Income Taxes |
3 Months Ended |
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Apr. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company recognized income tax expense of $4.4 million and $3.4 million for the three months ended April 30, 2023 and April 30, 2022, respectively. The tax expense for the three months ended April 30, 2023 and April 30, 2022 was primarily attributable to pre-tax foreign earnings and withholding taxes related to customer payments in certain foreign jurisdictions in which the Company conducts business. The Company’s effective tax rates of 89.8% and (12.7)% for the three months ended April 30, 2023 and April 30, 2022, respectively, differ from the U.S. statutory tax rate primarily due to U.S. losses for which there is no benefit and the tax rate differences between the United States and foreign countries. The Company has a full valuation allowance on its U.S. federal, U.S. state, and U.K. deferred tax assets. As a result, the Company does not record a tax benefit on these losses because it is more likely than not that the benefit will not be realized. Total gross unrecognized tax benefits were $40.6 million and $36.9 million as of April 30, 2023 and January 31, 2023, respectively. As of April 30, 2023 and January 31, 2023, approximately $4.4 million and $4.2 million, respectively 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 condensed consolidated statements of operations. The Company had incurred an insignificant amount of interest and penalties related to unrecognized tax benefits as of April 30, 2023 and January 31, 2023. During the three months ended April 30, 2023, the net increase in uncertain tax benefits was a result of research and development credits. The potential change in unrecognized tax benefits during the next 12 months is not expected to be material. In accordance with the guidance on the accounting for uncertainty in income taxes, for all U.S. and other tax jurisdictions, the Company recognizes potential liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes and interest will be due. If the Company’s estimate of income tax liabilities proves to be less than the ultimate assessment, a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes in the condensed consolidated statements of operations. Accrued interest and penalties are included within other liabilities, noncurrent on the condensed consolidated balance sheets.
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