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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Loss before income taxes included in the consolidated statements of operations was as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (in thousands)
United States | $ | (72,846) |  |  | $ | (41,111) |  |  | $ | (39,754) |
Foreign | (24,017) |  |  | (12,692) |  |  | (15,325) |
Loss before income taxes | $ | (96,863) |  |  | $ | (53,803) |  |  | $ | (55,079) |
Income tax expense included in the consolidated statements of operations was as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (in thousands)
Current: |  |  |  |  |
Federal | $ | 8 |  |  | $ | 260 |  |  | $ | 124 |
State and local | 122 |  |  | 109 |  |  | 126 |
Foreign | 1,149 |  |  | 255 |  |  | 228 |
Total current tax expense | 1,279 |  |  | 624 |  |  | 478 |
Deferred: |  |  |  |  |
Federal | 9 |  |  | 9 |  |  | (285) |
State and local | 2 |  |  | 2 |  |  | 16 |
Foreign | 696 |  |  | (593) |  |  | 257 |
Total deferred tax expense (benefit) | 707 |  |  | (582) |  |  | (12) |
Income tax expense | $ | 1,986 |  |  | $ | 42 |  |  | $ | 466 |
The reconciliation of the federal statutory rate of 21% to the effective income tax rate for the years ended December 31, 2020, 2019 and 2018 was as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal benefit | (0.1) |  |  | (0.2) |  |  | (0.2) |
Permanent differences | (4.0) |  |  | (2.8) |  |  | 0.2 |
Stock-based compensation | 12.1 |  |  | 22.3 |  |  | 9.3 |
Federal research and development credit | 1.1 |  |  | 1.3 |  |  | 1.2 |
Foreign rate differential | (1.4) |  |  | (1.4) |  |  | (1.1) |
Change in valuation allowance | (30.0) |  |  | (41.0) |  |  | (32.8) |
Other | (0.8) |  |  | 0.7 |  |  | 1.5 |
Effective income tax rate | (2.1) | % |  | (0.1) | % |  | (0.9) | %
Net deferred tax assets and liabilities, as set forth in the table below, reflect the impact of temporary differences between the amounts of assets and liabilities recorded for financial statement purposes and such amounts measured in accordance with tax laws:
| As of December 31,
| 2020 |  | 2019
| (in thousands)
Deferred tax assets: |  |  |
Accruals and reserves | $ | 1,272 |  |  | $ | 323 |
Net operating loss carryforwards | 117,478 |  |  | 85,969 |
Deferred revenue | 7,951 |  |  | 14,401 |
Depreciation | 3,330 |  |  | 2,335 |
Research and development credits | 6,201 |  |  | 4,665 |
Operating lease liabilities | 20,967 |  |  | 19,657 |
Stock-based compensation | 4,755 |  |  | 3,806 |
Tax credits | 1,148 |  |  | 1,181 |
Other | 2,105 |  |  | 61 |
Gross deferred tax assets | 165,207 |  |  | 132,398 |
Valuation allowance | (110,350) |  |  | (94,581) |
Total deferred tax assets | 54,857 |  |  | 37,817 |
Deferred tax liabilities: |  |  |
Intangible assets | (5,717) |  |  | (2,249) |
Operating lease ROU assets | (16,233) |  |  | (14,792) |
Convertible senior notes | (17,961) |  |  | (9,959) |
Deferred contract acquisition and fulfillment costs | (15,908) |  |  | (11,565) |
Other | (543) |  |  | (20) |
Total deferred tax liabilities | (56,362) |  |  | (38,585) |
Net deferred tax liabilities | $ | (1,505) |  |  | $ | (768) |
As of December 31, 2020, we have evaluated the need for a valuation allowance on deferred tax assets. In assessing whether the deferred tax assets are realized, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Due to our history of generating losses in the United States, the United Kingdom and Ireland, we continue to record a full valuation allowance against our deferred tax assets in these jurisdictions. If we achieve future profitability, a significant portion of these deferred tax assets could be available to offset future income taxes. The valuation allowance increased by $15.8 million for the year ended December 31, 2020, primarily due to additional operating losses generated during the year. We plan to permanently reinvest the undistributed earnings of our foreign subsidiaries. If we repatriate these earnings, we may be required to pay U.S. state and local taxes, as well as foreign withholding taxes. As of December 31, 2020, we had federal and state net operating loss carryforwards of $376.7 million and $290.2 million, respectively. Of our federal net operating losses, $257.2 million will carry forward indefinitely. The remaining federal and state net operating loss carryforwards expire at various dates beginning in 2021. As of December 31, 2020, we had foreign net operating loss carryforwards of $157.8 million that can be carried forward indefinitely. We also had federal, state and international research and development credit carryforwards of $4.0 million, $1.9 million and $0.3 million as of December 31, 2020, respectively. These credit carryforwards expire at various dates beginning in 2023. We are currently subject to the annual limitation under Sections 382 and 383 of the Internal Revenue Code. We will not be precluded from realizing the net operating loss carryforwards and tax credits but may be limited in the amount we could utilize in any given tax year in the event that the federal and state taxable income exceeds the limitation imposed by Section 382. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. We file income tax returns in all jurisdictions in which we operate. In the normal course of business, we are subject to examination by federal, state, and foreign tax authorities, where applicable. The statute of limitations for these jurisdictions is generally three to seven years. However, to the extent we utilize net operating losses or other similar carryforward attributes such as credits, the statute remains open to the extent of the net operating losses or credits that are utilized. We have no tax returns under examination as of December 31, 2020. As of December 31, 2020 and 2019, we had no reserves for unrecognized tax benefits.

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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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