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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions by Acquisition, Contingent Consideration

The Giphy purchase price was calculated as follows:

			Purchase Price
Purchase price			$	53,000
Cash acquired and other working capital adjustments			4,750
Cash paid on closing			$	57,750
Fair value of Giphy Retention Compensation contingent consideration1			(98,723)
Fair value of consideration attributable to pre-combination service2			34,972
Net purchase price			$	(6,001)

1 - This amount consists of $123.5 million of Giphy Retention Compensation, adjusted for $18.9 million of income tax obligations associated with the receipt of the Giphy Retention Compensation and $5.9 million for the time value of money.

2 - Relates to the cash value of replaced unvested Meta equity awards attributable to pre-combination services.

Schedule of Aggregate Purchase Price Allocation to Assets Acquired and Liabilities Assumed

The aggregate purchase price for this acquisition has been allocated to the assets acquired and liabilities assumed as follows (in thousands):

Assets acquired and liabilities assumed:			Giphy1
Cash and cash equivalents			$	4,030
Prepaid expenses and other current assets			1,416
Right of use assets			1,243
Intangible assets:
Trade name			21,000
Developed technology			21,500
Intangible assets			42,500
Deferred tax asset			1,006
Other assets			1,647
Total assets acquired			$	51,842
Accounts payable, accrued expenses and other liabilities			(4,949)
Lease liability			(1,090)
Total liabilities assumed			(6,039)
Net assets acquired			$	45,803
Net purchase price			(6,001)
Bargain purchase gain			$	51,804

1 - During the three months ended September 30, 2023, the Company revised its preliminary allocation of the Giphy purchase price to the assets acquired and liabilities assumed by $9.9 million associated with additional information analyzed related to the deferred income tax balances. The measurement and allocation of the purchase price is preliminary and will be finalized within the allowable measurement period once the Company finalizes its assessment of fair value of intangible assets, income tax balances and other assets acquired and liabilities assumed.

The aggregate purchase price for these acquisitions has been allocated to the assets acquired and liabilities assumed as follows (in thousands):

Assets acquired and liabilities assumed:			Pond51			Splash News			Total
Cash and cash equivalents			$	11,675		$	180		$	11,855
Accounts receivable			1,273			500			$	1,773
Other assets			1,102			525			1,627
Right of use asset			1,674			—			1,674
Intangible assets:
Customer relationships			34,900			—			34,900
Trade name			5,300			—			5,300
Developed technology			27,600			1,263			28,863
Intangible assets			67,800			1,263			69,063
Goodwill			158,957			5,565			164,522
Total assets acquired			$	242,481		$	8,033		$	250,514
Accounts payable, accrued expenses and other liabilities			(9,304)			(1,528)			(10,832)
Contributor royalties payable			(3,039)						(3,039)
Deferred revenue			(3,705)			—			(3,705)
Deferred tax liability			(6,381)			(189)			(6,570)
Lease liability			(2,038)			—			(2,038)
Total liabilities assumed			(24,467)			(1,717)			(26,184)
Net assets acquired			$	218,014		$	6,316		$	224,330

____________________________________________________

1 During the three months ended September 30, 2022, the Company updated its preliminary allocation of the Pond5 purchase price to the assets acquired and liabilities assumed. This resulted in a (i) $4.0 million increase to goodwill, (ii) a $4.1 million decrease to intangible assets, including a $7.0 million decrease to the value of customer relationships, partially offset by a $2.3 million increase to the value of the developed technology, and (iii) other immaterial adjustments.

Business Acquisition, Pro Forma Information

These pro forma results have been prepared for comparative purposes only and are based on estimates and assumptions that have been made solely for purposes of developing such pro forma information and are not necessarily indicative of what the Company’s operating results would have been, had the acquisitions actually taken place at the beginning of the previous annual period.

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Revenue
As Reported			$	233,248					$	204,096					$	657,368					$	610,100
Pro Forma			233,248						209,096						667,368						645,383
Income before income taxes
As Reported			$	27,613					$	27,139					$	120,408					$	82,528
Pro Forma			22,080						10,904						58,685						76,810

X

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)(2)
-SubTopic 10
-Topic 805
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479328/805-10-50-2

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)(3)
-SubTopic 10
-Topic 805
-Publisher FASB
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Tabular disclosure of contingent payment arrangements including the terms that will result in payment and the accounting treatment that will be followed if such contingencies occur, including the potential impact on earnings per share if contingencies are to be settled in common stock of the entity. The description also may include the period over which amounts are expected to be paid, and changes in the amount since the previous reporting period. This also includes contingent options and commitments.

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- Definition

Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree.

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