Income Taxes

3 Months Ended

12 Months Ended

Mar. 31, 2026

Dec. 31, 2025

9. Income Taxes

Effective Tax Rate

The following table presents the provision for income taxes and the effective tax rates for the three months ended March 31, 2026 and 2025 (in thousands):


	Three months ended March 31,
	2026			2025
Loss before income taxes	$	(10,168	)	$	(8,280	)
Income tax expense		(3	)		(4	)
Effective tax rate		0.0	%		0.0	%

The income tax amount for each of the three months ended March 31, 2026 and 2025 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to an increase in the valuation allowance. The effective tax rate was less than 1% for both the three months ended March 31, 2026 and 2025. The provision for income taxes is primarily related to the foreign subsidiaries’ local country obligations. There is no federal provision for income taxes as the Company has sufficient carryforward of net operating losses to offset any operating income earned since inception and has projected an operating loss in the current year.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, the net deferred tax assets are fully offset by a valuation balance at March 31, 2026 and December 31, 2025.

13. Income Taxes

The Company adopted ASU

No. 2023-09,

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

, on a retrospective basis during the year ended December 31, 2025.

The income tax amount for each of the years ended December 31, 2025 and 2024, differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to an increase in the valuation allowance.

Provision for Income Taxes

Loss before provision for income taxes, includes the components for the years ended December 31, 2025 and 2024, as follows (in thousands):


	2025			2024
Domestic	$	(34,058	)	$	(35,548	)
Foreign		(2,363	)		(4,085	)

Loss before provision for income taxes	$	(36,421	)	$	(39,633	)

For the years ended December 31, 2025 and 2024, the provision for income taxes consisted of the following (in thousands):


	2025		2024
Current:
Federal		—		—
State		—		—
Foreign		40		28

Total current income tax expense		40		28
Deferred:
Federal		—		—
State		—		—
Foreign		—		—

Total deferred income tax expense		—		—
Provision for income taxes		40		28

Deferred Tax Assets

The components of the deferred tax assets and liabilities at December 31, 2025 and 2024, are as follows (in thousands):


	2025			2024
Deferred tax assets:
Net operating loss carryforwards	$	47,207		$	37,760
Depreciable assets		119			223
Intangible assets		1,046			843
Research and development capitalization		14,050			17,883
Inventory allowance		3,128			3,675
Accrued liabilities and other		3,196			1,787
Uniform capitalization		303			304
Sales return allowance		203			204
Warrants		407			1,019

Total deferred tax assets		69,659			63,698
Less: valuation allowance		(69,659	)		(63,698	)

Net deferred tax assets		—			—

As of December 31, 2025 and 2024, the Company had net operating loss carryforwards (NOL) of approximately $202.8 million and $160.5 million, respectively. For federal tax reporting purposes, NOL carryforwards of $51.6 million will expire in fiscal years 2032 through 2037 if not utilized prior to that time. The remaining $151.2 million carries forward indefinitely. As of December 31, 2025, the Company had $21.4 million foreign NOL carryforwards. The foreign NOL will begin to expire after 2026 if not utilized.

Utilization of NOL carryforwards may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code. The annual limitation may result in the expiration of NOL and other tax attributes before utilization. The NOL carryforwards are subject to Internal Revenue Service adjustments until the statute closes on the year the NOL is utilized.

Uncertain Tax Position

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. At December 31, 2025, the Company has no unrecognized tax benefits. At December 31, 2024, the Company has no unrecognized tax benefits. Additionally, the Company does not expect any unrecognized tax benefits to change significantly over the next twelve months.

Effective Tax Rate

The following table presents the provision for income taxes and the effective tax rates for the years ended December 31, 2025 and 2024 (in thousands):


	2025					2024
Net income before income taxes		(36,421	)				(39,633	)
U.S. Federal benefit	$	(7,649	)	21.0	%	$	(8,323	)	21.0	%
State taxes, net of federal benefit	$	(77	)	0.2	%	$	(35	)	0.1	%
Permanent items
Stock-based compensation		1,166		-3.2	%		164		-0.4	%
Transaction costs		629		-1.7	%		73		-0.2	%
Other permanent items		(65	)	0.2	%		(147	)	0.4	%
Foreign tax differential — Singapore
Change in valuation allowance		608		-1.7	%		1,299		-3.3	%
Other		(50	)	0.1	%		(1,173	)	3.0	%
Foreign tax differential — Other		(21	)	0.1	%		—		0.0	%
Other		76		-0.2	%		(104	)	0.3	%
Change in valuation allowance — Other		5,423		-14.9	%		8,274		-20.9	%

Total	$	40		-0.1	%	$	28		-0.1	%

In accordance with ASC 740, the Company has recognized the effects of the new tax law in the period of enactment. Most or all the tax benefits under the One Big Beautiful Bill Act (OBBBA) relate to accelerated timing of tax deductions or benefits and will apply to future tax periods. Accordingly, the net effect of OBBBA did not have a material impact on the Company’s effective tax rate for the period.

The Company continues to evaluate the impact of OBBBA on its consolidated financial statements and will update its estimates as additional guidance becomes available.

The income tax amount for each of the years ended December 31, 2025 and 2024 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to an increase in the valuation allowance. The effective tax rate was less than 1% for both the years ended December 31, 2025 and 2024. The provision for income taxes is primarily related to the foreign subsidiaries’ local country obligations. There is no federal provision for income taxes as the Company has sufficient carryforward of net operating losses to offset any operating income earned since inception and has projected an operating loss in the current year.

The Company has established a valuation allowance equal to the net deferred tax assets due to uncertainties regarding the realization of the deferred tax assets based on the Company’s lack of earnings history. The valuation allowance was $69.5 million and $63.7 million during the years ended December 31, 2025 and 2024, respectively, primarily due to net losses from operations.

The Company provides for U.S. income taxes of the earnings of its foreign subsidiaries to the extent required by the Tax Cuts and Jobs Act. However, the Company does not provide for withholding taxes on any portion of the undistributed earnings of its foreign subsidiaries because it intends to permanently reinvest those earnings indefinitely outside the United States. At the present time it is not practicable to estimate the amount of income or withholding taxes that might be payable if these earnings were repatriated.

The Company files foreign and U.S. federal and various state income tax returns. For U.S. federal and state income tax purposes, the statute of limitations currently remains open for the years ending December 31, 2019 to present. In addition, prior year NOL carryforwards, including those originated from 2010, that may be utilized in future years, may be subject to examination. The Company is not currently under examination by income tax authorities in any jurisdiction.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
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-Section 50
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-URI https://asc.fasb.org/1943274/2147477617/942-740-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Ambiq Micro, Inc. S-1