Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Effective Income Tax Rate Reconciliation

Set forth below is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate:


	Year Ended December 31,
	2022		2021		2020
U.S. federal statutory income tax rate	21	%	21	%	21	%
State and local income taxes, net of federal benefit	9		(214)		3
Stock-based compensation expense	7		(426)		(3)
Non-deductible officers' compensation	(6)		47		—
Meals and entertainment	—		3		—

Change in valuation allowance	(37)		795		—

Other permanent differences	(1)		20		1
Research and development tax credits	5		(205)		(2)
Provision for income taxes	(2)	%	41	%	20	%

Schedule of Components of Income Tax Expense (Benefit)

The provision for income tax consists of the following (in thousands):


	Year Ended December 31,
	2022		2021		2020
Current
Federal	$	1,313	$	20	$	3,982
State and local	686		346		5,444
Total current	1,999		366		9,426
Deferred
Federal	(854)		(10,966)		27,982
State and local	257		11,306		1,020
Total deferred	(597)		340		29,002
Total income tax provision	$	1,402	$	706	$	38,428

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets (liabilities) were as follows (in thousands):


	December 31,
	2022		2021
Deferred income tax assets:
Net operating loss carryforwards	$	5,802	$	10,849
Research and development tax credits	18,558		15,966
Capitalized research and software costs	14,706		—

Stock-based compensation	5,105		3,965
Lease liability	14,260		13,983
Other	3,614		2,853
Total deferred tax assets	62,045		47,616
Valuation allowance	(43,776)		(17,217)
Deferred tax assets, net of valuation allowance	18,269		30,399
Deferred tax liabilities:
Capitalized research and software costs	—		(9,972)
Property and equipment	(4,914)		(5,024)
Intangible assets	(940)		(1,558)
Capitalized commissions	(4,217)		(3,296)

Lease asset	(6,249)		(11,056)
Other	(2,634)		(1,171)
Total deferred tax liabilities	(18,954)		(32,077)
Total net deferred tax liabilities	$	(685)	$	(1,678)

Summary of Valuation Allowance

The change in the valuation allowance are as follows (in thousands):


	Year Ended December 31,
	2022		2021		2020
Valuation allowance, at beginning of year	$	17,217	$	—	$	—
Increase in valuation allowance	26,559		17,217		—
Valuation allowance, at end of year	$	43,776	$	17,217	$	—

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the total amounts of reserves for unrecognized tax benefits from uncertain tax positions (in thousands):


	Year Ended December 31,
	2022		2021		2020
Unrecognized tax benefit beginning of year	$	7,816	$	6,141	$	4,421

Increases-tax positions in current year	1,639		1,675		1,720
Unrecognized tax benefit end of year	$	9,455	$	7,816	$	6,141