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Table of Contents Anthropic, PBC Notes to Consolidated Financial Statements (Continued) The tax effects of temporary differences and related deferred tax assets and liabilities were as follows (in millions): Deferred tax assets: Stock-based compensation Research and development capitalization Net operating loss carryforwards Research and development tax credit Lease liability Bad debt reserve Depreciation and amortization Contingency reserve Other accruals Valuation allowance Total deferred tax asset, net Deferred tax liabilities: ROU asset Depreciation and amortization Other deferred tax liabilities Total deferred tax liabilities Net deferred tax assets As of December 31, 2024 2025 $ 40 $ 459 445 260 10 1 1 1 — (1,206) 11 (8) — — (8) $ 3 $ 279 34 2,007 656 25 4 — 312 147 (3,422) 42 (28) (12) (2) (42) — In determining the need for a valuation allowance, the Company reviewed both positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance was established against the Company’s U.S. and foreign net deferred tax assets as of December 31, 2025. Management reevaluates the positive and negative evidence at each reporting period. A reconciliation of the beginning and ending amount of the Company’s valuation allowance is as follows (in millions): Valuation allowance, beginning of year Changes in related gross deferred tax asset Valuation allowance, end of year Year Ended December 31, 2024 2025 2023 $ $ 56 $ 144 200 $ 1,006 200 $ 1,206 $ 1,206 2,216 3,422 As of December 31, 2025, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $8.2 billion, which do not expire, state NOL carryforwards of $4.2 billion, which begin to expire in 2033, and NOL carryforwards in Ireland of $85 million, which do not expire. As of December 31, 2025, the Company had U.S. federal and California R&D tax credit carryforwards in the amount of $656 million and $343 million, respectively. The U.S. federal R&D tax credits begin to expire in 2042 while the California R&D tax credits can be carried forward indefinitely. The Company’s ability to utilize the NOL carryforwards and R&D credit carryforwards in the future may be subject to an annual limitation due to ownership changes that have occurred or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D tax credit F-55
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