Income Taxes

The geographical breakdown of loss before provision for income taxes is as follows (in thousands):



	Year Ended January 31,
	2015			2016			2017
Domestic	$	(186,922	)	$	(195,019	)	$	(200,355	)
International	5,028			(17,164		)	(42,824		)
Total	$	(181,894	)	$	(212,183	)	$	(243,179	)

The components of the provision for income taxes are as follows (in thousands):



	Year Ended January 31,
	2015		2016			2017
Current:
State	$	56	$	210		$	389
Foreign	1,073		2,198			1,806
Total	$	1,129	$	2,408		$	2,195
Deferred:
Foreign	208		(839		)	(308		)
Provision for income taxes	$	1,337	$	1,569		$	1,887

The reconciliation of the federal statutory income tax rate and effective income tax rate is as follows (in thousands):



	Year Ended January 31,
	2015			2016			2017
Tax at federal statutory rate	$	(61,844	)	$	(72,142	)	$	(82,682	)
State tax, net of federal benefit	44			152			276
Stock-based compensation expense	5,328			10,866			(5,242		)
Research and development tax credits	(1,999		)	(3,832		)	(1,570		)
Foreign rate differential	(429		)	7,106			15,878
Change in valuation allowance	60,042			58,979			73,863
Other	195			440			1,364
Provision for income taxes	$	1,337		$	1,569		$	1,887

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant component of our deferred tax assets and liabilities were as follows (in thousands):



	January 31,
	2016			2017
Deferred tax assets:
Net operating loss carryforwards	$	137,456		$	173,942
Tax credit carryover	12,406			15,319
Accruals and reserves	1,921			3,112
Deferred revenue	20,314			53,424
Stock-based compensation expense	12,588			26,401
Depreciation and amortization	3,397			7,302
Charitable contribution carryforwards	4,380			4,345
Total deferred tax assets	192,462			283,845
Valuation allowance	(180,926		)	(271,779		)
Total deferred tax assets, net of valuation allowance	11,536			12,066
Deferred tax liabilities:
Deferred commissions	(11,000		)	(11,222		)
Total deferred tax liabilities	(11,000		)	(11,222		)
Net deferred tax assets	$	536		$	844

As of January 31, 2017, the undistributed earnings of $11.1 million from non-U.S. operations held by our foreign subsidiaries are designated as permanently reinvested outside the U.S. Accordingly, no additional U.S. income taxes or additional foreign withholding taxes have been provided thereon. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

As of January 31, 2017, we had net operating loss carryforwards for federal income tax purposes of approximately $464.2 million and state income tax purposes of approximately $323.8 million. These net operating loss carryforwards will expire, if not utilized, beginning in 2028 for federal and state income tax purposes.

We had federal and state research and development tax credit carryforwards of approximately $12.1 million and $12.6 million as of January 31, 2017. The federal research and development tax credit carryforwards will expire commencing in 2028, while the state research and development tax credit carryforwards have no expiration date.

Realization of deferred tax assets is dependent on future taxable income, the existence and timing of which is uncertain. Based on our history of losses, management has determined that it is more likely than not that the U.S. deferred tax assets will not be realized, and accordingly has placed a full valuation allowance on the net U.S. deferred tax assets. The valuation allowance increased by $66.6 million, $68.0 million, and $90.9 million, respectively, during the years ended January 31, 2015, 2016 and 2017.

Utilization of the net operating loss carryforwards and credits may be subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

Uncertain Tax Positions

The activity related to the unrecognized tax benefits is as follows (in thousands):



	Year Ended January 31,
	2015		2016			2017
Gross unrecognized tax benefits—beginning balance	$	4,676	$	13,874		$	15,470
Decreases related to tax positions taken during prior years	—		(3,969		)	(11,286		)
Increases related to tax positions taken during prior years	—		35			—
Increases related to tax positions taken during current year	9,198		5,530			2,191
Gross unrecognized tax benefits—ending balance	$	13,874	$	15,470		$	6,375

As of January 31, 2017, our gross unrecognized tax benefit was approximately $6.4 million and if recognized, would have no impact to the effective tax rate because it would be offset by the reversal of deferred tax assets which are subject to a full valuation allowance.

As of January 31, 2017, we had no current or cumulative interest and penalties related to uncertain tax positions.

It is difficult to predict the final timing and resolution of any particular uncertain tax position. Based on our assessment, including experience and complex judgments about future events, we do not expect that changes in the liability for unrecognized tax benefits during the next twelve months will have a significant impact on our consolidated financial position or results of operations.

We file income tax returns in the U.S. federal jurisdiction as well as many U.S. states and foreign jurisdictions. Our fiscal year 2014 is currently under examination by the Internal Revenue Service. The fiscal years 2013 through 2016 remain open to examination by the major jurisdictions in which we are subject to tax. Fiscal years outside the normal statutes of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized.