Income Taxes

12 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 9 — Income Taxes

The components of (loss) income before income taxes by jurisdiction are as follows:

	Fiscal Years Ended
	March 31,  2022			March 31,  2021			March 31,  2020
	(In thousands)
United States	$	2,222		$	48,443		$	27,000
Foreign		(18,661	)		(22,457	)		(25,572	)
	$	(16,439	)	$	25,986		$	1,428

The benefit from (provision for) income taxes includes the following:

	Fiscal Years Ended
	March 31,  2022			March 31,  2021			March 31,  2020
	(In thousands)
Current tax provision
Federal	$	(7,097	)	$	(8,573	)	$	(5,935	)
State		(2,041	)		(3,386	)		(1,465	)
Foreign		(4,042	)		449			(327	)
		(13,180	)		(11,510	)		(7,727	)
Deferred tax benefit
Federal		12,961			708			9,889
State		11,865			823			5,797
Foreign		2,591			538			(44	)
		27,417			2,069			15,642
Total benefit from (provision for) income taxes	$	14,237		$	(9,441	)	$	7,915

Significant components of the Company’s net deferred tax assets are as follows:

	As of
	March 31,  2022			March 31,  2021
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	251,276		$	187,900
Tax credit carryforwards		299,165			272,126
Operating lease liabilities		93,580			88,259
Deferred revenue		21,546			21,345
Other		99,074			82,222
Valuation allowance		(78,071	)		(47,076	)
Total deferred tax assets		686,570			604,776
Deferred tax liabilities:
Intangible assets		(119,299	)		(71,335	)
Property, equipment and satellites		(163,560	)		(142,899	)
Operating lease assets		(87,677	)		(83,065	)
Other		(28,261	)		(34,208	)
Total deferred tax liabilities		(398,797	)		(331,507	)
Net deferred tax assets	$	287,773		$	273,269

A reconciliation of the benefit from (provision for) income taxes to the amount computed by applying the statutory federal income tax rate to (loss) income before income taxes is as follows:

	Fiscal Years Ended
	March 31,  2022			March 31,  2021			March 31,  2020
	(In thousands)
Tax benefit (provision) at federal statutory rate	$	3,455		$	(5,457	)	$	(300	)
State tax provision, net of federal benefit		(653	)		(5,067	)		(1,093	)
Tax credits, net of valuation allowance		27,052			24,272			25,153
Non-deductible compensation		(5,771	)		(5,728	)		(7,150	)
Non-deductible transaction costs		(1,361	)	—			—
Non-deductible meals and entertainment		(337	)		(386	)		(1,075	)
Stock-based compensation		(7,569	)		(9,901	)		780
Change in state effective tax rate		539			(2,360	)		(14	)
Foreign effective tax rate differential, net of    valuation allowance		(6,201	)		(3,046	)		(5,707	)
Unremitted subsidiary gains		(1,565	)		(1,682	)		(2,742	)
Change to indefinite reinvestment assertion (EBI)		8,071		—			—
Change in federal tax rate due to 2020 CARES    Act	—			—				567
Other		(1,423	)		(86	)		(504	)
Total benefit from (provision for) income taxes	$	14,237		$	(9,441	)	$	7,915

As of March 31, 2022, the Company had federal and state research & development (R&D) tax credit carryforwards of $242.9 million and $192.8 million, respectively, which begin to expire in fiscal year 2026 and fiscal year 2023, respectively. As of March 31, 2022, the Company had federal and state net operating loss carryforwards of $854.7 million and $546.5 million, respectively, both of which begin to expire in fiscal year 2023.

In accordance with the authoritative guidance for income taxes (ASC 740), net deferred tax assets are reduced by a valuation allowance if, based on all the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of existing deferred tax assets ultimately depends on future profitability and the existence of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under tax law. In the event that the Company’s estimate of taxable income is less than that required to utilize the full amount of any deferred tax asset, a valuation allowance is established, which would cause a decrease to income in the period such determination is made. A valuation allowance of $78.1 million at March 31, 2022 and $47.1 million at March 31, 2021 has been established relating to state and foreign net operating loss carryforwards, state R&D tax credit carryforwards, and foreign tax credit carryforwards that, based on management’s estimate of future taxable income attributable to such jurisdictions and generation of additional research credits, are considered more likely than not to expire unused.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	As of
	March 31,  2022		March 31,  2021			March 31,  2020
	(In thousands)
Balance, beginning of fiscal year	$	92,962	$	80,591		$	68,156
Increase (decrease) related to prior year tax positions		7,486		(828	)		(949	)
Increases related to current year tax positions		12,358		13,199			13,384
Balance, end of fiscal year	$	112,806	$	92,962		$	80,591

Of the total unrecognized tax benefits at March 31, 2022, $102.5 million would reduce the Company’s annual effective tax rate if recognized, subject to valuation allowance consideration. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of March 31, 2022, the Company has accrued interest and penalties of approximately $2.0 million. The Company recognized a tax benefit of $1.2 million for reductions of interest and penalties in income tax expense for the year ended March 31, 2022. No interest or penalties were accrued as of March 31, 2021.

In the next 12 months it is reasonably possible that the amount of unrecognized tax benefits will not change significantly.

The Company is subject to periodic audits by domestic and foreign tax authorities. By statute, the Company’s U.S. federal and state income tax returns are subject to examination by the tax authorities for fiscal years 2019 and thereafter. Additionally, net operating loss and R&D tax credit carryovers that were generated in prior years may also be subject to examination. With few exceptions, fiscal years 2018 and thereafter remain open to examination by foreign tax authorities. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and its accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations.