RED ROBIN GOURMET BURGERS INCRRGB
RED ROBIN GOURMET BURGERS INC Income Taxes Disclosure
11. Income Taxes
Income (loss) before income taxes included the following components for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 (in thousands):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| U.S. | $ | (23,019) | $ | (77,641) | $ | (20,894) | ||||||||||||||
| Foreign | (7) | 10 | (24) | |||||||||||||||||
Income (loss) before income taxes | $ | (23,026) | $ | (77,631) | $ | (20,918) | ||||||||||||||
Income tax (benefit) expense included the following components for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 (in thousands):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | $ | (11) | $ | (37) | $ | 37 | ||||||||||||||
| State | 269 | (53) | 273 | |||||||||||||||||
| Foreign | — | — | — | |||||||||||||||||
Total current income tax (benefit) expense | $ | 258 | $ | (90) | $ | 310 | ||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal | $ | — | $ | — | $ | — | ||||||||||||||
| State | — | — | — | |||||||||||||||||
| Foreign | — | — | — | |||||||||||||||||
Total deferred income tax (benefit) expense | $ | — | $ | — | $ | — | ||||||||||||||
Income tax (benefit) expense, net | $ | 258 | $ | (90) | $ | 310 | ||||||||||||||
The reconciliation between the income tax (benefit) expense and the amount of income tax computed by applying the U.S. federal statutory rate to income (loss) before income taxes as shown in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) for fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 were as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||||||
| Tax provision at U.S. federal statutory rate | $ | (4,835) | 21.0 | % | $ | (16,257) | 21.0 | % | $ | (4,382) | 21.0 | % | ||||||||||||||||||||||||||
State and local income tax, net of federal (national) income tax effect(1) | 220 | (1.0) | (512) | 0.7 | (15) | 0.1 | ||||||||||||||||||||||||||||||||
Foreign tax effects | 317 | (1.4) | (586) | 0.8 | 121 | (0.6) | ||||||||||||||||||||||||||||||||
Changes in valuation allowance | 3,512 | (15.2) | 14,321 | (18.6) | 2,868 | (13.8) | ||||||||||||||||||||||||||||||||
Nontaxable or nondeductible items | 546 | (2.4) | 621 | (0.8) | 698 | (3.3) | ||||||||||||||||||||||||||||||||
| Other | 498 | (2.1) | 2,323 | (3.0) | 1,020 | (4.9) | ||||||||||||||||||||||||||||||||
| Effective tax rate | $ | 258 | (1.1) | % | $ | (90) | 0.1 | % | $ | 310 | (1.5) | % | ||||||||||||||||||||||||||
(1) State taxes in California, Colorado, Illinois, Oregon, and Texas made up the majority (greater than 50%) of the tax effect in this category.
The Company's federal and state deferred taxes as of December 28, 2025 and December 29, 2024 were as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Deferred tax assets: | ||||||||||||||
| Leasing transactions | $ | 92,318 | $ | 104,831 | ||||||||||
| General business and other tax credits | 39,718 | 41,009 | ||||||||||||
| Net operating loss carryover | 50,302 | 50,688 | ||||||||||||
| Accrued compensation and related costs | 4,907 | 4,810 | ||||||||||||
| Goodwill | 7,332 | 7,250 | ||||||||||||
| Stock-based compensation | 5,933 | 6,423 | ||||||||||||
| Advanced payments | — | — | ||||||||||||
| Interest expense | 21,670 | 15,938 | ||||||||||||
Property & Equipment | 7,463 | 8,318 | ||||||||||||
| Other non-current deferred tax assets | 1,561 | 1,594 | ||||||||||||
| Subtotal | $ | 231,204 | $ | 240,861 | ||||||||||
| Valuation allowance | $ | (141,148) | $ | (136,595) | ||||||||||
| Total | $ | 90,056 | $ | 104,266 | ||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Leasing transactions | $ | (80,035) | $ | (89,804) | ||||||||||
| Property and equipment | — | — | ||||||||||||
| Supplies inventory | (4,114) | (4,349) | ||||||||||||
| Prepaid expenses | (1,282) | (1,862) | ||||||||||||
| Advanced Payments | (1,056) | (364) | ||||||||||||
| Other non-current deferred tax liabilities | (3,569) | (7,887) | ||||||||||||
| Total | $ | (90,056) | $ | (104,266) | ||||||||||
| Net deferred tax asset | $ | — | $ | — | ||||||||||
The Company had net operating loss carryforwards for tax purposes of $50.3 million as of December 28, 2025. This was comprised of approximately $21.4 million of federal net operating loss carryovers, approximately $19.8 million of state net operating loss carryovers, and approximately $9.1 million of foreign net operating loss carryovers. The federal net operating loss has an indefinite carryforward period, the state net operating loss carryovers expire at various dates between 2026 and 2046, and the foreign net operating loss carryovers expire at various dates between 2036 and 2046.
As of December 28, 2025, the Company had a deferred tax asset of $39.7 million related to federal tax credits, which expire at various dates between 2026 and 2040.
The Company establishes a valuation allowance to reduce the carrying amount of deferred income tax assets when it is more likely than not that it will not realize some portion or all the tax benefit of its deferred income tax assets. The realization of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences become deductible. In making this determination, the Company considers all available positive and negative evidence including historical operating losses, the reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies. In 2020, management determined that a full valuation allowance was required and has recorded a full valuation allowance as of December 28, 2025 and at December 29, 2024.
Based on the Company's evaluation of its deferred tax assets, a valuation allowance of approximately $141.1 million had been recorded against the deferred tax asset for federal and state tax credits, federal and state deferred tax assets, all net operating loss carry forwards and the deferred taxes of our foreign subsidiary.
The following table summarizes the Company's unrecognized tax benefits as of December 28, 2025, December 29, 2024, and December 31, 2023 (in thousands):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Beginning of year | $ | 51 | $ | 185 | $ | 185 | ||||||||||||||
| Increase due to current year tax positions | — | — | — | |||||||||||||||||
| Due to decrease to a position taken in a prior year | — | — | — | |||||||||||||||||
| Settlements | — | — | — | |||||||||||||||||
| Reductions related to lapses in the statute of limitations | (51) | (134) | — | |||||||||||||||||
| End of year | $ | — | $ | 51 | $ | 185 | ||||||||||||||
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $0.0 million. The Company does not anticipate significant changes in the aggregate amount of unrecognized tax benefits within the next 12 months, other than nominal tax settlements.
The following table summarizes the Company's net cash paid (refunds received) for income taxes, which consisted of the following as of December 28, 2025, December 29, 2024, and December 31, 2023 (in thousands):
| 2025 | 2024 | 2023 | ||||||||||||||||||
Federal | $ | 72 | $ | 21 | $ | 50 | ||||||||||||||
Aggregated state and local jurisdictions | 53 | 96 | 168 | |||||||||||||||||
Disaggregated state and local jurisdictions | ||||||||||||||||||||
Maryland | (293) | (191) | — | |||||||||||||||||
Oregon | 50 | 55 | 43 | |||||||||||||||||
Pennsylvania | 31 | 31 | 118 | |||||||||||||||||
Texas | 57 | 71 | 75 | |||||||||||||||||
Foreign | — | — | — | |||||||||||||||||
Net (refunds received) cash paid for income taxes | $ | (30) | $ | 83 | $ | 454 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 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.