XML 74 R20.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes The domestic and foreign components of income before income taxes are as follows:
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
United States |  | $ | 37,476 |  |  | $ | 24,426 |  |  | $ | 15,543 |
Foreign |  |  | 1,229 |  |  |  | 1,058 |  |  |  | 294 |
Income before income taxes |  | $ | 38,705 |  |  | $ | 25,484 |  |  | $ | 15,837 |
The (benefit from) provision for income taxes contained the following components:
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current (benefit) provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | (860 | ) |  | $ | 3,262 |
State |  |  | (220 | ) |  |  | 92 |  |  |  | 431 |
Foreign |  |  | 513 |  |  |  | 122 |  |  |  | 62 |
|  |  | 293 |  |  |  | (646 | ) |  |  | 3,755 |
Deferred (benefit) provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (2,377 | ) |  |  | (27,675 | ) |  |  | (755 | )
State |  |  | (1,306 | ) |  |  | (11,499 | ) |  |  | (343 | )
Foreign |  |  | (51 | ) |  |  | 134 |  |  |  | (19 | )
|  |  | (3,734 | ) |  |  | (39,040 | ) |  |  | (1,117 | )
Income tax (benefit) provision |  | $ | (3,441 | ) |  | $ | (39,686 | ) |  | $ | 2,638 |
The Company's effective tax rates for the years ending December 31, 2019 and 2018 are less than the U.S. federal statutory rate due to excess tax deductions related to stock-based compensation awards and federal and state research and development credits. The Company’s effective tax rate for the year ending December 31, 2017 is less than the U.S. federal statutory rate primarily due to federal and state research and development credits, excess tax deductions related to stock-based compensation awards, and tax deductions for fees incurred during the IPO process.
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
U.S. federal taxes at statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 35.0 | %
State taxes, net of federal benefit |  |  | 0.2 |  |  |  | (25.6 | ) |  |  | 3.1 |
Nondeductible expenses |  |  | 2.9 |  |  |  | 4.1 |  |  |  | 1.2 |
Tax deductible IPO costs |  |  | — |  |  |  | — |  |  |  | (9.3 | )
Stock compensation |  |  | (22.0 | ) |  |  | (127.2 | ) |  |  | (4.4 | )
Foreign rate differential |  |  | (0.3 | ) |  |  | (0.4 | ) |  |  | (0.4 | )
Credits |  |  | (10.3 | ) |  |  | (28.4 | ) |  |  | (9.0 | )
Other |  |  | (0.2 | ) |  |  | 0.7 |  |  |  | 0.5 |
Total |  |  | (8.7 | )% |  |  | (155.8 | )% |  |  | 16.7 | %
The approximate income tax effect of each type of temporary difference and carryforward as of December 31, 2019 and 2018 is as follows:
|  | As of December 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 35,977 |  |  | $ | 34,450 |
Credit carryforwards |  |  | 10,472 |  |  |  | 6,562 |
Stock-based compensation |  |  | 2,953 |  |  |  | 1,945 |
Landlord allowance on leasehold improvements |  |  | — |  |  |  | 1,908 |
Lease liability |  |  | 17,965 |  |  |  | — |
Intangible Assets |  |  | 62 |  |  |  | — |
Deferred rent |  |  | — |  |  |  | 873 |
Accruals and reserves |  |  | 1,185 |  |  |  | 1,074 |
|  |  | 68,614 |  |  |  | 46,812 |
Valuation Allowance |  |  | (62 | ) |  |  | — |
|  |  | 68,552 |  |  |  | 46,812 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Prepaid expenses |  |  | (1,523 | ) |  |  | (931 | )
Deferred commissions |  |  | (5,100 | ) |  |  | (3,187 | )
Right of use assets |  |  | (15,270 | ) |  |  | — |
Unbilled revenue |  |  | — |  |  |  | (227 | )
Fixed assets |  |  | (4,230 | ) |  |  | (3,581 | )
|  |  | (26,123 | ) |  |  | (7,926 | )
Net deferred tax assets |  | $ | 42,429 |  |  | $ | 38,886 |
The Company uses the asset and liability method to account for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred income taxes are recognized for the future tax consequences of differences between the tax and financial accounting bases of assets and liabilities at each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax rates applicable to the period in which these differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company has provided an immaterial valuation allowance against its net deferred tax assets at December 31, 2019, but did not provided a valuation allowance against its net deferred tax assets at December 31, 2018. Based upon the level of historical U.S. earnings and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, with the exception of the deferred tax asset related to intangible assets in Ireland. The change in the valuation allowance for the year ended December 31, 2019 was $62. As of December 31, 2019, the Company has federal and state net operating loss carryforwards of $136,771 and $114,459, respectively. The federal net operating losses carryforward indefinitely, subject to an annual limitation of 80% of taxable income. The state net operating losses, excluding Florida and Georgia which carryforward indefinitely, expire at various dates beginning in 2028. As of December 31, 2019, the Company has federal and state tax credit carryforwards of $6,507 and $5,018, respectively, available to reduce future tax liabilities that expire at various dates through 2039. Utilization of the net operating losses and tax credit carryforwards, respectively, may be subject to an annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Code, or Section 382, as well as similar state provisions. Ownership changes may limit the amount of net operating losses or tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of five percent stockholders in the stock of a corporation by more than 50% in the aggregate over a three-year period. At December 31, 2019 and 2018, the Company had no recorded liabilities for uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions. The Company permanently reinvests the earnings, if any, of its foreign subsidiaries and, therefore, does not provide for U.S. income taxes that could result from the distribution of those earnings to the U.S. parent. As of December 31, 2019, the amount of unrecognized deferred U.S. taxes on these earnings would be immaterial. The Company and its subsidiaries are subject to various U.S. federal, state, and foreign income taxes. The Company is currently not subject to examination under the statute of limitations by the Internal Revenue Service and state jurisdictions for the tax years of 2015 and prior. The Company is currently open to examination in its foreign jurisdictions for tax years 2017 and after. In 2018, the Internal Revenue Service commenced a federal income tax audit with respect to the Company’s 2016 tax year, which was concluded in October 2019 for an immaterial amount. In 2019, the Internal Revenue Service commenced a federal employment tax audit with respect to the 2018, 2017 and 2016 calendar years, which is still open.

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