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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of U.S. and International income (loss) before income taxes is as follows for the years presented:
Year Ended
December 31,
(in thousands)202320222021
United States$(11,676)$(4,811)$(55,912)
International23,927 32,927 26,924 
Total income (loss) before income taxes
$12,251 $28,116 $(28,988)
The income tax provision (benefit) for income taxes consists of the following for the years presented:
Year Ended
December 31,
(in thousands)202320222021
Current income tax provision:
US Federal$10,694 $— $— 
US State2,842 2,202 1,547 
International12,707 9,855 9,808 
Total current income tax provision26,243 12,057 11,355 
Deferred income tax benefit:
US Federal(9,854)(927)(15,597)
US State(2,973)(1,489)(2,451)
International(1,049)(935)(3,768)
Total deferred income tax benefit(13,876)(3,351)(21,816)
Total income tax provision (benefit)
$12,367 $8,706 $(10,461)
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate for continuing operations is as follows for the years presented:
Year Ended
December 31,
(dollars in thousands)202320222021
Income (loss) before income taxes
US Federal and State$(11,676)$(4,811)$(55,912)
International23,927 32,927 26,924 
Total income (loss) before income taxes
$12,251 $28,116 $(28,988)
US Federal statutory rate21 %21 %21 %
Income taxes computed at US Federal statutory rate
$2,573 $5,904 (6,088)
Tax impact of foreign operations
4,807 2,880 (1,348)
Tax credits
(1,324)(1,396)(840)
Non-deductible transaction related costs
520 346 851 
Non-deductible compensation
4,472 2,661 3,136 
Stock-based compensation shortfall (windfall)
895 (570)— 
State taxes, net of Federal effect
(825)(151)(949)
U.S. Return to provision and deferred tax adjustments
(391)60 (4,243)
Uncertain tax positions
1,670 1,190 (1,439)
Change in valuation allowance
— 48 234 
Amended tax returns— (2,268)— 
Other permanent differences
(30)2 225 
Total income tax provision (benefit)
$12,367 $8,706 $(10,461)
Effective income tax rate100.9 %31.0 %36.1 %

The Company provides for deferred tax on the financial reporting basis over the tax basis of its investments in foreign subsidiaries, except for unremitted foreign earnings needed to support operations and continued growth plans outside the U.S. In making its decision to not permanently reinvest certain unremitted foreign earnings, the Company evaluates foreign operational cash requirements and the ability to repatriate funds. For the year ended December 31, 2023, the Company’s estimate of its remaining unremitted earnings of its foreign subsidiaries was approximately $41.1 million, of which $38.2 million is deemed to be indefinitely reinvested.
Deferred income taxes are provided for the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes. Significant components of deferred tax assets and deferred tax liabilities consisted of the following:
December 31,
(in thousands)20232022
Deferred tax assets
Loss carryforwards
$8,912 $9,136 
Tax credits
724 7,113 
Accounts receivable, accrued expenses and reserves
7,752 8,466 
Interest expense
7,626 9,292 
Stock-based compensation
6,902 7,803 
Hedges, swaps and other unrealized losses
2,821 1,526 
ROU lease liability2,832 4,543 
Other71 163 
Total deferred tax assets, gross
37,640 48,042 
Valuation allowance(2,766)(2,766)
Total deferred tax assets, net
$34,874 $45,276 
Deferred tax liabilities
Intangibles
$(38,654)$(53,475)
Property and equipment
— (1,201)
ROU lease asset(1,533)(4,513)
Prepaid expenses
(1,827)(2,925)
Capitalized commissions
(1,492)(1,444)
Outside basis difference in subsidiaries
(441)(962)
Other(348)(11)
Total deferred liabilities
(44,295)(64,531)
Total deferred tax liabilities, net
$(9,421)$(19,255)
Activity in the Company’s valuation allowance accounts consists of the following for the years presented:
Year Ended
December 31,
(in thousands)202320222021
Beginning balance$(2,766)$(2,718)$(2,484)
Additions of deferred income tax expense— (48)(234)
Reductions of deferred income tax expense— — — 
Ending balance$(2,766)$(2,766)$(2,718)
The Company regularly evaluates the ability to realize the benefit of its net deferred tax assets. The Company weighs positive and negative evidence concerning the realizability of the Company’s deferred tax assets in each jurisdiction. In assessing the need for a valuation allowance, the Company considers the weight attributable to both positive and negative evidence that can be objectively verified. On the basis of this limitation, the Company maintains a valuation allowance of $2.8 million at December 31, 2023. The valuation allowance is primarily attributable to Internal Revenue Code Section 382 limitations related to certain acquired net operating losses. The Company considered the existence of a cumulative loss as of December 31, 2023 as a significant piece of negative evidence that requires equal or greater pieces of positive evidence. The Company considered the reversal of existing temporary differences, primarily related to the reversal of book amortization of existing definite-lived intangible assets to fully offset the interest expense carryovers, tax amortization and stock-based compensation deferred tax assets.
At December 31, 2023, the Company has $15.7 million of U.S. federal net operating loss carryforwards (“NOLs”). These NOLs are subject to annual use limitations and expire between 2026 and 2031. The Company has a $3.3 million deferred tax asset for U.S. state net operating loss carryforwards that have various expiration periods from 2024 to 2040 in addition to net operating loss carryforwards that do not expire. The Company has $2.3 million of deferred tax asset for foreign net operating loss carryforwards that do not expire.
A portion of the U.S. (federal and state) operating loss carryforwards and credits are subject to Internal Revenue Code Section 382 or similar provisions. The other tax credit carryforwards expire between 2027 and 2033. The Company has recorded a valuation allowance on $13.1 million related to its NOLs as of December 31, 2023.
Unrecognized tax benefits are reconciled as follows for the years presented:
December 31,
(in thousands)20232022
Gross unrecognized tax benefits as of January 1$3,721 $2,677 
Increases—prior year tax positions1,559 735 
Decreases—prior year tax positions(566)(266)
Increases—current year tax positions536 575 
Gross unrecognized tax benefits as of December 31$5,250 $3,721 
The balances of unrecognized tax benefits as of December 31, 2023 and 2022 are $5.3 million and $3.7 million, respectively, of which $4.8 million and $3.7 million represent the amounts that, if recognized, impact the effective income tax rate in future periods.
The Company accrued $0.7 million and $0.2 million for interest and penalties as of December 31, 2023 and 2022, respectively.
The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions including Australia, Canada, India, Philippines and the United Kingdom. The Company is not currently under examination by the taxing authorities except for the Philippines for tax year 2022. Based on the notice received, the Company believes this to be a routine tax examination performed by the tax authorities and, at this time, has no reason to record an uncertain tax position related to the matter. The Company’s U.S. tax returns are subject to examinations for open tax years beginning in 2019. The Company’s foreign jurisdiction tax returns are subject to examinations for open tax years beginning in 2013. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite the belief that the Company’s tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.
The Company estimates that it is reasonably possible that the balance of unrecognized tax benefits as of December 31, 2023 will increase by approximately $0.5 million in the next twelve months. These unrecognized tax benefits relate to research and development credits as well as state income tax liabilities.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA establishes a 15% corporate minimum tax effective for taxable years beginning after December 31, 2022 for domestic corporations with average annual adjusted financial statement income that exceeds $1.0 billion over a three-year period, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded U.S. corporations. The tax-related provisions of the IRA did not have a material impact on the Company’s financial results for the year ended December 31, 2023 and the Company does not expect it to have a material impact on the Company’s financial results in the future.