OMNICELL, INC.OMCL
OMNICELL, INC. Income Taxes Disclosure
Income Taxes
The total amount of gross unrecognized tax benefit that, if realized, would favorably affect the Company’s effective income tax rate in future periods, was $11.3 million and $10.5 million as of December 31, 2025 and 2024, respectively. The Company recognizes interest and penalties related to uncertain tax positions in interest and other income (expense), net in the Consolidated Statements of Operations, accruing $0.5 million, $0.3 million, and $0.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. Accrued interest and penalties are included within other long-term liabilities on the Consolidated Balance Sheets. The combined amount of cumulative accrued interest and penalties was approximately $1.1 million, $0.6 million, and $0.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
The following is a geographical breakdown of income (loss) before income taxes:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Domestic | $ | 10,154 | $ | 19,757 | $ | (28,105) | |||||||||||
| Foreign | 1,171 | 5,836 | 7,997 | ||||||||||||||
| Income (loss) before income taxes | $ | 11,325 | $ | 25,593 | $ | (20,108) | |||||||||||
The provision for income taxes consisted of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 3,309 | $ | 21,805 | $ | 8,556 | |||||||||||
| State | 5,490 | 4,964 | 1,471 | ||||||||||||||
| Foreign | 982 | 846 | 840 | ||||||||||||||
| Total current income taxes | 9,781 | 27,615 | 10,867 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 2,215 | (14,416) | (8,002) | ||||||||||||||
| State | (2,023) | 115 | (2,261) | ||||||||||||||
| Foreign | (700) | (252) | (341) | ||||||||||||||
| Total deferred income taxes | (508) | (14,553) | (10,604) | ||||||||||||||
| Total provision for income taxes | $ | 9,273 | $ | 13,062 | $ | 263 | |||||||||||
The following table provides the updated disclosure requirements under ASU 2023-09, which the Company adopted prospectively for annual periods beginning in 2025. The provision for income taxes differs from the amount computed by applying the statutory federal tax rate as follows:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| (In thousands) | % | ||||||||||
| U.S. federal tax provision at statutory rate | $ | 2,378 | 21 | % | |||||||
State income taxes, net of federal benefit (1) | 2,313 | 20 | % | ||||||||
| Foreign rate differential: | |||||||||||
| Germany | |||||||||||
| Statutory rate difference between Germany and U.S. | 22 | — | % | ||||||||
| Effect of changes in tax laws or rates enacted in the current period | 850 | 8 | % | ||||||||
Net operating loss (“NOL”) adjustment due to audit settlement | (1,083) | (10) | % | ||||||||
| Other | 218 | 2 | % | ||||||||
| Other | (229) | (2) | % | ||||||||
| Effect of cross-border tax laws: | |||||||||||
| Global intangible low-taxed income | 1,499 | 13 | % | ||||||||
| Foreign derived intangible income (“FDII”) | (1,146) | (10) | % | ||||||||
| Other | 105 | 1 | % | ||||||||
| Tax credits: | |||||||||||
| Research and development (“R&D”) credits | (3,795) | (34) | % | ||||||||
| Non-taxable or non-deductible items: | |||||||||||
| Share-based compensation expense | 4,520 | 41 | % | ||||||||
| Non-deductible officer compensation (Section 162(m)) | 2,320 | 20 | % | ||||||||
| Meals and entertainment | 567 | 5 | % | ||||||||
| Other adjustments | (13) | — | % | ||||||||
| Changes in unrecognized tax benefits | 747 | 7 | % | ||||||||
| Total provision for income taxes | $ | 9,273 | 82 | % | |||||||
_________________________________________________
(1) State taxes in New York, Texas, Pennsylvania, Florida and Minnesota made up the majority (greater than 50%) of the tax effect in this category.
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the provision for income taxes differs from the amount computed by applying the statutory federal tax rate as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
| U.S. federal tax provision at statutory rate | $ | 5,375 | $ | (4,223) | |||||||
| State taxes | 4,037 | (624) | |||||||||
| Section 162(m) limitation | 531 | 1,286 | |||||||||
| Non-deductible expenses | 510 | 531 | |||||||||
| Uncertain tax positions | (881) | (620) | |||||||||
| Share-based compensation tax expense | 6,078 | 7,384 | |||||||||
| Research tax credits | (3,531) | (4,587) | |||||||||
| Gain on extinguishment of debt | 477 | — | |||||||||
| Foreign-derived intangible income deduction | (229) | (325) | |||||||||
| Global intangible low-taxed income inclusion | 826 | — | |||||||||
| Foreign rate differential | 122 | 219 | |||||||||
| Foreign branch taxes | (7) | 6 | |||||||||
| Transaction cost | — | — | |||||||||
| Provision to return true up | (244) | 697 | |||||||||
| State rate true up | — | 528 | |||||||||
| Other | (2) | (9) | |||||||||
| Total provision for income taxes | $ | 13,062 | $ | 263 | |||||||
The amount of cash income taxes paid, net of refunds received, consisted of the following:
| Year Ended December 31, | |||||
| 2025 | |||||
| (In thousands) | |||||
U.S. Federal (1) | $ | 11,500 | |||
| U.S. State and Local | 6,279 | ||||
| Foreign | 631 | ||||
| Total cash paid for income taxes, net of refunds received | $ | 18,410 | |||
_________________________________________________
(1) Individual jurisdictions equaling 5% or more of the total income taxes paid, net of refunds received, for the year ended December 31, 2025 include U.S. Federal of $11.5 million.
The amount of cash income taxes paid, net of refunds received, by the Company during the years ended December 31, 2024 and 2023 was $11.3 million and $20.2 million, respectively.
The Organization for Economic Co-Operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar Two rules that impose a global minimum tax rate of 15% on multi-national corporations. These rules did not have an impact on the Company’s provision for income taxes for the year ended December 31, 2025. The Company continues to monitor evolving tax legislation in the jurisdictions in which it operates.
Significant components of the Company’s deferred tax assets (liabilities) were as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
| Deferred revenues | $ | 40,549 | $ | 23,550 | |||||||
| Share-based compensation | 8,992 | 9,915 | |||||||||
| Inventory-related items | 6,424 | 6,055 | |||||||||
| Tax credit carryforwards | 12,531 | 12,843 | |||||||||
| Reserves and accruals | 10,575 | 8,384 | |||||||||
| Loss carryforwards | 6,802 | 6,493 | |||||||||
| Lease liability | 9,111 | 10,615 | |||||||||
| Convertible debt | 8,318 | 11,276 | |||||||||
| Capitalized research and development | 40,788 | 49,380 | |||||||||
| Other, net | 1,139 | 1,580 | |||||||||
| Gross deferred tax assets | 145,229 | 140,091 | |||||||||
| Valuation allowance | — | — | |||||||||
| Total net deferred tax assets | 145,229 | 140,091 | |||||||||
Deferred tax liabilities: | |||||||||||
| Intangibles | (23,837) | (27,057) | |||||||||
| Depreciation and amortization | (43,388) | (35,759) | |||||||||
| Prepaid expenses | (14,224) | (14,466) | |||||||||
| Right-of-use assets | (6,126) | (6,448) | |||||||||
| Total deferred tax liabilities | (87,575) | (83,730) | |||||||||
| Net deferred tax assets | $ | 57,654 | $ | 56,361 | |||||||
Deferred income tax assets (liabilities) are provided for temporary differences that will result in future tax deductions or future taxable income, as well as the future benefit of tax credit carryforwards. The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. As of December 31, 2025 and 2024, the Company does not have a valuation allowance against any of its deferred tax assets.
As of December 31, 2025, the Company had no federal net operating loss carryforward and $9.5 million of state net operating loss carryforwards. The Company also has $22.4 million of foreign net operating losses carried forward indefinitely. For income tax purposes, the Company had no federal research tax credit carryforward and a California research tax credit carryforward of $21.2 million. California research tax credits are carried forward indefinitely to reduce cash taxes payable.
It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2025, the Company has not made a provision for U.S. federal income, withholding, and state income taxes on the outside basis difference related to certain foreign subsidiaries because earnings are intended to be indefinitely reinvested in operations outside the U.S.
The Company files income tax returns in the United States and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examinations by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, France, the United Kingdom and India. With few exceptions, as of December 31, 2025, the Company was no longer subject to federal U.S., state, and foreign tax examinations for years before 2022, 2021, and 2021, respectively.
The following table summarizes the aggregate change in the balance of gross unrecognized tax benefit, which excludes interest and penalties:
| (In thousands) | |||||
| Balance as of December 31, 2022 | $ | 9,296 | |||
| Increases related to tax positions taken during a prior period | 750 | ||||
| Decreases related to tax positions taken during the prior period | (161) | ||||
| Increases related to tax positions taken during the current period | 1,566 | ||||
| Decreases related to expiration of statute of limitations | (703) | ||||
| Balance as of December 31, 2023 | 10,748 | ||||
| Increases related to tax positions taken during a prior period | 4 | ||||
| Decreases related to tax positions taken during the prior period | (138) | ||||
| Increases related to tax positions taken during the current period | 1,163 | ||||
| Decreases related to settlements | (333) | ||||
| Decreases related to expiration of statute of limitations | (952) | ||||
| Balance as of December 31, 2024 | 10,492 | ||||
Increases related to tax positions taken during a prior period | 4 | ||||
| Decreases related to tax positions taken during the prior period | (32) | ||||
| Increases related to tax positions taken during the current period | 997 | ||||
| Decreases related to expiration of statute of limitations | (197) | ||||
| Balance as of December 31, 2025 | $ | 11,264 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 26, 2016 | |
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.