Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

On September 15, 2023, the Company completed the acquisition of all outstanding equity of Unearth Technologies, Inc. (“Unearth”). This acquisition was accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired were concentrated in a single identifiable asset. The value of developed technology acquired was $9.2 million, which is comprised of $6.8 million of cash paid to Unearth, $2.3 million as a result of the tax consequences of the transaction, and capitalized transaction expenses, which were immaterial. The acquired developed technology has an estimated useful life of five years, and the amortization expense is recorded in cost of revenue on the accompanying condensed consolidated statements of operations and comprehensive loss.

During 2023, the Company also acquired a $2.8 million in-process research and development (“IPR&D”) intangible asset, which was capitalized as an indefinite-lived intangible asset and recorded in intangible assets within the accompanying condensed consolidated balance sheets. No impairments of the IPR&D intangible asset were recorded in any periods presented.

The Company’s finite-lived and indefinite-lived intangible assets are summarized as follows (in thousands):


	March 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Useful Life (Years)
Developed technology	$	166,320	$	(73,781)	$	92,539	4.1
Customer relationships	66,350		(33,990)		32,360		4.1
Total finite-lived intangible assets	232,670		(107,771)		124,899		4.1
In-process research and development	2,848		—		2,848
Total intangible assets	$	235,518	$	(107,771)	$	127,747


	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Useful Life (Years)
Developed technology	$	166,453	$	(67,221)	$	99,232	4.3
Customer relationships	66,350		(30,884)		35,466		4.2
Total finite-lived intangible assets	232,803		(98,105)		134,698		4.3
In-process research and development	2,848		—		2,848
Total intangible assets	$	235,651	$	(98,105)	$	137,546

The Company estimates that there is no significant residual value related to its finite-lived intangible assets. Amortization expense recorded on the Company’s finite-lived intangible assets is summarized as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Cost of revenue	$	5,885	$	5,493
Sales and marketing	3,106		3,107
Research and development	675		734
Total amortization of acquired intangible assets	$	9,666	$	9,334

Goodwill

As of March 31, 2024, the Company had goodwill of $539.1 million on its condensed consolidated balance sheet. The change in the Company’s goodwill balance during the three months ended March 31, 2024 was due to the effect of foreign currency translation. There was no impairment of goodwill during the periods presented.