
	Year Ended January 31,
	2021			2020		2019

			(in thousands)
Current
Federal	$	—		$	—	$	—
State	401			104		304
Foreign	5,811			2,574		1,481
Total current	6,212			2,678		1,785
Deferred
Federal	(136)			(362)		—
State	(317)			(57)		—
Foreign	(999)			(262)		(418)
Total deferred	(1,452)			(681)		(418)
Provision for income taxes	$	4,760		$	1,997	$	1,367


	Year Ended January 31,
	2021		2020		2019

	(in thousands)
Provision for income taxes at statutory rate	$	(18,453)	$	(29,354)	$	(29,129)
State income taxes, net of federal benefit	—		25		245
Foreign earnings at different rates	1,994		207		97
Research and other credits	(9,373)		(1,534)		(3,769)
Stock-based compensation	(140,489)		(43,477)		2,414
Non-deductible expenses	2,212		1,773		1,833
Change in unrecognized tax benefits	—		(2,659)		—
Valuation allowance	168,869		77,016		29,676
Provision for income taxes	$	4,760	$	1,997	$	1,367


	Year Ended January 31,
	2021		2020

	(in thousands)
Deferred tax assets
Net operating loss carryforwards	$	289,889	$	166,083
Research and other credit carryforwards	22,778		15,355
Intangible assets	—		78
Stock-based compensation	20,154		8,716
Deferred revenue	21,595		21,012
Accrued expenses	7,791		2,555
Operating lease liabilities	10,718		—
Capitalized research and development	63,158		—
Other, net	—		950
Gross deferred assets	436,083		214,749
Less: Valuation allowance	(413,828)		(207,596)
Total deferred tax assets	22,255		7,153
Deferred tax liabilities
Property and equipment, net	(4,446)		(2,534)
Capitalized Commissions	(2,960)		(4,456)
Intangible assets	(3,697)		—
Operating right-of-use assets	(9,610)		—
Other, net	(302)		—
Total deferred tax liabilities	(21,015)		(6,990)
Net deferred tax assets (liabilities)	$	1,240	$	163

At each reporting date, the Company has established a valuation allowance against its U.S. net deferred tax assets due to the uncertainty surrounding the realization of those assets. During the fiscal year ended January 31, 2020, the Company has established a valuation allowance against its net U.K. deferred tax assets due to uncertainty surrounding the realization of those assets. The Company periodically evaluates the recoverability of the deferred tax assets and, when it is determined to be more-likely-than-not that the deferred tax assets are realizable, the valuation allowance is reduced. During the years ended January 31, 2021, January 31, 2020 and January 31, 2019, the valuation allowance increased by $206.2 million, $87.2 million, and $36.0 million, respectively. The increase in the valuation allowance during the years ended January 31, 2021, January 31, 2020 and January 31, 2019 was primarily driven by losses generated in the United States and the United Kingdom.

As of January 31, 2021, the Company had aggregate federal and California net operating loss carryforwards of $1.1 billion and $122.6 million, respectively, which may be available to offset future taxable income for income tax purposes. The federal and California net operating loss carryforwards begin to expire in fiscal 2031 through fiscal 2041. In addition, for federal losses generated after December 31, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) modified the maximum deduction of net operating loss, eliminated carryback, and provided an indefinite carryforward. As of January 31, 2021, net operating loss carryforwards for other states total $660.7 million which begin to expire in fiscal 2024 through fiscal 2041. As of January 31, 2021, net operating loss carryforwards for United Kingdom total $50.2 million which are carried forward indefinitely.

As of January 31, 2021, the Company had federal and California research and development (“R&D”) credit carryforwards of $38.7 million and $8.7 million, respectively. The federal R&D credit carryforwards will begin to expire in fiscal 2035 though fiscal 2041. The California R&D credits are carried forward indefinitely.

Realization of these net operating loss and research and development credit carryforwards depends on future income, and there is a risk that the Company’s existing carryforwards could expire unused and be unavailable to offset future income tax liabilities.

The Internal Revenue Code imposes limitations on a corporation’s ability to utilize net operating loss (“NOLs”) and credit carryovers if it experiences an ownership change as defined in Section 382. In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50% over a three-year period. If an ownership change has occurred, or were to occur, utilization of the Company’s NOLs and credit carryovers could be restricted.

The total gross unrecognized tax benefit as of January 31, 2021, January 31, 2020 and January 31, 2019 were $24.4 million, $5.5 million, and $8.1 million, respectively. As of January 31, 2021, the Company had $0.6 million of unrecognized tax benefits, which, if recognized, would affect the Company’s effective tax rate due to the full valuation allowance. The Company’s policy is to classify interest and penalties related to unrecognized tax benefits as part of the income tax provision in the consolidated statements of operations. The Company had no accrued interest and penalties related to unrecognized tax benefits as of January 31, 2021, January 31, 2020 or January 31, 2019. During the year ended January 31, 2021, the uncertain tax benefits balance increased as a result of additional guidance released by the IRS. During the year ended January 31, 2020, the uncertain tax benefits balance decreased due to the application of the IRS’ simplified approach for determining research credits. The potential reduction in unrecognized tax benefits during the next 12 months is not expected to be material.


Balance as of February 1, 2018	$	8,128
Increases in current period tax positions	—
Balance as of January 31, 2019	8,128
Reductions in prior period tax positions	(2,659)
Balance as of January 31, 2020	5,469
Increases in prior period tax positions	6,926
Increase in current period tax positions	12,052
Balance as of January 31, 2021	$	24,447

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. As the Company expands its global operations in the normal course of business, the Company could be subject to examination by taxing authorities throughout the world. These audits could include questioning the timing and amount of deductions; the nexus of income among various tax jurisdictions; and compliance with federal, state, local, and foreign tax laws. The Company is not currently under audit by the Internal Revenue Service or other similar state, local, and foreign authorities. All tax years remain subject to examination by U.S. taxing authorities due to the Company’s net operating losses and R&D credit carryforwards.

The Company attributes net revenue, costs, and expenses to domestic and foreign components based on the terms of its agreements with its subsidiaries. The Company does not provide for federal and state income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are to be reinvested offshore indefinitely. As a result of the Tax Act, if the Company repatriated these earnings, the tax impact of future distributions of foreign earnings would generally be limited to withholding tax from local jurisdictions, and the resulting income tax liability would be insignificant.

as a response to the economic uncertainty resulting from the global COVID-19 pandemic. The CARES Act did not have a material impact on the Company’s condensed consolidated financial statements for the fiscal year ended January 31, 2021. The Company continues to monitor any effects that may result from the CARES Act.