v3.22.4

Income Taxes (Tables)

12 Months Ended

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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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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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.

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