v3.19.3.a.u2

Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents the components of loss before income taxes:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in thousands)
Loss before income taxes: |  |  |  |  |  |  |  |
United States | $ | (239,629 | ) |  | $ | (33,339 | ) |  | $ | (25,002 | )
Foreign | (15,453 | ) |  | (9,858 | ) |  | (5,718 | )
Total | $ | (255,082 | ) |  | $ | (43,197 | ) |  | $ | (30,720 | )
The following table presents the components of the income tax (provision) benefit:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in thousands)
Current income tax (provision) benefit: |  |  |  |  |
United States federal and state | $ | (97 | ) |  | $ | — |  |  | $ | — |
Foreign | 3 |  |  | — |  |  | — |
Total current income tax (provision) benefit | $ | (94 | ) |  | $ | — |  |  | $ | — |
Deferred income tax benefit: |  |  |  |  |  |  |  |
United States federal and state | $ | 17,459 |  |  | $ | 2,774 |  |  | $ | — |
Foreign | 2,495 |  |  | 2,093 |  |  | 1,297 |
Total deferred income tax benefit | $ | 19,954 |  |  | $ | 4,867 |  |  | $ | 1,297 |
Total income tax (provision) benefit | $ | 19,860 |  |  | $ | 4,867 |  |  | $ | 1,297 |
A reconciliation between the Company’s statutory federal income tax rate and the effective tax rate is presented below:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
U.S. statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Increase (decrease) resulting from: |  |  |  |  |
U.S. state income taxes, net of federal benefits | 4.2 |  |  | 0.9 |  |  | 9.9 |
Foreign tax rate differential | 0.2 |  |  | 1.1 |  |  | (1.4 | )
Non-deductible expenses | (1.1 | ) |  | (2.6 | ) |  | (1.8 | )
Stock-based compensation | 0.5 |  |  | 30.0 |  |  | 40.9 |
Change in valuation allowance | (10.9 | ) |  | (39.3 | ) |  | 29.8 |
Change in tax rate | — |  |  | (0.1 | ) |  | (108.0 | )
Non-deductible impairment | (5.8 | ) |  | — |  |  | — |
Other | (0.3 | ) |  | 0.3 |  |  | (0.2 | )
Effective tax rate | 7.8 | % |  | 11.3 | % |  | 4.2 | %
The significant components of the Company’s deferred tax assets and liabilities are as follows:
| As of December 31,
| 2019 |  | 2018
| (in thousands)
Deferred tax assets: |  |  |  |  |
Accrued expenses and other | $ | 3,037 |  |  | $ | 2,580 |
Accrued compensation and related benefits | 2,779 |  |  | 3,395 |
Rebate reserve | — |  |  | 5 |
Deferred rent | 7,543 |  |  | 6,388 |
Stock-based compensation | 14,546 |  |  | 8,279 |
Deferred income | 345 |  |  | 257 |
Interest expense carryforwards | 2,059 |  |  | — |
Foreign net operating loss carryforwards | 3,171 |  |  | 1,543 |
U.S. net operating loss carryforwards | 164,854 |  |  | 96,809 |
Valuation allowance | (116,244 | ) |  | (88,061 | )
Total deferred tax assets | $ | 82,090 |  |  | $ | 31,195 |
Deferred tax liabilities: |  |  |  |  |
Prepaid expenses and other | $ | (142 | ) |  | $ | (95 | )
Property and equipment | (3,056 | ) |  | (4,038 | )
Intangibles | (84,025 | ) |  | (34,011 | )
Total deferred tax liabilities | (87,223 | ) |  | (38,144 | )
Net deferred tax liabilities | $ | (5,133 | ) |  | $ | (6,949 | )
As of December 31, 2019, the Company had a U.S. net operating loss (“NOL”) carryforward of approximately $627.7 million, of which $265.0 million expires between 2029 and 2037. In accordance with the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), U.S. NOLs arising in a tax year ending after 2017 will not expire. The Company has generated $362.7 million of U.S. NOLs in tax years ending after 2017. The gross amount of the state NOL carryforwards is equal to or less than the federal NOL carryforwards and expires over various periods based on individual state tax laws. The Company also had an NOL carryforward of $14.5 million in its foreign jurisdictions, which does not expire. A full valuation allowance has been established to offset its net deferred tax assets in the U.S., and certain foreign jurisdictions as the Company has not generated taxable income since inception and does not have sufficient deferred tax liabilities to recover the deferred tax assets in these jurisdictions. The total increase in the valuation allowance was $28.2 million for the year ended December 31, 2019. The utilization of the NOL carryforwards to reduce future income taxes will depend on the Company’s ability to generate sufficient taxable income prior to the expiration of the NOL carryforwards. Under the provisions of Internal Revenue Code Section 382, certain substantial changes in the Company’s ownership may result in a limitation on the amount of U.S. net operating loss carryforwards that could be utilized annually to offset future taxable income and taxes payable. The Company does not expect such limitation, if any, to impact the use of the net operating losses prior to their expiration. A one-time tax benefit of approximately $17.5 million related to the acquisition of Trilogy was included in the Company’s income tax benefit for the year ended December 31, 2019. This one-time benefit relates to the release of the Company’s tax valuation allowance that was no longer needed as a result of recognizing an additional net deferred tax liability, due to the acquisition of Trilogy. As of December 31, 2019 and 2018, the Company has not recognized any amounts for uncertain tax positions. The Company has analyzed its filing positions in all significant federal, state and foreign jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for the years prior to 2016, though the NOL carryforwards can be adjusted upon audit and could impact taxes owed in open tax years. No income tax returns are currently under examination by the taxing authorities. On December 22, 2017, the Tax Act was enacted into law and contains certain key tax provisions that affect the Company. The Tax Act affects the Company by (i) reducing the U.S. tax rate to 21%, effective January 1, 2018, (ii) impacting the values of the Company’s deferred assets and liabilities, (iii) changing the Company’s ability to utilize future net operating losses and (iv) requiring a one-time tax on any of the Company’s unrepatriated foreign earnings and profits (“E&P”) in 2017. The Company did not incur the one-time tax as cumulative foreign earnings and profits were negative. The Tax Act includes Global Intangible Low-Taxed Income (“GILTI”) provisions that require a company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. Due to foreign subsidiary losses, this provision did not apply to the Company in 2019. Another significant section of the Tax Act, the Base Erosion Anti-Abuse Tax (“BEAT”), did not apply to the Company’s 2019 tax year as the Company did not meet the minimum revenue requirements under the BEAT. As these taxes may become applicable in the future, the Company will continue to monitor the potential impact.

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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