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Goodwill and Intangible Assets, Net | 12 Months Ended
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Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill During the year ended December 31, 2023, a decline in our financial performance, overall negative trend in the video service provider channel and an uncertain economic environment contributed to a significant decline in our market capitalization. We considered this to be an impairment trigger. We, therefore, performed a quantitative valuation analysis under an income approach to estimate our reporting unit's fair value. The income approach used projections of estimated operating results and cash flows that were discounted using a discount rate based on the weighted-average cost of capital. The main assumptions supporting the cash flow projections include, but are not limited to, revenue growth, margins, discount rate, and terminal growth rate. The financial projections reflect our best estimate of economic and market conditions over the projected period, including forecasted revenue growth, margins, capital expenditures, depreciation and amortization. In addition to our valuation analysis under an income approach, we also considered the implied control premium compared to our market capitalization. We determined that the implied control premium over our market capitalization to be substantial; therefore, we recorded an impairment charge of $49.1 million during the year ended December 31, 2023. Changes in the carrying amount of goodwill were as follows:
(In thousands) |
Balance at December 31, 2021 | $ | 48,463 |
Goodwill acquired during the period (1) | 713 |
Foreign exchange effects | (91) |
Balance at December 31, 2022 | 49,085 |
Goodwill impairment | (49,075) |
Foreign exchange effects | (10) |
Balance at December 31, 2023 | $ | — |
(1) During the year ended December 31, 2022, we recognized $0.7 million of goodwill related to the Qterics, Inc. acquisition. Refer to Note 21 for further information about this acquisition. We conducted annual goodwill impairment reviews on December 31, 2022 and 2021. Based on the analysis performed, we determined that our goodwill was not impaired. Intangible Assets, Net The components of intangible assets, net were as follows:
| December 31,
| 2023 |  | 2022
(In thousands) | Gross (1) |  | Accumulated Amortization (1) |  | Net (1) |  | Gross (1) |  | Accumulated Amortization (1) |  | Net (1)
Capitalized software development costs | $ | 2,161 |  |  | $ | (421) |  |  | $ | 1,740 |  |  | $ | 1,647 |  |  | $ | (44) |  |  | $ | 1,603 |
Customer relationships | 6,340 |  |  | (3,803) |  |  | 2,537 |  |  | 6,340 |  |  | (3,080) |  |  | 3,260 |
Developed and core technology | 4,220 |  |  | (3,754) |  |  | 466 |  |  | 4,520 |  |  | (3,693) |  |  | 827 |
Distribution rights | — |  |  | — |  |  | — |  |  | 308 |  |  | (281) |  |  | 27 |
Patents | 33,195 |  |  | (12,686) |  |  | 20,509 |  |  | 29,388 |  |  | (10,790) |  |  | 18,598 |
Trademarks and trade names | 450 |  |  | (353) |  |  | 97 |  |  | 450 |  |  | (295) |  |  | 155 |
Total intangible assets, net | $ | 46,366 |  |  | $ | (21,017) |  |  | $ | 25,349 |  |  | $ | 42,653 |  |  | $ | (18,183) |  |  | $ | 24,470 |
(1)This table excludes the gross value of fully amortized intangible assets totaling $45.0 million and $43.7 million on December 31, 2023 and 2022, respectively. Amortization expense is recorded in selling, general and administrative expenses, except amortization expense related to capitalized software development costs, which is recorded in cost of sales. Amortization expense by statement of operations caption was as follows:
| Year Ended December 31,
(In thousands) | 2023 |  | 2022 |  | 2021
Cost of sales | $ | 443 |  |  | $ | 49 |  |  | $ | 27 |
Selling, general and administrative expenses | 4,440 |  |  | 3,969 |  |  | 3,963 |
Total amortization expense | $ | 4,883 |  |  | $ | 4,018 |  |  | $ | 3,990 |
Estimated future annual amortization expense related to our intangible assets at December 31, 2023 is as follows:
(In thousands) |
2024 | $ | 5,095 |
2025 | 4,552 |
2026 | 3,830 |
2027 | 3,135 |
2028 | 2,506 |
Thereafter | 6,231 |
Total | $ | 25,349 |
The remaining weighted average amortization period of our intangible assets at December 31, 2023 is 6.5 years.

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