XML 45 R28.htm IDEA: XBRL DOCUMENT

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Domestic and Foreign Components of Income Before Income Taxes

The following are the domestic and foreign components of the Company’s income before income taxes (in thousands):

	Year Ended December 31,
	2021			2020			2019
Domestic	$	193,048		$	212,531		$	162,252
Foreign		(71,012	)		(68,628	)		(46,032	)
Income before income taxes	$	122,036		$	143,903		$	116,220

Components of Provision for (Benefit from) Income Taxes

The following are the components of the provision for (benefit from) income taxes (in thousands):

	Year Ended December 31,
	2021			2020			2019
Current:
Federal	$	10,332		$	(50,096	)	$	9,180
State and local		(10,417	)		(19,650	)		7,800
Foreign		2,435			2,550			1,412
Total current provision		2,350			(67,196	)		18,392
Deferred:
Federal		(21,287	)		(20,900	)		(6,316	)
State and local		3,193			(9,079	)		(5,339	)
Foreign		18			(1,239	)		1,165
Total deferred provision		(18,076	)		(31,218	)		(10,490	)
Total provision for (benefit from) income taxes	$	(15,726	)	$	(98,414	)	$	7,902

Reconciliation of Statutory Tax Rate to Effective Tax Rate

A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows:

	Year Ended December 31,
	2021			2020			2019
U.S. federal statutory income tax rate		21.0	%		21.0	%		21.0	%
State and local income taxes, net of federal benefit		(5.3	)		(15.7	)		1.7
Foreign income at other than U.S. rates ⁽¹⁾		14.2			10.9			10.5
Stock-based compensation		(29.9	)		(59.6	)		(20.5	)
Meals and entertainment		0.2			0.2			0.7
Nondeductible compensation		1.7			0.6			(1.3	)
Research and development credit		(15.3	)		(14.1	)		(5.0	)
Other permanent items		0.5			0.1			(0.3	)
Benefit from carryback of NOLs		—			(11.8	)		—
Effective income tax rate	(12.9%)			(68.4)%				6.8	%

__________

(1)

For the years ended December 31, 2021, 2020, and 2019, includes the impact of the valuation allowance associated with the United Kingdom (“U.K.”). For additional information, see discussion below.

Tax Effects of Temporary Differences that Give Rise to a Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities

Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands):

	As of December 31,
	2021			2020
Deferred tax assets (liabilities):
Reserves and allowances	$	6,161		$	5,521
Accrued expenses		8,103			8,977
Net operating losses		142,708			58,813
Research and development tax credit		53,472			30,138
Stock-based compensation		16,621			13,584
Prepaid expenses		(1,674	)		(1,365	)
Property and equipment		(21,924	)		(14,375	)
Intangibles ⁽¹⁾		219,492			184,965
Capitalized software development costs		(3,565	)		(2,836	)
Operating lease assets		(46,435	)		(55,685	)
Operating lease liabilities		56,415			64,359
Other		484			487
Valuation allowance		(361,614	)		(242,415	)
Total deferred tax assets, net	$	68,244		$	50,168

(1)

As of December 31, 2021 and 2020, includes intangibles associated with our international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below.

Schedule of Changes in Gross Unrecognized Tax Benefits

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

	Year Ended December 31,
	2021 ⁽¹⁾		2020 ⁽¹⁾			2019 ⁽¹⁾
Beginning balance	$	66,875	$	53,213		$	4,330
Increases related to prior year tax positions		13,075		5,378			—
Decreases related to prior year tax positions		—		—			(20	)
Increases related to current year tax positions		6,381		9,206			49,100
Settlements		—		(520	)		(197	)
Expiration of statute of limitations		—		(402	)		—
Ending balance	$	86,331	$	66,875		$	53,213

______________

(1)Includes the impact of a statutory rate change in the U.K