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Goodwill and Intangible Assets | 6 Months Ended
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Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date). The following table presents the changes in the carrying amount of goodwill for the periods indicated:
|  | Six Months Ended June 30,
|  | 2024 |  | 2023
|  | (in thousands)
Beginning balance |  | $ | 318,588 |  |  | $ | 306,739 |
Acquisitions (Note 3) |  | — |  |  | 11,717 |
Ending balance |  | $ | 318,588 |  |  | $ | 318,456 |
The Company performs an annual goodwill impairment assessment on October 31st each year, using a quantitative assessment comparing the fair value of each reporting unit, which the Company has determined to be the entity itself, with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded. As a result of the Company’s impairment assessment, no goodwill impairment was recognized as of October 31, 2023. In addition to its annual review, the Company performs a test of impairment when indicators of impairment are present. During the six months ended June 30, 2024 and 2023, there were no indications of impairment of the Company’s goodwill balances. Acquired Intangibles Finite-lived Intangible Assets The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases, which are amortized over their estimated useful lives:
|  |  | June 30, 2024 |  | December 31, 2023
| Weighted Average Useful Life (in Years) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
|  |  | (in thousands)
Licensed technology | 7.0 |  | $ | 23,276 |  |  | $ | (1,924) |  |  | $ | 21,352 |  |  | $ | 20,133 |  |  | $ | (1,431) |  |  | $ | 18,702 |
Developed technology | 6.9 |  | 311,261 |  |  | (276,946) |  |  | 34,315 |  |  | 311,261 |  |  | (263,635) |  |  | 47,626 |
Trademarks and trade names | 6.2 |  | 14,800 |  |  | (14,348) |  |  | 452 |  |  | 14,800 |  |  | (14,276) |  |  | 524 |
Customer relationships | 5.0 |  | 128,800 |  |  | (127,117) |  |  | 1,683 |  |  | 128,800 |  |  | (126,347) |  |  | 2,453 |
Patents | 7.0 |  | 4,780 |  |  | (796) |  |  | 3,984 |  |  | 4,780 |  |  | (455) |  |  | 4,325 |
| 6.1 |  | $ | 482,917 |  |  | $ | (421,131) |  |  | $ | 61,786 |  |  | $ | 479,774 |  |  | $ | (406,144) |  |  | $ | 73,630 |
The following table sets forth amortization expense associated with finite-lived intangible assets, which is included in the consolidated statements of operations as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
| (in thousands) |  | (in thousands)
Cost of net revenue | $ | 5,336 |  |  | $ | 9,333 |  |  | $ | 13,804 |  |  | $ | 18,791 |
Research and development | — |  |  | 1 |  |  | — |  |  | 2 |
Selling, general and administrative | 592 |  |  | 709 |  |  | 1,183 |  |  | 1,637 |
| $ | 5,928 |  |  | $ | 10,043 |  |  | $ | 14,987 |  |  | $ | 20,430 |
Amortization of finite-lived intangible assets in cost of net revenue in the consolidated statements of operations results primarily from acquired developed technology. The following table sets forth the activity related to finite-lived intangible assets:
|  | Six Months Ended June 30,
|  | 2024 |  | 2023
|  | (in thousands)
Beginning balance |  | $ | 73,630 |  |  | $ | 109,316 |
Additions |  | 3,143 |  |  | 5,524 |
Other disposals |  | — |  |  | (769) |
Amortization |  | (14,987) |  |  | (20,430) |
Impairment losses |  | — |  |  | (2,438) |
Ending balance |  | $ | 61,786 |  |  | $ | 91,203 |
The Company regularly reviews the carrying amount of its long-lived assets subject to depreciation and amortization, as well as the related useful lives, to determine whether indicators of impairment may exist that warrant adjustments to carrying values or estimated useful lives. An impairment loss is recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of the asset. Should impairment exist, the impairment loss is measured based on the excess of the carrying amount of the asset over the asset’s fair value. During the three and six months ended June 30, 2024, and the three months ended June 30, 2023, no impairment losses related to finite-lived intangible assets were recognized. During the six months ended June 30, 2023, impairment losses related to finite-lived intangible assets of $2.4 million were recognized. The impairment losses were attributable to certain purchased licensed technology. The following table presents future amortization of the Company’s finite-lived intangible assets at June 30, 2024:
|  | Amount
|  | (in thousands)
2024 (6 months) |  | $ | 8,370 |
2025 |  | 14,795 |
2026 |  | 13,966 |
2027 |  | 10,354 |
2028 |  | 5,016 |
Thereafter |  | 9,285 |
Total |  | $ | 61,786 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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