Acquisition, Goodwill and Acquisition-Related Intangible Assets

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition, Goodwill and Acquisition-Related Intangible Assets

Acquisitions

We had no material business acquisitions during the year ended December 31, 2023. During the year ended December 31, 2022, we completed two acquisitions of private companies for total consideration of $158.9 million, including $4.0 million in common stock and the remainder in cash. The purchase prices included $62.3 million of intangible assets, $77.5 million of goodwill and $19.1 million of net tangible assets acquired. We also incurred certain acquisition-related expenses of $4.7 million, which primarily consisted of retention bonuses to continuing employees as well as professional and consulting fees.

The intangible assets are amortized on a straight-line basis over their estimated useful lives, as we believe this method most closely reflects the pattern in which the economic benefits of the assets will be consumed. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except years):


	Acquisition Date Fair Value		Weighted Average Estimated Useful Life (in years)
Developed technology	$	30,200	5.7
Customer relationships	28,700		7.0
Trade name	3,400		3.0
Total intangible assets acquired	$	62,300

The purchase price allocation for the two acquisitions have been finalized. No changes were made to the purchase price allocation for the year ended December 31, 2023.

Goodwill

The changes in the carrying values of goodwill for the years ended December 31, 2023 and 2022 are as follows (in thousands):


	Amount
Balance at December 31, 2021	$	188,397
Additions related to current year acquisitions	85,048
Measurement-period adjustments	(7,521)
Balance at December 31, 2022	265,924
Additions related to current year acquisition	2,607
Balance at December 31, 2023	$	268,531

The Company performed an annual qualitative test for goodwill impairment in the fourth quarter of the fiscal years ended December 31, 2023 and 2022 and determined that goodwill was not impaired.

Acquisition-Related Intangible Assets

The following table presents details of our acquisition-related intangible assets as of December 31, 2023 and 2022 (in thousands, except for years):


	Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount				Weighted Average Remaining Useful Life (in years)
	December 31, 2022		Additions		December 31, 2023		December 31, 2022		Amortization		December 31, 2023		December 31, 2022		December 31, 2023
Developed technology	$	154,930	$	—	$	154,930	$	(79,036)	$	(23,457)	$	(102,493)	$	75,894	$	52,437	4.0
Customer relationships	54,620		—		54,620		(14,097)		(7,700)		(21,797)		40,523		32,823		4.7
Trade name	12,390		—		12,390		(6,602)		(2,280)		(8,882)		5,788		3,508		1.6
Total	$	221,940	$	—	$	221,940	$	(99,735)	$	(33,437)	$	(133,172)	$	122,205	$	88,768	4.2

Amortization expense related to acquisition-related intangible assets was $33.4 million, $33.7 million and $29.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, future estimated amortization expense related to the acquired-related intangible assets is as follows (in thousands):


Years Ending December 31,	Future Amortization Expense
2024	$	26,759
2025	19,642
2026	17,260
2027	13,436
2028	10,037
Thereafter	1,634
Total	$	88,768