Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Components of Income Before Income Taxes

Income before income taxes consisted of the following for the years ended December 31:



(in millions)	2025		2024		2023
United States	$	332.8	$	290.6	$	225.8
Foreign	87.4		127.2		143.0
Total	$	420.2	$	417.8	$	368.8

Schedule of Components of Income Tax Expense (Benefit)

Income taxes from continuing operations consisted of the following for the years ended December 31:


(in millions)	United States		State and Local		Foreign		Total
2025
Current	$	30.4	$	18.1	$	24.0	$	72.5
Deferred	$	35.0	$	6.5	$	2.1	$	43.6
Income taxes							$	116.1
2024
Current	$	48.2	$	16.5	$	32.4	$	97.1
Deferred	$	14.1	$	2.0	$	(5.0)	$	11.1
Income taxes							$	108.2
2023
Current	$	77.0	$	13.3	$	33.2	$	123.5
Deferred	$	(16.7)	$	—	$	(4.6)	$	(21.3)
Income taxes							$	102.2

Schedule of Income Taxes Paid (Net of Refunds)

Income taxes paid (net of refunds) consisted of the following for the year ended December 31, 2025:



(in millions)
Federal	$	10.6
State and local	9.0
Foreign:
Australia	2.3
United Kingdom	18.0
Other	4.6
Total foreign	24.9
Income taxes paid (net of refunds)	$	44.5

Schedule of Reconciliation of Provision of Income Taxes

The reconciliation between the income tax computed by applying the U.S. federal statutory rate and the reported effective tax rate on income from continuing operations is as follows for the years ended December 31:



	2025
(in millions)	Amount		Percent
U.S. Federal statutory tax rate	$	88.2	21.0	%
State and local income taxes, net of federal income tax effect (a)	19.4		4.6
Foreign tax effects	8.2		1.9
Effect of changes in tax laws or rates enacted in the current period	—		—
Effect of cross-border tax laws	(1.1)		(0.3)
Tax credits	2.0		0.5
Changes in valuation allowances	(4.0)		(1.0)
Nontaxable or nondeductible items	7.9		1.9
Changes in unrecognized tax benefits	(5.3)		(1.2)
Other adjustments	0.8		0.2
Effective tax rate	$	116.1	27.6	%

(a) State taxes in California, North Dakota, Illinois, Utah and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.



	2024			2023

U.S. Federal statutory rate		21.0	%		21.0	%
State income taxes, net of federal income tax effect		2.9			2.8
Foreign income tax rate differential		1.5			2.3












Revaluation of deferred tax assets for foreign and state tax rate changes, net		0.5			0.4
Tax credits		(0.3)			(0.3)
Tax reserves		0.9			1.0

Change in valuation allowance		(2.0)			(4.7)

Nondeductible expenses		1.7			4.1
Incremental tax benefit from share-based compensation awards		(0.6)			2.0
GILTI		0.1			0.5

Other		0.2			(1.4)
Effective tax rate		25.9	%		27.7	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences in the recognition of income and expense for tax and financial reporting purposes that give rise to significant portions of the deferred tax assets and liabilities are presented below:


	December 31,
(in millions)	2025		2024
Deferred tax assets related to:
Reserve for credit losses	$	18.5	$	17.2
Tax credit carryforwards	8.4		16.2
Stock-based compensation, net	31.3		32.8
Net operating loss carry forwards	32.8		36.6
Capital loss carry forwards	22.7		21.3
Accruals	44.4		41.2
Operating lease liabilities	14.5		16.2

Contractual obligations	17.3		31.8
Property, equipment and capitalized software	—		4.8
Unrealized losses on debt securities	—		27.8
Other	5.4		5.1
Total	$	195.3	$	250.9
Deferred tax liabilities related to:

Property, equipment and capitalized software	(14.7)		—
Intangibles	(266.0)		(265.0)

Operating lease assets	(12.0)		(12.7)
Other	(3.0)		(4.3)


Total	$	(295.7)	$	(282.0)
Valuation allowance	(70.0)		(96.3)
Deferred income taxes, net	$	(170.4)	$	(127.4)

Schedule of Net Deferred Tax Assets by Jurisdiction

Net deferred tax (liabilities) assets by jurisdiction are as follows:


	December 31,
(in millions)	2025		2024
United States	$	(184.5)	$	(142.1)
Australia	8.6		8.9
Europe	2.6		2.8

Singapore	1.7		2.3
Other	1.2		0.7



Deferred income taxes, net	$	(170.4)	$	(127.4)

Schedule of Valuation Allowance

The following table provides a summary of the Company’s valuation allowance:


(in millions)	Balance at Beginning of Year		Charges to Expense		Releases		(Charges to)/ Releases from Accumulated Other Comprehensive Loss		Foreign Currency Translation		Balance at End of Year
Year Ended December 31, 2025	$	(96.3)	$	(4.0)	$	5.0	$	28.1	$	(2.8)	$	(70.0)
Year Ended December 31, 2024	$	(100.7)	$	(4.2)	$	12.8	$	(8.0)	$	3.9	$	(96.3)

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits excluding interest and penalties is as follows:


	Year ended December 31,
(in millions)	2025		2024		2023
Beginning balance	$	12.6	$	10.1	$	7.5
Increases related to prior year tax positions	—		2.5		3.7
Increases related to current year tax positions	—		—		1.5

Decreases related to prior year tax positions	(4.9)		—		(2.6)

Lapse of statute	(3.8)		—		—
Ending balance	$	3.9	$	12.6	$	10.1

WEX Inc. 10-K