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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Income (Loss) Before Income Taxes

Income (loss) before income taxes consists of the following for the periods shown below (in thousands):

	Year Ended December 31,
	2019			2018			2017
United States	$	155,887		$	29,941		$	(6,081	)
International		(108,552	)		(3,478	)		43,664
Total	$	47,335		$	26,463		$	37,583

Components of Provision for (Benefit from) Income Taxes

The provision for (benefit from) income taxes consists of the following for the periods shown below (in thousands):

	Year Ended December 31,
	2019			2018			2017
Current tax expense (benefit):
Federal	$	11,552		$	3,918		$	(2,132	)
State		5,387			205			142
Foreign		7,722			11,967			13,562
Total current tax expense (benefit)	$	24,661		$	16,090		$	11,572
Deferred tax (benefit) expense:
Federal	$	90		$	1,350		$	(1,231	)
State		560			444			300
Foreign		(19,901	)		(6,878	)		303
Total deferred tax (benefit) expense	$	(19,251	)	$	(5,084	)	$	(628	)
Provision for (benefit from) income taxes	$	5,410		$	11,006		$	10,944

Reconciliation of Federal Statutory Income Tax Provision (Benefit) to Effective Income Tax Provision

The reconciliation of federal statutory income tax provision (benefit) to our effective income tax provision is as follows (in thousands):

	Year Ended December 31,
	2019			2018			2017
Expected provision for (benefit from) income taxes at U.S. federal statutory rate⁽¹⁾	$	9,940		$	5,557		$	13,154
State income taxes, net of federal benefit		4,743			205			142
BEAT obligation		—			3,918			—
Income (loss) taxed at foreign rates		10,292			4,447			(3,643	)
Stock-based compensation		(15,683	)		(3,457	)		(2,898	)
Tax reserve for uncertain tax positions		3,174			1,676			3,101
Change in valuation allowance		(56,194	)		(5,610	)		(51,976	)
Impact of 2017 Tax Act		—			—			48,237
Acquisition costs		1,166			536			—
Contingent consideration		42,328			1,155			(252	)
Officer's compensation limitation		5,165			2,340			2,582
Investment in subsidiaries		—			—			1,676
Other		479			239			821
Actual provision for (benefit from) income taxes	$	5,410		$	11,006		$	10,944

⁽¹⁾

^{For the purpose of the reconciliation above, the U.S. federal statutory rate was 21% for both the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017.}

Schedule of Deferred Tax Assets and Liabilities

Our deferred tax assets and liabilities are as follows (in thousands):

	December 31,			December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	35,546		$	60,737
Tax credit carryforwards		76,354			103,740
Operating lease liabilities		34,382			—
Acquired intangible assets		29,982			28,957
Stock-based compensation		9,251			10,150
Accrued expenses		4,899			3,718
Other accrued compensation		7,297			6,524
Charitable contributions		67			2,533
State taxes		1,547			351
Other		71			—
Total deferred tax assets	$	199,396		$	216,710
Less: Valuation allowance		(141,577	)		(205,989	)
Deferred tax assets, net of valuation allowance	$	57,819		$	10,721

Deferred tax liabilities:
Acquired intangible assets	$	(37,600	)	$	(11,637	)
Right-of-use assets		(34,021	)		—
Goodwill		(7,131	)		(5,000	)
Deferred rent		—			(2,334	)
Depreciation		—			(4,694	)
Convertible debt		(9,621	)		—
Other		(2,275	)		(2,547	)
Total deferred tax liabilities	$	(90,648	)	$	(26,212	)
Net deferred taxes	$	(32,829	)	$	(15,491	)

Summary of Net Operating Loss and Tax Credit Carryforwards

Net operating loss and tax credit carryforwards as of December 31, 2019 are as follows (in thousands):

	Amount		Expiration years
Net operating losses, federal	$	5,991	2030 - 2036
Net operating losses, state		17,384	2020 - 2036
Net operating losses, foreign		13,507	2029 - indefinite
Tax credits, federal		100,462	2027 - 2039
Tax credits, state		93,056	2021 - indefinite

Schedule of Changes in Gross Unrecognized Tax Benefits

The following table reflects changes in the gross unrecognized tax benefits (in thousands):

December 31, 2016	$	151,100
Additions based on tax positions related to 2017		8,598
Additions for tax positions of prior years		427
Decreases related to expiration of prior year tax positions		(31	)
Decreases related to settlements of prior year tax positions		(54	)
December 31, 2017	$	160,040
Additions based on tax positions related to 2018		4,355
Additions for tax positions of prior years		815
Decreases related to expiration of prior year tax positions		(1,230	)
December 31, 2018	$	163,980
Additions based on tax positions related to 2019		5,879
Additions for tax positions of prior years		1,888
Decreases related to expiration of prior year tax positions		(322	)
December 31, 2019	$	171,425