Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of US and Foreign Component of Income (Loss) Before Income Tax

The U.S. and foreign components of income (loss) before provision for (benefit from) income taxes for the years ended December 31, 2023, 2024, and 2025 are as follows (in millions):


	Year Ended December 31,
	2023		2024		2025
U.S.	$	1,525	$	3,455	$	4,620
Foreign	796		670		1,180
Income before income taxes and income (loss) from equity method investments	$	2,321	$	4,125	$	5,800

Schedule of Components of Income Tax Expense

The components of the provision for (benefit from) income taxes for the years ended December 31, 2023, 2024, and 2025 are as follows (in millions):


	Year Ended December 31,
	2023		2024		2025
Current
Federal	$	1	$	22	$	164
State	16		42		116
Foreign	170		205		153
Total current tax expense	187		269		433
Deferred
Federal	11		(5,154)		(118)
State	12		(857)		98
Foreign	3		(16)		(4,759)
Total deferred tax expense (benefit)	26		(6,027)		(4,779)
Total provision for (benefit from) income taxes	$	213	$	(5,758)	$	(4,346)

Schedule of Reconciliation of the Statutory Federal Income Tax Rate

The following is a reconciliation of the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2023 and 2024:


	Year Ended December 31,
	2023		2024
Federal statutory income tax rate	21.0	%	21.0	%
State income tax expense (1)	1.2		(19.8)
Foreign rate differential	(0.4)		(0.4)


Non-deductible expenses	(0.2)		2.2
Stock-based compensation	(1.9)		(5.2)
Federal research and development credits	(7.2)		(5.1)
Deferred tax on investments	(3.5)		—
Entity restructuring	0.6		(0.5)
Change in unrecognized tax benefits	(6.8)		37.8
Valuation allowance (2)	(2.8)		(164.3)
US effects on foreign operations	4.1		(2.5)
Withholding taxes	9.5		(0.1)
Other interest	(4.1)		(2.8)
Other, net	(0.3)		0.1
Effective income tax rate	9.2	%	(139.6)	%

(1) We reported the effects of the state valuation allowance on the state income tax expense line-item within our effective tax rate. In 2024, we released $1.2 billion of our valuation allowance on our U.S. state deferred tax assets, with the exception of our California R&D credits.

(2) In 2024, we released $5.2 billion of our valuation allowance on our U.S. federal deferred tax assets. This was included on the change in valuation allowance line-item.

The following is a reconciliation of the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2025 (in millions):


	Year Ended December 31, 2025

Federal statutory income tax rate	$	1,218	21.0	%
State and local income taxes, net of federal income tax effect (1)	156		2.7
Federal
Changes in valuation allowances	(14)		(0.2)
Effect of cross-border tax laws
Foreign-derived intangible income	(73)		(1.3)
Global intangible low-taxed income	107		1.8
Other	26		0.4
Tax credits
Foreign tax credits	(173)		(3.0)
Research and development credits	(55)		(0.9)
Other	(2)		—
Nontaxable or nondeductible items
Excess tax benefits on share-based payments	(216)		(3.7)
Stock based compensation	90		1.6
Other	31		0.5
Other adjustments
Capitalized research and development expenses	(338)		(5.8)
Loss on subsidiary stock	(620)		(10.7)
Capital loss on debt instrument	(285)		(4.9)
Other	(34)		(0.6)
Foreign tax effects
Netherlands
Changes in valuation allowances(2)	(5,011)		(86.4)
Other	74		1.3
Brazil
Withholding tax expense	128		2.2


Other	(2)		—
India
Changes in valuation allowances	88		1.5
Other	(47)		(0.8)
Other foreign jurisdictions	16		0.3
Worldwide changes in unrecognized tax benefits	590		10.2
Effective income tax rate	$	(4,346)	(74.8)	%

(1) In 2025, the states that contributed to the majority (greater than 50%) of the tax effect in this category are Florida, Illinois, and New Jersey.

(2) In 2025, we released $5.0 billion of our valuation allowance on our Netherlands' deferred tax assets.

Schedule of Income Taxes Paid

The following is the cash paid for income taxes for the year ended December 31, 2025 (in millions):


	Year Ended December 31, 2025


US federal	$	12
US state and local	81
Foreign	252
Total income taxes paid, net of refunds	$	345

Schedule of Deferred Tax Assets and Liabilities

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


	As of December 31,
	2024		2025
Deferred tax assets
Net operating loss carryforwards	$	4,319	$	3,177
Research and development credits	1,539		1,641
Stock-based compensation	71		122
Accruals and reserves	730		1,297
Accrued legal	221		234
Fixed assets and intangible assets (1)	3,226		2,938
Lease liability	391		367
Interest limitation carryforwards	760		657
Capitalized research expenses (1)	1,591		2,175
Other	381		307
Total deferred tax assets	13,229		12,915
Less: Valuation allowance	(6,267)		(1,312)
Total deferred tax assets, net of valuation allowance	6,962		11,603
Deferred tax liabilities
Investments	515		418
Right-of-use assets	270		253
Other	14		9
Total deferred tax liabilities	799		680
Net deferred tax assets (liabilities)	$	6,163	$	10,923

(1) Prior period amounts have been reclassified to conform to the current period presentation. Certain deferred tax assets in Fixed Assets and Intangibles were reclassified to Capitalized Research Expenses.

Schedule of Unrecognized Tax Benefits Roll Forward

The following table reflects changes in gross unrecognized tax benefits (in millions):


	Year Ended December 31,
	2023		2024		2025
Unrecognized tax benefits at beginning of year	$	3,513	$	3,345	$	4,937
Gross increases - current year tax positions	177		201		693
Gross increases - prior year tax positions (1)	42		1,437		13
Gross decreases - prior year tax positions	(315)		(37)		(26)
Gross decreases - settlements with tax authorities	—		(6)		(5)
Gross decreases - lapse of statute of limitations	(72)		(3)		(1)
Unrecognized tax benefits at end of year	$	3,345	$	4,937	$	5,611

(1) In 2024, new information became available that required a remeasurement of a prior year transfer pricing tax position resulting in an overall reduction in our net deferred tax assets of $1.2 billion, which was fully offset by a change in the valuation allowance. This is reflected in the increases to prior year uncertain tax positions above.

Schedule of Open Tax Years for Major Tax Jurisdictions

As of December 31, 2025, the open tax years for our major tax jurisdictions are as follows:


Jurisdiction						Tax Years
U.S. Federal						2013 - 2025
U.S. States						2007 - 2025
Australia						2019 - 2025
Netherlands						2019 - 2025
United Kingdom						2022 - 2025