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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES
18. INCOME TAXES
The components of income (loss) before provision for income taxes are:
(in thousands)202420232022
Domestic$51,966 $14,016 $(185,820)
Foreign90,670 81,424 24,023 
$142,636 $95,440 $(161,797)
The components of provision for income taxes are:
(in thousands)202420232022
Current:
Federal$22,941 $7,827 $3,920 
State7,503 4,480 775 
Foreign14,547 14,962 10,200 
Total current provision44,991 27,269 14,895 
Deferred:
Federal— — 149,028 
State— — 20,704 
Foreign(1,544)363 (842)
Total deferred (benefit) provision(1,544)363 168,890 
$43,447 $27,632 $183,785 
A reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate:
(in thousands)202420232022
U.S. federal income taxes at statutory rates
$29,954 $20,042 $(33,977)
Valuation allowance
(1,504)(19,272)188,258 
State income taxes, net of federal benefit and tax credits
1,297 4,117 (2,433)
Permanent differences
786 435 11,561 
Federal research and experimentation credits
(4,888)(3,709)(5,012)
Tax effects of foreign activities
(7,817)658 3,770 
GILTI, FDII, and BEAT
13,945 14,022 16,390 
Provision to return adjustments
121 (3,728)(6,317)
Non-deductible compensation
10,933 6,818 4,769 
Tax Reserves
5,917 1,850 5,673 
Excess tax (benefits) / detriments related to share-based compensation
(5,645)4,666 1,563 
Impact of change in tax law
— 1,726 (793)
Other
348 7 333 
$43,447 $27,632 $183,785 
The effective income tax rate in 2024 was primarily driven by the valuation allowance on our deferred tax assets and tax expense in the U.S. and U.K., partially offset by available tax attributes.
Deferred income taxes
Significant components of net deferred tax assets and liabilities are:
December 31,
(in thousands)20242023
Deferred tax assets:
Net operating loss carryforwards$72,089 $84,656 
Accruals and reserves57,312 41,323 
Software revenue454 3,186 
Convertible senior notes355 2,645 
Tax credit carryforwards10,441 28,456 
Research and development capitalization75,289 58,866 
Total deferred tax assets215,940 219,132 
Valuation allowances(195,252)(196,901)
Total net deferred tax assets20,688 22,231 
Deferred tax liabilities:
Capped call transactions(57)(223)
Depreciation(3,663)(4,428)
Intangibles(9,116)(11,979)
Other, net(3,554)(2,782)
Total deferred tax liabilities(16,390)(19,412)
$4,298 $2,819 
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. Future realization of deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. The Company’s deferred tax valuation allowance requires significant judgment and has uncertainties, including assumptions about future taxable income based on historical and projected information. In assessing the Company’s ability to realize its net deferred tax assets, the Company considered various factors including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial results to determine whether it is more likely than not that some portion or all of its net deferred tax assets will not be realized. Based upon these factors, the Company has determined that the uncertainty regarding the realization of these assets is sufficient to warrant the need for a full valuation allowance against its net U.S. and U.K. deferred tax assets as of December 31, 2024. Accordingly, the Company maintained a valuation allowance of $195.3 million at December 31, 2024, a decrease of $1.6 million as a result of the operations of its entities throughout the year.
Given the Company’s recent earnings, the Company believes that there is a reasonable possibility that in a future period sufficient positive evidence may become available to allow the Company to reach a conclusion that a substantial portion of the valuation allowance will no longer be needed. However, the exact timing and amount of the valuation allowance release are subject to significant judgement. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.
The Company had approximately $5.4 million and $8.8 million of post apportionment state net operating loss carryforwards, as of December 31, 2024 and 2023, respectively. The U.S. state losses expire at various times through 2044. Additionally, as of December 31, 2024, the Company had $10.4 million of state tax credit carryforwards.
The Company’s federal net operating loss carryforwards were approximately $14.2 million and $20.6 million at December 31, 2024 and 2023, respectively. These federal carryforward losses and state credits expire between 2025 and 2039, except for $1.2 million of federal net operating losses and $1 million of state credits, which have an unlimited carryforward period.
The Company’s UK net operating loss carryforwards were approximately $147.9 million and $183.1 million at December 31, 2024 and 2023, respectively, which have indefinite carryforward periods.

Uncertain tax benefits
A rollforward of the Company’s gross unrecognized tax benefits is:
(in thousands)
202420232022
Balance as of January 1,
$30,655 $19,746 $17,584 
Additions for tax positions related to the current year7,316 4,859 1,706 
Additions for tax positions of prior years2,941 7,921 728 
Reductions for tax positions of prior years(3,026)(1,871)(272)
Balance as of December 31,
$37,886 $30,655 $19,746 
The total amount of accrued liabilities related to uncertain tax positions that would affect the Company's effective tax rate, if recognized, is $12.9 million as of December 31, 2024.
Tax examinations
The Company files federal and state income tax returns in the U.S. and various foreign jurisdictions. In the ordinary course of business, the Company and its subsidiaries are examined by various tax authorities, including the Internal Revenue Service in the U.S. As of December 31, 2024, the Company’s U.S. federal tax returns for the years 2014 through 2019 were under examination by the Internal Revenue Service. In addition, certain foreign jurisdictions are auditing the Company’s income tax returns for periods ranging from 2018 through 2022. The Company does not expect the results of these audits to have a material effect on the Company’s financial condition, results of operations, or cash flows. With few exceptions, the statute of limitations remains open in all jurisdictions for all tax years since 2018.