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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, the income tax benefit and/or provision has been computed for the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the statement of cash flows. The tax sharing agreement between the Company and IAC governs the parties’ respective rights, responsibilities and obligations with respect to tax matters, including responsibility for taxes attributable to the Company, entitlement to refunds, allocation of tax attributes and other matters and, therefore, ultimately governs the amount payable to or receivable from IAC with respect to income taxes. Any differences between taxes currently payable to or receivable from IAC under the tax sharing agreement and the current tax provision or benefit computed on an as if standalone, separate return basis for GAAP are reflected as adjustments to additional paid-in capital in the statement of shareholders’ equity and financing activities within the statement of cash flows.
U.S. and foreign earnings (loss) from continuing operations before income taxes and noncontrolling interests are as follows:
 Year Ended December 31,
 202420232022
 (In thousands)
U.S. $8,980 $(38,717)$(87,557)
Foreign11,097 10,509 (7,001)
Total$20,077 $(28,208)$(94,558)
The components of the income tax (benefit) provision are as follows:
 Year Ended December 31,
 202420232022
 (In thousands)
Current income tax provision:   
Federal$92 $1,373 $27 
State2,675 3,198 2,650 
Foreign4,413 7,277 1,691 
Current income tax provision 7,180 11,848 4,368 
Deferred income tax provision (benefit):   
Federal6,765 (8,232)(8,045)
State727 (1,499)(2,894)
Foreign(31,443)(278)1,181 
Deferred income tax benefit(23,951)(10,009)(9,758)
Income tax (benefit) provision$(16,771)$1,839 $(5,390)
A reconciliation of the income tax (benefit) provision to the amounts computed by applying the statutory federal income tax rate to earnings (loss) from continuing operations before income taxes is shown as follows:
 Years Ended December 31,
 202420232022
 (In thousands)
Income tax provision (benefit) at the federal statutory rate of 21%$4,216 $(5,924)$(19,857)
State income taxes, net of effect of federal tax benefit2,418 1,510 362 
Change in judgement on beginning of the year valuation allowance(34,976)399 966 
Research credit(4,317)(4,912)(7,123)
Stock-based compensation4,250 4,546 3,917 
Unbenefited losses3,504 3,352 7,106 
Foreign income taxed at a different statutory tax rate3,329 1,216 5,355 
Non-deductible executive compensation2,771 3,514 4,731 
Net adjustment related to the reconciliation of income tax provision accruals to tax returns802 (2,430)(1,212)
Non-deductible transaction costs501 73 23 
Deferred tax adjustment for enacted changes in tax law and rates235 99 178 
Other, net496 396 164 
Income tax (benefit) provision$(16,771)$1,839 $(5,390)
The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below. The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.
December 31,
 20242023
 (In thousands)
Deferred tax assets:
Net operating loss carryforwards$145,160 $182,386 
Tax credit carryforwards29,685 26,519 
Capitalized research & development expenditures29,230 18,919 
Capitalized software, leasehold improvements and equipment, net22,961 10,923 
Accrued expenses13,697 11,828 
Long-term lease liabilities11,816 16,288 
Other17,829 21,657 
Total deferred tax assets270,378 288,520 
Less valuation allowance(42,493)(76,821)
Total deferred tax assets, net of valuation allowance227,885 211,699 
Deferred tax liabilities:
Intangible assets, net(46,192)(46,571)
Right-of-use assets(7,554)(10,588)
Capitalized costs to obtain a contract with a customer(6,567)(9,004)
Other— (92)
Total deferred tax liabilities(60,313)(66,255)
Net deferred tax assets$167,572 $145,444 
The portion of the December 31, 2024 deferred tax assets that will be payable to IAC pursuant to the tax sharing agreement, upon realization, is $87.3 million.
At December 31, 2024, the Company has federal and state NOLs of $345.9 million and $373.9 million, respectively, available to offset future income. Of these federal NOLs, $214.2 million can be carried forward indefinitely and $131.7 million, if not utilized, will expire at various times between 2035 and 2037. Of these state NOLs, $18.8 million will be carried forward indefinitely and $355.1 million will expire at various times primarily between 2025 and 2044. Federal and state NOLs of $317.8 million and $288.3 million, respectively, can be used against future taxable income without restriction and the remaining NOLs will be subject to limitations under Section 382 of the Internal Revenue Code, separate return limitations, and applicable state law. At December 31, 2024, the Company has foreign NOLs of $289.9 million available to offset future income. Of these foreign NOLs, $279.7 million can be carried forward indefinitely and $10.2 million, if not utilized, will expire at various times between 2038 and 2044. During 2024, the Company recognized tax benefits related to NOLs of $36.2 million.
At December 31, 2024, the Company has tax credit carryforwards of $38.5 million relating to federal and state tax credits for research activities. Of these credit carryforwards, $1.5 million can be carried forward indefinitely and $37.0 million, if not utilized, will expire between 2025 and 2044.
The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. At December 31, 2024, the Company has a U.S. gross deferred tax asset of $195.9 million that the Company expects to fully utilize on a more likely than not basis.
During 2024, the Company’s valuation allowance decreased by $34.3 million primarily due to a change in judgement on the realizability of foreign NOLs and currency translation adjustments. Following the purchase of the remaining noncontrolling interests of a foreign subsidiary, we reorganized related business operations, which resulted in the release of a valuation allowance for foreign net operating losses in the amount of $31.1 million as a discrete item in the third quarter because we are now forecasting the utilization of these net operating losses within the foreseeable future. At December 31, 2024, the Company has a valuation allowance of $42.5 million related to the portion of NOLs and other items for which it is more likely than not that the tax benefit will not be realized.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows:
 December 31,
 202420232022
 (In thousands)
Balance at January 1$8,014 $6,181 $6,298 
Additions based on tax positions related to the current year1,509 1,564 1,342 
Additions for tax positions of prior years96 545 1,006 
Reductions for tax positions of prior years(92)(88)— 
Expirations of statutes(33)— — 
Settlements— (188)(2,465)
Balance at December 31$9,494 $8,014 $6,181 
The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. At December 31, 2024 and 2023, accruals for interest are not material and there are no accruals for penalties.
The Company’s income taxes are routinely under audit by federal, state, local and foreign authorities as a result of previously filed separate company and consolidated tax returns with IAC. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Company is not currently under audit by the Internal Revenue Service. Returns filed in various other jurisdictions are open to examination for tax years beginning with 2015. Income taxes payable include unrecognized tax benefits that are considered sufficient to pay assessments that may result from the examination of prior year tax returns. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.
At December 31, 2024 and December 31, 2023, the Company has unrecognized tax benefits, including interest, of $9.7 million and $8.1 million, respectively; all of which are for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at December 31, 2024 are subsequently recognized, the income tax provision would be reduced by $9.1 million. The comparable amount as of December 31, 2023 is $7.6 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $0.6 million by December 31, 2025 due to settlements; $0.5 million of which would reduce the income tax provision.