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Acquisitions and Dispositions | 3 Months Ended
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Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions and Dispositions | Acquisitions and Dispositions 2023 Acquisitions During the three months ended March 31, 2023, the Company recognized total earn-out costs of $13.2 million related to asset acquisitions closed in 2021 and prior. No other acquisitions were completed during the three-month period ended March 31, 2023. 2022 Acquisitions Business Combinations MoPub—On January 1, 2022, the Company completed its acquisition from Twitter, Inc. of certain assets that comprised its MoPub business for a total purchase price of $1.03 billion in cash. The acquisition allowed the Company to integrate certain product features of the MoPub platform into MAX, the Company's in-app mediation platform, and migrate publishers and demand partners from the MoPub platform to MAX. The Company accounted for the acquisition as a business combination. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $14.4 million. The following table summarizes the allocation of the purchase consideration to the fair value of the assets acquired (in thousands):
Intangible assets |
Advertiser Relationships—estimated useful life of 9 years | $ | 212,700 |
Publisher Relationships—estimated useful life of 9 years | 123,300 |
Developed Technology—estimated useful life of 5 years | 61,800 |
Tradename—estimated useful life of 3 months | 60 |
Goodwill | 632,472 |
Total purchase consideration | $ | 1,030,332 |
The income approach was used to determine the preliminary fair value of the advertiser relationships, publisher relationships, developed technology and tradename. Goodwill represents the excess of the purchase price over the preliminary fair value of identifiable assets acquired at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. For tax purposes, an estimated tax deductible goodwill of $694.5 million was generated as a result of this acquisition. No liabilities were assumed in the transaction. Contemporaneously with the signing of the asset purchase agreement, the Company entered into an agreement for Twitter, Inc. to provide certain transitional services to facilitate the migration of publishers and demand partners to MAX during a three-month transitional period following the closing of the transaction (the "TSA"). The Company accounted for the TSA as a transaction separate from the business combination since it was negotiated primarily for the benefit of the Company. During the first quarter of 2022, the Company recognized total expense of $7.0 million related to the transitional services, which was included primarily in cost of revenue in the Company's condensed consolidated statement of operations. The Company’s condensed consolidated statement of operations for the three months ended March 31, 2022 includes revenue generated from the MoPub business during the transitional period of $44.1 million. However, due to the significant integration of the MoPub business with MAX, it was impractical to determine the impact of the acquired business on earnings. The unaudited supplemental pro forma information below presents the combined historical results of operations of the Company and the MoPub business, as if the MoPub business had been acquired as of January 1, 2021 (in thousands):
| Three Months Ended March 31, 2022
Revenue | $ | 625,421 |
Net loss | (99,932) |
The unaudited supplemental pro forma information above includes the following adjustments to net loss in the appropriate pro forma periods (in thousands):
| Three Months Ended March 31, 2022
A decrease in amortization expense related to the fair value of acquired identifiable intangible assets, net of the amortization expense already reflected in actual historical results | $ | 60 |
A decrease in expenses related to the TSA | $ | 7,000 |
A decrease in expenses related to transaction costs | $ | 12,848 |
An (increase) in income tax provision | $ | (4,564) |
Asset Acquisitions During the three months ended March 31, 2022, the Company recognized total earn-out costs of $31.7 million related to asset acquisitions closed in 2021 and prior. These earn-out costs increased the book value of the acquired mobile Apps, and are amortized over the remaining useful life of the originally acquired mobile Apps. No other asset acquisitions were completed during the three-month period ended March 31, 2022.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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