Rubrik, Inc.RBRK
Rubrik, Inc. Income Taxes Disclosure
Note 12 – Income Taxes
U.S. and foreign components of consolidated loss before income taxes were as follows (in thousands):
| Year Ended January 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Domestic | $ | (401,015) | $ | (1,223,181) | $ | (356,015) | |||||||||||
| Foreign | 74,542 | 74,729 | 28,546 | ||||||||||||||
| Loss before income taxes | $ | (326,473) | $ | (1,148,452) | $ | (327,469) | |||||||||||
The provision for income taxes was as follows (in thousands):
| Year Ended January 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | — | $ | (2,330) | $ | 2,336 | |||||||||||
| State | 4 | (1,315) | 2,818 | ||||||||||||||
| Foreign | 18,343 | 8,772 | 19,598 | ||||||||||||||
| Total current provision for income taxes | 18,347 | 5,127 | 24,752 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 30 | — | — | ||||||||||||||
| State | — | — | — | ||||||||||||||
| Foreign | 3,978 | 1,241 | 1,937 | ||||||||||||||
| Total deferred provision for income taxes | 4,008 | 1,241 | 1,937 | ||||||||||||||
| Total provision for income taxes | $ | 22,355 | $ | 6,368 | $ | 26,689 | |||||||||||
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate after the adoption of ASU 2023-09 for the year ended January 31, 2026 is as follows (in thousands, except for percentages):
| Year Ended January 31, 2026 | |||||||||||
| $ | % | ||||||||||
| U.S. federal statutory tax rate | $ | (68,559) | 21.0 | % | |||||||
State and local income tax, net of federal income tax effect (1) | (2,582) | 0.8 | |||||||||
| Foreign tax effects | |||||||||||
| India | |||||||||||
| Nondeductible compensation | 11,260 | (3.4) | |||||||||
| Other | (1,806) | 0.6 | |||||||||
| Israel | |||||||||||
| Nondeductible compensation | 7,824 | (2.4) | |||||||||
| Other | 313 | (0.1) | |||||||||
| United Kingdom | |||||||||||
| Tax effects of stock awards | (3,921) | 1.2 | |||||||||
| Other | 1,092 | (0.3) | |||||||||
| Other foreign jurisdictions | 7,829 | (2.4) | |||||||||
| Effect of cross-border tax laws | |||||||||||
| Foreign income tax deduction | (3,813) | 1.2 | |||||||||
| Other | 2,363 | (0.7) | |||||||||
| Tax credits | |||||||||||
| Research and development credits | (22,348) | 6.8 | |||||||||
| Changes in valuation allowances | 153,830 | (47.1) | |||||||||
| Nontaxable or nondeductible items | |||||||||||
| Tax effects of stock awards | (101,095) | 31.0 | |||||||||
| Nondeductible compensation | 28,901 | (8.9) | |||||||||
| Other | 3,436 | (1.1) | |||||||||
| Changes in unrecognized tax benefits | 7,725 | (2.4) | |||||||||
| Other adjustments | 1,906 | (0.6) | |||||||||
| Total tax provision and effective rate | $ | 22,355 | (6.8) | % | |||||||
(1) State taxes in California made up the majority (greater than 50%) of the tax effect in this category.
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the year ended January 31, 2025 and 2024 is as follows:
| Year Ended January 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Provision at federal statutory rate | 21.0 | % | 21.0 | % | ||||||||||
| State, net of federal benefit | 3.2 | — | ||||||||||||
| Stock-based compensation | 10.4 | 0.3 | ||||||||||||
| Impact of foreign operations | 2.9 | (5.1) | ||||||||||||
| Change in valuation allowance | (42.8) | (14.5) | ||||||||||||
| Research and development credits | 4.9 | 3.9 | ||||||||||||
| Non-deductible expenses | — | (12.8) | ||||||||||||
| Other adjustments | (0.2) | (1.0) | ||||||||||||
| Effective income tax rate | (0.6) | % | (8.2) | % | ||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at the enacted rates. The significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):
| January 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 477,971 | $ | 330,908 | |||||||
| Capitalized research and development expenditures | 197,339 | 208,690 | |||||||||
| Research and development credit carryforward | 148,631 | 117,837 | |||||||||
| Deferred revenue | 177,086 | 151,326 | |||||||||
| Stock-based compensation | 69,317 | 68,587 | |||||||||
| Other | 67,032 | 31,368 | |||||||||
| Total deferred tax assets | 1,137,376 | 908,716 | |||||||||
| Less: valuation allowance | (1,069,457) | (863,039) | |||||||||
| Total deferred tax assets, net | 67,919 | 45,677 | |||||||||
| Deferred tax liabilities: | |||||||||||
| State income taxes | (36,833) | (28,936) | |||||||||
| Other | (46,438) | (28,085) | |||||||||
| Total deferred tax liabilities | (83,271) | (57,021) | |||||||||
| Net deferred tax assets (liabilities) | $ | (15,352) | $ | (11,344) | |||||||
The valuation allowance increased by $206.4 million for the fiscal year ended January 31, 2026. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception, expected near-term future losses, and the absence of taxable income in prior carryback years. The Company expects to maintain a valuation allowance until circumstances change.
As of January 31, 2026, the Company had U.S. federal net operating loss carryforwards of approximately $1.97 billion, and state net operating loss carryforwards of approximately $870.7 million. A portion of the U.S. federal net operating loss carryforwards will begin to expire in fiscal 2037. The state net operating loss carryforwards will begin to expire in fiscal 2027.
As of January 31, 2026, the Company had U.S. federal research and development tax credit carryforwards of approximately $110.3 million, which if not utilized, will begin to expire in fiscal 2036. As of January 31, 2026, the Company had state research and development tax credit carryforwards of approximately $75.5 million. The state credit carryforwards do not expire.
Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to the “ownership change” limitation provided by Section 382 and 383 of the Internal Revenue Code (“IRC”) of 1986, as amended, and other similar state provision. Any future annual limitation may result in the expiration of net operating loss and tax credit carryforwards before utilization.
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):
| January 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Unrecognized tax benefits at beginning of period | $ | 46,624 | $ | 31,263 | $ | 11,206 | |||||||||||
| Decreases related to prior year tax positions | — | (567) | — | ||||||||||||||
| Increases related to prior year tax positions | 152 | — | 63 | ||||||||||||||
| Increases related to current year tax positions | 8,253 | 15,928 | 19,994 | ||||||||||||||
| Unrecognized tax benefits at end of period | $ | 55,029 | $ | 46,624 | $ | 31,263 | |||||||||||
In the fiscal year ended January 31, 2026, the Company recorded an increase in its unrecognized tax benefits related to US federal and California research tax credits. Certain research tax credits have not been utilized on any tax return and currently have no impact on the Company’s tax expense due to the Company’s operating losses and the related valuation allowances.
The Company’s policy is to record interest and penalties related to uncertain tax positions within the provision for income taxes. To date, the combined amounts of accrued interest and penalties included in long-term income taxes payable related to tax positions taken on the Company’s tax returns were not material.
The Company files income tax returns with the U.S. federal government and certain state and foreign jurisdictions. The Company’s tax returns remain open to examination for the periods ended January 31, 2016 to January 31, 2026.
On July 4, 2025, the U.S. enacted tax reform legislation through the One Big Beautiful Bill Act ("OBBBA"). Included in this legislation are provisions that allow for the immediate expensing of domestic research and development expenses as well as other changes to the U.S. taxation of profits derived from foreign operations. The provisions in the legislation are generally effective beginning in fiscal 2026. As the Company maintains a full valuation allowance on its U.S. deferred tax assets, the legislation does not have a material impact on its consolidated financial statements.
Cash paid for income taxes, net of refunds received by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended January 31, 2026 is as follows (in thousands):
| Year Ended January 31, 2026 | |||||
| Federal | $ | — | |||
| State | 264 | ||||
| Foreign | |||||
| India | 6,724 | ||||
| Israel | 1,276 | ||||
| Other foreign jurisdictions | 3,741 | ||||
| Cash paid for income taxes, net of refunds received | $ | 12,005 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 19, 2026 | Showing above |
| 2025 | Mar 20, 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.