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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Taxes |
Income Taxes | Note 14 - Income Taxes Income (loss) before provision (benefit) for income taxes included the following components for the years ended December 31 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020
United States | ​ | $ | 191,631 | ​ | $ | (146,995) | ​ | $ | (11,529)
Foreign | ​ | ​ | 4,887 | ​ | ​ | 5,620 | ​ | ​ | 5,238
Total | ​ | $ | 196,518 | ​ | $ | (141,375) | ​ | $ | (6,291)
​ Significant components of the provision (benefit) for income taxes were as follows for the years ended December 31 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020
Current: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | 10,804 | ​ | $ | (331) | ​ | $ | 5,277
State | ​ | ​ | 10,118 | ​ | ​ | 85 | ​ | ​ | 3,886
Foreign | ​ | ​ | 2,892 | ​ | ​ | (60) | ​ | ​ | 1,943
Total current | ​ | ​ | 23,814 | ​ |  | (306) | ​ |  | 11,106
Deferred: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | ​ | 26,238 | ​ |  | (65,557) | ​ |  | (10,175)
State | ​ | ​ | (2,002) | ​ |  | (15,266) | ​ |  | (3,111)
Foreign | ​ | ​ | (2,146) | ​ |  | 478 | ​ |  | (3,131)
Total deferred | ​ | ​ | 22,090 | ​ |  | (80,345) | ​ |  | (16,417)
Tax impact of unrecorded tax benefits liability | ​ | ​ | 3,475 | ​ |  | (706) | ​ |  | 744
Provision for income taxes (Income tax benefit) | ​ | $ | 49,379 |  | $ | (81,357) |  | $ | (4,567)
​ A reconciliation of our effective income tax rate to the federal statutory rate follows for the years ended December 31 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020 | ​
Federal income tax at the statutory rate | ​ | $ | 41,283 | ​ | $ | (29,691) | ​ | $ | (1,321) |
State income taxes, net of federal benefit | ​ | ​ | 7,928 | ​ | ​ | (12,717) | ​ | ​ | 935 |
Difference between statutory and foreign tax rates | ​ | ​ | (428) | ​ | ​ | (155) | ​ | ​ | (86) | ​
Other permanent differences (1) | ​ | ​ | 1,771 | ​ | ​ | 1,842 | ​ | ​ | 794 |
Foreign derived intangible income deduction | ​ | ​ | (2,597) | ​ | ​ | — | ​ | ​ | (902) | ​
Executive compensation limitation | ​ | ​ | 5,784 | ​ |  | 180,509 | ​ | ​ | 15,463 | ​
R&D credits | ​ | ​ | (13,340) | ​ |  | (34,376) | ​ |  | (10,246) | ​
Return to provision adjustment | ​ | ​ | (757) | ​ |  | 204 | ​ |  | (1,078) | ​
Change in liability for unrecognized tax benefits | ​ | ​ | 3,215 | ​ |  | 10,188 | ​ |  | 987 | ​
Excess stock-based compensation benefit | ​ | ​ | (4,616) | ​ |  | (205,483) | ​ |  | (9,002) | ​
Change in valuation allowance | ​ | ​ | 10,216 | ​ |  | 8,961 | ​ |  | 163 | ​
Tax effects of intercompany transactions | ​ | ​ | (417) | ​ |  | 96 | ​ |  | (389) | ​
Other | ​ | ​ | 1,337 | ​ |  | (735) | ​ |  | 115 | ​
Provision for income taxes (Income tax benefit) | ​ | $ | 49,379 | ​ | $ | (81,357) | ​ | $ | (4,567) | ​
Effective tax rate | ​ | ​ | 25.1 | % |  | 57.5 | % |  | 72.6 | %
(1) | Other permanent differences include certain expenses that are not deductible for tax purposes including meals and entertainment, lobbying fees, and taxable income as a result of global intangible low-tax income ("GILTI").
​ Significant components of our deferred income tax assets and liabilities are as follows at December 31 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021
Deferred income tax assets: | ​ | ​ | ​ | ​ | ​ | ​
Net operating loss carryforward | ​ | $ | 4,874 | ​ | $ | 68,353
Deferred revenue | ​ | ​ | 47,586 | ​ | ​ | 27,031
Deferred compensation | ​ | ​ | 1,575 | ​ | ​ | 1,414
Lease liability | ​ | ​ | 9,973 | ​ |  | 5,886
Inventory reserve | ​ | ​ | 1,279 | ​ |  | 684
Stock based compensation | ​ | ​ | 15,374 | ​ |  | 10,913
Amortization | ​ | ​ | 2,820 | ​ |  | 2,672
R&D tax credit carryforward | ​ | ​ | 12,826 | ​ |  | 29,249
Reserves, accruals, and other | ​ | ​ | 17,732 | ​ |  | 14,717
R&D capitalization, net | ​ | ​ | 46,122 | ​ |  | —
Convertible debt, net | ​ | ​ | 48,378 | ​ | ​ | —
Total deferred income tax assets | ​ | ​ | 208,539 | ​ |  | 160,919
Deferred income tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​
Customer contract asset | ​ | ​ | (552) | ​ |  | (1,104)
Right of use asset | ​ | ​ | (8,748) | ​ |  | (5,008)
Depreciation | ​ | ​ | (10,272) | ​ |  | (8,938)
Strategic investments | ​ | ​ | (4,615) | ​ | ​ | (2,653)
Prepaid expenses | ​ | ​ | (1,119) | ​ | ​ | (594)
Other | ​ | ​ | — | ​ |  | (72)
Total deferred income tax liabilities | ​ | ​ | (25,306) | ​ |  | (18,369)
Net deferred income tax assets before valuation allowance | ​ | ​ | 183,233 | ​ |  | 142,550
Valuation allowance | ​ | ​ | (26,368) | ​ |  | (16,168)
Net deferred income tax assets | ​ | $ | 156,865 |  | $ | 126,382
​ We have $89.5 million of state net operating losses (“NOLs”) which will expire at various dates between 2026 and 2041 or carry forward indefinitely. We have $4.4 million of federal R&D credits, which expire between 2034 and 2041, and $0.1 million of which is subject to limitation under IRC Section 382. We have $21.6 million of state R&D credits carrying forward, which expire at various dates between 2023 and 2037, or carry forward indefinitely. In the U.K., we have $4.1 million of NOLs which may be carried forward indefinitely. In preparing our condensed consolidated financial statements, management assesses the likelihood that its deferred tax assets will be realized from future taxable income. In evaluating our ability to recover our deferred income tax assets, management considers all available positive and negative evidence, including our operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction by jurisdiction basis. A valuation allowance is established if it is determined that it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Management exercises significant judgment in determining our provision for income taxes, our deferred tax assets and liabilities, and our future taxable income for purposes of assessing our ability to utilize any future tax benefit from our deferred tax assets. As of December 31, 2022, management continues to believe the positive evidence from projected future earnings outweighs the negative evidence and a valuation allowance is only needed on specific deferred tax assets. We have concluded that a valuation allowance is necessary against unrealized investment losses as well as transaction costs incurred in connection with certain investments. Additionally, we do have Arizona R&D tax credits expiring unutilized each year; therefore, management has concluded that it is more likely than not that our Arizona R&D deferred tax asset will not be realized, and a valuation allowance has been recorded against this net asset. In Australia, we have determined that sufficient deferred tax liabilities will reverse in order to realize all assets except one long-lived intangible asset where there is not an expectation that the asset may be realized. Therefore, we continue to have a partial valuation allowance for Australia. We consider the undistributed earnings of certain non-U.S. subsidiaries to be indefinitely reinvested outside of the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. We project that our foreign earnings will be utilized offshore for working capital and future foreign growth and we have not made a provision for U.S. or additional foreign withholding taxes of the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. We have determined the amount of deferred tax liability related to investments in these foreign subsidiaries is immaterial. If we decide to repatriate the undistributed foreign earnings, we will recognize the income tax effects in the period we change our assertion on indefinite reinvestment. We complete R&D tax credit studies for each year that an R&D tax credit is claimed for federal and state income tax purposes. Management has made the determination that it is more likely than not that the full benefit of the R&D tax credit will not be sustained on examination and recorded a liability for unrecognized tax benefits of $21.5 million as of December 31, 2022. Should the unrecognized benefit of $21.5 million be recognized, our effective tax rate would be favorably impacted. The following table presents a roll forward of our liability for unrecognized tax benefits, exclusive of accrued interest, as of December 31 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020
Balance, beginning of period | ​ | $ | 18,249 | ​ | $ | 7,657 | ​ | $ | 6,861
Increase (decrease) in previous year tax positions | ​ | ​ | 232 | ​ | ​ | 22 | ​ | ​ | (34)
Increase in current year tax positions | ​ | ​ | 3,343 | ​ | ​ | 11,416 | ​ | ​ | 950
Decrease due to lapse of statutes of limitations | ​ | ​ | (332) | ​ | ​ | (846) | ​ | ​ | (120)
Balance, end of period | ​ | $ | 21,492 |  | $ | 18,249 |  | $ | 7,657
​ Federal income tax returns for 2019 through 2021 remain open to examination by the U.S. Internal Revenue Service (the “IRS”), while state and local income tax returns for 2018 through 2021 also generally remain open to examination by state taxing authorities. The 2008 through 2017 state and local income tax returns are only open to the extent that net operating loss or other tax attributes carrying forward from those years were utilized in 2018 through 2021. The foreign tax returns for 2018 through 2021 also generally remain open to examination, although some foreign statutes can audit returns up to ten years. We recognize interest and penalties related to unrecognized tax benefits within the provision (benefit) for income tax expense line in the accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2022, and 2021, we had accrued interest of $0.3 million and $0.2 million, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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