XML 46 R22.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Loss before income taxes was generated in the following jurisdictions:
Years Ended December 31,
(In thousands)202320222021
U.S.$(13,526)$(9,569)$(15,056)
Non-U.S.(13,787)(2,124)(11,087)
Total$(27,313)$(11,693)$(26,143)
For the years ended December 31, 2023, 2022, and 2021, domestic income excludes intercompany dividend income of $0 each year. The provision (benefit) for income taxes consists of the following:
Years Ended December 31,
(In thousands)202320222021
Current:
Federal$2 $122 $(11)
State54 32 (23)
Foreign2,473 1,665 2,478 
Total current2,529 1,819 2,444 
Deferred:
Federal361 (349)3,774 
State(47)35 (3)
Foreign(357)1,236 (1,774)
Total deferred(43)922 1,997 
Total$2,486 $2,741 $4,441 
For 2023, 2022, and 2021, the Company's U.S. federal statutory rate was 21%. The differences between the income tax provisions computed using the statutory federal income tax rate and the provisions for income taxes reported in the consolidated statements of operations are as follows:
Years Ended December 31,
(In thousands)202320222021
Expected tax at statutory rate$(5,736)$(2,456)$(5,490)
Foreign taxes at other rates(213)3,373 307 
Valuation allowance changes8,513 4,370 15,019 
Global intangible low-taxed income inclusion— — — 
State income taxes, net of federal benefit(170)(322)(811)
Uncertain tax positions— (515)12 
Research credits(633)(2,568)(3,466)
Disallowed expenses and other725 859 (1,130)
Total$2,486 $2,741 $4,441 
Significant components of the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022, are as follows:
December 31,
(In thousands)20232022
Deferred tax assets:
Stock and long-term compensation plans$1,515 $923 
Foreign NOL & other carryforwards45,390 41,154 
U.S. and state NOL carryforwards7,866 5,654 
Deferred revenue650 863 
Pension liability531 498 
Amortization and depreciation1,626 526 
Lease liability2,383 2,641 
Capitalized research and development446 487 
Accrued expenses and other948 1,427 
Total gross deferred tax assets61,355 54,173 
Less: Valuation allowance(47,844)(39,177)
Net deferred income tax assets$13,511 $14,996 
Deferred tax liabilities:  
Accruals$367 $319 
Tax on unremitted foreign earnings1,164 1,249 
Right of use asset2,095 2,531 
Intangible assets2,217 3,009 
Tax on credits3,689 3,736 
Contract acquisition costs3,325 3,448 
Deferred tax liabilities$12,857 $14,292 
Net deferred tax assets$654 $704 
Deferred tax assets and liabilities are netted by tax jurisdiction.
At December 31, 2023, the Company had foreign and state net operating loss (NOL) carryforwards and other foreign deductible carryforwards as shown in the following table:
(In thousands)CarryforwardExpiration
NOL Carryforward
Canada$44,461 
2032-2043
United States27,512 None
United Kingdom10,543 None
Switzerland20,127 
2028-2029
Other foreign5,779 None
Canada province43,352 
2032-2043
U.S. states30,526 
2025-2043
$182,300 
Other Carryforwards
United States credit$1,277 
2031-2033
Canada44,357 None
Canada province58,488 None
Capital loss382 None
Canada credits8,819 
2033-2043
Canada province credits3,677 
2036-2043
$117,000 
$299,300 
The valuation allowance against the net deferred tax assets as of December 31, 2023 and 2022 was $47.8 million and $39.2 million, respectively.
The Company recorded changes in valuation allowance of $8.5 million and $4.4 million, during the years ended December 31, 2023 and 2022, respectively, against deferred tax assets that, based on the Company's assessment are considered not to be more likely than not to be realized. The increase in the valuation allowance in 2023 reflects Net Operating Losses (“NOLs”), other deduction carryforwards, and credits for which the realization is not more likely than not. The change in valuation allowance also reflects other factors including, but not limited to, changes in the Company's assessment of the ability to use existing deferred tax assets, including NOLs and other deduction carryforwards.
The Company assesses the need for a valuation allowance on a regular basis, weighing all positive and negative evidence to determine whether a deferred tax asset will be fully or partially realized. In evaluating the realizability of deferred tax assets, significant pieces of negative evidence such as 3-year cumulative losses are considered. The Company also reviewed reversal patterns of temporary differences to determine if the Company would have sufficient taxable income due to the reversal of temporary differences to support the realization of deferred tax assets. In 2022, the Company established a valuation allowance against certain deferred tax assets in jurisdictions that were not previously valued as the deferred tax assets were no longer more likely than not to be realized. In 2023, the Company continued to maintain a valuation allowance against certain deferred tax assets in jurisdictions where assets are not more likely than not to be realized. For all other remaining deferred tax assets, the Company believes it is still more likely than not that the results of future operations or tax planning strategies will generate sufficient taxable income to realize the deferred tax assets.
The Company's policy is to record interest and penalties on income taxes as income tax expense. It recorded expense of less than $0.1 million in 2023, 2022, and 2021.
ASC 740, Income Taxes sets a “more-likely-than-not” criterion for recognizing the tax benefit of uncertain tax positions. As of December 31, 2023, 2022, and 2021, the Company had reserves of $0, $0, and $0.5 million, respectively.
December 31,
(In thousands)202320222021
Reserve at beginning of year$— $512 $500 
Increases related to prior year tax positions— — 12 
Decreases related to prior year tax positions— (512)— 
Settlement— — — 
Total$— $— $512 
The Company files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions, and is subject to examination of its income tax returns by the IRS and other tax authorities. The Company reduced an uncertain tax position in the U.S. upon filing of an accounting method change and receiving audit protection.
The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with the Company's expectations, there could be a requirement to adjust the provision for income taxes in the period such resolution occurs. Included in the balance of unrecognized tax benefits as of December 31, 2023 is $0 of tax benefits that, if recognized, would affect the effective tax rate.
The Company's primary tax jurisdictions and the earliest tax year subject to audit are presented in the following table.
Australia2015
Austria2017
Belgium2019
Canada2019
Netherlands2018
Singapore2018
Switzerland2019
United Kingdom2021
United States2017