XML 55 R21.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Jan. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of pre-tax loss for the years ended January 31, 2020, 2019 and 2018 were as follows (in thousands):
| Year Ended January 31,
| 2020 |  | 2019 |  | 2018
Domestic | $ | (220,846 | ) |  | $ | (128,214 | ) |  | $ | (112,858 | )
Foreign | 10,514 |  |  | 2,700 |  |  | 2,688 |
Loss before benefit from income taxes | $ | (210,332 | ) |  | $ | (125,514 | ) |  | $ | (110,170 | )
The components of the benefit from income taxes for the years ended January 31, 2020, 2019 and 2018 were as follows (in thousands):
| Year Ended January 31,
| 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |
Federal | $ | 33 |  |  | $ | — |  |  | $ | — |
State | 86 |  |  | 61 |  |  | — |
Foreign | 822 |  |  | 667 |  |  | 183 |
Total current provision for income taxes | 941 |  |  | 728 |  |  | 183 |
Deferred: |  |  |  |  |  |
Federal | (518 | ) |  | (620 | ) |  | (32 | )
State | (406 | ) |  | (130 | ) |  | 10 |
Foreign | (1,436 | ) |  | 5 |  |  | (482 | )
Total deferred benefit from income taxes | (2,360 | ) |  | (745 | ) |  | (504 | )
Total benefit from income taxes | $ | (1,419 | ) |  | $ | (17 | ) |  | $ | (321 | )
For the tax year ended January 31, 2020 the income tax benefit resulted from the release of valuation allowance in the United States in connection with the Azuqua acquisition and excess tax benefits from stock-based compensation in the United Kingdom. For the tax year ended January 31, 2019, the income tax benefit resulted from the release of valuation allowance in the United States in connection with the ScaleFT acquisition and excess tax benefits from stock-based compensation in the United Kingdom. The income tax benefits in the years ended January 31, 2020 and 2019 were partially offset by foreign income taxes, state taxes and tax amortization of goodwill. For the year ended January 31, 2018, the income tax benefit resulted from $1.3 million of excess tax deductions related to option exercises by foreign employees, a portion of which we used to claim a refund for taxes paid in prior years. The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended January 31, 2020, 2019 and 2018:
| Year Ended January 31,
| 2020 |  | 2019 |  | 2018
Tax at federal statutory rate | 21.0 | % |  | 21.0 | % |  | 33.8 | %
State income taxes, net of federal benefit | 4.0 |  |  | 3.8 |  |  | 3.4 |
Change in valuation allowance | (100.1 | ) |  | (68.5 | ) |  | (27.1 | )
Stock-based compensation | 59.8 |  |  | 45.5 |  |  | 42.4 |
Research and development credits | 18.0 |  |  | — |  |  | — |
Tax Cuts and Jobs Act of 2017 | — |  |  | — |  |  | (51.3 | )
Other, net | (2.0 | ) |  | (1.8 | ) |  | (0.9 | )
Effective tax rate | 0.7 | % |  | — | % |  | 0.3 | %
The tax effects of temporary differences and related deferred tax assets and liabilities as of January 31, 2020 and 2019 were as follows (in thousands):
| As of January 31,
| 2020 |  | 2019
|  |  | As Adjusted(1)
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 370,705 |  |  | $ | 202,471 |
Stock-based compensation | 18,680 |  |  | 13,185 |
Deferred revenue | 1,960 |  |  | 1,312 |
Operating lease liabilities | 42,073 |  |  | 39,060 |
Other reserves and accruals | 6,414 |  |  | 3,750 |
Research and development and other credits | 39,918 |  |  | 791 |
Convertible debt | — |  |  | 477 |
Disallowed interest | 4,507 |  |  | 1,292 |
Total deferred tax assets | 484,257 |  |  | 262,338 |
Valuation allowance | (361,606 | ) |  | (203,899 | )
Total deferred tax assets, net | 122,651 |  |  | 58,439 |
Deferred tax liabilities: |  |  |
Convertible debt | (50,963 | ) |  | — |
Deferred commissions | (27,569 | ) |  | (19,424 | )
Capitalized internal-use software costs | (2,248 | ) |  | (2,047 | )
Goodwill | (262 | ) |  | (217 | )
Operating lease right-of-use assets | (31,165 | ) |  | (29,697 | )
Depreciation and amortization | (8,315 | ) |  | (6,492 | )
Total deferred tax liabilities | (120,522 | ) |  | (57,877 | )
Net deferred tax assets | $ | 2,129 |  |  | $ | 562 |
(1) | Adjusted for adoption of ASC 842. See Note 2.
As a result of continuing losses, the Company has determined that it is not more likely than not that it will realize the benefits of the U.S. deferred tax assets and, therefore, the Company has recorded a valuation allowance to reduce the carrying value of the U.S. deferred tax assets, net of U.S. deferred tax liabilities, to approximately zero. The U.S. valuation allowance increased by $157.7 million and $86.6 million during the years ended January 31, 2020 and 2019, respectively. As of January 31, 2020, the Company had approximately $1,462.6 million of federal and $919.5 million of state net operating loss carryforwards available to offset future taxable income. If not used, the federal and state net operating loss carryforwards will begin to expire in 2029 and 2021, respectively. As of January 31, 2020, the Company had approximately $29.9 million of UK net operating losses which do not expire. As of January 31, 2020, the Company had federal research and development tax credit carryforwards of $35.3 million and California research and development tax credit carryforwards of $23.4 million. The federal research and development credits will start to expire in 2030 while the California research and development credits do not expire. The Company also had California Enterprise Zone credits of $1.0 million that begin to expire in 2023. The Company’s ability to use the net operating loss and tax credit carryforwards in the future may be subject to substantial restrictions in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code and similar state tax laws. The Company attributes net revenue, costs and expenses to domestic and foreign components based on the terms of its agreements with its subsidiaries. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are to be reinvested offshore indefinitely. If the Company repatriated these earnings, the resulting income tax liability would be insignificant. The Company is subject to taxation in the United States and various states and foreign jurisdictions. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease to effective for tax years beginning after December 31, 2017. This change in tax rate resulted in a reduction in the Company's net U.S. deferred tax assets before valuation allowance by $56.5 million, which was fully offset by a reduction in the Company's valuation allowance. A reconciliation of beginning and ending amount of unrecognized tax benefit was as follows (in thousands):
| Year Ended January 31,
| 2020 |  | 2019 |  | 2018
Gross amount of unrecognized tax benefits as of the beginning of the year | $ | 23,931 |  |  | $ | 11,719 |  |  | $ | 5,775 |
Additions based on tax positions related to a prior year | 658 |  |  | 1,859 |  |  | — |
Additions based on tax positions related to current year | 6,866 |  |  | 10,353 |  |  | 5,944 |
Reductions based on tax positions related to current year | — |  |  | — |  |  | — |
Reductions based on tax positions taken in a prior year | (15,468 | ) |  | — |  |  | — |
Gross amount of unrecognized tax benefits as of the end of the year | $ | 15,987 |  |  | $ | 23,931 |  |  | $ | 11,719 |
The Company is subject to taxation in the U.S. and various other state and foreign jurisdictions. As the Company has net operating loss carryforwards for U.S. federal and state jurisdictions, the statute of limitations is open for all years. For material foreign jurisdictions, the tax years open to examination include the tax years 2015 and forward. As of January 31, 2020, 2019 and 2018, the Company had unrecognized tax benefits which would not impact the effective tax rate because of the valuation allowance. The Company's policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes. The Company did not have any uncertain tax positions as of January 31, 2020 for which it was reasonably possible that the positions will increase or decrease within the next twelve months. As of January 31, 2020 and 2019, the Company had not accrued any interest or penalties related to unrecognized tax benefits.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration