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Income Taxes
 12 Months Ended
Jan. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
14Income Taxes
The U.S. and foreign components of (loss) income before income taxes for fiscal years 2023, 2022, and 2021 are as follows (in thousands):
Year Ended January 31,
202320222021
U.S.$(273,467)$(306,814)$(105,589)
Foreign(44,094)(204,069)10,931 
Loss before income taxes$(317,561)$(510,883)$(94,658)
The components of the provision for (benefit from) income taxes for fiscal years 2023, 2022, and 2021 are as follows (in thousands):
Year Ended January 31,
202320222021
Provision for (benefit from) income taxes
Current expense
Federal$213 $— $— 
State493 80 47 
Foreign9,224 20,455 5,275 
Total current expense9,930 20,535 5,322 
Deferred expense (benefit)
Federal— — — 
State— — — 
Foreign861 (5,832)(7,587)
Total deferred expense (benefit)$861 $(5,832)$(7,587)
Total provision for (benefit from) income taxes$10,791 $14,703 $(2,265)
The following is a reconciliation of the statutory federal income tax rate to our effective tax rate for fiscal years 2023, 2022, and 2021:
Year Ended January 31,
202320222021
Federal statutory income tax rate21.0 %21.0 %21.0 %
Foreign taxes(2.2)(3.7)0.2 
Non-deductible expenses(2.1)(2.7)(1.1)
Stock-based compensation(10.8)27.1 (14.0)
Valuation allowance(12.3)(48.2)(10.1)
Research and development credits3.3 3.8 6.7 
Other, net(0.3)(0.2)(0.3)
Effective income tax rate(3.4)%(2.9)%2.4 %
Significant components of DTAs and DTLs as of January 31, 2023 and 2022 are as follows (in thousands):
As of January 31,
2023
2022
Deferred tax assets:
Net operating loss carryforwards$387,822 $377,285 
Accruals and reserves15,072 9,429 
Stock-based compensation25,665 37,751 
Deferred revenue9,477 4,722 
Research and development67,103 15,372 
Foreign exchange— 4,478 
Depreciation and amortization587 — 
Excessive borrowing1,668 1,370 
Other7,406 1,170 
Total deferred tax assets, gross514,800 451,577 
Less: valuation allowance(476,589)(422,262)
Total deferred tax assets, net of valuation allowance38,211 29,315 
Deferred tax liabilities:
Intangible assets(3,312)(579)
Foreign exchange(97)— 
Depreciation and amortization— (1,446)
Commissions(29,245)(16,695)
Other— (1)
Total deferred tax liabilities(32,654)(18,721)
Net deferred tax assets$5,557 $10,594 
Net deferred tax assets$5,895 $10,628 
Net deferred tax liabilities (included in other liabilities, non-current)(338)(34)
Net deferred tax assets$5,557 $10,594 
We have evaluated the available positive and negative evidence supporting the realization of our U.S. federal and state, Romanian, and U.K. DTAs, including cumulative losses and the amount and timing of future taxable income, and have determined that it is more likely than not that these assets will not be realized. Accordingly, we have recorded a full valuation allowance against U.S. federal and state, Romanian, and U.K DTAs as of January 31, 2023 and 2022.
The table below details the changes in DTA valuation allowances for fiscal years 2023 and 2022 (in thousands):
Beginning
Balance		Valuation
Allowance
Recorded
During the Period		Valuation
Allowance
Released
During the Period		Ending
Balance
Year ended January 31, 2023
$422,262 $54,327 $— $476,589 
Year ended January 31, 2022
$137,766 $284,496 $— $422,262 
As of January 31, 2023, we had U.S. federal NOLs of $979.9 million available to offset future taxable income, all of which can be carried forward indefinitely. As of January 31, 2022 we had U.S. federal NOLs of $1,015.4 million, $1,006.1 million of which could be carried forward indefinitely, and $9.3 million of which were to begin expiring in 2035.
As of January 31, 2023 and 2022, we had state NOLs of $771.5 million and $648.5 million, respectively, which begin expiring in 2024.
As of January 31, 2023 and 2022, we had Romanian NOLs of $601.6 million and $531.4 million, respectively, which begin expiring in 2024. As of January 31, 2023 and 2022, we had Japanese NOLs of $10.4 million and $13.5 million, respectively, which begin expiring in 2027. Additionally, as of January 31, 2023 and 2022, we had U.K. NOLs of $135.1 million and $139.2 million, respectively, which may be carried forward indefinitely.
Pursuant to Section 382 of the IRC, annual use of our U.S. NOLs may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. We determined that two such ownership changes have occurred. The first resulted in an annual limitation, independent of net unrealized built-in gains, of $0.1 million for our NOLs as of April 24, 2017 but did not result in permanent disallowance of any NOLs. The second resulted in an annual limitation, independent of net unrealized built-in gains, of $29.0 million for our NOLs as of July 9, 2020 but did not result in permanent disallowance of any NOLs.
We do not provide for deferred taxes on $76.0 million of the undistributed earnings of our foreign subsidiaries as of January 31, 2023, because we intend to indefinitely reinvest such undistributed earnings in our non-U.S. operations.
As of January 31, 2023, we had gross unrecognized tax benefits totaling $2.3 million related to income taxes, which would impact the effective tax rate if recognized. Of this amount, the total liability pertaining to uncertain tax positions was $0.5 million, excluding interest and penalties, which are accounted for as a component of our income tax provision. As of January 31, 2022, we had gross unrecognized tax benefits of $2.5 million. Of this amount, the total liability pertaining to uncertain tax positions was $0.6 million, excluding interest and penalties
Our tax positions are subject to income tax audits in multiple tax jurisdictions globally, and we believe that we have provided adequate reserves for our income tax uncertainties in all open tax years. Our Romanian subsidiary is currently under audit for tax years from 2017 through 2022. Our Indian subsidiary is currently under audit for tax years from 2019 through 2021.
We file income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and various international jurisdictions. Tax years 2019 and forward generally remain open for examination for federal and state tax purposes. Tax years 2017 and forward generally remain open for examination for foreign tax purposes. To the extent utilized in future years’ tax returns, NOLs at January 31, 2023 and 2022 will remain subject to examination until the respective tax year is closed.