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Income Taxes
 12 Months Ended
Jan. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the loss before income taxes are as follows:
 
Year Ended January 31,
(in thousands)202220212020
Domestic$(131,478)$(127,599)$(123,760)
Foreign(3,536)1,569 176 
Total loss before income taxes$(135,014)$(126,030)$(123,584)
The provision for (benefit from) income taxes consists of the following (in thousands):
 
Year Ended January 31,
(in thousands)202220212020
Current
Federal$— $— $— 
State15 23 29 
Foreign3,488 1,095 500 
Total current tax provision3,503 1,118 529 
Deferred
Federal30 60 — 
State(2)30 — 
Foreign(1,421)(135)(399)
Total deferred tax benefit(1,393)(45)(399)
Income tax provision$2,110 $1,073 $130 
A reconciliation between the U.S. federal statutory income tax and the Company’s effective tax rates as a percentage of loss before income taxes is as follows:
 
Year Ended January 31,
 202220212020
Provision computed at federal statutory rate21.0 %21.0 %21.0 %
States taxes, net of federal benefit3.7 %2.4 %2.4 %
Foreign rate differential(2.2)%(0.8)%(1.0)%
Revaluation gain/loss0.9 %(5.0)%0.1 %
Tax credits2.5 %2.3 %2.0 %
Change in valuation allowance(27.3)%(21.3)%(23.9)%
Other(0.2)%0.5 %(0.7)%
Effective tax rate(1.6)%(0.9)%(0.1)%
The components of the Company’s deferred tax assets and liabilities are as follows:
 
January 31,
(in thousands)20222021
Deferred tax assets
Net operating loss carryforwards$114,654 $92,570 
Tax Credit carryforwards21,245 17,679 
Stock-based compensation8,252 4,013 
Deferred revenue3,909 5,239 
Excess interest expense8,656 6,799 
Other12,208 4,826 
Total deferred tax assets168,924 131,126 
Valuation allowance(166,081)(126,270)
Total deferred tax assets2,843 4,856 
Deferred tax liabilities
Property and equipment— — 
Intangible assets(2,701)(4,432)
Total deferred tax liabilities(2,701)(4,432)
Net deferred tax assets$142 $424 
The Company had deferred tax assets of $168.9 million and $131.1 million before valuation allowances as of January 31, 2022 and 2021, respectively. The Company assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of its deferred tax assets will not be realized. The Company evaluates all available positive and negative evidence such as past operating results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies. Management believes that it is more likely than not that the majority of U.S. and foreign deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against its deferred tax assets in these jurisdictions.
The net change in the total valuation allowance is as follows:
 
Year Ended January 31,
(in thousands)202220212020
Valuation allowance, beginning of year$126,270 $102,758 $73,155 
Change in valuation allowance39,811 23,512 29,603 
Valuation allowance, end of year$166,081 $126,270 $102,758 
The Company considers the undistributed earnings of its foreign subsidiaries permanently reinvested in foreign operations and has not provided for U.S. income taxes on such earnings. As of January 31, 2022, the Company’s unremitted earnings from its foreign subsidiaries were $23.1 million and the corresponding unrecognized deferred U.S. income tax liability is not material.
As of January 31, 2022, the Company had approximately $472.9 million of federal, $226.6 million of state and $0.8 million of foreign net operating loss (“NOL”) carryforwards available to offset future taxable income, which will expire in varying amounts beginning in 2023. An insignificant amount of NOL and credits carryforwards may be subject to annual limitations under Internal Revenue Code Section 382.
As of January 31, 2022, the Company had approximately $16.6 million of federal and $11.8 million of California research and development credit carryforwards available to reduce future taxable liability. The federal credit carryforwards will expire beginning in 2032 and California credits can be carried forward indefinitely.
The Company’s unrecognized tax benefits are as follows:
 
Year Ended January 31,
(in thousands)202220212020
Beginning of year$4,714 $3,918 $3,234 
Additions based on tax positions related to the current year906 796 684 
Additions for tax positions of prior years68 — — 
End of year$5,688 $4,714 $3,918 
As of January 31, 2022, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes. The Company determined that no accrual for interest and penalties was required as of January 31, 2022 and 2021 and no such expenses were incurred in the years presented.
The Company does not anticipate the total amounts of unrecognized tax benefits to significantly increase or decrease in the next twelve months.
The Company files U.S. federal, various state and foreign income tax returns. The Company is not currently under audit by any taxing authorities. All tax years remain open to examination by taxing jurisdictions to which the Company is subject.