Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

4. Goodwill and Other Intangible Assets

Changes in the Company’s goodwill balance for the nine months ended September 30, 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)
Adjustment related to finalization of current year business combinations	273
Foreign currency translation adjustment	(1,721)
Balance at September 30, 2020	$	383,336

Net intangible assets include the estimated acquisition-date fair values of customer relationships, marketing-related assets, developed technology, and non-compete agreements 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
September 30, 2020:
Customer relationships	1-10	$	312,603	$	79,161	$	233,442
Trade name	1.5-10	9,093		4,495		4,598
Developed technology	4-9	77,807		30,821		46,986
Non-compete agreements	3	1,148		862		286
Total intangible assets		$	400,651	$	115,339	$	285,312


	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 nine months ended September 30, 2020, the Company considered whether the current market and economic conditions arising from the COVID-19 pandemic could 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 September 30, 2020 and September 30, 2019 was $11.2 million and $8.0 million, respectively, and the nine months ended September 30, 2020 and September 30, 2019 was $33.6 million and $22.1 million, respectively.

The Company has historically performed its annual goodwill and indefinite-lived intangible asset impairment test as of October 31st. During the first quarter of 2020, the Company changed the date of its annual impairment test to the first day of its fourth fiscal quarter, October 1st. 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.

As of September 30, 2020, the 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	$	10,933
2021	42,822
2022	40,290
2023	38,244
2024	35,603
2025 and thereafter	117,420
Total	$	285,312