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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The geographical breakdown of income (loss) before income taxes is as follows (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Domestic income (loss) | $ | 15,455 |  |  | $ | (20,345) |  |  | $ | (29,658) |
Foreign income | 3,684 |  |  | 3,933 |  |  | 3,123 |
Income (loss) before income taxes | $ | 19,139 |  |  | $ | (16,412) |  |  | $ | (26,535) |
The provision for income taxes consisted of the following (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Current provision for income taxes: |  |  |  |  |
State | $ | 40 |  |  | $ | 49 |  |  | $ | 44 |
Foreign | 1,057 |  |  | 1,716 |  |  | 953 |
Total current | 1,097 |  |  | 1,765 |  |  | 997 |
Deferred tax expense (benefit): |  |  |  |  |
Federal | 2 |  |  | 3 |  |  | (13) |
Foreign | 224 |  |  | (361) |  |  | 98 |
Total deferred | 226 |  |  | (358) |  |  | 85 |
Provision for income taxes | $ | 1,323 |  |  | $ | 1,407 |  |  | $ | 1,082 |
The reconciliation of the statutory federal income taxes and the provision for income tax is as follows (in thousands, except percentages):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
| Amount |  | Percentage |  | Amount |  | Percentage |  | Amount |  | Percentage
Tax at statutory rate | $ | 4,019 |  |  | 21.0 | % |  | $ | (3,447) |  |  | 21.0 | % |  | $ | (5,572) |  |  | 21.0 | %
State tax - net of federal benefits | 31 |  |  | 0.2 |  |  | 42 |  |  | (0.3) |  |  | 39 |  |  | (0.1) |
Foreign rate differential | 507 |  |  | 2.6 |  |  | 363 |  |  | (2.2) |  |  | 258 |  |  | (1.0) |
Changes in federal valuation allowance | (3,281) |  |  | (17.1) |  |  | 4,695 |  |  | (28.6) |  |  | 6,430 |  |  | (24.2) |
Change in federal tax rate due to Tax Cuts and Jobs Act | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock-based compensation | 781 |  |  | 4.1 |  |  | 578 |  |  | (3.5) |  |  | 1,950 |  |  | (7.3) |
Non-deductible meals and entertainment expenses | 219 |  |  | 1.2 |  |  | 287 |  |  | (1.8) |  |  | 342 |  |  | (1.3) |
Other permanent items | 364 |  |  | 1.9 |  |  | 257 |  |  | (1.6) |  |  | 351 |  |  | (1.3) |
Federal tax credits - net of uncertain tax positions | (1,035) |  |  | (5.4) |  |  | (1,809) |  |  | 11.0 |  |  | (2,634) |  |  | 9.9 |
Expenses for uncertain tax positions | — |  |  | — |  |  | 166 |  |  | (1.0) |  |  | 137 |  |  | (0.5) |
Other | (282) |  |  | (1.5) |  |  | 275 |  |  | (1.6) |  |  | (219) |  |  | 0.7 |
| $ | 1,323 |  |  | 7.0 | % |  | $ | 1,407 |  |  | (8.6) | % |  | $ | 1,082 |  |  | (4.1) | %
Deferred tax balances are comprised of the following (in thousands):
| December 31, 2020 |  | December 31, 2019
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 42,251 |  |  | $ | 46,273 |
Research and development credits, net of uncertain tax positions | 27,743 |  |  | 25,386 |
Accruals, reserves, and other | 12,026 |  |  | 12,021 |
Stock-based compensation | 2,362 |  |  | 3,306 |
Depreciation and amortization | 1,537 |  |  | 2,219 |
Operating lease liability | 6,049 |  |  | 7,061 |
Gross deferred tax assets | 91,968 |  |  | 96,266 |
Valuation allowance | (82,938) |  |  | (85,743) |
Total deferred tax assets | 9,030 |  |  | 10,523 |
Deferred tax liabilities: |  |  |
Deferred contract acquisition costs | (2,068) |  |  | (2,245) |
Operating lease right-of-use asset | (5,996) |  |  | (7,088) |
Other | (22) |  |  | (19) |
Total deferred tax liabilities | (8,086) |  |  | (9,352) |
Net deferred tax assets | $ | 944 |  |  | $ | 1,171 |
Recognition of deferred tax assets is appropriate when realization of these assets is more likely than not. Based upon the weight of available evidence, which includes our historical operating performance and the recorded cumulative net losses in prior fiscal periods, we recorded a full valuation allowance of $82.9 million and $85.7 million against the U.S. net deferred tax assets as of December 31, 2020 and 2019, respectively. For the years ended December 31, 2020 and 2019, the valuation allowance decreased by $2.8 million and increased by $7.1 million, respectively. As of December 31, 2020 and 2019, we had U.S. federal net operating loss (“NOL”) carryforwards of $177.0 million and $193.8 million, respectively, and state NOL carryforwards of $78.0 million and $84.6 million, respectively. The federal NOL carryforwards will expire at various dates beginning in the year ending December 31, 2033, if not utilized. The state NOL carryforwards expire in various years ending between 2023 and 2039, if not utilized. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”), as modified by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, among other things, includes changes to the rules governing NOLs. NOLs arising in tax years beginning after December 31, 2017 are subject to an 80% of taxable income limitation (as calculated before taking the NOLs into account) for tax years beginning after December 31, 2020. In addition, NOLs arising in tax years 2018, 2019, and 2020 are subject to a five year carryback and indefinite carryforward, while NOLs arising in tax years beginning after December 31, 2020 also are subject to indefinite carryforward but cannot be carried back. Additionally, as of December 31, 2020 and 2019, we had U.S. federal research and development credit carryforwards of $16.4 million and $15.3 million, respectively, and state research and development credit carryforwards of $18.2 million and $16.4 million, respectively. The federal credit carryforwards will begin to expire at various dates beginning in 2025 while the state credit carryforwards can be carried over indefinitely. Utilization of the NOL and credit carryforwards may be subject to an annual limitation provided for in the IRC Section 382 and similar state codes. Any annual limitation could result in the expiration of NOL and credit carryforwards before utilization. With respect to our undistributed foreign subsidiaries’ earnings we consider those earnings to be indefinitely reinvested and, accordingly, no related provision for U.S. federal and state income taxes has been provided. Our intention has not changed subsequent to the one-time transition tax under the Tax Act. Upon distribution of those earnings in the form of dividends or otherwise, we may be subject to both U.S. income taxes subject to an adjustment for foreign tax credits and withholding taxes in the various countries. As of December 31, 2020 and 2019, the undistributed earnings approximated $16.0 million and $13.6 million, respectively. Our undistributed earnings through December 31, 2017, have been taxed under the one-time transition tax under the Tax Act. Uncertain Tax Positions As of December 31, 2020, 2019 and 2018, we had gross unrecognized tax benefits of $4.6 million, $4.4 million and $4.2 million, respectively. Accrued interest expense related to unrecognized tax benefits is not recognized as part of our income tax provision in our consolidated statements of operations and is immaterial for the years ended December 31, 2020 and 2019. Our policy for classifying interest and penalties associated with unrecognized income tax benefits is to exclude such items in income tax expense. The activity related to the unrecognized tax benefits is as follows (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Gross unrecognized tax benefits—beginning balance | $ | 4,441 |  |  | $ | 4,191 |  |  | $ | 3,782 |
Increases (decreases) related to tax positions from prior years | (268) |  |  | (280) |  |  | (266) |
Increases related to tax positions taken during current year | 412 |  |  | 530 |  |  | 675 |
Decreases related to tax positions taken during the current year | — |  |  | — |  |  | — |
Gross unrecognized tax benefits—ending balance | $ | 4,585 |  |  | $ | 4,441 |  |  | $ | 4,191 |
These amounts are related to certain deferred tax assets with a corresponding valuation allowance. As of December 31, 2020, the total amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $0.8 million. We do not anticipate a material change to our unrecognized tax benefits over the next twelve months. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. The Company is subject to taxation in the United States, various states, and several foreign jurisdictions. Because the Company has NOL and credit carryforwards, there are open statutes of limitations in which federal, state and foreign taxing authorities may examine our tax returns for all years from 2005 through the current period. The Company is not currently under examination by any taxing authorities. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to the tax depreciation methods for qualified improvement property. The CARES Act has an immaterial impact on the Company’s income taxes.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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