Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Domestic and Foreign Components of Income/Loss before Income Tax Expense

The U.S. and foreign components of income/(loss) before income tax expense for the years ended December 31, 2022, 2021 and 2020 are as follows:


	Year Ended December 31,
	2022			2021		2020
U.S.	$	(4,067	)	$	15,986	$	(5,187	)
Foreign		44,017			40,685		(30,035	)

Total	$	39,950		$	56,671	$	(35,222	)

Components of Current and Deferred Income Tax Expense

The components of current and deferred income tax expense included in the Consolidated Statement of Operations for years ended December 31, 2022, 2021 and 2020 are as follows:


	Years Ended December 31,
	2022			2021			2020
Current:
Federal	$	4,685		$	5,857		$	3,670
State and local		1,415			1,538			832
Foreign		(15,538	)		(837	)		(1,877	)

	$	(9,438	)	$	6,558		$	2,625


Deferred:
Federal	$	(6	)	$	(1,217	)	$	60
State and local		(1	)		(251	)		13
Foreign		(1,289	)		1,784			(2,265	)

	$	(1,296	)	$	316		$	(2,192	)

Income tax expense/(benefit)	$	(10,734	)	$	6,874		$	433

Reconciliation of Statutory Federal Income Tax Rate and Company's Effective Rate

A reconciliation of the statutory federal income tax expense and the Company’s total income tax expense is as follows:


	Years Ended December 31,
	2022			2021			2020
U.S. federal statutory income tax	$	8,386		$	11,901		$	(7,397	)
Decrease in unrecognized tax benefits, net		(19,871	)		(4,998	)		(5,661	)
Change in valuation allowance – Capital losses		4,761			5			4,448
Change in tax-related indemnification assets, net		4,173			1,053			1,189
Foreign operations		(2,919	)		(3,211	)		(3,342	)
Change in valuation allowance—Foreign net operating losses (“NOLs”) and interest carryforwards		(1,609	)		—			(2,018	)
(Gain)/loss on revaluation of deferred consideration (1)		(5,842	)		(424	)		11,929
GILTI		499			—			—
Non-deductible executive compensation		789			881			399
Stock-based compensation tax shortfalls		507			647			1,485
Blended state income tax rate, net of federal benefit		(134	)		526			(171	)
Non-taxable gain on sale—Canadian ETF business		—			—			(740	)
Other differences, net		526			494			312

Income tax expense/(benefit)	$	(10,734	)	$	6,874		$	433

(1)	The (gain)/loss on revaluation of deferred consideration is not adjusted for income taxes as the obligation was assumed by a wholly-owned subsidiary that is based in Jersey, a jurisdiction where the Company is subject to a zero percent tax rate.

Schedule of Income Tax Payments By Jurisdiction

A summary of income taxes paid by jurisdiction for the years ended December 31, 2022, 2021 and 2020 is as follows:


	Years Ended December 31,
	2022		2021		2020
Federal	$	6,424	$	4,258	$	4,470
State and local		1,431		1,020		1,353
Foreign		4,645		3,178		4,308

	$	12,500	$	8,456	$	10,131

Summary of Deferred Tax Asset Recorded

A summary of the components of the Company’s deferred tax assets at December 31, 2022 and 2021 is as follows:


	2022			2021
Deferred tax assets:
Capital losses	$	17,541		$	16,601
Accrued expenses		6,030			4,993
Unrealized losses		3,821			614
NOLs—Foreign		1,609			1,934
Stock-based compensation		1,526			1,359
Goodwill and intangible assets		1,085			1,276
Operating lease liabilities		313			—
NOLs—U.S.		255			382
Foreign currency translation adjustment		173			—
Outside basis differences		122			122
Interest carryforwards		—			437
Other		341			376

Deferred tax assets		32,816			28,094

Deferred tax liabilities:
Fixed assets and prepaid assets		278			257
Foreign currency translation adjustment		—			181
Unremitted earnings—European subsidiaries		205			118
Right of use assets—operating leases		313			—

Deferred tax liabilities		796			556

Total deferred tax assets less deferred tax liabilities		32,020			27,538
Less: Valuation allowance		(21,484	)		(18,657	)

Deferred tax assets, net	$	10,536		$	8,881

Schedule of Changes in Balance of Gross Unrecognized Tax Benefits

The table below sets forth the aggregate changes in the balance of these gross unrecognized tax benefits:


	Total			Unrecognized Tax Benefits			Interest and Penalties
Balance at January 1, 2021	$	27,016		$	21,850		$	5,166
Decrease—Lapse of statute of limitations (1)		(5,171	)		(3,559	)		(1,612	)
Increases		173			—			173
Foreign currency translation (2)		(93	)		(73	)		(20	)

Balance at December 31, 2021	$	21,925		$	18,218		$	3,707
Decrease—Settlements (1)		(13,052	)		(11,865	)		(1,187	)
Decrease—Lapse of statute of limitations (1)		(6,845	)		(4,825	)		(2,020	)
Increases		26			—			26
Foreign currency translation (2)		(701	)		(571	)		(130	)

Balance at December 31, 2022	$	1,353		$	957		$	396

(1)

In January

2022, an audit of ManJer’s tax returns (a Jersey-based subsidiary) for the years ended December 31, 2014, 2016, 2017 and 2018 were resolved in favor of ManJer. The settlement, as well as the reduction in unrecognized tax benefits from the lapse of the statute of limitations totaling $19,897 during the year ended December 31, 2022 was recorded as an income tax benefit along with an equal and offsetting amount recorded in other losses and gains, net, to recognize a reduction in the indemnification asset. During the year ended December 31, 2021, an income tax benefit of $5,171 was recorded upon the lapse of the statute of limitations with an equal and offsetting amount in other losses and gains, net.

(2)	The gross unrecognized tax benefits were accrued in British pounds.