Zeta Global Holdings Corp. Income Taxes Disclosure

NOTE 17. Income Taxes

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, as well as operating loss and tax credit carry forwards. The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which is inherently uncertain. The Company assesses all available positive and negative evidence to determine if its existing deferred tax assets are realizable on a more-likely-than-not basis. In making such an assessment, the Company considered the reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operating results. The ultimate realization of a deferred tax asset is dependent on the Company’s generation of sufficient taxable income within the available net operating loss carry back and/or carryforward periods to utilize the deductible temporary differences.

A significant piece of objective negative evidence was the cumulative loss incurred in the U.S., United Kingdom, and other foreign jurisdictions over the three-year period ended December 31, 2025. Such objective evidence limits the Company’s ability to consider other subject evidence, such as the Company projections for future growth. On the basis of this evaluation, the Company continued to conclude that its U.S., United Kingdom and other foreign deferred tax assets are not realizable on a more-likely-than-not basis and that a full valuation allowance is required. The amount of deferred tax asset considered realizable, however, could be adjusted if estimates of future income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future growth. During 2025, the Company’s valuation allowance increased by $55,896, primarily due to valuation allowances recorded with the acquisition of the Marigold’s Enterprise Business.

As of December 31, 2025, the Company had U.S. federal net operating loss carryforwards of approximately $273,444 of which $75,361 are subject to an annual limitation pursuant to IRC Section 382. Approximately, $103,081 of U.S. federal net operating loss carryforwards expire in varying amounts during 2028 to 2037, if not utilized. These net operating losses are available to offset 100% of future taxable income. The remaining $170,363 of U.S. federal net operating loss may be carried forward indefinitely but are only available to offset 80% of future taxable income. In addition, the Company had state net operating losses in various state tax jurisdictions of $24,368 (tax effected) which will expire in varying amounts during 2027 through 2045, if not utilized.

As of December 31, 2025, the Company had United Kingdom net operating loss carryforwards of approximately $273,143, primarily acquired in connection with the acquisition of the Marigold’s Enterprise Business, which may be carried forward indefinitely subject to various limitations under United Kingdom tax law.

As of December 31, 2025, the Company had U.S. federal research tax credit carryforwards of $8,643, of which $1,774 are subject to an annual limitation under IRC Section 383. These credits expire in varying amounts from 2035 to 2045, if not utilized. The Company also had state research tax credit carryforwards of $3,095 (tax effected) as of December 31, 2025, of which $2,901 may be carried forward indefinitely. The remaining $194 will expire in varying amounts from 2029 to 2040 if not utilized.

The Company plans to continue to reinvest foreign earnings indefinitely outside the U.S. If these future earnings are repatriated to the U.S., or if the Company determines that such earnings will be remitted in the foreseeable future, the Company may be required to accrue applicable withholding taxes. However, the determination of the amount of the deferred tax liability is not practicable.

As of December 31, 2025 and 2024, the accrued amount of interest and penalties were $192 and $173, respectively. The Company’s accounting policy is to record both accrued interest and penalties related to income tax matters in the income tax provision in the accompanying consolidated statements of operations and comprehensive loss.

The Company, or one of its subsidiaries, files its tax returns in the U.S. and certain state and foreign income tax jurisdictions with varying statutes of limitations. The earliest years’ tax returns filed by the Company that are still subject to examination by the tax authorities in the major jurisdictions are as follows: