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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the Company's loss before income taxes for the years ended December 31, 2024, 2023, and 2022 were as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Domestic | $ | (125,307) |  |  | $ | (210,547) |  |  | $ | (219,586) |
Foreign | 54,436 |  |  | 32,685 |  |  | 28,853 |
Total loss before income taxes | $ | (70,871) |  |  | $ | (177,862) |  |  | $ | (190,733) |
The components of the Company's provision for (benefit from) income taxes for the years ended December 31, 2024, 2023, and 2022 were as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Current expense: |  |  |  |  |
Federal | $ | 1,681 |  |  | $ | 513 |  |  | $ | 332 |
State | 142 |  |  | 324 |  |  | 1 |
Foreign | 3,995 |  |  | 2,986 |  |  | 2,455 |
Total current provision for income taxes | $ | 5,818 |  |  | $ | 3,823 |  |  | $ | 2,788 |
Deferred expense (benefit): |  |  |  |  |
Federal | (1,205) |  |  | — |  |  | (1,124) |
State | (235) |  |  | — |  |  | (573) |
Foreign | 3,551 |  |  | 2,264 |  |  | 1,557 |
Total deferred provision for (benefit from) income taxes | $ | 2,111 |  |  | $ | 2,264 |  |  | $ | (140) |
Total provision for income taxes | $ | 7,929 |  |  | $ | 6,087 |  |  | $ | 2,648 |
A reconciliation of the U.S. federal statutory rate to the Company's effective tax rate is as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Expected benefit at U.S. federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal tax benefits | 0.1 |  |  | (0.1) |  |  | 0.2 |
Foreign income or losses taxed at different rates | 5.9 |  |  | 1.0 |  |  | 1.1 |
Stock-based compensation | 60.8 |  |  | 12.4 |  |  | 18.7 |
Non-deductible compensation | (9.4) |  |  | (0.9) |  |  | — |
Change in valuation allowance | (84.8) |  |  | (30.6) |  |  | (41.2) |
Withholding taxes | (2.3) |  |  | (0.3) |  |  | (0.2) |
Gain/loss on convertible senior notes | — |  |  | (5.1) |  |  | — |
Miscellaneous permanent items | (2.4) |  |  | (0.8) |  |  | (1.0) |
Total provision for income taxes | (11.1) | % |  | (3.4) | % |  | (1.4) | %
The components of the Company's deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 442,764 |  |  | $ | 390,405 |
Tax credit carryforwards | 74,866 |  |  | 65,390 |
Capitalized research and development expenditures | 109,623 |  |  | 71,617 |
Operating lease liabilities | 43,135 |  |  | 36,609 |
Business interest carryforwards | — |  |  | 1,244 |
Stock-based compensation | 42,101 |  |  | 35,786 |
Accrued expenses and reserves | 5,812 |  |  | 4,650 |
Capitalized contract expenditures | 8,664 |  |  | 32,425 |
Other | 1,542 |  |  | 2,235 |
Gross deferred tax assets | 728,507 |  |  | 640,361 |
Valuation allowance | (630,590) |  |  | (552,165) |
Total deferred tax assets | $ | 97,917 |  |  | $ | 88,196 |
Deferred tax liabilities: |  |  |
Right-of-use assets | (40,579) |  |  | (33,337) |
Deferred commissions | (42,483) |  |  | (32,807) |
Capitalized internal-use software | (4,570) |  |  | (3,909) |
Depreciation and amortization | (21,849) |  |  | (25,045) |
Other | (38) |  |  | (57) |
Total deferred tax liabilities | $ | (109,519) |  |  | $ | (95,155) |
Net deferred tax liabilities | $ | (11,602) |  |  | $ | (6,959) |
In determining the need for a valuation allowance, the Company weighs both positive and negative evidence in the various jurisdictions in which it operates to determine whether it is more likely than not that its deferred tax assets are realizable. A full valuation allowance has been established in the United States and United Kingdom and no deferred tax assets and related tax benefits have been recognized in the consolidated financial statements. There is no valuation allowance associated with any other jurisdiction as of December 31, 2024. The worldwide valuation allowance as of December 31, 2024 and 2023 was $630.6 million and $552.2 million, respectively. The net change in the worldwide valuation allowance for the years ended December 31, 2024, 2023, and 2022 was an increase of $78.4 million, an increase of $74.6 million, and an increase of $208.1 million, respectively. The increase in the Company’s valuation allowance compared to the prior year was primarily due to an increase in taxable losses generated in the United States and United Kingdom and the capitalization and amortization of research and development expenses. As of December 31, 2024, the Company had federal and state net operating loss carryforwards of $1,604.0 million and $860.2 million, which begin to expire in 2029 and 2027, respectively. As of December 31, 2024, the Company had U.K. net operating loss carryforwards of $209.5 million that can be carried forward indefinitely. As of December 31, 2024, the Company had research and development tax credit carryforwards for federal and state purposes of $73.4 million and $34.6 million, which begin to expire in 2029 and 2039, respectively. As of December 31, 2024 the Company had foreign tax credit carryforwards for federal income tax purposes of $0.6 million, which will expire, if not utilized, in 2025. Utilization of net operating losses and tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Such a limitation could result in the expiration of the net operating loss carryforwards and tax credits before utilization. A reconciliation of the beginning and ending amount of the Company's total gross unrecognized tax benefits was as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Balance as of the beginning of the period | $ | 29,039 |  |  | $ | 23,940 |  |  | $ | 12,590 |
Increases for tax positions related to the prior year | 268 |  |  | 590 |  |  | 5,753 |
Decreases for tax positions related to the prior year | (1,232) |  |  | (243) |  |  | — |
Additions for tax positions related to the current year | 4,939 |  |  | 4,752 |  |  | 5,597 |
Balance as of the end of the period | $ | 33,014 |  |  | $ | 29,039 |  |  | $ | 23,940 |
The Company classifies uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year or otherwise directly related to an existing deferred tax asset, in which case the asset is recorded net of the uncertain tax position on the consolidated balance sheet. As of December 31, 2024, $0.6 million of the Company’s gross unrecognized tax benefits, if recognized, would affect the effective tax rate and $32.4 million would result in an adjustment to deferred tax assets with corresponding adjustments to valuation allowance. The Company does not expect significant changes to its uncertain tax positions within the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company did not recognize any income tax expense related to interest and penalties in the years ended December 31, 2024, 2023, and 2022, respectively. The Company currently considers its significant tax jurisdictions to include the United States, Portugal, and the United Kingdom. Because of the net operating loss carryforwards, substantially all of the Company’s tax years remain open to U.S. federal and state tax examination. The Company’s foreign tax returns are open to audit under the statutes of limitations of the respective foreign countries in which the subsidiaries are located. The Company generally does not provide deferred income taxes for the undistributed earnings of its foreign subsidiaries where the Company intends to reinvest such earnings indefinitely. Should circumstances change and it becomes apparent that some or all of the undistributed earnings will no longer be indefinitely reinvested, the Company will accrue for income taxes not previously recognized, where applicable.

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