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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents domestic and foreign components of loss before income taxes for the periods presented:
|  | Year Ended December 31,
| 2023 |  | 2022 |  | 2021
|  | (In thousands)
United States |  | $ | (816,089) |  |  | $ | (1,021,208) |  |  | $ | (737,360) |
International |  | (180,640) |  |  | (222,424) |  |  | (223,569) |
Loss before (provision for) benefit from income taxes |  | $ | (996,729) |  |  | $ | (1,243,632) |  |  | $ | (960,929) |
Provision for (benefit from) income taxes consists of the following:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Current: |  | (In thousands)
Federal |  | $ | 2,567 |  |  | $ | 3,928 |  |  | $ | 122 |
State |  | 1,533 |  |  | 4,100 |  |  | 420 |
Foreign |  | 31,354 |  |  | 17,450 |  |  | 8,274 |
Total |  | 35,454 |  |  | 25,478 |  |  | 8,816 |
Deferred: |  |  |  |  |  |
Federal |  | (1,337) |  |  | (5,155) |  |  | (13,772) |
State |  | (208) |  |  | (818) |  |  | (4,083) |
Foreign |  | (15,197) |  |  | (6,992) |  |  | (1,990) |
Total |  | (16,742) |  |  | (12,965) |  |  | (19,845) |
Provision for (benefit from) income taxes |  | $ | 18,712 |  |  | $ | 12,513 |  |  | $ | (11,029) |
The following table presents a reconciliation of the statutory federal tax rate and the Company's effective tax rate:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Tax at federal statutory rate |  | 21 | % |  | 21 | % |  | 21 | %
State tax, net of federal benefit |  | 3 |  |  | 3 |  |  | 8 |
Stock-based compensation |  | (7) |  |  | (7) |  |  | 16 |
Credits |  | 2 |  |  | 1 |  |  | 4 |
Foreign rate differential |  | 1 |  |  | (2) |  |  | (1) |
Change in valuation allowance |  | (23) |  |  | (17) |  |  | (46) |
Other |  | 1 |  |  | (1) |  |  | — |
Effective tax rate |  | (2) | % |  | (2) | % |  | 2 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company's deferred tax assets and liabilities:
|  | As of December 31,
| 2023 |  | 2022 |  |
Deferred tax assets: |  | (In thousands)
Net operating loss carryforwards |  | $ | 983,652 |  |  | $ | 959,864 |  |  |
Accruals and reserves |  | 52,750 |  |  | 47,986 |  |  |
Stock-based compensation |  | 29,572 |  |  | 37,981 |  |  |
Research and development credits |  | 177,109 |  |  | 159,604 |  |  |
Intangibles |  | 135,564 |  |  | 135,500 |  |  |
Capitalized research and development expenses |  | 231,819 |  |  | 219,176 |  |  |
Lease liability |  | 44,682 |  |  | 60,795 |  |  |
Unrealized losses on marketable securities |  | — |  |  | 32,108 |  |  |
Investments and other basis differences |  | 51,368 |  |  | 11,952 |  |  |
Other |  | 31,852 |  |  | 24,878 |  |  |
Gross deferred tax assets |  | 1,738,368 |  |  | 1,689,844 |  |  |
Valuation allowance |  | (1,533,933) |  |  | (1,357,300) |  |  |
Net deferred tax assets |  | 204,435 |  |  | 332,544 |  |  |
Deferred tax liabilities: |  |  |  |  |  |
Capitalized software |  | (36,109) |  |  | (36,552) |  |  |
Prepaid expenses |  | (1,073) |  |  | (1,587) |  |  |
Acquired intangibles |  | (81,415) |  |  | (202,778) |  |  |
Right-of-use asset |  | (19,964) |  |  | (35,734) |  |  |
Deferred commissions |  | (50,703) |  |  | (59,675) |  |  |
Net deferred tax asset (liability) |  | $ | 15,171 |  |  | $ | (3,782) |  |  |
The following table summarizes the Company’s tax carryforwards, carryovers and credits:
|  | As of December 31, 2023 |  | Expiration Date (If not utilized)
|  | (In thousands) |  |
Federal tax credits |  | $ | 147,500 |  |  | Various dates beginning in 2037
Federal net operating loss carryforwards |  | $ | 3,444,800 |  |  | Indefinite
State net operating loss carryforwards |  | $ | 2,640,300 |  |  | Various dates beginning in 2026
State tax credits |  | $ | 120,300 |  |  | Indefinite
Foreign net operating loss carryforwards |  | $ | 1,011,800 |  |  | Indefinite
A limitation may apply to the use of the net operating loss and credit carryforwards, under provisions of the Internal Revenue Code of 1986, as amended, and similar state tax provisions that are applicable if the Company experiences an “ownership change.” An ownership change may occur, for example, as a result of issuance of new equity. Should these limitations apply, the carryforwards would be subject to an annual limitation, resulting in a potential reduction in the gross deferred tax assets before considering the valuation allowance. The Company's accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company's deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the federal, state and foreign net deferred tax assets will be realized, and accordingly, a valuation allowance has been established. The valuation allowance increased by approximately $176.6 million and $220.5 million during the years ended December 31, 2023 and 2022, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In thousands)
Unrecognized tax benefit, beginning of year |  | $ | 228,966 |  |  | $ | 223,380 |  |  | $ | 191,183 |
Gross increases for tax positions of prior years |  | 3,427 |  |  | 3,250 |  |  | 3,496 |
Gross decreases for tax positions of prior years |  | (5,130) |  |  | (705) |  |  | (10,693) |
Gross increases for tax positions of current year |  | 7,754 |  |  | 4,081 |  |  | 39,394 |
Lapse of statute of limitations |  | (1,239) |  |  | (1,040) |  |  | — |
Unrecognized tax benefit, end of year |  | $ | 233,778 |  |  | $ | 228,966 |  |  | $ | 223,380 |
As of December 31, 2023, the Company had approximately $233.8 million of unrecognized tax benefits. If the $233.8 million is recognized, $5.1 million would affect the effective tax rate. The remaining amount would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company recognizes interest and penalties, if any, related to uncertain tax positions in its income tax provision. As of December 31, 2023, 2022 and 2021, such amounts are not significant. The Company does not anticipate any significant changes within 12 months of December 31, 2023, in its uncertain tax positions that would be material to its consolidated financial statements taken as a whole because nearly all of the unrecognized tax benefit has been offset by a deferred tax asset, which has been reduced by a valuation allowance. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states and foreign jurisdictions. As of December 31, 2023, the tax years 2008 through the current period remain open to examination by the major jurisdictions in which the Company is subject to tax. Years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. The Company is fully reserved for all open U.S. federal, state and local, or non-U.S. income tax examinations by any tax authorities. On June 7, 2019, a three-judge panel from the U.S. Court of Appeals for the Ninth Circuit overturned the U.S. Tax Court's decision in Altera Corp. v. Commissioner and upheld the portion of the Treasury regulations under Section 482 of the Internal Revenue Code that requires related parties in a cost-sharing arrangement to share expenses related to share-based compensation. As a result of this decision, the Company's gross unrecognized tax benefits increased to reflect the impact of including share-based compensation in cost-sharing arrangements. On July 22, 2019, Altera filed a petition for a rehearing before the full Ninth Circuit and the request was denied on November 12, 2019. On February 10, 2020, Altera filed a petition to appeal the decision to the Supreme Court and on June 22, 2020 the Supreme Court denied the petition. There is no impact on the Company’s effective tax rate for years ended December 31, 2023 and 2022 due to a full valuation allowance against its deferred tax assets. We will continue to monitor future developments and their potential effects on our consolidated financial statements. The provision for and benefit from income taxes recorded in the years ended December 31, 2023 and 2022, respectively, consist primarily of income taxes, withholding taxes in foreign jurisdictions in which the Company conducts business and the tax benefit related to the release of valuation allowance from acquisitions. The Company’s U.S. operations have been in a loss position and the Company maintains a full valuation allowance against its U.S. deferred tax assets.

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