Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income before Income Taxes

The components of our income before income taxes are as follows (in thousands):


	Year Ended December 31,
	2023		2022		2021
Domestic	$	97,453	$	56,531	$	46,019
Foreign	372		62		50
Total	$	97,825	$	56,593	$	46,069

Schedule of Components of Income Tax Expense (Benefit)

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


	Year Ended December 31,
	2023		2022		2021
Current
Federal	$	51,923	$	44,591	$	2,678
State	11,577		10,730		1,437
Foreign	1,715		680		894
Total Current	65,215		56,001		5,009
Deferred
Federal	(40,519)		(45,609)		(9,295)
State	(6,986)		(9,271)		(820)
Foreign	(225)		(159)		—
Total Deferred	(47,730)		(55,039)		(10,115)
Total	$	17,485	$	962	$	(5,106)

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,
	2023		2022		2021
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income tax expense, net of federal benefits	3.0		1.0		(1.0)
Foreign tax rate differential	0.1		—		—
Nondeductible meals and entertainment	0.2		0.9		0.5

Foreign-derived intangible income deduction	(4.4)		(7.0)		(1.7)
Valuation allowance	0.7		0.4		1.1
Research and development tax credits	(7.2)		(16.5)		(17.7)
Tax shortfall / (windfall benefits)	0.4		(3.0)		(18.8)

Foreign withholding tax	1.3		1.2		1.9
Nondeductible compensation	1.0		1.8		1.9
Income tax underpayment interest, net of tax benefit	1.1		0.7		—
Other	0.7		1.2		1.7
Effective rate	17.9	%	1.7	%	(11.1)	%

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,
	2023		2022
Deferred tax assets, non-current
Provision for credit losses on accounts receivable	$	1,500	$	1,073
Depreciation	401		445

Accrued expenses	6,324		5,288
Deferred revenue	2,681		2,274
Operating lease liabilities	8,107		9,757

Stock-based compensation	21,040		22,191
Acquisition costs	2,107		2,363


Inventory reserve	529		654

Net operating losses	2,600		3,492
Tax credits	3,535		3,085

Capitalized research and development expenditures	99,799		53,901
Other	2,873		786
Total deferred tax assets, non-current prior to valuation allowance	151,496		105,309
Valuation allowance	(3,754)		(2,591)
Total deferred tax assets, non-current, net of valuation allowance	147,742		102,718
Deferred tax liabilities, non-current
Intangible assets and prepaid patent licenses	(3,552)		(4,354)
Operating lease right-of-use assets	(5,983)		(7,134)
Depreciation	(4,267)		(5,828)
Sales commissions	(1,477)		(1,138)


Equity investments	(161)		(79)

Other deferred tax liabilities	(487)		—
Total deferred tax liabilities, non-current	(15,927)		(18,533)
Net deferred tax assets, non-current	$	131,815	$	84,185

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,
	2023		2022		2021
Beginning balance	$	7,596	$	5,541	$	4,228
Additions based on tax positions of the current year	1,589		1,881		1,526
Additions based on tax positions of prior year	204		225		15
Decreases based on tax positions of prior year	(205)		(51)		(10)

Decreases due to lapse of applicable statute of limitations	(121)		—		(218)
Ending balance	$	9,063	$	7,596	$	5,541