Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Impairment

The Company determined that the significant decline in the U.S. economy as a result of the COVID-19 pandemic, together with the decline in the Company’s stock price, constituted a triggering event, which required the Company to perform interim impairment analyses related to its long-lived assets and goodwill during the first quarter of 2020. The impairment analysis for long-lived assets indicated that the assets were recoverable; therefore, no impairment was recorded. After assessing long-lived assets, the Company performed a goodwill impairment analysis and determined that the fair value of its only reporting unit exceeded its carrying value by approximately $50.3 million. The fair value was determined using the income approach. The Company believes that the income approach is the most reliable indication of fair value since it incorporates future estimated revenues and expenses for the reporting unit that the market approach may not directly incorporate. In addition to future estimated revenue and expenses, the determination of fair value included assumptions related to a discount rate.

The Company will continue to monitor its goodwill on a quarterly basis for indicators of impairment, including but not limited to, further declines in the stock price. Accordingly, there may be future impairments.

Goodwill

The Company’s goodwill relates entirely to the acquisition of Jiff in 2017. As of March 31, 2020, the gross amount of goodwill was $91.8 million and accumulated goodwill impairment was $50.3 million, all of which was recorded in the first quarter of 2020. The goodwill impairment did not involve any cash expenditures.

Intangible assets, net

Identified intangible assets are recorded at their estimated fair values at the date of acquisition and are amortized over their respective estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are used. Backlog and Other acquired intangible assets were fully amortized and written off during the three months ended March 31, 2020.

The following tables set forth the fair value components of identifiable acquired intangible assets (dollars in thousands):

	As of March 31, 2020
	Useful Life	Gross		Accumulated Amortization		Net
Customer relationships	6	$	10,900	$	(4,036)	$	6,864
Developed technology	5	10,600		(6,360)		4,240
Total identifiable intangible assets		$	21,500	$	(10,396)	$	11,104

	As of December 31, 2019
	Useful Life			Gross		Accumulated Amortization		Net
Customer relationships	6			$	10,900	$	(3,509)	$	7,391
Developed technology	5			10,600		(5,830)		4,770
Backlog	2.5			1,500		(1,500)		—
Other acquired intangible assets	1	-	3	900		(883)		17
Total identifiable intangible assets				$	23,900	$	(11,722)	$	12,178

Amortization expense from acquired intangible assets for the three months ended March 31, 2020 and 2019 was $1.1 million and $0.9 million and is included in cost of subscription, sales and marketing, and general and administrative expenses.

Future estimated amortization expense for acquired intangible assets is as follows (in thousands):

Remainder of 2020	$	3,174
2021	4,232
2022	2,642
2023	1,056
Total amortization expense	$	11,104