SITIME CorpSITM
SITIME Corp Income Taxes Disclosure
Income Taxes
The components of income (loss) before income taxes were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| United States | $ | (43,529) | $ | (93,691) | $ | (81,208) | |||||||||||
| Foreign | 1,224 | 576 | 825 | ||||||||||||||
| $ | (42,305) | $ | (93,115) | $ | (80,383) | ||||||||||||
The components of income tax expense were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Current Provision: | |||||||||||||||||
| Federal | $ | — | $ | — | $ | — | |||||||||||
| State | (1) | (1) | (1) | ||||||||||||||
| Foreign | (597) | (485) | (151) | ||||||||||||||
| Total current provision | (598) | (486) | (152) | ||||||||||||||
| Total deferred provision | — | — | — | ||||||||||||||
| Total income tax provision | $ | (598) | $ | (486) | $ | (152) | |||||||||||
The material components of the deferred tax assets and liabilities consisted of net operating loss carry-forwards, capitalized research and development costs, and tax credit carry-forwards.
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Deferred tax assets (liabilities): | |||||||||||||||||
| Deferred tax assets: | |||||||||||||||||
| Accrual, write-down and other | $ | 11,560 | $ | 12,863 | $ | 9,169 | |||||||||||
| Acquired assets | 6,161 | 4,623 | 1,650 | ||||||||||||||
| Capitalized research and development | 35,673 | 46,495 | 37,706 | ||||||||||||||
| Credits | 5,657 | 5,657 | 5,657 | ||||||||||||||
| Net operating loss and credits carry forwards | 78,252 | 58,689 | 54,212 | ||||||||||||||
| Gross deferred tax assets | $ | 137,303 | $ | 128,327 | $ | 108,394 | |||||||||||
| Deferred tax liabilities: | |||||||||||||||||
| Depreciation and amortization | $ | (909) | $ | (2,277) | $ | (2,622) | |||||||||||
| Gross deferred tax liabilities | $ | (909) | $ | (2,277) | $ | (2,622) | |||||||||||
| Total gross deferred tax assets | $ | 136,394 | $ | 126,050 | $ | 105,772 | |||||||||||
| Valuation allowance | (136,394) | (126,050) | (105,772) | ||||||||||||||
| Total net deferred tax assets | $ | — | $ | — | $ | — | |||||||||||
The net valuation allowance increased by $10.3 million and $20.3 million for the year ended December 31, 2025 and 2024 respectively.
Beginning in 2025 annual reporting period, we adopted ASU 2023-09 prospectively. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| (in thousands) | % | ||||||||||
| U.S. federal statutory income tax rate | $ | (8,884) | (21.0) | % | |||||||
| Change in valuation allowance | 10,341 | 24.4 | % | ||||||||
| Nontaxable or Nondeductible items | |||||||||||
| Excess tax expense from share-based compensation | (13,469) | (31.8) | % | ||||||||
| Non-deductible executive compensation | 9,240 | 21.8 | % | ||||||||
| Non-deductible non-U.S. equity compensation | 2,756 | 6.5 | % | ||||||||
| Other Adjustments | |||||||||||
| Other | 614 | 1.5 | % | ||||||||
| Effective tax rate | $ | 598 | 1.4 | % | |||||||
A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate for the prior years is as follows:
| Years Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| US Federal rate benefit | (21.0) | % | (21.0) | % | |||||||
| RSU excess tax benefit | (15.5) | (12.9) | |||||||||
| Section 162(m) limitation | 10.4 | — | |||||||||
| Permanent differences and others | 5.0 | 7.0 | |||||||||
| Change in valuation allowance | 21.6 | 27.1 | |||||||||
| Net tax expense | 0.5 | % | 0.2 | % | |||||||
The reported amount of income tax expense differs from an expected amount based on statutory rates primarily due to the Company’s valuation allowance, the stock-based compensation windfall, and the disallowed executive compensation.
Cash paid for income taxes, net of refunds received, by jurisdiction, pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:
| Year Ended December 31, | |||||
| 2025 | |||||
| (in thousands) | |||||
| Foreign | |||||
| India | $ | 221 | |||
| Japan | 80 | ||||
| Ukraine | 39 | ||||
| Malaysia | 23 | ||||
| Other | 39 | ||||
| Cash paid for income taxes, net of refunds received | $ | 402 | |||
As of December 31, 2025 and 2024, based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be realized. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at December 31, 2025 and 2024.
At December 31, 2025 and 2024, the Company has federal net operating loss carry-forwards of approximately $344.3 million and $250.7 million, respectively, and state net operating loss carry-forwards of approximately $85.1 million and $84.5 million, respectively. At December 31, 2025 and 2024, the Company has net operating loss carryforwards for foreign income tax purposes of approximately $0.2 million and $2.0 million, respectively. These federal, state, and foreign net operating loss carry-forwards will expire beginning in 2028.
At December 31, 2025 and 2024, the Company also has federal research and development tax credit carry-forwards of approximately $3.9 million and $3.9 million, respectively, and state research and development tax credit carry-forwards of approximately $3.6 million and $3.6 million, respectively. The federal tax credits begin to expire in 2025, and the California tax credits carry forward indefinitely.
As of December 31, 2025 and 2024, the Company had $2.5 million and $2.5 million of total unrecognized tax benefits. The Company currently has a full valuation allowance against its net deferred tax assets which would impact the timing of the effective tax rate benefit should any of these uncertain tax positions be favorably settled in the future. If the Company is able to eventually recognize these uncertain tax positions, none of the unrecognized benefit would reduce the Company’s effective tax rate due to full valuation allowance of the Company’s deferred tax assets. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. During the years ended December 31, 2025 and 2024, the Company had immaterial amounts related to the accrual of interest and penalties.
A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Beginning balance | $ | 2,505 | $ | 2,271 | |||||||
| Increase in balance related to tax position taken during prior periods | 30 | 259 | |||||||||
| Decrease in balance related to tax position taken during the current period | — | (25) | |||||||||
| Ending balance | $ | 2,535 | $ | 2,505 | |||||||
These amounts are related to certain deferred tax assets with a corresponding valuation allowance.
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, local, and foreign jurisdictions, where
applicable. Due to the Company’s net losses, its federal, state and local, and foreign tax returns since inception are subject to audit.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 11, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Mar 2, 2020 | |
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.