REPLIGEN CORP Income Taxes Disclosure
The components of income (loss) before income taxes are as follows:
|
|
For the Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Domestic |
|
$ |
(23,511 |
) |
|
$ |
(89,321 |
) |
|
$ |
(24,888 |
) |
Foreign |
|
|
85,894 |
|
|
|
62,286 |
|
|
|
81,595 |
|
Income (loss) before income taxes |
|
$ |
62,383 |
|
|
$ |
(27,035 |
) |
|
$ |
56,707 |
|
The components of the income tax provision (benefit) are as follows:
|
|
For the Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Components of the income tax provision (benefit): |
|
|
|
|
|
|
|
|
|
|||
Current |
|
$ |
16,862 |
|
|
$ |
15,037 |
|
|
$ |
19,941 |
|
Deferred |
|
|
(3,373 |
) |
|
|
(16,558 |
) |
|
|
1,170 |
|
Total |
|
$ |
13,489 |
|
|
$ |
(1,521 |
) |
|
$ |
21,111 |
|
Jurisdictional components of the income tax provision (benefit): |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
(5,470 |
) |
|
$ |
(13,684 |
) |
|
$ |
2,272 |
|
State |
|
|
3,621 |
|
|
|
(2,059 |
) |
|
|
(26 |
) |
Foreign |
|
|
15,338 |
|
|
|
14,222 |
|
|
|
18,865 |
|
Total |
|
$ |
13,489 |
|
|
$ |
(1,521 |
) |
|
$ |
21,111 |
|
At December 31, 2025, the Company had federal net operating loss carryforwards of $7.5 million, state net operating loss carryforwards of $15.0 million, and foreign net operating loss carryforwards of $27.4 million. The federal net operating loss carryforwards have unlimited carryforward periods and do not expire. The state net operating loss carryforwards will expire at various dates through 2045. Approximately $5.7 million of the foreign net operating loss carryforwards have unlimited carryforward periods and do not expire, while $21.7 million of the foreign net operating loss carryforwards will expire at various dates through 2034. At December 31, 2025, the Company had federal and state business tax credit carryforwards of $7.1 million available to reduce future federal and state income taxes. The business tax credit carryforwards will expire at various dates through 2045. Net operating loss carryforwards and available tax credits are subject to review and possible adjustment by the Internal Revenue Service, state and foreign jurisdictions and may be limited in the event of certain changes in the ownership interest of significant stockholders.
The components of deferred income taxes are as follows:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Deferred tax assets: |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
$ |
8,442 |
|
|
$ |
6,809 |
|
Operating leases |
|
|
33,000 |
|
|
|
36,415 |
|
Capitalized research and development |
|
|
23,484 |
|
|
|
20,641 |
|
Inventory |
|
|
11,327 |
|
|
|
15,539 |
|
Net operating loss carryforwards |
|
|
7,926 |
|
|
|
9,877 |
|
Business tax credit carryforwards |
|
|
5,593 |
|
|
|
5,172 |
|
Other |
|
|
12,678 |
|
|
|
11,587 |
|
Total deferred tax assets |
|
|
102,450 |
|
|
|
106,040 |
|
Less: valuation allowance |
|
|
(4,068 |
) |
|
|
(517 |
) |
Net deferred tax assets |
|
|
98,382 |
|
|
|
105,523 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Fixed assets |
|
|
(14,247 |
) |
|
|
(18,318 |
) |
Acquired intangible assets |
|
|
(67,014 |
) |
|
|
(63,132 |
) |
Operating lease right of use assets |
|
|
(26,211 |
) |
|
|
(29,897 |
) |
Debt discount |
|
|
(12,712 |
) |
|
|
(16,202 |
) |
Total deferred tax liabilities |
|
|
(120,184 |
) |
|
|
(127,549 |
) |
Net deferred tax liabilities |
|
$ |
(21,802 |
) |
|
$ |
(22,026 |
) |
The net change in the total valuation allowance for the year ended December 31, 2025 and 2024 was an increase of $3.6 million and an increase of $0.5 million, respectively.
The reconciliation of the federal statutory rate to the effective income tax rate for the year ended December 31, 2025, following the adoption of ASU 2023-09 is as follows:
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|||||
|
|
Amount |
|
|
% |
|
||
|
|
(Amounts in thousands, except percentages) |
|
|||||
Income before income taxes |
|
$ |
62,383 |
|
|
|
|
|
Expected tax at statutory rate |
|
|
13,100 |
|
|
|
21.0 |
% |
Adjustments due to: |
|
|
|
|
|
|
||
State income taxes, net of federal income tax effect (1) |
|
|
3,643 |
|
|
|
5.8 |
% |
Foreign tax effects: |
|
|
|
|
|
|
||
Sweden |
|
|
|
|
|
|
||
Contingent consideration |
|
|
(3,415 |
) |
|
|
(5.5 |
%) |
Other |
|
|
(177 |
) |
|
|
(0.3 |
%) |
Netherlands |
|
|
|
|
|
|
||
Statutory tax rate difference |
|
|
787 |
|
|
|
1.3 |
% |
Other |
|
|
(8 |
) |
|
|
(0.0 |
%) |
Other foreign jurisdictions |
|
|
113 |
|
|
|
0.2 |
% |
Changes in tax laws or rates |
|
|
— |
|
|
|
0.0 |
% |
Effect of cross-border tax laws: |
|
|
|
|
|
|
||
US taxation of foreign earnings, net of foreign tax credits |
|
|
(545 |
) |
|
|
(0.9 |
%) |
Foreign-derived intangible income |
|
|
(838 |
) |
|
|
(1.3 |
%) |
Tax credits: |
|
|
|
|
|
|
||
Research and development tax credits |
|
|
(1,320 |
) |
|
|
(2.1 |
%) |
Changes in valuation allowance |
|
|
— |
|
|
|
0.0 |
% |
Nontaxable or nondeductible items: |
|
|
|
|
|
|
||
Stock compensation |
|
|
(727 |
) |
|
|
(1.2 |
%) |
Executive compensation |
|
|
3,388 |
|
|
|
5.4 |
% |
Other |
|
|
294 |
|
|
|
0.5 |
% |
Changes in unrecognized tax benefits |
|
|
(1,294 |
) |
|
|
(2.1 |
%) |
Other adjustments |
|
|
488 |
|
|
|
0.8 |
% |
Effective tax rate |
|
$ |
13,489 |
|
|
|
21.6 |
% |
(1) State taxes in New Jersey, Massachusetts, Pennsylvania and California made up the majority (greater than 50 percent) of the tax effect in this category.
The reconciliation of the federal statutory rate to the effective income tax rate for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09 is as follows:
|
|
For the Years Ended December 31, |
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
||||
|
|
(Amounts in thousands, except percentages) |
|
|||||||||||||
(Loss) income before income taxes |
|
$ |
(27,035 |
) |
|
|
|
|
$ |
56,707 |
|
|
|
|
||
Expected tax at statutory rate |
|
|
(5,677 |
) |
|
|
21.0 |
% |
|
|
11,910 |
|
|
|
21.0 |
% |
Adjustments due to: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Difference between U.S. and foreign tax |
|
|
1,200 |
|
|
|
(4.4 |
%) |
|
|
1,078 |
|
|
|
1.9 |
% |
State income taxes |
|
|
(1,812 |
) |
|
|
6.7 |
% |
|
|
1,224 |
|
|
|
2.2 |
% |
Business tax credits |
|
|
(1,523 |
) |
|
|
5.6 |
% |
|
|
(4,522 |
) |
|
|
(8.0 |
%) |
Stock-based compensation expense |
|
|
1,782 |
|
|
|
(6.6 |
%) |
|
|
(2,461 |
) |
|
|
(4.3 |
%) |
U.S. taxation of foreign earnings |
|
|
422 |
|
|
|
(1.6 |
%) |
|
|
539 |
|
|
|
1.0 |
% |
Executive compensation |
|
|
2,718 |
|
|
|
(10.1 |
%) |
|
|
3,084 |
|
|
|
5.4 |
% |
Contingent consideration |
|
|
796 |
|
|
|
(2.9 |
%) |
|
|
(6,412 |
) |
|
|
(11.3 |
%) |
Nondeductible transactions cost |
|
|
330 |
|
|
|
(1.2 |
%) |
|
|
604 |
|
|
|
1.1 |
% |
Loss on extinguishment of debt |
|
|
— |
|
|
|
0.0 |
% |
|
|
2,634 |
|
|
|
4.6 |
% |
Debt discount |
|
|
— |
|
|
|
0.0 |
% |
|
|
16,650 |
|
|
|
29.4 |
% |
Foreign exchange loss |
|
|
— |
|
|
|
0.0 |
% |
|
|
(2,288 |
) |
|
|
(4.0 |
%) |
Change in U.S. and foreign tax rates |
|
|
494 |
|
|
|
(1.8 |
%) |
|
|
— |
|
|
|
0.0 |
% |
Uncertain tax (benefit) provisions |
|
|
(805 |
) |
|
|
3.0 |
% |
|
|
165 |
|
|
|
0.3 |
% |
Change in valuation allowance |
|
|
106 |
|
|
|
(0.4 |
%) |
|
|
— |
|
|
|
0.0 |
% |
Return to provision adjustments |
|
|
346 |
|
|
|
(1.3 |
%) |
|
|
(1,255 |
) |
|
|
(2.2 |
%) |
Other |
|
|
102 |
|
|
|
(0.4 |
%) |
|
|
161 |
|
|
|
0.3 |
% |
Income tax (benefit) provision |
|
$ |
(1,521 |
) |
|
|
5.6 |
% |
|
$ |
21,111 |
|
|
|
37.2 |
% |
The Company made income tax payments (net of refunds received) during the year ended December 31, 2025 as follows:
(Amounts in thousands) |
|
|
|
|
Federal |
|
$ |
59 |
|
State (1) |
|
|
318 |
|
Foreign |
|
|
|
|
Germany |
|
|
1,821 |
|
Netherlands |
|
|
3,022 |
|
Sweden |
|
|
14,326 |
|
Other foreign jurisdictions |
|
|
1,379 |
|
Total income tax payments (net of refunds received) |
|
$ |
20,925 |
|
(1) No individual state accounted for 5% or more of the total income tax payments (net of refunds received) during the year ended December 31, 2025.
Total cash paid for income taxes during the years ended December 31, 2024 and 2023 were $19.3 million and $27.0 million, respectively.
The Company’s tax returns are subject to examination by federal, state and foreign tax authorities. The Company’s two major tax jurisdictions are subject to examination for the following periods:
Jurisdiction |
|
Fiscal Years Subject to Examination |
United States - federal and state |
|
|
Sweden |
|
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:
|
|
For the Years Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Balance of gross unrecognized tax benefits, beginning of period |
|
$ |
2,129 |
|
|
$ |
3,139 |
|
Gross amounts of increases in unrecognized tax benefits as a result |
|
|
80 |
|
|
|
76 |
|
Gross amounts of changes in unrecognized tax benefits as a result |
|
|
(10 |
) |
|
|
(20 |
) |
Gross amounts of decreases due to release |
|
|
(1,418 |
) |
|
|
(1,066 |
) |
Balance of gross unrecognized tax benefits, end of period |
|
$ |
781 |
|
|
$ |
2,129 |
|
Included in the balance of unrecognized tax benefits as of December 31, 2025, are $0.8 million of tax benefits that, if recognized, would affect the effective tax rate. The Company classifies interest and penalties related to income taxes as components of its income tax provision (benefit). In the years ended December 31, 2025 and 2024, interest and penalties recorded within the income tax provision on the consolidated statement of comprehensive income or loss, and the related accruals on the consolidated balance sheets were immaterial to the financial statements.
In 2021, the Organization of Economic Co-operation and Development announced an Inclusive Framework on Base Erosion and Profit Sharing with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%. The Company continues to evaluate the impacts of enacted legislation and pending legislation in the tax jurisdictions in which we operate. While various countries have implemented the legislation and various countries continue to implement, the Company does not expect a material impact on our consolidated financial statements or results of operations in future periods.
On July 4, 2025, the United States enacted new tax legislation, the One Big Beautiful Bill Act (“OBBBA”), which contains several provisions modifying the corporate income tax code such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, updates to the international tax framework and the reinstatement of certain business-related provisions. The legislation has multiple effective dates, with provisions taking effect from 2025 through 2027. The changes effective in 2025 are included in the Company’s provision for income taxes for the year ended December 31, 2025 and were not material. The Company does not expect the OBBBA to have a material impact on our consolidated financial statements or results of operations in future periods.
As of December 31, 2025, the Company has accumulated undistributed earnings generated by its foreign subsidiaries. The Company has not provided for taxes on outside basis differences of its foreign subsidiaries as it is not practicable and the Company has the ability and intent to indefinitely reinvest the undistributed earnings of its foreign subsidiaries, and there are no needs for such earnings in the United States that would contradict its plan to indefinitely reinvest.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 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.