Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

4. Goodwill and Other Intangible Assets

Changes in the Company’s goodwill balance for the three months ended March 31, 2020 are summarized in the table below (in thousands):


Balance at December 31, 2019	$	346,134
Acquired in business combinations	39,646

Adjustment related to prior year business combinations	(996)

Foreign currency translation adjustment	(7,039)
Balance at March 31, 2020	$	377,745

Net intangible assets include the estimated acquisition-date fair values of customer relationships, marketing-related assets, and developed technology that the Company recorded as part of its business acquisitions.

The following is a summary of the Company’s intangible assets, net (in thousands):


	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
March 31, 2020:
Customer relationships	1-10	$	307,854	$	61,530	$	246,324
Trade name	1.5-10	8,953		4,042		4,911
Developed technology	4-9	76,577		25,342		51,235
Non-compete agreements	3	1,148		670		478
Total intangible assets		$	394,532	$	91,584	$	302,948


	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
December 31, 2019:
Customer relationships	1-10	$	283,005	$	53,984	$	229,021
Trade name	1.5-10	8,827		3,884		4,943
Developed technology	4-9	71,522		23,333		48,189
Non-compete agreements	3	1,148		574		574
Total intangible assets		$	364,502	$	81,775	$	282,727

The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life. During the three months ended March 31, 2020, the Company considered the current market and economic condition arising from the COVID-19 pandemic to be a potential indicator of impairment of the Company’s intangible assets and goodwill. Based on management’s qualitative review no impairment of intangible assets or goodwill was identified. During the fourth quarter of 2019, management made the decision to sunset and divest certain minor non-strategic customer contracts and related website management and analytics assets. The remaining useful life of certain customer relationship assets included in the sunset asset group were reduced by 1 year to 2.5 years which represents the term left on the current active contracts. Total amortization expense during the three months ended March 31, 2020 and March 31, 2019 was $11.2 million and $6.8 million, respectively.

The Company has historically performed its annual goodwill and indefinite-lived intangible asset impairment test as of October 31^st. During the first quarter of 2020 the Company decided to change the date of its annual impairment test to the first day of its fourth fiscal quarter, October 1^st. This change was made to improve alignment with our quarterly financial reporting process and our annual planning and budgeting process. In connection with the change in the date of our annual goodwill and indefinite-lived intangible asset impairment test the Company will also perform a qualitative assessment as of October 31, 2020 to ensure the change does not result in the delay, acceleration or avoidance of an impairment charge.

Estimated annual amortization expense for the next five years and thereafter is as follows (in thousands):


	Amortization Expense
Year ending December 31:
Remainder of 2020	$	33,275
2021	42,822
2022	40,290
2023	38,244
2024	35,603
2025 and thereafter	112,714
Total	$	302,948