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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company files income tax returns for U.S. federal and various U.S. states, as well as various foreign jurisdictions. The liabilities for unrecognized tax benefits are carried in Other long-term liabilities on the consolidated balance sheets because the payment of cash is not anticipated within one year of the balance sheet date.
The components of income before income taxes consisted of the following (in thousands):
Year Ended December 31,
202420232022
Domestic$454,452 $312,870 $260,564 
Foreign jurisdictions21,470 22,812 22,296 
Income before income taxes$475,922 $335,682 $282,860 
Income tax provision consisted of the following (in thousands):
CurrentDeferred Total
Year ended December 31, 2024
U.S. Federal$80,490 $(19,837)$60,653 
U.S. state and local11,791 (5,707)6,084 
Foreign jurisdictions5,877 (1,078)4,799 
$98,158 $(26,622)$71,536 
Year ended December 31, 2023
U.S. Federal$64,381 $(24,117)$40,264 
U.S. state and local8,848 (1,869)6,979 
Foreign jurisdictions4,622 1,007 5,629 
$77,851 $(24,979)$52,872 
Year ended December 31, 2022
U.S. Federal$49,991 $(19,705)$30,286 
U.S. state and local7,160 (3,297)3,863 
Foreign jurisdictions3,330 13 3,343 
$60,481 $(22,989)$37,492 
The difference between the statutory rate for federal income tax and the effective income tax rate was as follows (in thousands):
Year Ended December 31,
202420232022
Income tax expense calculated at the federal statutory rate$99,944 21.0 %$70,493 21.0 %$59,401 21.0 %
Effect of:
State and local taxes, net of federal benefit7,556 1.6 5,146 1.5 4,235 1.5 
Tax on foreign earnings, net of tax credits and deductions(4,031)(0.8)(1,305)(0.4)(3,277)(1.2)
Deferred credit(338)(0.1)(596)(0.2)(621)(0.2)
Permanent items:
Stock-based awards(22,197)(4.7)(14,692)(4.4)(18,738)(6.6)
Deduction for FDII(10,931)(2.3)(9,358)(2.8)(4,983)(1.8)
Other1,628 0.4 63 — 595 0.2 
State/Local tax credits(2,786)(0.6)(2,536)(0.8)(1,294)(0.5)
Change in liability for uncertain tax positions1,611 0.3 4,784 1.4 1,560 0.6 
Other1,080 0.2 873 0.5 614 0.3 
$71,536 15.0 %$52,872 15.8 %$37,492 13.3 %
As of December 31, 2024, the Company’s accounting position is that unremitted foreign earnings are indefinitely reinvested. Therefore, the Company has not recorded deferred foreign withholding taxes on the unremitted foreign earnings and it is not practicable to determine the amount of the additional taxes that would result if these earnings were repatriated. The undistributed earnings of foreign subsidiaries was approximately $73.2 million for the year ended December 31, 2024.
Components of the Company’s net deferred tax asset (liability) included in the consolidated balance sheets consisted of the following at December 31 (in thousands):
20242023
Deferred tax assets:
Accrued liabilities$31,898 $27,101 
Depreciation and amortization1,222 1,258 
Foreign operating loss carryforward51 35 
Advanced billings127,115 98,438 
Other2,002 2,474 
Valuation allowance(1,607)(1,826)
Total deferred tax assets160,681 127,480 
Deferred tax liabilities:
Depreciation and amortization(59,016)(52,443)
Prepaid expenses(1,462)(1,581)
Other(1,646)(1,425)
Total deferred tax liabilities(62,124)(55,449)
Net deferred tax asset (liability)$98,557 $72,031 
The Company has foreign operating loss carryforwards for which a deferred tax asset of $0.1 million has been established as of December 31, 2024. The Company does not have a valuation allowance against this deferred tax asset as of December 31, 2024 based upon its assessment that it is more likely than not that this amount will be realized. The ultimate realization of this tax benefit is dependent upon the generation of sufficient operating income in the respective tax jurisdictions. The foreign net operating loss carryforwards will expire in 2028 if not utilized.
Annual activity related to the Company’s valuation allowance is as follows (in thousands):
Year Ended December 31,
202420232022
Beginning Balance$1,826 $430 $850 
Additions charged to expense938 1,582 15 
Reductions from utilization, reassessments and expirations(1,157)(186)(493)
Remeasurement due to effect of tax reform— — 58 
Ending Balance$1,607 $1,826 $430 
A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands):
Year Ended December 31,
202420232022
Beginning Balance$20,380 $15,947 $13,784 
Increases in tax positions for prior years435 — 171 
Decreases in tax positions for prior years(189)(97)(490)
Increases in tax positions for current year6,822 5,382 4,871 
Lapse in statute of limitations(1,921)(852)(2,389)
Ending Balance$25,527 $20,380 $15,947 
Interest and penalties associated with uncertain tax positions are recognized as components of Income tax provision in the consolidated statements of operations. There was no material change to tax-related interest and penalties during the years
ended December 31, 2024, 2023 and 2022. As of December 31, 2024 and 2023, respectively, the Company has a liability for interest and penalties of $6.7 million and $5.2 million that is associated with related tax liabilities of $20.3 million and $16.2 million for uncertain tax positions.
The Company operates in various foreign, state and local jurisdictions. The number of tax years for which the statute of limitations remains open for foreign, state and local jurisdictions varies by jurisdiction and is approximately four years (2020 through 2024). For federal tax purposes, the Company’s open tax years are 2021 through 2024.