XML 21 R9.htm IDEA: XBRL DOCUMENT v3.24.3
Acquisitions
 9 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
During the three months ended June 30, 2024, the Company completed the acquisition of 100% of the ownership interests in Latter & Blum Holdings, LLC and Parks Village Nashville, LLC, two residential real estate brokerages, and during the three months ended March 31, 2024, the Company completed the acquisition of 100% ownership interest in a title insurance and escrow settlement services company. The purpose of these acquisitions was to expand the Company’s existing brokerage business and title and escrow presence in key domestic markets. The Company has accounted for these acquisitions as business combinations.
The consideration for the acquisitions completed during the nine months ended September 30, 2024 is comprised of $26.1 million in the Company's Class A common stock, $21.3 million of cash paid at or near closing, net of cash acquired, an additional $2.7 million to be paid in cash and the Company's Class A common stock at a later date and an estimated $7.1 million of additional Class A common stock or cash that may be paid contingent on certain earnings-based targets being met at various payment dates through 2027. Payments in excess of the original estimate may impact the Company's statement of operations in future periods. The future consideration amounts were recorded within Accrued expenses and other current liabilities and Other non-current liabilities in the condensed consolidated balance sheet.
For the nine months ended September 30, 2024, the fair value of the assets acquired and the liabilities assumed, related to the 2024 acquisitions, primarily resulted in the recognition of: $28.7 million of customer relationships; $2.4 million of trademark intangible assets; $20.1 million of other current and non-current assets; and $18.9 million of current and non-
current liabilities. The excess of the aggregate purchase price over the aggregate fair value of the acquired net assets was recorded as goodwill of $24.9 million. Goodwill represents the expected synergies from combining the acquired assets and the operations of the acquirer as well as the intangible assets that do not qualify for separate recognition. The acquired intangible assets are being amortized over the estimated useful lives of approximately 5 to 6 years.
Approximately $9.8 million of the goodwill recorded during the nine months ended September 30, 2024 is deductible for tax purposes. The amount of tax-deductible goodwill may increase in the future to approximately $17.0 million dependent on the payment of certain contingent consideration arrangements. These amounts are not expected to have an impact on the income tax provision while the Company maintains a full valuation allowance on its U.S. deferred tax assets.
The Company has recorded the preliminary purchase price allocations as of the acquisition dates and expects to finalize its analysis within the measurement period (up to one year from each of the respective acquisition dates) of the transactions. Any adjustments during the measurement periods would have a corresponding offset to goodwill. Upon conclusion of the measurement periods or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the consolidated statements of operations.
Pro forma revenue and earnings for this acquisition have not been presented because the acquisition is not material to the Company’s consolidated revenue and results of operations.

Contingent Consideration
Contingent consideration represents obligations of the Company to transfer cash and common stock to the sellers of certain acquired businesses in the event that certain targets and milestones are met. As of September 30, 2024, the undiscounted estimated payment under these arrangements was $39.7 million. Changes in contingent consideration measured at fair value on a recurring basis were as follows (in millions):
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Opening balance$26.9 $17.6 $20.9 $14.0 
Acquisitions and measurement period adjustments(0.3)4.0 7.1 12.8 
Payments(0.4)(3.3)(2.7)(9.1)
Changes in fair value included in net loss0.4 0.5 1.3 1.1 
Closing balance$26.6 $18.8 $26.6 $18.8 
Other Acquisition-Related Arrangements
In connection with the Company’s acquisitions, certain amounts paid or to be paid to selling shareholders are subject to clawback and forfeiture dependent on certain employees and agents providing continued service to the Company. These retention-based payments are accounted for as compensation for future services and the Company recognizes the expenses over the service period. As of September 30, 2024, the Company expects to pay up to an additional $2.6 million in future compensation to such selling shareholders in connection with these arrangements. For the three and nine months ended September 30, 2023, the Company recognized expense of $0.1 million and $2.1 million, respectively, within Operations and support in the condensed consolidated statements of operations related to these arrangements. Expense related to these arrangements was immaterial for the three and nine months ended September 30, 2024