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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Income (Loss) before Income Tax, Domestic and Foreign

Income (loss) before provision (benefit) for income taxes included the following components for the years ended December 31 (in thousands):


	2021		2020		2019
United States	$	(146,995)	$	(11,529)	$	(1,449)
Foreign		5,620		5,238		3,519
Total	$	(141,375)	$	(6,291)	$	2,070

Significant Components of the Provision (Benefit) for Income Taxes

Significant components of the provision (benefit) for income taxes are as follows for the years ended December 31 (in thousands):


	2021		2020		2019
Current:
Federal	$	(331)	$	5,277	$	4,247
State		85		3,886		2,414
Foreign		(60)		1,943		1,533
Total current		(306)		11,106		8,194
Deferred:
Federal		(65,557)		(10,175)		(6,060)
State		(15,266)		(3,111)		(1,665)
Foreign		478		(3,131)		(264)
Total deferred		(80,345)		(16,417)		(7,989)
Tax impact of unrecorded tax benefits liability		(706)		744		983
Provision (benefit) for income taxes	$	(81,357)	$	(4,567)	$	1,188

Reconciliation of the Company's Effective Income Tax Rate to the Federal Statutory Rate

A reconciliation of our effective income tax rate to the federal statutory rate follows for the years ended December 31 (in thousands):


	2021			2020			2019
Federal income tax at the statutory rate	$	(29,691)		$	(1,321)		$	435
State income taxes, net of federal benefit		(12,717)			935			526
Difference between statutory and foreign tax rates		(155)			(86)			43
Other permanent differences ⁽¹⁾		1,842			794			1,356
Foreign derived intangible income deduction		—			(902)			(217)
Executive compensation limitation		180,509			15,463			7,596
Research and development		(34,376)			(10,246)			(4,911)
Return to provision adjustment		204			(1,078)			(9)
Change in liability for unrecognized tax benefits		10,188			987			1,191
Excess stock-based compensation benefit		(205,483)			(9,002)			(4,999)
Change in valuation allowance		8,961			163			368
Tax effects of intercompany transactions		96			(389)			16
Other		(735)			115			(207)
Provision for income taxes (Income tax benefit)	$	(81,357)		$	(4,567)		$	1,188
Effective tax rate		57.5	%		72.6	%		57.4	%

(1)	Other permanent differences include certain expenses that are not deductible for tax purposes including meals and entertainment, lobbying fees, and taxable income as a result of global intangible low-tax income ("GILTI").

Components of Deferred Income Tax Assets and Liabilities

Significant components of our deferred income tax assets and liabilities are as follows at December 31 (in thousands):


	2021		2020
Deferred income tax assets:
Net operating loss carryforward	$	68,353	$	1,834
Deferred revenue		27,031		21,055
Deferred compensation		1,414		1,175
Lease liability		5,886		5,730
Inventory reserve		684		511
Stock-based compensation		10,913		18,890
Amortization		2,672		2,436
Research and development tax credit carryforward		29,249		6,654
Reserves, accruals, and other		14,717		7,274
Total deferred income tax assets		160,919		65,559
Deferred income tax liabilities:
Contract asset		(1,104)		(1,150)
Right of use asset		(5,008)		(5,237)
Depreciation		(8,938)		(5,363)
Strategic investments		(2,653)		(321)
Prepaid expenses		(594)		(874)
Other		(72)		(185)
Total deferred income tax liabilities		(18,369)		(13,130)
Net deferred income tax assets before valuation allowance		142,550		52,429
Valuation allowance		(16,168)		(7,308)
Net deferred income tax assets	$	126,382	$	45,121

Roll Forward of Liability for Unrecognized Tax Benefits Exclusive of Accrued Interest

The following table presents a roll forward of our liability for unrecognized tax benefits, exclusive of accrued interest, as of December 31 (in thousands):


	2021		2020		2019
Balance, beginning of period	$	7,657	$	6,861	$	6,058
Increase (decrease) in previous year tax positions		22		(34)		(615)
Increase in current year tax positions		11,416		950		1,749
Decrease due to lapse of statutes of limitations		(846)		(120)		(331)
Balance, end of period	$	18,249	$	7,657	$	6,861