Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Components of Income Tax Expense (Benefit)

The components of our income tax expense are as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
Current
Federal	$	3,583	$	1,615	$	741
State	2,735		900		653
Foreign	438		452		263
Total Current	6,756		2,967		1,657
Deferred
Federal	(3,628)		2,622		(8,821)
State	372		(23)		(2,643)
Foreign	—		—		(18)
Total Deferred	(3,256)		2,599		(11,482)
Total	$	3,500	$	5,566	$	(9,825)

Schedule of Effective Income Tax Rate Reconciliation

The difference between the income tax expense at the federal statutory rate and income tax expense in the consolidated statements of operations is as follows:


	Year Ended December 31,
	2020		2019		2018
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income tax expense, net of federal benefits	1.4		0.6		(3.4)
Nondeductible meals and entertainment	0.1		0.8		2.1
Nondeductible employee fringe benefits	—		—		1.3
Foreign-derived intangible income deduction	(1.4)		(0.7)		—
Valuation allowance	1.3		—		—
Research and development tax credits	(9.4)		(7.1)		(48.7)
Tax windfall benefits	(8.8)		(7.5)		(55.7)

Change in tax rate	(0.2)		0.4		(1.4)
Other	0.4		2.0		0.8
Effective rate	4.4	%	9.5	%	(84.0)	%

Schedule of Components of Deferred Tax Assets and Liabilities

The components of our net deferred tax assets (liabilities) are as follows (in thousands):


	December 31,
	2020		2019
Deferred tax assets, non-current
Provision for credit losses on accounts receivable	$	1,524	$	606
Depreciation	261		267

Accrued expenses	4,633		3,114
Deferred revenue	1,725		2,060
Operating lease liabilities	11,511		10,929

Stock-based compensation	12,768		8,840
Acquisition costs	2,773		2,811
Subsidiary unit compensation	249		185
Equity investments	31		243
Inventory reserve	240		30
Net operating losses	1,198		1,289
Tax credits	5,502		7,755

Other	288		106
Total deferred tax assets, non-current prior to valuation allowance	42,703		38,235
Valuation allowance	(1,568)		(322)
Total deferred tax assets, non-current, net of valuation allowance	41,135		37,913
Deferred tax liabilities, non-current
Intangible assets and prepaid patent licenses	(4,421)		(6,162)
Operating lease right-of-use assets	(8,043)		(7,441)
Depreciation	(5,322)		(3,030)
Sales commissions	(866)		(766)
Contingent liability	(171)		(170)
Internally developed software	(620)		(1,208)
Total deferred tax liabilities, non-current	(19,443)		(18,777)
Net deferred tax assets, non-current	$	21,692	$	19,136

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amounts of unrecognized tax benefits (without related interest expense) is as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
Beginning balance	$	3,065	$	2,801	$	1,973
Additions based on tax positions of the current year	1,166		718		857
Additions based on tax positions of prior year	656		18		147
Decreases based on tax positions of prior year	(259)		(253)		—

Decreases due to lapse of applicable statute of limitations	(400)		(219)		(176)
Ending balance	$	4,228	$	3,065	$	2,801