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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 14 – INCOME TAXES The components of income (loss) before taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. |  | $ | (31,758 | ) |  | $ | (142,447 | ) |  | $ | (667,612 | )
Foreign |  |  | 43,337 |  |  |  | 12,801 |  |  |  | (80,005 | )
Income (loss) before taxes |  | $ | 11,579 |  |  | $ | (129,646 | ) |  | $ | (747,617 | )
The provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current: |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 3,696 |  |  | $ | 1,398 |  |  | $ | — |
Foreign |  |  | 12,161 |  |  |  | 16,546 |  |  |  | 21,252 |
State and local |  |  | (476 | ) |  |  | 694 |  |  |  | 1,723 |
Total current |  |  | 15,381 |  |  |  | 18,638 |  |  |  | 22,975 |
Deferred: |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (10 | ) |  |  | 19 |  |  |  | (5,431 | )
Foreign |  |  | (2,748 | ) |  |  | (8,113 | ) |  |  | (3,871 | )
State and local |  |  | (175 | ) |  |  | (502 | ) |  |  | (84 | )
Total deferred |  |  | (2,933 | ) |  |  | (8,596 | ) |  |  | (9,386 | )
Provision for income taxes |  | $ | 12,448 |  |  | $ | 10,042 |  |  | $ | 13,589 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. As of December 31, 2024, the Company released $1.3 million of valuation allowance associated with certain foreign deferred tax assets due to the change in circumstances that affect the realizability of those deferred tax assets. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
|  | December 31, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Loss carryforward |  | $ | 33,497 |  |  | $ | 22,442 |
Research credits |  |  | 14,998 |  |  |  | 10,513 |
Foreign tax credits |  |  | 10,026 |  |  |  | 5,796 |
Accrued expenses |  |  | 16,377 |  |  |  | 25,729 |
Fixed and intangible assets |  |  | 6,216 |  |  |  | 38,899 |
Deferred revenue |  |  | 9,768 |  |  |  | 10,652 |
Capitalized R&D |  |  | 95,281 |  |  |  | 87,465 |
Lease liability |  |  | 8,981 |  |  |  | 11,075 |
Other tax credits |  |  | 2,378 |  |  |  | 2,318 |
Other |  |  | 1,668 |  |  |  | — |
Gross deferred tax assets |  |  | 199,190 |  |  |  | 214,889 |
Valuation allowance |  |  | (152,235 | ) |  |  | (157,595 | )
Net deferred tax assets |  |  | 46,955 |  |  |  | 57,294 |
Deferred tax liabilities: |  |  |  |  |  |
Acquired intangible assets |  |  | (27,391 | ) |  |  | (36,416 | )
Revenue recognition |  |  | — |  |  |  | (4,574 | )
Operating ROU assets |  |  | (7,603 | ) |  |  | (9,758 | )
Other |  |  | (6,224 | ) |  |  | (8,436 | )
Gross deferred tax liabilities |  |  | (41,218 | ) |  |  | (59,184 | )
Net deferred tax assets (liabilities) |  | $ | 5,737 |  |  | $ | (1,890 | )
The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more-likely-than-not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. In making such assessment, significant weight is given to evidence that can be objectively verified. After considering both positive and negative evidence to assess the recoverability of the Company’s net deferred tax assets, the Company determined that it was not more-likely-than-not that it would realize its federal, certain state and certain foreign deferred tax assets. The Company intends to continue maintaining a valuation allowance on its federal deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of certain federal deferred tax assets and a decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release depends on the level of profitability that the Company is able to achieve. As of December 31, 2024, the Company had recorded deferred tax assets for the tax effects of the following gross tax loss carryforwards (in thousands):
|  | Carry forward Amount |  |  | Years of Expiration
Federal |  | $ | 22,075 |  |  | 2027—2030
State (post-apportionment) |  | $ | 93,782 |  |  | 2025—Indefinite
As of December 31, 2024, the Company had recorded deferred tax assets for the tax effects of the following gross capital loss carryforwards (in thousands):
|  | Carry forward Amount |  |  | Years of Expiration
Federal |  | $ | 78,975 |  |  | 2029
State (post-apportionment) |  | $ | 14,563 |  |  | 2029—2039
As of December 31, 2024, the Company had the following credits available to reduce future income tax expense (in thousands):
|  | Carry forward Amount |  |  | Years of Expiration
Federal research and development credits |  | $ | 12,671 |  |  | 2031—2044
State research and development credits |  | $ | 20,326 |  |  | Indefinite
Foreign tax credits |  | $ | 12,404 |  |  | 2033—2034
The deferred tax asset valuation allowance and changes in the deferred tax asset valuation allowance consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Balance at beginning of period |  | $ | 157,595 |  |  | $ | 111,779 |  |  | $ | 101,529 |
Charged (credited) to expenses |  |  | (5,051 | ) |  |  | 46,397 |  |  |  | 19,321 |
Charged (credited) to other accounts |  |  | (309 | ) |  |  | (581 | ) |  |  | (9,071 | )
Balance at end of period |  | $ | 152,235 |  |  | $ | 157,595 |  |  | $ | 111,779 |
Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate to income (loss) before income taxes as a result of the following (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. federal statutory rate |  | $ | 2,432 |  |  | $ | (27,226 | ) |  | $ | (157,032 | )
State, net of federal benefit |  |  | 501 |  |  |  | 532 |  |  |  | 1,974 |
Stock-based compensation |  |  | 5,390 |  |  |  | 6,758 |  |  |  | 2,036 |
Executive compensation limitation |  |  | 560 |  |  |  | 1,911 |  |  |  | 2,286 |
Research tax credit |  |  | (3,998 | ) |  |  | (6,983 | ) |  |  | (5,225 | )
Foreign withholding tax |  |  | 11,051 |  |  |  | 12,811 |  |  |  | 8,079 |
Goodwill impairment |  |  | — |  |  |  | — |  |  |  | 107,831 |
Restructuring and transaction costs |  |  | 1,394 |  |  |  | 649 |  |  |  | 293 |
Divestiture-related activity |  |  | 5,339 |  |  |  | (26,915 | ) |  |  | — |
Foreign rate differential |  |  | (10,651 | ) |  |  | (7,354 | ) |  |  | 19,337 |
Foreign tax credit |  |  | (10,338 | ) |  |  | (10,124 | ) |  |  | (977 | )
Change in valuation allowance |  |  | 5,412 |  |  |  | 50,314 |  |  |  | 20,491 |
Effect of cross-border tax laws |  |  | 2,580 |  |  |  | 10,151 |  |  |  | 7,656 |
Unrecognized tax benefits |  |  | (238 | ) |  |  | 746 |  |  |  | 6,798 |
Change in estimates |  |  | 3,387 |  |  |  | 3,844 |  |  |  | (1,802 | )
Change in other comprehensive income |  |  | (826 | ) |  |  | — |  |  |  | — |
Non-deductible expense |  |  | 184 |  |  |  | — |  |  |  | — |
Others |  |  | 269 |  |  |  | 928 |  |  |  | 1,844 |
Total |  | $ | 12,448 |  |  | $ | 10,042 |  |  | $ | 13,589 |
At December 31, 2024, the Company asserts that it will not permanently reinvest its foreign earnings outside the United States. The Company anticipates that the cash from its foreign earnings may be used domestically to fund operations or used for other business needs. The accumulated undistributed earnings generated by its foreign subsidiaries was approximately $33.1 million. Substantially all of these earnings will not be taxable upon repatriation to the United States since they will be treated as previously taxed earnings and profits. The U.S. state income taxes and foreign withholding taxes related to the distributable cash of the Company’s foreign subsidiaries are not expected to be material. The following table summarizes the total unrecognized tax benefits and the amounts of which that would affect the effective tax rate upon recognition of such as of December 31, 2024, 2023, and 2022 (in thousands):
|  | December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Total unrecognized tax benefits |  | $ | 15,376 |  |  | $ | 23,587 |  |  | $ | 19,354 |
Amount affecting the effective tax rate upon recognition of unrecognized tax benefits |  | $ | 1,198 |  |  | $ | 9,592 |  |  | $ | 8,791 |
The Company is unable to make a reasonable estimate of the timing of the long-term payments or the amount by which the unrecognized tax benefits will increase or decrease over the next 12 months. The reconciliation of the Company’s unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Total unrecognized tax benefits at January 1 |  | $ | 23,587 |  |  | $ | 19,354 |  |  | $ | 8,438 |
Changes due to Separation, mergers, and dispositions |  |  | (6,858 | ) |  |  | — |  |  |  | 1,682 |
Increases for tax positions related to the current year |  |  | 2,009 |  |  |  | 4,070 |  |  |  | 8,793 |
Increases for tax positions related to prior years |  |  | 33 |  |  |  | 961 |  |  |  | 444 |
Decreases for tax positions related to prior years |  |  | (3,395 | ) |  |  | (798 | ) |  |  | (3 | )
Total unrecognized tax benefits at December 31 |  | $ | 15,376 |  |  | $ | 23,587 |  |  | $ | 19,354 |
It is the Company’s policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. For the years ended December 31, 2024, 2023, and 2022, we recognized interest and penalties related to unrecognized tax benefits of an immaterial amount, $0.3 million, and an immaterial amount, respectively. As of December 31, 2024 and 2023, accrued interest and penalties were $0.1 million and $0.4 million, respectively. With few exceptions, the Company’s 2020 through 2024 tax years are open to examination in the United States, any net operating losses or credits that were generated in prior years, but not yet fully utilized in a year that is closed under the statute of limitations, may also be subject to examination.

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