Rapid7, Inc. - 10-K filing on 2016-03-10

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Loss before income taxes included in the consolidated statements of operations was as follows:


	Year Ended December 31,
	2015		2014		2013
	(in thousands)
United States.		$(43,020)		$(32,937)		$(18,892)
Foreign		(6,341)		689		189

Loss before income taxes		$(49,361)		$(32,248)		$(18,703)

Summary of Income Tax Provision

Income tax provision included in the consolidated statements of operations was as follows:


	Year Ended December 31,
	2015		2014		2013
	(in thousands)
Current:
Federal		$—		$—		$—
State and local		116		22		24
Foreign		261		161		35

Total current provision		377		183		59

Deferred:
Federal		98		180		47
State and local		11		14		14
Foreign		10		2		50

Total deferred expense		119		196		111

Total income tax provision		$496		$379		$170

Reconciliation of Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes

The table below reconciles the differences between income taxes computed at the federal statutory rate of 34% and our provision for income taxes:


	Year Ended December 31,
	2015		2014		2013
Expected income tax		34.0%		34.0%		34.0%
State taxes, net of federal benefit		(0.1)		(0.1)		(0.1)
Permanent differences		(3.0)		(0.5)		(1.2)
Federal research and development credit		0.6		0.8		1.5
Foreign rate differential		(3.3)		0.2		0.1
Change in valuation allowance		(29.9)		(35.6)		(35.0)
Other		0.7		—		(0.2)

Total income tax provision		(1.0)%		(1.2)%		(0.9)%

Components of Net Deferred Tax Assets and Liabilities

Net deferred tax assets and liabilities, as set forth in the table below, reflect the impact of temporary differences between the amounts of assets and liabilities recorded for financial statement purposes and such amounts measured in accordance with tax laws:


	As of December 31,
	2015		2014
	(in thousands)
Deferred tax assets:
Accruals and reserves		$300		$734
Net operating loss carryforwards		37,744		26,640
Deferred revenue		9,971		7,512
Amortization		3,318		5,570
Research and development credits		1,269		829
Stock-based compensation		2,436		1,905
Other		3,312		2,129

Total gross deferred tax asset		58,350		45,319
Less valuation allowance		(58,328)		(45,314)

Net deferred tax assets		22		5
Deferred tax liabilities:
Intangible assets		(417)		(317)
Depreciation		(51)		(15)

Total deferred tax liabilities		(468)		(332)

Total net deferred tax liabilities		$(446)		$(327)

Changes in Reserves for Unrecognized Income Tax Benefits

Changes in our reserves for unrecognized income tax benefits are as follows:


	Year Ended December 31,
	2015		2014
	(in thousands)
Beginning balance		$35		$35
Additions based on current year tax positions		106		—

Ending balance		$141		$35