Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Income Before Income Taxes Attributable to Geographic Locations

Income before income taxes is attributable to the following geographic locations for the years ended December 31 (in millions):


	2025		2024		2023
Domestic	$	380	$	147	$	278
Foreign	1,128		828		846
Income before income taxes	$	1,508	$	975	$	1,124

Schedule of Components of Tax Benefit (Expenses) for Income Taxes

The tax expenses for income taxes consisted of the following components for the years ended December 31 (in millions):


	2025		2024		2023
Current:
Federal	$	(6)	$	1	$	—
State and local	(2)		(3)		—
Foreign	(208)		(189)		(150)
Subtotal	(216)		(191)		(150)
Deferred:

State and local	(1)		2		—
Foreign	57		28		(5)
Subtotal	56		30		(5)
Income tax expense	$	(160)	$	(161)	$	(155)

Schedule of Income Tax Reconciliation

Income tax benefit (expense) for the year ended December 31, 2025 differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pre-tax income as a result of the following ($ in millions, except percentages):


	2025
	$		%
Federal tax at statutory rate	$	(317)	21.0	%
State and local taxes (1)	(3)		0.2	%
Non-deductible or non-taxable items:
REIT status/dividends paid deduction (2)	194		(12.9)	%
Other	(2)		0.1	%
Change in valuation allowance	(4)		0.3	%
Foreign tax effects:
Canada	20		(1.3)	%
Singapore
Tax rate differential	17		(1.1)	%


Other	(8)		0.5	%
Other foreign jurisdictions	(53)		3.5	%
Change in unrecognized tax benefits	(3)		0.2	%
Other adjustments	(1)		0.1	%
Total income tax expense	$	(160)	10.6	%

(1)State taxes in Virginia contributed to the majority of the tax effect in this category.

(2)The REIT status/dividends paid deduction reconciling item reflects that the Company is generally entitled to a deduction for dividends paid and therefore generally is not subject to U.S. federal corporate income tax on taxable income that is distributed; accordingly, certain permanent differences (e.g., nondeductible executive compensation) do not result in incremental federal income tax expense when fully offset through the dividends paid deduction mechanism.

Income tax benefit (expense) for the years ended December 31, 2024 and 2023 differed from the amounts computed by applying the U.S. federal income rate of 21% to pre-tax income as a result of the following (in millions):


	2024		2023
Federal tax at statutory rate	$	(205)	$	(236)
State and local tax expense	(1)		—
Foreign income tax rate differential	(12)		(14)
Non-deductible expenses	(10)		(6)
Stock-based compensation expense	(8)		(9)
Change in valuation allowance	(72)		(32)
Foreign financing activities	(2)		(4)
Uncertain tax positions reserve	11		21
Tax adjustments related to REIT	130		132
Change in deferred tax adjustments	1		(3)
Effect of tax rate change on deferred tax assets	—		(2)
Other, net	7		(2)
Total income tax expense	$	(161)	$	(155)

Schedule of Deferred Tax Assets and Liabilities

The types of temporary differences that give rise to significant portions of our deferred tax assets and liabilities are set out below as of December 31 (in millions):


	2025		2024
Deferred tax assets:
Stock-based compensation expense	$	11	$	10
Net unrealized losses	26		12
Operating lease liabilities	233		217
Finance lease liabilities	36		—
Deferred revenue	15		11

Loss carryforwards and tax credits	304		253
Others, net	62		25
Gross deferred tax assets	687		528
Valuation allowance	(285)		(277)
Total deferred tax assets, net	402		251
Deferred tax liabilities:

Finance lease liabilities	—		(13)
Property, plant and equipment	(305)		(200)
Right-of-use assets	(235)		(220)
Deferred income	(6)		(5)
Goodwill	(40)		(17)
Intangible assets	(83)		(87)
Total deferred tax liabilities	(669)		(542)
Net deferred tax liabilities	$	(267)	$	(291)

Schedule of Changes in Valuation Allowance for Deferred Tax Assets

Changes in the valuation allowance for deferred tax assets for the years ended December 31 are as follows (in millions):


	2025		2024		2023
Beginning balance	$	277	$	221	$	167
Amounts from acquisitions	—		—		10

Amounts recognized into income	(26)		6		(2)
Current increase	26		57		44
Impact of foreign currency exchange	8		(7)		2
Ending balance	$	285	$	277	$	221

Schedule of Net operating Loss Carryforwards

Our net operating loss carryforwards for federal, state and foreign tax purposes which expire, if not utilized, at various intervals from 2026, are outlined below (in millions):


Expiration Date	Federal		State		Foreign		Total (1) (2)
2026	$	1	$	—	$	12	$	13
2027 to 2029	1		—		73		74
2030 to 2032	—		1		38		39
2033 to 2035	1		—		69		70
2036 to 2038	2		—		16		18
2039 to 2041	—		21		74		95
Thereafter	194		92		727		1,013
	$	199	$	114	$	1,009	$	1,322

(1)In certain jurisdictions, the net operating loss carryforwards can only be used to offset a percentage of taxable income in a given year.

(2)If certain substantial changes in the entity's ownership occur, there may be a limitation on the amount of the carryforwards that can be utilized.

Schedule of Reconciliation of Unrecognized Tax Benefits

The beginning and ending balances of our unrecognized tax benefits are reconciled below for the years ended December 31 (in millions):


	2025		2024		2023
Beginning balance	$	57	$	70	$	89
Gross increases related to prior year tax positions	7		—		3
Gross decreases related to prior year tax positions	—		(12)		(17)
Gross increases related to current year tax positions	5		7		5
Decreases resulting from expiration of statute of limitation	(7)		(7)		(10)
Decreases resulting from settlements	—		(1)		—
Ending balance	$	62	$	57	$	70

Schedule of Cash Flow Supplemental Disclosures

We applied ASU 2023-09 on a prospective basis as discussed in Note 1. Accordingly, the income taxes paid by jurisdiction (net of refunds received) in the table below provide the disclosures required by ASU 2023-09 for the year ended December 31, 2025 (in millions):


	2025
US federal	$	(1)
US states	2
Foreign
Brazil	26
Singapore	68
Japan	23
Australia	23
Netherlands	31
Other	35
Total foreign	206
Total income taxes paid (net of refunds received) (1)	$	207

(1)Includes withholding tax expense.

EQUINIX INC 10-K