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Goodwill and Long-Lived Assets | 12 Months Ended
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Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Long-Lived Assets | 4. Goodwill and Long-Li ved Assets Property and Equipment. Property and equipment as of December 31, 2023 and 2022 consisted of the following (in thousands, except years):
|  | Useful Lives |  |  |  |  |  |  |
|  | (Years) |  |  | December 31, 2023 |  |  | December 31, 2022 |
Computer equipment |  | 3-6 |  |  | $ | 89,946 |  |  | $ | 85,432 |
Leasehold improvements |  |  | 10 |  |  |  | 27,134 |  |  |  | 23,996 |
Operating equipment |  | 3-8 |  |  |  | 67,825 |  |  |  | 65,949 |
Furniture and fixtures |  |  | 8 |  |  |  | 2,456 |  |  |  | 1,876 |
|  |  |  |  |  | 187,361 |  |  |  | 177,253 |
Less – accumulated depreciation |  |  |  |  |  | (121,816 | ) |  |  | (105,466 | )
Property and equipment, net |  |  |  |  | $ | 65,545 |  |  | $ | 71,787 |
Goodwill. We do not have any intangible assets with indefinite lives other than goodwill. A rollforward of goodwill for 2022 and 2023 is as follows (in thousands):
January 1, 2022 balance |  | $ | 321,330 |
Adjustments related to prior acquisitions |  |  | 1,896 |
Impairment charge related to MobileCard Holdings, LLC |  |  | (7,211 | )
Effects of changes in foreign currency exchange rates |  |  | (11,979 | )
December 31, 2022 balance |  |  | 304,036 |
Adjustments related to prior acquisitions |  |  | (20 | )
Impairment charge related to Keydok, LLC |  |  | (1,118 | )
Effects of changes in foreign currency exchange rates |  |  | 5,698 |
December 31, 2023, balance |  | $ | 308,596 |
The 2022 adjustments related to prior acquisitions are primarily a result of the finalization of the purchase accounting for MobileCard Holdings, LLC (“MobileCard”) and DGIT Systems Pty Ltd (“DGIT”). See Notes 7 and 8 for further discussion, to include the decisions to dissolve the MobileCard and Keydok, LLC (“Keydok”) businesses, resulting in the impairment charges recorded above. Other Intangible Assets. Our other intangible assets subject to ongoing amortization consist of acquired customer contracts and software. Acquired Customer Contracts. As of December 31, 2023 and 2022, the carrying values of our acquired customer contracts were as follows (in thousands):
|  | December 31, 2023 |  |  | December 31, 2022 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Amount |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Amount |
Acquired customer contracts (1) |  | $ | 162,348 |  |  | $ | (126,469 | ) |  | $ | 35,879 |  |  | $ | 165,497 |  |  | $ | (120,080 | ) |  | $ | 45,417 |
The aggregate amortization related to acquired customer contracts included in our operations for 2023, 2022, and 2021 was as follows (in thousands):
|  | 2023 |  |  | 2022 |  |  | 2021 |
Acquired customer contracts (1) |  | $ | 9,775 |  |  | $ | 11,605 |  |  | $ | 9,240 |
(1) Acquired customer contracts represent assets acquired in our prior business acquisitions. Acquired customer contracts are amortized over their estimated useful lives ranging from three to twenty years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized, with the amortization expense included as cost of revenue in our Income Statements. The remaining weighted-average amortization period of the acquired customer contracts as of December 31, 2023 was approximately 74 months. Based on the net carrying value of these acquired customer contracts, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2024 – $8.6 million; 2025 – $7.7 million; 2026 – $5.9 million; 2027 – $3.1 million; and 2028 – $2.5 million. Software. Software consists of: (i) software and similar intellectual property rights from various business acquisitions; and (ii) internal use software. As of December 31, 2023 and 2022, the carrying values of our software assets were as follows (in thousands):
|  | December 31, 2023 |  |  | December 31, 2022 |
|  | Gross |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Net |  |  | Carrying |  |  | Accumulated |  |  | Net |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Acquired software (2) |  | $ | 84,031 |  |  | $ | (77,520 | ) |  | $ | 6,511 |  |  | $ | 83,543 |  |  | $ | (74,578 | ) |  | $ | 8,965 |
Internal use software (3) |  |  | 87,794 |  |  |  | (80,081 | ) |  |  | 7,713 |  |  |  | 89,568 |  |  |  | (75,759 | ) |  |  | 13,809 |
Total software |  | $ | 171,825 |  |  | $ | (157,601 | ) |  | $ | 14,224 |  |  | $ | 173,111 |  |  | $ | (150,337 | ) |  | $ | 22,774 |
The aggregate amortization related to software included in our operations for 2023, 2022, and 2021 was as follows (in thousands):
|  | 2023 |  |  | 2022 |  |  | 2021 |
Acquired software amortization (2) |  | $ | 2,410 |  |  | $ | 2,750 |  |  | $ | 2,405 |
Internal use software amortization (3) |  |  | 13,624 |  |  |  | 14,140 |  |  |  | 13,316 |
Total software amortization |  | $ | 16,034 |  |  | $ | 16,890 |  |  | $ | 15,721 |
(2) Acquired software represents software intangible assets acquired in our prior business acquisitions, which are amortized over their estimated useful lives ranging from four to eight years. The amortization of acquired software is reflected as a cost of revenue in our Income Statements. (3) Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of the third-party software licenses. Internal use software is amortized over its estimated useful life ranging from one to ten years. The remaining weighted-average amortization period of the software intangible assets as of December 31, 2023 was approximately 24 months. Based on the net carrying value of these intangible assets, the estimated amortization for each of the four succeeding fiscal years ending December 31 will be: 2024 – $8.2 million; 2025 – $3.8 million; 2026 – $2.1 million; and 2027 – $0.1 million; with the software intangible assets being fully amortized by the end of 2027. Customer Contract Costs. As of December 31, 2023 and 2022, the carrying values of our customer contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):
|  | December 31, 2023 |  |  | December 31, 2022 |
|  | Gross |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Net |  |  | Carrying |  |  | Accumulated |  |  | Net |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Customer contract incentives (4) |  | $ | 7,027 |  |  | $ | (4,935 | ) |  | $ | 2,092 |  |  | $ | 6,626 |  |  | $ | (3,798 | ) |  | $ | 2,828 |
Capitalized costs (5) |  |  | 71,976 |  |  |  | (29,027 | ) |  |  | 42,949 |  |  |  | 63,081 |  |  |  | (20,459 | ) |  |  | 42,622 |
Capitalized commission fees (6) |  |  | 17,512 |  |  |  | (8,132 | ) |  |  | 9,380 |  |  |  | 15,629 |  |  |  | (6,344 | ) |  |  | 9,285 |
Total customer contract costs |  | $ | 96,515 |  |  | $ | (42,094 | ) |  | $ | 54,421 |  |  | $ | 85,336 |  |  | $ | (30,601 | ) |  | $ | 54,735 |
The aggregate amortization related to our customer contract costs included in our operations for 2023, 2022, and 2021 was as follows (in thousands):
|  | 2023 |  |  | 2022 |  |  | 2021 |
Customer contract incentives amortization (4) |  | $ | 1,136 |  |  | $ | 792 |  |  | $ | 687 |
Capitalized costs amortization (5) |  |  | 15,422 |  |  |  | 15,918 |  |  |  | 17,955 |
Capitalized commission fees amortization (6) |  |  | 3,733 |  |  |  | 3,028 |  |  |  | 2,576 |
Total customer contract costs amortization |  | $ | 20,291 |  |  | $ | 19,738 |  |  | $ | 21,218 |
(4) Customer contract incentives consist principally of incentives provided to new or existing customers to convert their customer accounts to, or retain their customer accounts on, our solutions. Customer contract incentives are amortized ratably over the contract period to include renewal periods, if applicable, which as of December 31, 2023, have termination dates that range from 2024 to 2027. The amortization of customer contract incentives is reflected as a reduction of revenue in our Income Statements. (5) Capitalized costs are related to: (i) customer conversion/set-up activities; and (ii) direct material costs to fulfill long-term revenue management solutions and managed services arrangements. These costs are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2023, range from 2024 to 2036, and are included in cost of revenue in our Income Statements. (6) Capitalized commission fees are incremental commissions paid as a result of obtaining a customer contract. These fees are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2023, range from 2024 to 2029, and are included in Selling, General, and Administrative (“SG&A”) expenses in our Income Statements. Incremental commission fees incurred as a result of obtaining a customer contract are expensed when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less.

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- Definition The entire disclosure for intangible assets and long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
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