v3.22.2.2
Income Taxes
 6 Months Ended
Jul. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

The following table provides details of income taxes for the periods indicated:

 

 

 

Three Months Ended July 31,

 

 

Six Months Ended July 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Loss before income taxes

 

$

(20,214

)

 

$

(5,742

)

 

$

(30,626

)

 

$

(15,285

)

Provision for income taxes

 

 

3,436

 

 

 

1,414

 

 

 

3,846

 

 

 

2,689

 

Effective tax rate

 

(17.0)%

 

 

(24.6)%

 

 

(12.6)%

 

 

(17.6)%

 

 

The Company recorded an income tax provision of $3.4 million and $1.4 million for the three months ended July 31, 2022 and 2021, and $3.8 million and $2.7 million for the six months ended July 31, 2022 and 2021, respectively. The increase in income tax expense for the three and six months ended July 31, 2022 was primarily due to a decrease in the U.S. federal research tax credit, a decrease in tax benefits from excess stock-based compensation deductions as well as an increase in non-deductible stock-based compensation, partially offset by a decrease in the proportion of profits generated in higher tax jurisdictions.

The Company files federal and state income tax returns in the United States and in various foreign jurisdictions. The Internal Revenue Service is currently examining the Company’s U.S. federal income tax return for the fiscal year ended January 31, 2017. The tax years 2013 to 2021 remain open to examination by U.S. federal tax authorities. The tax years 2009 to 2021 remain open to examination by U.S. state tax authorities. The tax years 2015 to 2021 remain open to examination by foreign tax authorities. Fiscal years outside of the normal statute of limitations remain open to audit by tax authorities due to tax attributes generated in those earlier years, which have been carried forward and may be audited in subsequent years when utilized.

The Company regularly assesses the likelihood of adverse outcomes resulting from potential tax examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of July 31, 2022, the gross amount of unrecognized tax benefits was approximately $31.3 million. If the estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense could be required. If events occur, and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities could result in tax benefits being recognized in the period in which the Company determines the liabilities are no longer necessary. The Company does not anticipate significant changes to its uncertain tax positions during the next twelve months.