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Income Taxes
 12 Months Ended
Jan. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The domestic and international components of the Company's loss from operations before income taxes are as follows:
Fiscal year ended January 31,
(in thousands)202220212020
Domestic$(95,062)$(69,953)$(63,390)
International3,080 (24,642)(57,057)
Loss from operations before income taxes$(91,982)$(94,595)$(120,447)
The Company's (provision for) benefit from income taxes is comprised of the following:
Fiscal year ended January 31,
(in thousands)202220212020
Current:
   Federal$(9)$313 $(19)
   State(184)(198)(120)
   International(884)(1,070)(1,051)
   Total current(1,077)(955)(1,190)
Deferred:
   Federal(4)(28)— 
   State(4)(31)— 
   International(192)917 93 
   Total deferred(200)858 93 
Total (provision for) benefit from income taxes$(1,277)$(97)$(1,097)
The Company’s current tax provision is primarily attributable to profitable jurisdictions outside of the United States and U.S. state income taxes. In the fiscal year ended January 31, 2021, the Company released a portion of its valuation allowance against certain foreign deferred tax assets resulting in an income tax benefit of $0.7 million, and recorded a U.S. tax benefit of $0.2 million due to the expiration of certain statutes of limitations of unrecognized tax benefits.
The Company reconciled its income taxes at the federal statutory income tax rate to the (provision for) benefit from income taxes included within its consolidated statements of operations and comprehensive loss. The Company elected to account its Global Intangible Low-Taxed Income as an expense in the period it is incurred. The reconciliation is as follows:
Fiscal year ended January 31,
(in thousands)202220212020
U.S. federal tax (provision) benefit at statutory rate$19,316 $19,865 $25,294 
State taxes, net of federal (provision) benefit4,344 5,000 4,124 
Foreign tax rate differential(132)(2,130)970 
Non-deductible expenses(1,244)(329)(903)
Change in valuation allowance(22,027)(23,900)(24,377)
Rate change(66)131 (7,017)
Stock-based compensation expense(1,489)(1,929)(2,064)
Net excess tax benefits from stock-based compensation(990)3,444 6,519 
Return to provision adjustment1,718 16 (2,323)
Global intangible low-taxed income— (6,129)— 
Intra-entity asset transfer— 3,944 — 
Other, net(707)1,920 (1,320)
Total (provision for) benefit from income taxes$(1,277)$(97)$(1,097)
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss carryforwards. The components of the Company's deferred income taxes were as follows:
As of January 31,
(in thousands)20222021
Deferred tax assets:
  Net operating loss carryforwards$136,226 $111,583 
  Stock-based compensation7,271 7,884 
  Allowance for doubtful accounts523 650 
  Operating lease liability32,156 33,350 
  Accrued expenses2,372 2,903 
  Unearned revenue61 52 
  Intangible assets10,625 11,570 
  Other339 216 
  Total deferred tax assets189,573 168,208 
  Less: valuation allowance(151,205)(129,178)
  Deferred tax assets, net of valuation allowance38,368 39,030 
Deferred tax liabilities:
  Property and equipment(2,440)(2,062)
  Costs to obtain revenue contracts(11,041)(9,904)
  Operating lease right-of-use assets (23,259)(25,082)
  Other(874)(1,028)
  Total deferred tax liabilities(37,614)(38,076)
Net deferred tax asset (liability) $754 $954 
As of January 31, 2022, for federal income tax purposes, the Company had $501.0 million of gross U.S. federal NOL carryforwards, with pre-2018 NOL expiring starting in fiscal year 2028 and others indefinitely carried forward.
As of January 31, 2022, for state income tax purposes, the Company had $23.6 million of post-apportioned, tax-effected NOL carryforwards, which expire in fiscal year 2023 through fiscal year 2040. As of January 31, 2022, the Company had $7.5 million of tax-effected foreign NOL carryforwards which expires starting in fiscal year 2026.
Utilization of the Company’s NOL carryforwards in the future will be dependent upon its ability to generate taxable income and could be limited due to ownership changes, as defined under the provisions of Section 382 of the Code and similar state provisions. Utilization of the Company’s foreign NOL carryforwards in the future will be dependent upon the local tax law and regulation.
The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax-planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. During the fiscal year ended January 31, 2022, the valuation allowance had a net increase of $22.0 million from approximately $129.2 million to $151.2 million, primarily due to the impact of the NOL carryforwards established in the current period net with other changes in U.S. deferred tax assets. During the fiscal year ended January 31, 2021, the valuation allowance increased $23.9 million from approximately $105.3 million to $129.2 million, primarily due to the impact of the NOL carryforwards established in the current period and other increases in U.S. deferred tax assets. The increase in the valuation allowance was partially offset by the use of the NOL in the local jurisdiction due to the intra-entity asset transfer. The Company also released a portion of the valuation allowance in certain foreign jurisdictions, as these jurisdictions demonstrated a sustained profitability evidenced by three consecutive years of positive earnings as well as forecasted continuing profitability. The Company will continue to assess the realizability of the deferred tax assets in each applicable jurisdiction going forward.
Other Considerations
The Company may be subject to state income taxes and withholding taxes upon distribution of non-U.S. earnings in the form of dividends. The Company does not believe these taxes are material.
A reconciliation of the beginning and ending balance of total unrecognized tax benefits for the fiscal years ended January 31, 2022, 2021, and 2020 is as follows:
Fiscal year ended January 31,
(in thousands)202220212020
Beginning of period$267 $493 $233 
Tax positions taken in prior period:
Gross increases— — 262 
Gross decreases— (13)(8)
Tax positions taken in current period
Gross increases20 — 13 
Lapse of statute of limitations— (233)— 
Currency translation effect1 20 (7)
End of period$288 $267 $493 
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the (provision for) benefit from income taxes and recognized less than $0.1 million for interest and penalties in each of the fiscal years ended January 31, 2022, 2021, and 2020. As of January 31, 2022, 2021, and 2020 accrued unrecognized tax benefits were $0.3 million, $0.3 million, and $0.5 million, respectively, and if recognized would reduce the (provision for) benefit from income taxes, and the Company's effective tax rate. The Company anticipates it is reasonably possible that a decrease of unrecognized tax benefits of up to $0.3 million may occur in the next twelve months.
The Company is subject to income tax examinations in the United States and various state and foreign jurisdictions. The Company’s most significant operations are in the United States and the earliest open tax year subject to potential examination in the United States is 2008.