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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes

Schedule of Income (Loss) before Income Tax, Domestic and Foreign

Income (loss) before provision (benefit) for income taxes included the following components for the years ended December 31 (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​		2023			2022			2021
United States	​	$	132,448	​	$	191,631	​	$	(146,995)
Foreign	​	​	22,552	​	​	4,887	​	​	5,620
Total	​	$	155,000	​	$	196,518	​	$	(141,375)

Significant Components of the Provision (Benefit) for Income Taxes

Significant components of the provision (benefit) for income taxes were as follows for the years ended December 31 (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​		2023			2022			2021
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	33,084	​	$	10,804	​	$	(331)
State	​	​	10,371	​	​	10,118	​	​	85
Foreign	​	​	2,804	​	​	2,892	​	​	(60)
Total current	​	​	46,259	​		23,814	​		(306)
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​	​	(61,106)	​		26,238	​		(65,557)
State	​	​	(9,244)	​		(2,002)	​		(15,266)
Foreign	​	​	89	​		(2,146)	​		478
Total deferred	​	​	(70,261)	​		22,090	​		(80,345)
Tax impact of unrecorded tax benefits liability	​	​	4,775	​		3,475	​		(706)
Provision for income taxes (Income tax benefit)	​	$	(19,227)		$	49,379		$	(81,357)

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):

​

​	​	​	​	​	​	​	​	​	​	​
​		2023			2022			2021		​
Federal income tax at the statutory rate	​	$	32,550	​	$	41,283	​	$	(29,691)	​
Excess stock-based compensation benefit	​	​	(106,522)	​	​	(4,616)	​	​	(205,483)
Executive compensation limitation	​	​	77,350	​	​	5,784	​	​	180,509
R&D credits	​	​	(26,204)	​	​	(13,340)	​	​	(34,376)
Change in valuation allowance	​	​	(4,695)	​	​	10,216	​	​	8,961	​
Change in liability for unrecognized tax benefits	​	​	4,351	​	​	3,215	​	​	10,188	​
State income taxes, net of federal benefit	​	​	3,658	​		7,928	​	​	(12,717)	​
Tax effects of intercompany transactions	​	​	(2,033)	​	​	(417)	​	​	96	​
Foreign tax credit	​	​	(1,922)	​		—	​		—	​
Global intangible low-taxed income	​	​	1,890	​		653	​		1,250	​
Other permanent differences (1)	​	​	1,201	​		1,118	​		592	​
Difference between statutory and foreign tax rates	​	​	1,013	​		(428)	​		(155)	​
Foreign derived intangible income deduction	​	​	(961)	​		(2,597)	​		—	​
Return to provision adjustment	​	​	346	​		(757)	​		204	​
Other	​	​	751	​		1,337	​		(735)	​
Provision for income taxes (Income tax benefit)	​	$	(19,227)	​	$	49,379	​	$	(81,357)	​
Effective tax rate	​	​	(12.4)	%		25.1	%		57.5	%

(1) Other permanent differences include certain expenses that are not deductible for tax purposes including meals and entertainment, lobbying fees, and nondeductible transaction-related costs.

​

Components of Deferred Income Tax Assets and Liabilities

Significant components of our deferred income tax assets and liabilities are as follows at December 31, 2023 and December 31, 2022 (in thousands):

​

​	​	​	​	​	​	​
​		2023			2022
Deferred income tax assets:	​	​	​	​	​	​
R&D capitalization, net	​	$	99,746	​	$	46,122
Deferred revenue	​	​	60,206	​	​	47,586
Convertible debt, net	​	​	39,649	​		48,378
R&D tax credit carryforward	​	​	16,554	​	​	12,826
Reserves, accruals, and other	​	​	12,264	​		9,080
Accrued bonus	​	​	11,253	​		8,652
Stock based compensation	​	​	10,544	​		15,374
Lease liability	​	​	9,664	​		9,973
Strategic investments	​	​	6,109	​		—
Amortization	​	​	4,425	​		2,820
Deferred compensation	​	​	2,803	​	​	1,575
Net operating loss carryforward	​	​	2,115	​	​	4,874
Inventory reserve	​	​	1,986	​	​	1,279
Total deferred income tax assets	​	​	277,318	​		208,539
Deferred income tax liabilities:	​	​	​	​	​	​
Depreciation	​	​	(14,575)	​	​	(10,272)
Right of use asset	​	​	(8,404)	​	​	(8,748)
Prepaid expenses	​	​	(2,223)	​		(1,119)
Customer contract asset	​	​	(690)	​	​	(552)
Goodwill amortization	​	​	(313)	​		—
Strategic investments	​	​	—	​		(4,615)
Total deferred income tax liabilities	​	​	(26,205)	​		(25,306)
Net deferred income tax assets before valuation allowance	​	​	251,113	​		183,233
Valuation allowance	​	​	(21,600)	​		(26,368)
Net deferred income tax assets	​	$	229,513		$	156,865

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):

​

​	​	​	​	​	​	​	​	​	​
​		2023			2022			2021
Balance, beginning of period	​	$	21,492	​	$	18,249	​	$	7,657
Increase (decrease) in previous year tax positions	​	​	(215)	​	​	232	​	​	22
Increase in current year tax positions	​	​	6,963	​	​	3,343	​	​	11,416
Decrease due to lapse of statutes of limitations	​	​	(2,486)	​	​	(332)	​	​	(846)
Balance, end of period	​	$	25,754		$	21,492		$	18,249

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