v3.24.0.1

Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The components of income (loss) before income taxes consist of the following (in thousands):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
United States | $ | (699,114) |  |  | $ | (486,886) |  |  | $ | 240,560 |
Foreign | (316) |  |  | (5,397) |  |  | (3,973) |
Net income (loss) before income taxes | $ | (699,430) |  |  | $ | (492,283) |  |  | $ | 236,587 |
The income tax expense (benefit) consisted of the following (in thousands):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 697 |  |  | $ | 694 |  |  | $ | — |
State | 2,715 |  |  | 2,444 |  |  | 589 |
Foreign | 5,448 |  |  | 2,002 |  |  | 490 |
| 8,860 |  |  | 5,140 |  |  | 1,079 |
Deferred: |  |  |  |  |
Federal | 233 |  |  | 448 |  |  | 193 |
State | 222 |  |  | 220 |  |  | 256 |
Foreign | 816 |  |  | (86) |  |  | (7,326) |
| 1,271 |  |  | 582 |  |  | (6,877) |
Total income tax expense (benefit) | $ | 10,131 |  |  | $ | 5,722 |  |  | $ | (5,798) |
The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate:
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
U.S. federal income tax at statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
U.S. state and local income taxes | (0.4) |  |  | (0.5) |  |  | 0.2 |
Change in valuation allowance | (23.6) |  |  | (39.1) |  |  | 140.0 |
Research and development tax credit | 6.8 |  |  | 14.6 |  |  | (30.7) |
Stock-based compensation | (2.8) |  |  | 4.0 |  |  | (114.3) |
Discrete tax benefit due to intellectual property transfer | — |  |  | — |  |  | (19.1) |
Meals and entertainment | (0.2) |  |  | (0.1) |  |  | 0.1 |
Foreign rate differential | — |  |  | 0.2 |  |  | 0.1 |
Section 162(m) limitation | (2.1) |  |  | (0.5) |  |  | 1.1 |
State apportionment change | — |  |  | 0.1 |  |  | — |
Tax rate change | — |  |  | — |  |  | (0.7) |
Provision to return true-up | 0.1 |  |  | (0.1) |  |  | (0.1) |
Other | (0.2) |  |  | (0.8) |  |  | (0.1) |
Effective tax rate | (1.4) | % |  | (1.2) | % |  | (2.5) | %
Significant components of the Company’s deferred income tax assets and liabilities consist of the following (in thousands):
| As of December 31,
| 2023 |  | 2022
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 484,136 |  |  | $ | 517,787 |
Reserves and accruals | 23,677 |  |  | 20,068 |
Research and development credits | 248,381 |  |  | 230,586 |
Operating lease liabilities | 183,359 |  |  | 153,145 |
Stock-based compensation | 55,785 |  |  | 50,661 |
Depreciation and amortization | 51,700 |  |  | 41,377 |
Section 174 capitalization | 280,906 |  |  | 165,219 |
Other | 6,190 |  |  | 286 |
Total deferred tax assets | 1,334,134 |  |  | 1,179,129 |
Deferred tax liabilities: |  |  |
Operating lease right-of-use assets | (111,164) |  |  | (128,517) |
Other | (4,357) |  |  | — |
Total deferred tax liabilities | (115,521) |  |  | (128,517) |
Valuation allowance | (1,209,822) |  |  | (1,040,341) |
Net deferred tax assets | $ | 8,791 |  |  | $ | 10,271 |
Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) eliminated the right to deduct research and development expenses for tax purposes in the period the expenses were incurred and instead requires all U.S. and foreign research and development expenses to be amortized over five and fifteen tax years, respectively. Due to this required capitalization of research and development expenses, the Company has recorded U.S. current income tax expense of $3.7 million for the year ended December 31, 2023. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized through future operations. As a result of the Company’s analysis of all available objective evidence, both positive and negative, as of December 31, 2023, the Company believes it is more likely than not that the U.S. and Netherlands deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its U.S. and Netherlands deferred tax assets. The Company’s U.S. federal and state valuation allowance increased by $166.0 million and $199.2 million during the years ended December 31, 2023 and 2022, respectively. The change in the valuation allowance during the years ended December 31, 2023 and December 31, 2022 is primarily attributable to an increase in deferred tax assets generated through capitalization of section 174 research and development expenses for U.S. federal and conforming state purposes. For federal and state income tax reporting purposes, respective net operating loss carryforwards of $1,807.3 million and $1,604.0 million are available to reduce future taxable income. The federal net operating loss carryforwards will begin to expire in 2037, and certain state net operating losses have expired in 2023. For Brazil, Netherlands, and U.K. income tax reporting purposes, the net operating loss carryforwards of $8.6 million, $47.6 million, and $14.0 million, respectively, are available to reduce future taxable income, if any. Brazil and U.K. net operating losses can be carried forward indefinitely. Netherlands net operating losses can be carried back one year and carried forward indefinitely. As of December 31, 2023, the Company has research and development tax credit carryforwards of $194.7 million and $149.5 million for federal and state income tax purposes, respectively. If not utilized, the federal and state carryforwards will begin to expire in 2030 and 2039, respectively. The total amount of unrecognized tax benefits as of December 31, 2023 is $88.5 million, of which $71.8 million is composed of research and development credits and $16.7 million is related to international activities. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):
| As of December 31,
| 2023 |  | 2022
Unrecognized tax benefits at beginning of year | $ | 88,028 |  |  | $ | 66,150 |
Gross increase for tax positions of current year | 13,166 |  |  | 22,888 |
Gross decrease due to statute expiration | (54) |  |  | (317) |
Gross increase for tax positions of prior years | 140 |  |  | 676 |
Gross decrease for tax positions of prior years | (12,689) |  |  | (1,185) |
Decrease relating to settlements with taxing authorities | (43) |  |  | (184) |
Unrecognized tax benefits balance at end of year | $ | 88,548 |  |  | $ | 88,028 |
As of December 31, 2023, $5.2 million of the Company's gross unrecognized tax benefits, if recognized, would affect the effective tax rate and $83.3 million would result in an adjustment to deferred tax assets with corresponding adjustments to the valuation allowance. The Company does not expect its gross unrecognized tax benefits to change significantly within the next 12 months. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of its income tax expense. The Company recorded $1.0 million and $0.8 million of accrued interest and penalties related to uncertain tax positions as of December 31, 2023 and December 31, 2022, respectively. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and certain foreign jurisdictions. All tax years remain subject to examination by federal and state authorities. These audits include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and local tax laws. The Company will continue to indefinitely reinvest earnings from its foreign subsidiaries, which are not significant. While federal income tax expense has been recognized as a result of the Tax Act, the Company has not provided any additional deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss. It is not practicable for the Company to determine the amount of unrecognized tax expense on these reinvested international earnings.

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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