Tenable Holdings, Inc.

11. Income Taxes

U.S. and foreign components of the loss before income taxes were as follows:

The components of the provision for income taxes were as follows:

Our provision for income taxes in 2024 included expense of $3.3 million related to Base Erosion and Anti-Abuse Tax, or BEAT, and $1.2 million of expense related to restructuring of our operations in Israel through intercompany transactions, neither of which were applicable in 2025 or 2023.

The items accounting for the difference between income taxes computed at the federal statutory rate and our effective tax rate after the adoption of ASU 2023-09 were as follows:

(1) State and local taxes in California, Texas, Illinois, and New York make up the majority of the tax effect.

The items accounting for the difference between income taxes computed at the federal statutory rate and our effective tax rate were as follows for years prior to our adoption of ASU 2023-09:

We maintain a valuation allowance on certain U.S. federal, state and foreign deferred tax assets as the realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. In 2025, our valuation allowance increased by $35.1 million, primarily related to our 2025 loss before income taxes and U.S. R&D tax credits.

The components of the deferred tax assets and liabilities were as follows:

At December 31, 2025, we had net operating loss (“NOL”) carryforwards for federal, state and foreign tax purposes of $378.4 million, $218.9 million, and $618.7 million, respectively, which will begin to expire in 2030, as well as $31.7 million of federal, state and foreign research and development tax credits, foreign tax credits, minimum tax credits and miscellaneous state tax credits. The federal research and development and foreign tax credits will begin to expire in 2032 if unutilized.

We are currently subject to the annual limitation under Sections 382 and 383 of the Internal Revenue Code. We will not be precluded from realizing the NOL carryforward and tax credits but may be limited in the amount we could utilize in any given tax year in the event that the federal and state taxable income will exceed the limitation imposed by Section 382. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

At December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $9.1 million and $8.5 million, respectively, which, if recognized, would impact our effective tax rate by approximately $0.4 million and $0.2 million in 2025 and 2024, respectively. Interest and penalties associated with uncertain tax positions recognized as a component of income tax expense were immaterial in 2025, 2024 and 2023.

The change in gross unrecognized tax benefits, excluding accrued interest, were as follows:

We file income tax returns in the United States, including various state jurisdictions. Our subsidiaries file income tax returns in various foreign jurisdictions. Tax years after 2014 remain open to examination by the major taxing jurisdictions in which we are subject to tax. At December 31, 2025, we were not under examination for income tax audits by the Internal Revenue Service. We are currently under tax examination in France for tax years 2019 through 2022.

Depending on the jurisdiction, distributions of earnings could be subject to withholding taxes at rates applicable to the distributing jurisdiction. As we intend to continue to reinvest the earnings of foreign subsidiaries indefinitely, we have not provided for a U.S. income tax liability and foreign withholding taxes on undistributed foreign earnings of foreign subsidiaries. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested foreign earnings.

On July 4, 2025, U.S. legislation commonly known as the One Big Beautiful Bill Act ("OBBBA") was enacted, which includes permanent extensions of expiring and expired federal income tax provisions, including immediate expensing of domestic research and development expenses, as well as certain prospective international tax changes. The application of the OBBBA did not have a material impact on our financial statements for the year ended December 31, 2025.

The amount of cash income taxes paid, net of refunds received were as follows: