Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

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



	Year Ended December 31,
	2018		2017		2016
Domestic	$	136,818	$	373,221	$	196,202
Foreign	151,983		101,539		46,023
Income before income taxes	$	288,801	$	474,760	$	242,225

Schedule of Components of Income Tax Expense (Benefit)

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



	Year Ended December 31,
	2018			2017			2016
Current provision for income taxes:
Federal	$	6,113		$	31,935		$	64,594
State	2,018			3,645			10,529
Foreign	10,451			7,322			4,675
Total current	18,582			42,902			79,798
Deferred taxes benefit:
Federal	(57,726		)	12,795			(18,579		)
State	(4,164		)	(3,404		)	(3,564		)
Foreign	3,994			(734		)	381
Total deferred	(57,896		)	8,657			(21,762		)
Total provision for (benefit from) income taxes	$	(39,314	)	$	51,559		$	58,036

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of the statutory federal income tax rate and our effective income tax rate is as follows:



	Year Ended December 31,
	2018		2017		2016
U.S. federal statutory income tax rate	21.00	%	35.00	%	35.00	%
State tax, net of federal benefit	(0.59	)	0.03		1.87
Taxes on foreign earnings differential	(3.37	)	(5.18	)	(2.27	)
Tax credits	(7.68	)	(3.23	)	(4.39	)
Change in valuation allowance	1.00		—		—
Uncertain tax positions and associated interest	—		—		(2.33	)
Stock-based compensation	(24.90	)	(25.86	)	(2.81	)
Tax Cuts and Jobs Act	(1.72	)	11.14		—
Acquisition and integration costs	2.12		—		—
Other, net	0.53		(1.04	)	(1.11	)
Effective tax rate	(13.61	)%	10.86	%	23.96	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows (in thousands):



	December 31,
	2018			2017
Deferred tax assets:
Property and equipment	$	1,890		$	1,942
Stock-based compensation	19,186			22,050
Reserves and accruals not currently deductible	77,373			41,024
Net operating losses	11,052			2,432
Tax credits	57,793			30,831
Capitalized R&D expenses	30,027			—
Other	2,053			2,115
Gross deferred tax assets	199,374			100,394
Valuation allowance	(56,724		)	(35,132		)
Total deferred tax assets	142,650			65,262
Deferred tax liabilities:
Acquired intangibles	(13,401		)	—
Accrued liabilities	(5,190		)	(2,006		)
Other	(1,320		)	(9		)
Total deferred tax liabilities	(19,911		)	(2,015		)
Net deferred tax assets	$	122,739		$	63,247

The following table presents the breakdown between non-current deferred tax assets and liabilities (in thousands):



	December 31,
	2018			2017
Deferred tax assets, non-current	$	126,492		$	65,125
Deferred tax liabilities, non-current	(3,753		)	(1,878		)
Total net deferred tax assets	$	122,739			$63,247

Schedule of Unrecognized Tax Benefits Roll Forward

The reconciliation of the beginning and ending amount of gross unrecognized tax benefits as of December 31, 2018, 2017 and 2016 was as follows (in thousands):



	Year Ended December 31,
	2018			2017			2016
Gross unrecognized tax benefits—beginning balance	$	48,835		$	26,915		$	22,239
Increases related to tax positions taken in a prior year	330			1,243			46
Increases related to tax positions taken during current year	27,413			22,202			11,359
Decreases related to tax positions taken in a prior year	(675		)	(21		)	(426		)
Decreases related to settlements with taxing authorities	—			—			(432		)
Decreases related to lapse of statute of limitations	(2,173		)	(1,504		)	(5,871		)
Adjustment for acquisition	706			—			—
Gross unrecognized tax benefits—ending balance	$	74,436		$	48,835		$	26,915