Income Taxes

3 Months Ended

Apr. 30, 2020

The following table provides details of the provision for income taxes:


	Three Months Ended April 30,
	2020			2019

	(in thousands, except percentages)
Net income before provision for income taxes	$	29,175		$	2,530
Provision for income taxes	2,100			316
Effective tax rate	7.2		%	12.5		%

The provision for income taxes was $2.1 million and $0.3 million for the three months ended April 30, 2020 and 2019, respectively. The provision for income taxes for the three months ended April 30, 2020 consisted primarily of foreign income taxes and state taxes. For the three months ended April 30, 2020 and 2019, the provision for income taxes differed from the U.S. federal statutory rate primarily due to stock-based compensation and the full valuation allowance on the U.S. and the U.K. deferred tax assets.

The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence during the three months ended April 30, 2020, we believe it is more likely than not that the tax benefits of the U.S. and the U.K. losses incurred may not be realized. Accordingly, we recorded a full valuation allowance against the tax benefits of the U.S. and the U.K. losses incurred. We intend to maintain the full valuation allowance on the U.S. and the U.K. net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance.

During the three months ended April 30, 2020, there were no material changes to the total amount of unrecognized tax benefits.