Acquisition, Goodwill and Acquisition-Related Intangible Assets

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition, Goodwill and Acquisition-Related Intangible Assets

Acquisition, Goodwill and Acquisition-Related Intangible Assets

Acquisitions

    During the six months ended June 30, 2022, we completed two acquisitions of private companies for total consideration of $158.9 million including $4.0 million in common stock and the remainder in cash. The purchase prices included $62.3 million of intangible assets, $85.1 million of goodwill and $11.5 million of net assets acquired. We also incurred certain acquisition-related expenses of $4.7 million, which primarily consisted of retention bonuses to continuing employees as well as professional and consulting fees.

    The intangible assets are amortized on a straight-line basis over their estimated useful lives, as we believe this method most closely reflects the pattern in which the economic benefits of the assets will be consumed. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except years):

	Acquisition Date Fair Value		Weighted Average Estimated Useful Life (in years)
Developed technology	$	30,200	5.7
Customer relationships	28,700		7.0
Trade name	3,400		3.0
Total intangible assets acquired	$	62,300

Goodwill

    The changes in the carrying values of goodwill for the three and six months ended June 30, 2022 are as follows (in thousands):

	Amount
Balance at December 31, 2021	$	188,397
Additions related to the acquisition completed in January, 2022	28,518
Balance at March 31, 2022	$	216,915
Additions related to the acquisition completed in June, 2022	56,530
Measurement-period adjustments to the acquisition completed in January, 2022	49
Balance at June 30, 2022	$	273,494

Acquisition-Related Intangible Assets

    Acquisition-related intangible assets were as follows (in thousands, except years):

	Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount				Weighted Average Remaining Useful Life (in years)
	December 31, 2021		Additions		June 30, 2022		December 31, 2021		Amortization		June 30, 2022		December 31, 2021		June 30, 2022
Developed technology	$	124,730	$	30,200	$	154,930	$	(53,663)	$	(11,732)	$	(65,395)	$	71,067	$	89,535	4.7
Customer relationships	25,920		28,700		54,620		(7,899)		(2,347)		(10,246)		18,021		44,374		6.1
Trade name	8,990		3,400		12,390		(4,693)		(770)		(5,463)		4,297		6,927		3.1
Others	5,720		—		5,720		(5,550)		(170)		(5,720)		170		—		0.0
Total	$	165,360	$	62,300	$	227,660	$	(71,805)	$	(15,019)	$	(86,824)	$	93,555	$	140,836	5.1

    Amortization expense related to acquisition-related intangible assets was $7.7 million, and $7.4 million for the three months ended June 30, 2022 and 2021, and $15.0 million and $14.8 million for the six months ended June 30, 2022 and 2021, respectively.

    As of June 30, 2022, future estimated amortization expense related to the acquisition-related intangible assets is as follows (in thousands):

	Future Amortization Expense
Remainder of 2022	$	18,630
2023	33,438
2024	26,759
2025	19,642
2026	17,260
Thereafter	25,107
Total	$	140,836