Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Components of Income Before Income Taxes

The components of income before income taxes consist of the following:



	Year ended December 31,
	2018			2017		2016
Domestic	$	(24,442	)	$	4,626	$	12,652
Foreign	84,812			80,408		71,232
	$	60,370		$	85,034	$	83,884

Summary of Income Tax Expense

The income tax expense consists of the following:



	Year ended December 31,
	2018			2017			2016
Current provision:
Domestic	$	(13,249	)	$	17,407		$	7,107
Foreign	17,271			18,008			18,428
	$	4,022		$	35,415		$	25,535
Deferred provision/(benefit):
Domestic	$	(1,999	)	$	2,618		$	(2,506	)
Foreign	1,374			(1,887		)	(878		)
	$	(625	)	$	731		$	(3,384	)
Income tax expense	$	3,397		$	36,146		$	22,151

Summary of Effective Income Tax Rate Differs from Amount Computed by Applying U.S. Federal Statutory Income Tax Rate to Income Before Income Taxes

The effective income tax rate differs from the amount computed by applying the U.S. federal statutory income tax rate to income before income taxes approximately as follows:



	Year ended December 31,
	2018			2017			2016
Expected tax expense	$	12,678		$	29,762		$	29,361
Change in valuation allowance	—			(21		)	22
Impact of tax holiday	(5,448		)	(4,396		)	(4,027		)
Foreign tax rate differential	5,014			(2,616		)	(2,716		)
Deferred tax (benefit)/provision	(3,915		)	(1,887		)	(878		)
Unrecognized tax benefits and interest	(88		)	(3,905		)	495
State taxes, net of Federal taxes	2,200			339			202
Non-deductible expenses	3,066			825			144
US Tax Reform Act impact	176			29,185			—
Excess tax benefit on stock-based compensation	(7,227		)	(9,797		)	—
Research & Development credit	(1,500		)	(844		)	(890		)
Other	(1,559		)	(499		)	438
Tax expense	$	3,397		$	36,146		$	22,151

Summary of Components of Deferred Tax Balances

The components of the deferred tax balances as of December 31, 2018 and 2017 are as follows:



	As of
	December 31, 2018			December 31, 2017
Deferred tax assets:
Depreciation and amortization	$	3,731		$	2,183
Stock-based compensation	8,614			7,647
Accrued employee costs and other expenses	3,596			3,673
Tax credit carry forward	—			1,474
Net operating loss carry forward	1,113			2,068
Unrealized exchange loss	6,671			252
Deferred rent	2,255			2,064
Others	1,380			1,007
	$	27,360		$	20,368
Valuation allowance	(99		)	(108		)
Deferred tax assets	$	27,261		$	20,260

Deferred tax liabilities:
Unrealized exchange gain	$	115		$	5,069
Intangible assets	19,289			4,648
Unamortized discount on convertible senior notes	4,105			—
Others	5,595			1,958
Deferred tax liabilities	$	29,104		$	11,675
Net deferred tax assets/(liabilities)	$	(1,843	)	$	8,585

Summary of Activity Related to Gross Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits for the years ended December 31, 2018, 2017 and 2016.



	2018			2017			2016
Balance as of January 1	$	824		$	3,087		$	2,797
Increases related to prior year tax positions	—			—			156
Decreases related to prior year tax positions	(320		)	(2,520		)	—
Increases related to current year tax positions	300			169			178
Effect of exchange rate changes	—			88			(44		)
Balance as of December 31	$	804		$	824		$	3,087