had NOL carryforwards available to reduce future taxable income, if any, for federal and state income tax purposes of $323.4 million and $507.7 million, respectively. All outstanding federal NOL carryforwards were generated for tax years beginning after December 31, 2017, and carry forward indefinitely. State NOL carryforwards begin expiring in 2029. As of November 30, 2025, the Company had federal and state research credit carryforwards of $60.5 million and $32.4 million, respectively. If not utilized, the federal credit carryforwards will begin expiring in 2035 and the state credits carry forward indefinitely.
Section 382 of the Internal Revenue Code of 1986, as amended (IRC) places a limitation on the utilization of NOL and tax credit carryforwards in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percentage points. The Company has identified ownership changes that have triggered a limitation on pre-change NOLs under Section 382. A majority of the Company’s pre-change NOLs remain available within the carryforward period provided by the IRC, subject to availability of taxable income.
Unrecognized Tax Benefits
The Company has recorded a liability related to uncertain tax positions in the financial statements. The Company has unrecognized tax benefits of $32.3 million as of November 30, 2025, of which $31.8 million are offset by a valuation allowance. There are $0.5 million of uncertain tax benefits included in the balance of unrecognized tax benefits that, if recognized, would affect the effective tax rate. As of November 30, 2025, the Company has recognized $0.2 million of interest related to unrecognized tax benefits. The Company’s policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the statements of operations.
A reconciliation of the beginning and ending amounts of unrecognized income tax benefits during the years ended November 30, 2025, 2024 and 2023 is as follows (in thousands):
| Year ended November 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of period | $ | 21,866 | $ | 15,508 | $ | 10,261 | |||||||||||
| Additions based on tax positions related to prior period | 5,948 | — | — | ||||||||||||||
| Additions based on tax positions related to current period | 4,493 | 6,358 | 5,247 | ||||||||||||||
| Balance at end of period | $ | 32,307 | $ | 21,866 | $ | 15,508 | |||||||||||
The Company files income tax returns in the United States and in various states. In January 2019, the California Franchise Tax Board (FTB) initiated an examination of the Company’s California tax return for tax years ending in 2015, 2016, 2017 and 2018. During the year ended November 30, 2021, the FTB issued proposed audit assessments related to revenue sourcing and R&D credits. The Company did not agree with the FTB’s assessments and challenged the assessments. In May 2025, the Company received new information from the FTB and remeasured the unrecognized tax benefit for California revenue sourcing, resulting in discrete tax expense. The Company entered into settlement procedures with the FTB in September 2025. All of the Company’s tax years will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of the utilization of any NOLs.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes several significant tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company will no longer be required to capitalize its domestic research and experimental costs under Section 174 of the Internal Revenue Code beginning with the tax year ending November 30, 2026. The enactment of OBBBA did not have a material impact on the financial statements for the year ended November 30, 2025.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 28, 2026 | Showing above |
| 2024 | Jan 28, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 9, 2023 | |
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.