Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of Deferred Tax Assets and Liabilities

We present below significant components of our deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows (in thousands):

	December 31,
	2023			2022
Deferred tax assets:
Accounts receivable	$	1,179		$	1,321
Accrued liabilities		12,255			9,208
Equity-based compensation		12,148			9,832
Capitalized R&D costs		50,654			27,516
Accrued sales taxes		189			190
Operating lease liabilities		3,219			2,974
State tax credits		3,102			2,700
Tax credit - foreign		5,397			3,108
Valuation allowance		(2,881	)		(2,735	)
Other		295			279
		85,557			54,393
Deferred tax liabilities:
Intangible Assets		7,417			7,428
Depreciation		429			580
Deferred commissions		8,638			6,408
Operating lease right-of-use assets		3,030			2,771
		19,514			17,187
Net deferred tax assets	$	66,043		$	37,206

Components of Income from Domestic and Foreign Operations Before Income Tax Expense

We present below income from domestic and foreign operations before income tax expense for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands):

	Year Ended December 31,
	2023		2022		2021
Domestic	$	193,727	$	139,217	$	120,565
Foreign		19,944		18,904		13,507
Total	$	213,671	$	158,121	$	134,072

Components of Income Tax Provision

The components of our income tax provision for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands):

	Year Ended December 31,
	2023			2022			2021
Current:
Federal	$	46,497		$	42,198		$	14,042
State		10,911			11,183			5,188
Foreign		8,539			5,492			6,309
	$	65,947		$	58,873		$	25,539
Deferred:
Federal		(23,116	)		(22,383	)		(427	)
State		(3,132	)		(5,200	)		(531	)
Foreign		(2,596	)		(2,128	)		(981	)
		(28,844	)		(29,711	)		(1,939	)
Total	$	37,103		$	29,162		$	23,600

Reconciliation of Statutory U.S. Federal Rate and Tax Effective Rates

We present below a summary of the items that cause recorded income taxes to differ from taxes computed using the statutory federal income tax rate for the years ended December 31, 2023, 2022 and 2021:

	Year Ended December 31,
	2023			2022			2021
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
Effect of:
State income tax, net of federal benefit		3.0			3.6			3.6
State credit carryforwards		(0.2	)		1.2			(0.8	)
U.S. federal R&D tax credit		(1.8	)		(1.8	)		(1.8	)
Non-deductible equity compensation		1.1			1.1			0.9
Excess benefit of equity compensation		(3.2	)		(4.8	)		(4.9	)
Employee compensation limitation		3.4			3.7			3.4
Global Intangible Low Taxed Income (GILTI)		0.1			0.1			0.2
Foreign-derived intangible income (FDII) deduction		(3.6	)		(3.3	)		(3.1	)
Foreign operations		(2.9	)		0.5			(0.7	)
Tax contingencies		(0.3	)		(1.3	)		(0.3	)
Other permanent differences		0.7			(0.3	)		(0.6	)
Change in valuation allowance		0.1			(1.3	)		0.7
Income taxes		17.4	%		18.4	%		17.6	%

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):

	December 31,
	2023			2022			2021
Unrecognized tax benefits at January 1,	$	(10,532	)	$	(13,186	)	$	(12,804	)
Gross amount of increases in unrecognized tax benefits as a    result of tax positions taken during a prior period		(425	)		(199	)		(408	)
Gross amount of decreases in unrecognized tax benefits as a     result of tax positions taken during a prior period		908			2,583			147
Gross amount of increases in unrecognized tax benefits as a    result of tax positions taken during the current period		(2,182	)		(1,787	)		(3,117	)
Reductions to unrecognized tax benefits relating to    settlements with taxing authorities		-			-			148
Reductions to unrecognized tax benefits as a result of a lapse of    the applicable statute of limitations		2,543			2,057			2,848
Unrecognized tax benefits at December 31,	$	(9,688	)	$	(10,532	)	$	(13,186	)