SI-BONE, Inc.SIBN
SI-BONE, Inc. Income Taxes Disclosure
Income Taxes
The components of the Company’s loss before income taxes are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
Domestic | $ | (19,093) | $ | (31,082) | $ | (43,491) | |||||||||||
Foreign | 189 | 169 | 155 | ||||||||||||||
Loss before income taxes | $ | (18,904) | $ | (30,913) | $ | (43,336) | |||||||||||
There was no provision for income taxes recorded for the years ended December 31, 2025, 2024 and 2023. The Company continues to maintain a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding realization of such assets. The Company periodically evaluates the realizability of its net deferred tax assets based on the expected realization and is dependent on the Company's ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets.
The components of deferred income taxes are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
(in thousands) | |||||||||||
| Federal | $ | 1,587 | $ | (5,080) | |||||||
| State | 462 | (1,002) | |||||||||
| Foreign | 17 | 70 | |||||||||
| Total deferred income taxes | 2,066 | (6,012) | |||||||||
| Change in deferred tax valuation allowance | (2,066) | 6,012 | |||||||||
| Net deferred income tax | $ | — | $ | — | |||||||
The Company has elected to prospectively adopt ASU 2023-09. The following table is a reconciliation of the total income tax expense computed at the U.S. federal statutory rate of 21% to the Company’s total income tax expense for the year ended December 31, 2025, in accordance with ASU 2023-09:
| December 31, 2025 | |||||||||||
(in thousands) | |||||||||||
| U.S. Federal Statutory Tax Rate | $ | (3,970) | 21.0 | % | |||||||
Tax credits (research and development tax credits) | (540) | 2.9 | % | ||||||||
Changes in valuation allowances | (1,587) | 8.4 | % | ||||||||
Nontaxable or nondeductible items | |||||||||||
Share-based payment awards | 5,867 | (31.0) | % | ||||||||
Meals and entertainment | 244 | (1.4) | % | ||||||||
Other | (14) | 0.1 | % | ||||||||
| Effective Tax Rate | $ | — | — | % | |||||||
The following table is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to ASU 2023-09:
| December 31, 2024 | December 31, 2023 | ||||||||||
Tax at statutory rate | 21.0 | % | 21.0 | % | |||||||
State Tax, net of federal benefit | 3.3 | % | 4.3 | % | |||||||
Tax credits | 2.0 | % | 1.3 | % | |||||||
| Change in deferred tax valuation allowance | (19.5) | % | (28.7) | % | |||||||
| Stock compensation | (2.9) | % | 3.0 | % | |||||||
| Foreign rate differences | (0.2) | % | 2.1 | % | |||||||
| Reversal of nontaxable or nondeductible items | (1.3) | % | (2.1) | % | |||||||
| Nondeductible executive compensation | (1.3) | % | (0.3) | % | |||||||
| Other | (1.1) | % | (0.6) | % | |||||||
| Total income tax expense | — | % | — | % | |||||||
The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
(in thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 90,824 | $ | 89,592 | |||||||
| Research and development credits | 7,124 | 6,279 | |||||||||
| Accruals and reserves | 5,218 | 4,506 | |||||||||
Stock compensation | 1,668 | 3,693 | |||||||||
Depreciation and amortization | (220) | 144 | |||||||||
Operating lease liabilities | 273 | 511 | |||||||||
Interest limitation | 1,662 | 2,584 | |||||||||
Capitalized research and development | 4,872 | 6,413 | |||||||||
Total deferred tax assets | 111,421 | 113,722 | |||||||||
Deferred tax liabilities: | |||||||||||
Operating lease right-of-use assets | (265) | (500) | |||||||||
Total deferred tax liabilities | (265) | (500) | |||||||||
Less: Valuation allowance | (111,156) | (113,222) | |||||||||
Total deferred tax assets, net of valuation allowance | $ | — | $ | — | |||||||
The following table summarizes changes in the valuation allowance for the year ended December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
| Beginning Balance | $ | 113,222 | $ | 107,210 | $ | 94,776 | |||||||||||
| Change during the period | (2,066) | 6,012 | 12,434 | ||||||||||||||
| Ending Balance | 111,156 | 113,222 | 107,210 | ||||||||||||||
As of December 31, 2025 the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $357.0 million and $274.4 million, respectively. The federal net operating loss carryforwards will begin to expire in 2029, and the state operating loss carryforwards began to expire in 2025.
As of December 31, 2025 the Company also had federal and California tax credit carryforwards of approximately $6.3 million and $5.0 million, respectively. The federal tax credit carryforward will begin to expire in 2029, and the state credits carryforward indefinitely.
Utilization of the Company's net operating losses and credits may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.
The Company accounts for the uncertainty in income taxes by utilizing a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or are expected to
be taken on an income tax return. The changes in the Company’s uncertain income tax positions for the years ended December 31, 2025, 2024, and 2023 consisted of the following:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
Balance at beginning of the year | $ | 3,024 | $ | 2,629 | $ | 2,944 | |||||||||||
Decrease related to tax positions taken prior to current year | (15) | (43) | (726) | ||||||||||||||
Increase related to current year's tax positions | 413 | 438 | 411 | ||||||||||||||
Balance at end of the year | $ | 3,422 | $ | 3,024 | $ | 2,629 | |||||||||||
The Company has elected to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. The Company has no accrued interest at December 31, 2025 and 2024 for payment of interest related to unrecognized tax benefits. None of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rate for the years ended December 31, 2025, 2024, and 2023. The Company does not anticipate the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months.
The Company files U.S. and state income tax returns with varying statutes of limitations. The Company is currently under tax examination for tax year 2023. The Company has no state or foreign tax examinations in progress nor has it had any state examinations since inception. The tax years from 2024 forward remain open to examination due to the carryover of unused net operating losses and tax credits.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law, bringing significant amendments to the U.S. tax code. This legislation extends and modifies provisions from the 2017 Tax Cuts and Jobs Act and introduces new tax measures affecting both businesses and individuals. The enacted legislation had an immaterial impact on the Company’s effective tax rate for the year ended December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 2, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 11, 2020 | |
| 2018 | Mar 14, 2019 | |
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.