Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

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, 2024 and 2023 are as follows (in thousands):

	December 31,
	2024			2023
Deferred tax assets:
Accounts receivable	$	835		$	1,179
Accrued liabilities		13,373			12,255
Equity-based compensation		16,568			12,148
Capitalized R&D costs		73,364			50,654
Accrued sales taxes		265			189
Operating lease liabilities		10,206			3,219
State tax credits		3,222			3,102
Tax credit - foreign		6,112			5,397
Valuation allowance		(2,853	)		(2,881	)
Other		-			295
		121,092			85,557
Deferred tax liabilities:
Intangible Assets		7,395			7,417
Depreciation		150			429
Deferred commissions		9,032			8,638
Operating lease right-of-use assets		9,992			3,030
Other		18
		26,587			19,514
Net deferred tax assets	$	94,505		$	66,043

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, 2024, 2023 and 2022 are as follows (in thousands):

	Year Ended December 31,
	2024		2023		2022
Domestic	$	240,871	$	193,727	$	139,217
Foreign		25,943		19,944		18,904
Total	$	266,814	$	213,671	$	158,121

Components of Income Tax Provision

The components of our income tax provision for the years ended December 31, 2024, 2023 and 2022 are as follows (in thousands):

	Year Ended December 31,
	2024			2023			2022
Current:
Federal	$	54,761		$	46,497		$	42,198
State		12,627			10,911			11,183
Foreign		9,751			8,539			5,492
	$	77,139		$	65,947		$	58,873
Deferred:
Federal		(23,777	)		(23,116	)		(22,383	)
State		(3,796	)		(3,132	)		(5,200	)
Foreign		(1,116	)		(2,596	)		(2,128	)
		(28,689	)		(28,844	)		(29,711	)
Total	$	48,450		$	37,103		$	29,162

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, 2024, 2023 and 2022:

	Year Ended December 31,
	2024			2023			2022
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
Effect of:
State income tax, net of federal benefit		2.9			3.0			3.6
State credit carryforwards		-			(0.2	)		1.2
U.S. federal R&D tax credit		(1.6	)		(1.8	)		(1.8	)
Non-deductible equity compensation		1.4			1.1			1.1
Excess benefit of equity compensation		(4.9	)		(3.2	)		(4.8	)
Employee compensation limitation		2.8			3.4			3.7
Global Intangible Low Taxed Income (GILTI)		0.1			0.1			0.1
Foreign-derived intangible income (FDII) deduction		(3.5	)		(3.6	)		(3.3	)
Foreign operations		(0.2	)		(2.9	)		0.5
Tax contingencies		(0.2	)		(0.3	)		(1.3	)
Other permanent differences		0.4			0.7			(0.3	)
Change in valuation allowance		-			0.1			(1.3	)
Income taxes		18.2	%		17.4	%		18.4	%

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, 2024, 2023 and 2022 (in thousands):

	December 31,
	2024			2023			2022
Unrecognized tax benefits at January 1,	$	(9,688	)	$	(10,532	)	$	(13,186	)
Gross amount of increases in unrecognized tax benefits as a    result of tax positions taken during a prior period		(147	)		(425	)		(199	)
Gross amount of decreases in unrecognized tax benefits as a     result of tax positions taken during a prior period		32			908			2,583
Gross amount of increases in unrecognized tax benefits as a    result of tax positions taken during the current period		(1,996	)		(2,182	)		(1,787	)
Reductions to unrecognized tax benefits relating to    settlements with taxing authorities		16			-			-
Reductions to unrecognized tax benefits as a result of a lapse of    the applicable statute of limitations		2,634			2,543			2,057
Unrecognized tax benefits at December 31,	$	(9,149	)	$	(9,688	)	$	(10,532	)