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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) before income taxes included the following components for the years ended December 31 (in thousands):
| 2019 |  | 2018 |  | 2017
United States | $ | (1,449 | ) |  | $ | 25,751 |  |  | $ | 14,978 |
Foreign | 3,519 |  |  | 2,353 |  |  | 783 |
Total | $ | 2,070 |  |  | $ | 28,104 |  |  | $ | 15,761 |
Significant Components of the Provision for Income Taxes | Significant components of the provision for income taxes are as follows for the years ended December 31 (in thousands):
| 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |
Federal | $ | 4,247 |  |  | $ | 4,900 |  |  | $ | 6,039 |
State | 2,414 |  |  | 1,377 |  |  | 1,263 |
Foreign | 1,533 |  |  | 228 |  |  | 656 |
Total current | 8,194 |  |  | 6,505 |  |  | 7,958 |
Deferred: |  |  |  |  |
Federal | (6,060 | ) |  | (8,382 | ) |  | 4,539 |
State | (1,665 | ) |  | (364 | ) |  | (1,631 | )
Foreign | (264 | ) |  | (3 | ) |  | (78 | )
Total deferred | (7,989 | ) |  | (8,749 | ) |  | 2,830 |
Tax impact of unrecorded tax benefits liability | 983 |  |  | 1,143 |  |  | (234 | )
Provision for income taxes (Income tax benefit) | $ | 1,188 |  |  | $ | (1,101 | ) |  | $ | 10,554 |
Reconciliation of the Company's Effective Income Tax Rate to the Federal Statutory Rate | A reconciliation of our effective income tax rate to the federal statutory rate follows for the years ended December 31 (in thousands):
| 2019 |  | 2018 |  | 2017
Federal income tax at the statutory rate | $ | 435 |  |  | $ | 5,902 |  |  | $ | 5,518 |
State income taxes, net of federal benefit | 526 |  |  | (215 | ) |  | 339 |
Difference between statutory and foreign tax rates | 43 |  |  | 7 |  |  | (560 | )
Permanent differences (1) | 1,139 |  |  | 725 |  |  | 300 |
Executive compensation limitation | 7,596 |  |  | 1,167 |  |  | — |
Research and development | (4,911 | ) |  | (6,908 | ) |  | (2,380 | )
Return to provision adjustment | (9 | ) |  | 1,780 |  |  | 23 |
Change in liability for unrecognized tax benefits | 1,191 |  |  | 1,768 |  |  | 7 |
Excess stock-based compensation benefit | (4,999 | ) |  | (8,907 | ) |  | (1,819 | )
Change in valuation allowance | 368 |  |  | 1,984 |  |  | 1,949 |
Tax effects of intercompany transactions | 16 |  |  | 1,004 |  |  | (277 | )
Adjustments to deferred tax assets, net resulting from enactment of new tax law (2) | — |  |  | — |  |  | 7,601 |
Other | (207 | ) |  | 592 |  |  | (147 | )
Provision for income taxes (Income tax benefit) | $ | 1,188 |  |  | $ | (1,101 | ) |  | $ | 10,554 |
Effective tax rate | 57.4 | % |  | (3.9 | )% |  | 66.9 | %
(1) | Permanent differences include certain expenses that are not deductible for tax purposes including meals and entertainment, certain transaction costs, lobbying fees, and taxable income as a result of global intangible low-tax income ("GILTI") offset by favorable items including the domestic production activities deduction, for tax year 2017, and a deduction for foreign derived intangible income ("FDII") beginning in 2018.
(2) The adjustment to deferred tax assets of $7.6 million in 2017 was a result of the impact of changes in the U.S. federal effective tax rate, as well as a reduction of the stock-based compensation deferred tax asset due to expected permanent limitations on its deductibility for certain key executives under the Tax Cuts and Jobs Act.
Components of Deferred Income Tax Assets and Liabilities | Significant components of our deferred income tax assets and liabilities are as follows at December 31 (in thousands):
| 2019 |  | 2018
Deferred income tax assets: |  |  |
Net operating loss carryforward | $ | 2,341 |  |  | $ | 2,347 |
Deferred revenue | 15,348 |  |  | 13,304 |
Deferred compensation | 971 |  |  | 858 |
Lease liability | 2,460 |  |  | — |
Inventory reserve | 1,258 |  |  | 1,294 |
Stock-based compensation | 10,769 |  |  | 3,758 |
Amortization | 1,133 |  |  | 412 |
Research and development tax credit carryforward | 4,957 |  |  | 5,193 |
Reserves, accruals, and other | 3,394 |  |  | 3,094 |
Total deferred income tax assets | 42,631 |  |  | 30,260 |
Deferred income tax liabilities: |  |  |
Customer contract asset | (883 | ) |  | — |
Right of use asset | (2,228 | ) |  | — |
Depreciation | (3,715 | ) |  | (2,195 | )
Amortization | (62 | ) |  | (57 | )
Other | (1,237 | ) |  | (1,232 | )
Total deferred income tax liabilities | (8,125 | ) |  | (3,484 | )
Net deferred income tax assets before valuation allowance | 34,506 |  |  | 26,776 |
Valuation allowance | (7,172 | ) |  | (7,429 | )
Net deferred income tax assets | $ | 27,334 |  |  | $ | 19,347 |
Roll Forward of Liability for Unrecognized Tax Benefits Exclusive of Accrued Interest | The following table presents a roll forward of our liability for unrecognized tax benefits, exclusive of accrued interest, as of December 31 (in thousands):
| 2019 |  | 2018 |  | 2017
Balance, beginning of period | $ | 6,058 |  |  | $ | 4,243 |  |  | $ | 4,050 |
Increase (decrease) in previous year tax positions | (615 | ) |  | 213 |  |  | 379 |
Increase in current year tax positions | 1,749 |  |  | 1,982 |  |  | 587 |
Decrease due to lapse of statutes of limitations | (331 | ) |  | (380 | ) |  | (773 | )
Balance, end of period | $ | 6,861 |  |  | $ | 6,058 |  |  | $ | 4,243 |

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