Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 8 — Goodwill and Intangible Assets

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. The following table presents the changes in goodwill balances for the year ending December 31, 2023:

	Gross carrying		Accumulated
	amount		impairment		Net amount
	(in thousands)
Balance at December 31, 2022	$	430,331	$	248,388	$	181,943
Acquisition		33,021		—		33,021
Balance at December 31, 2023	$	463,352	$	248,388	$	214,964

The Company performs its annual goodwill impairment test at the beginning of the fourth quarter each year. As the Company maintains a single goodwill reporting unit, it determines the fair value of its reporting unit based upon the Company’s adjusted market capitalization. The annual test performed at the beginning of the fourth quarter of fiscal 2023, 2022, and 2021 did not result in any potential impairment as the fair value of the reporting unit was determined to exceed the carrying amount of the reporting unit.

The valuation of goodwill will continue to be subject to changes in the Company’s market capitalization and observable market control premiums. This analysis is sensitive to changes in the Company’s stock price and absent other qualitative factors, the Company may be required to record goodwill impairment charges in future periods if the stock price declines and remains depressed for an extended period of time. 

The components of purchased intangible assets were as follows:

		December 31, 2023						December 31, 2022
	Average			Accumulated						Accumulated
	Remaining	Gross		Amortization				Gross		Amortization
	Amortization	Carrying		and		Net		Carrying		and		Net
	Period	Amount		Impairment		Amount		Amount		Impairment		Amount
	(in years)	(in thousands)
Technology	11.9	$	355,928	$	321,923	$	34,005	$	327,908	$	316,918	$	10,990
Customer relationships	5.3		146,925		137,649		9,276		146,465		135,415		11,050
Trademarks and tradenames	0.6		30,910		30,269		641		30,910		29,063		1,847
Other	0.6		3,746		3,723		23		3,686		3,686		—
Total	10.3	$	537,509	$	493,564	$	43,945	$	508,969	$	485,082	$	23,887

Other intangible assets primarily consist of patents, licenses, and backlog.

Based on the intangible assets recorded at December 31, 2023, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated annual amortization expense, is expected to be as follows:

	Amortization
	(in thousands)
2024	$	6,983
2025		5,394
2026		4,517
2027		4,010
2028		4,050
Thereafter		18,991
Total	$	43,945