v3.22.4

Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax, Domestic and Foreign | The domestic and foreign components of income before provision for income taxes were as follows (in thousands):
| December 31,
| 2022 |  | 2021 |  | 2020
Domestic | $ | 32,945 |  |  | $ | 61,822 |  |  | $ | 28,169 |
Foreign | 4,522 |  |  | 2,981 |  |  | 3,411 |
Income before provision for income taxes | $ | 37,467 |  |  | $ | 64,803 |  |  | $ | 31,580 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consisted of the following (in thousands):
| December 31,
| 2022 |  | 2021 |  | 2020
Current provisions for income taxes: |  |  |  |  |
Federal | $ | 11,379 |  |  | $ | 2,437 |  |  | $ | 360 |
State | 2,060 |  |  | 714 |  |  | 240 |
Foreign | 1,349 |  |  | 295 |  |  | 1,434 |
Total current tax expense | 14,788 |  |  | 3,446 |  |  | 2,034 |
Deferred tax expense: |  |  |  |  |
Federal | (5,491) |  |  | 4,513 |  |  | 1,845 |
State | (769) |  |  | 251 |  |  | 1,170 |
Foreign | 234 |  |  | (11) |  |  | (82) |
Total deferred tax expense | (6,026) |  |  | 4,753 |  |  | 2,933 |
Total provision for income taxes | $ | 8,762 |  |  | $ | 8,199 |  |  | $ | 4,967 |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents a reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the periods presented:
| December 31,
| 2022 |  | 2021 |  | 2020
Federal statutory income tax rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
State after-tax rate | 3.45 |  |  | 1.49 |  |  | 4.47 |
Stock options | 2.67 |  |  | (10.38) |  |  | (6.79) |
Research credit | (4.51) |  |  | (1.37) |  |  | (2.04) |
Transfer pricing reserve | 0.76 |  |  | (1.26) |  |  | 1.32 |
Foreign rate differential | (0.02) |  |  | 0.73 |  |  | 0.61 |
Foreign derived intangible income | (2.13) |  |  | (0.48) |  |  | (3.26) |
Section 162(m) limitation | 2.59 |  |  | 2.49 |  |  | — |
Other | (0.38) |  |  | 0.42 |  |  | 0.42 |
Effective tax rate | 23.43 | % |  | 12.64 | % |  | 15.73 | %
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):
| December 31,
| 2022 |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |  |
Net operating loss carryforwards | $ | 263 |  |  | $ | 56 |  |  | $ | 124 |
Accruals and allowances | 1,067 |  |  | 1,104 |  |  | 614 |
Tax credits | 1,954 |  |  | 1,396 |  |  | 1,631 |
Stock-based compensation | 4,907 |  |  | 3,171 |  |  | 2,045 |
Unrealized gain on equity investment | 124 |  |  | — |  |  | — |
Intangibles assets | 907 |  |  | 1,010 |  |  | 1,106 |
Lease obligation | 5,074 |  |  | 5,226 |  |  | — |
Other | 1,222 |  |  | 808 |  |  | 1,101 |
Total deferred tax assets | 15,518 |  |  | 12,771 |  |  | 6,621 |
Valuation allowance | (1,954) |  |  | (1,396) |  |  | (1,372) |
Total deferred tax assets, net of valuation allowance | 13,564 |  |  | 11,375 |  |  | 5,249 |
Deferred tax liabilities: |  |  |  |  |
Property, equipment, and software | (3,905) |  |  | (8,316) |  |  | (4,995) |
Goodwill | (843) |  |  | (749) |  |  | (653) |
Prepaid expense | (1,188) |  |  | (1,365) |  |  | (400) |
Right-of-use asset | (5,158) |  |  | (5,201) |  |  | — |
Acquired intangibles | (1,996) |  |  | — |  |  | — |
Unrealized loss on equity investment | — |  |  | (1,296) |  |  | — |
Total deferred tax liabilities | (13,090) |  |  | (16,927) |  |  | (6,048) |
Net deferred income tax asset (liabilities) | $ | 474 |  |  | $ | (5,552) |  |  | $ | (799) |
Summary of Income Tax Contingencies | The activity related to the unrecognized income tax benefits is as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Gross unrecognized income tax benefits — beginning balance | $ | 2,364 |  |  | $ | 3,208 |  |  | $ | 2,369 |
Increases related to tax positions taken during the current year | 1,788 |  |  | 649 |  |  | 951 |
Decreases related to tax positions taken during current year | — |  |  | — |  |  | — |
Increases related to tax positions taken during the prior years | 386 |  |  | — |  |  | — |
Decreases related to tax positions taken during the prior years | (235) |  |  | (1,493) |  |  | (112) |
Gross unrecognized income tax benefits — ending balance | $ | 4,303 |  |  | $ | 2,364 |  |  | $ | 3,208 |

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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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