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Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

11. Income Taxes

The Company recorded an income tax benefit of $0.2 million and $15,000 for the three and six months ended June 30, 2020, and $0.3 million and $0.5 million for the three and six months ended June 30, 2019, respectively. The decrease in the Company’s income tax benefit for the three and six months ended June 30, 2020, relative to the respective prior period, was primarily due to the Company’s expanding international footprint and the partial release of the valuation allowance in the second quarter of 2019 as a result of the Usabilla acquisition.

The Company regularly evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during periods in which those temporary differences become deductible. As of June 30, 2020, the Company continues to maintain a valuation allowance on certain deferred tax assets in the United States and Ireland that are not realizable on a more likely than not basis.

The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the audits cannot be predicted with certainty, if any issues addressed in the Company's tax audits are resolved in a manner inconsistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. There were no material changes in gross unrecognized tax benefits during each of the three and six months ended June 30, 2020 and 2019.

On July 27, 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion invalidating the regulations relating to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was issued by the Tax Court in December 2015. The Internal Revenue Service appealed the Tax Court decision in June 2016. On July 24, 2018, the Ninth Circuit Federal Court issued a decision that was subsequently withdrawn and a reconstituted panel conferred on the appeal. On June 7, 2019, the Ninth Circuit Federal Court panel upheld the cost-sharing regulations. On July 22, 2019, Intel Corporation, which acquired Altera Corp., filed a request for rehearing of the case by the entire Ninth Circuit Federal Court, which was denied on November 11, 2019. On February 10, 2020, Intel Corporation filed a petition with the United States Supreme Court which was denied on June 22, 2020, therefore validating the Ninth Circuit Federal Court decision to uphold the cost sharing regulations.

Upon resolution of all appeals, the Company recorded a cumulative reduction to its deferred tax assets related to non-operating losses of $9.0 million, offset by a corresponding valuation allowance release. In addition, the Company has commenced including stock-based compensation in its cost share allocation. Due to the full valuation allowance the Company has against its deferred tax assets in the United States and Ireland, the change does not have a material impact to its effective tax rate and income tax expense.