XML 34 R19.htm IDEA: XBRL DOCUMENT
v3.22.1

Income taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income taxes | Income taxes The domestic and foreign components of income (loss) before provision for income taxes consisted of the following (in thousands):
| Fiscal Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Domestic | $ | (80,243) |  |  | $ | (77,212) |  |  | $ | (69,161) |
Foreign | 1,400 |  |  | 2,741 |  |  | 833 |
Total net loss before taxes | $ | (78,843) |  |  | $ | (74,471) |  |  | $ | (68,328) |
The provision for income taxes consisted of the following (in thousands):
| Fiscal Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | — |
State | 183 |  |  | 63 |  |  | 83 |
Foreign | 1,149 |  |  | 2,937 |  |  | 1,292 |
Total current income tax expense | 1,332 |  |  | 3,000 |  |  | 1,375 |
Deferred: |  |  |  |  |
Federal | — |  |  | — |  |  | — |
State | — |  |  | — |  |  | — |
Foreign | (149) |  |  | 149 |  | — |
Total deferred income tax expense | (149) |  |  | 149 |  | — |
Total provision for income taxes | $ | 1,183 |  |  | $ | 3,149 |  |  | $ | 1,375 |
The Company had an effective tax rate of (1.50)%, (4.23)%, and (2.00)% for the periods ended December 31, 2021, 2020, and 2019 respectively. The difference between the 21% statutory federal tax rate and the effective tax rate was primarily a result of federal and state research and development (“R&D”) tax credits, foreign withholding tax, tax adjustments related to stock-based compensation, change in valuation allowance, and nondeductible compensation. The reconciliation between the statutory federal income tax rate and the Company’s effective tax rate as a percentage of loss before income taxes is as follows:
| Fiscal Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Federal tax expense | 21.00 | % |  | 21.00 | % |  | 21.00 | %
State taxes, net of federal benefit | 1.07 | % |  | 1.17 | % |  | 0.09 | %
Foreign rate differential | (0.12) | % |  | (0.32) | % |  | 0.07 | %
Withholding taxes | (0.78) | % |  | (3.06) | % |  | (1.70) | %
Nondeductible compensation | (5.29) | % |  | — | % |  | — | %
Stock-based compensation | 0.27 | % |  | (1.94) | % |  | (2.77) | %
Change in valuation allowance | (34.54) | % |  | (21.16) | % |  | (18.76) | %
Research and development credits | 16.87 | % |  | — | % |  | — | %
Other | 0.02 | % |  | 0.08 | % |  | 0.07 | %
Effective tax rate | (1.50) | % |  | (4.23) | % |  | (2.00) | %
Significant components of the net deferred tax assets (liabilities) for the years ended December 31, 2021 and 2020, consisted of the following (in thousands):
| December 31, |  | December 31,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Accruals and reserves | $ | 4,795 |  |  | $ | 2,540 |
Deferred revenue | 45,268 |  |  | 29,807 |
Net operating loss | 42,008 |  |  | 37,053 |
Research and development tax credits | 13,301 |  |  | — |
Stock-based compensation | 2,952 |  |  | 1,487 |
Indirect tax reserves | 4,107 |  |  | 5,682 |
Property and equipment, net | 1,799 |  |  | 1,665 |
Other | 351 |  |  | 299 |
Gross deferred tax assets | 114,581 |  |  | 78,533 |
Valuation allowance | (97,010) |  |  | (69,766) |
Total deferred tax assets | 17,571 |  |  | 8,757 |
Deferred tax liabilities: |  |  |
Deferred contract costs | (10,009) |  |  | (5,774) |
Other deferred tax liabilities | (7,562) |  |  | (3,132) |
Total deferred tax liabilities | (17,571) |  |  | (8,906) |
Net deferred tax liabilities | $ | — |  |  | $ | (149) |
A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. As of December 31, 2021 and 2020, the Company has established a valuation allowance of $97.0 million and $69.8 million, respectively, against its gross deferred tax assets due to the uncertainty surrounding the realization of such assets. The change in total valuation allowance from 2020 to 2021 was an increase of $27.2 million. As of December 31, 2021, the Company had $189.2 million of federal net operating loss (“NOL”) carryforwards. $101.9 million of federal NOL carryforwards generated in taxable years beginning prior to January 1, 2018 begin expiring in 2030, if not utilized. $87.3 million of federal NOL carryforwards generated in taxable years beginning after December 31, 2017 have an indefinite carryforward period, but are subject to the 80% deduction limitation based upon pre-NOL deduction taxable income. As of December 31, 2021, the Company had $34.0 million of state NOL carryforwards. The state NOL carryforwards begin expiring in 2023, if not utilized. As of December 31, 2021, the Company had U.S. federal and state R&D tax credit carryforwards of $9.7 million and $8.6 million, respectively. The federal R&D tax credit carryforwards will expire in various amounts beginning in 2035 while the state R&D tax credit carryforwards can be carried forward indefinitely. The utilization of the Company’s net operating losses may be subject to a limitation due to the “ownership change” provisions under Section 382 of the Internal Revenue Code and similar state and foreign provisions. Such limitation may result in the expiration of the net operating loss carryforwards generated before 2018 prior to their utilization. The Company has performed a Section 382 study to determine any potential Section 382 limitations on the utilization of its net operating loss carryforwards and tax credit carryforwards and has determined that the Company experienced two ownership changes with the Company’s Series A and A-1 preferred stock offering in September 2011 and with the Company’s Series B preferred stock offering in November 2012. The Company has estimated that the gross U.S. federal NOL carryforwards from 2010 to 2012 that would be subject to limitation are approximately $3.6 million. On October 29, 2021, the Company completed its initial public offering. As of the period ending December 31, 2021, the Company has not performed a subsequent Section 382 study; the Company is evaluating rolling forward the previous Section 382 study in 2022. The Company has performed a Section 382 study to determine any potential Section 382 limitations on the utilization of the acquired federal NOLs from the business combination of CorpU and has determined that CorpU experienced an ownership change in May 2013 and therefore, the federal gross NOL carry forwards of $3.3 million would be subject to limitation. The $3.6 million of existing NOL carryforwards and the $3.3 million of acquired NOL carryforwards subject to the Section 382 limitation will expire unutilized, therefore the deferred tax asset associated with such NOLs have been written off. Uncertain tax positions—As of December 31, 2021 and 2020, the Company had gross unrecognized tax benefits of $3.6 million and $10.6 million, respectively, related to federal and state R&D tax credits. The Company has performed a R&D tax credit study and has reserved against a portion of its federal and state R&D tax credit carryforwards. The Company’s tax position of such credits is not more likely than not to be sustained upon examination. The Company has recorded an uncertain tax position related to the deferred tax asset recognized for these credits. A reconciliation of the beginning and ending balance of unrecognized tax benefit is as follows (in thousands):
| December 31, |  | December 31, |  | December 31,
| 2021 |  | 2020 |  | 2019
Gross unrecognized tax benefits at the beginning of the year | $ | 10,580 |  |  | $ | 146 |  |  | $ | 146 |
Increases (decreases) related to prior year tax positions | (7,892) |  |  | 7,006 |  |  | — |
Increases related to current year tax positions | 920 |  |  | 3,428 |  |  | — |
Statute of limitations expirations | — |  |  | — |  |  | — |
Gross unrecognized tax benefits at the end of the year | $ | 3,608 |  |  | $ | 10,580 |  |  | $ | 146 |
The Company is currently unaware of uncertain tax positions that could result in significant additional payments, accruals, or other material deviations in the next 12 months. The Company currently does not record interest and penalties, if any, related to unrecognized tax benefits. None of the unrecognized tax benefits as of December 31, 2021, if recognized in a future period, would affect the Company’s effective tax rate. The Company files income tax returns in U.S. federal, and certain state and foreign jurisdictions with varying statutes of limitations. Due to NOL carryforwards and tax credit carryforwards, the statutes of limitations remain open for tax years from inception of the Company through 2021. There are currently no income tax audits underway by U.S. federal, state, or foreign tax authorities. The Company intends to indefinitely reinvest any future undistributed foreign earnings outside the United States and therefore such earnings will not be subject to U.S. federal or state, or foreign withholding tax. The Company has prepared an analysis of the repatriation of earnings outside of the U.S. and has determined that the potential tax in connection with such repatriation is approximately $0.2 million. Intended to provide economic relief to those impacted by the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 and includes provisions, among others, addressing the carryback of net operating losses for specific periods, refunds of alternative minimum tax credits, temporary modifications to the limitations placed on the tax deductibility of net interest expenses, and technical amendments for qualified improvement property. Additionally, the CARES Act, in efforts to enhance business’ liquidity, provides for refundable employee retention tax credits and the deferral of the employer-paid portion of social security taxes. Under the CARES Act, the Company deferred $2.6 million related to the employer portion of social security taxes during the year ended December 31, 2020, of which $1.5 million was settled by the Company in 2021.

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://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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration