Business Combinations, Intangible Assets, and Goodwill

12 Months Ended

Jan. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Business Combinations, Intangible Assets, and Goodwill

Business Combinations, Intangible Assets, and Goodwill

Business Combinations

During the fiscal year ended January 31, 2021, the Company acquired certain assets from a privately-held company for $7.1 million in cash. The Company has accounted for this transaction as a business combination. In allocating the aggregate purchase price based on the estimated fair values, the Company recorded $5.7 million as a developed technology intangible asset (to be amortized over an estimated useful life of five years) and $1.4 million as goodwill, which is deductible for income tax purposes.

During the fiscal year ended January 31, 2020, the Company completed acquisitions of two privately-held companies for an aggregate of $13.3 million in cash and equity. The Company has accounted for these transactions as business combinations. In allocating the aggregate purchase price based on the estimated fair values, the Company recorded a total of $5.6 million of developed technology intangible assets (to be amortized over estimated useful lives of five years), $1.1 million of net assets acquired, $0.5 million of a deferred tax liability, $0.1 million of a customer relationships intangible asset, and $7.0 million of goodwill, which is not deductible for income tax purposes.

The excess of purchase consideration over the fair value of net tangible and identifiable assets acquired was recorded as goodwill. The Company believes the goodwill balances associated with these business combinations represent the synergies expected from expanded market opportunities when integrating the acquired developed technologies with the Company’s offerings.

Aggregate acquisition-related costs associated with these business combinations were not material for all periods presented, and were included in general and administrative expenses in the consolidated statements of operations. The results of operations of the business combinations have been included in the Company’s consolidated financial statements from the acquisition dates. These business combinations did not have a material impact on the Company’s consolidated financial statements. Therefore, historical results of operations prior to the acquisition dates and pro forma results of operations have not been presented.

Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

	January 31, 2022
	Gross		Accumulated Amortization		Net
Finite-lived intangible assets:
Assembled workforce	$	28,252	$	(3,941)	$	24,311
Developed technology	11,332		(4,812)		6,520
Patents	8,174		(2,690)		5,484
Other	47		(47)		—
Total finite-lived intangible assets	$	47,805	$	(11,490)	$	36,315
Infinite-lived intangible assets - trademarks					826
Total intangible assets, net					$	37,141

	January 31, 2021
	Gross		Accumulated Amortization		Net
Finite-lived intangible assets:
Developed technology	$	11,332	$	(2,546)	$	8,786
Patents	7,948		(1,069)		6,879
Other	47		(47)		—
Total finite-lived intangible assets	$	19,327	$	(3,662)	$	15,665
Infinite-lived intangible assets - trademarks					426
Total intangible assets, net					$	16,091

Intangible assets acquired during the fiscal year ended January 31, 2022 consisted primarily of $28.3 million of assembled workforce assets with a useful life of four years.

Amortization expense of intangible assets was $7.8 million, $2.8 million, and $0.9 million for the fiscal years ended January 31, 2022, 2021, and 2020, respectively.

As of January 31, 2022, future amortization expense is expected to be as follows (in thousands):

	Amount
Fiscal Year Ending January 31,
2023	$	10,976
2024	10,976
2025	10,126
2026	4,237
2027	—
Thereafter	—
Total	$	36,315

Goodwill

Changes in goodwill were as follows (in thousands):

	Amount
Balance—January 31, 2020	$	7,049
Addition	1,400
Balance—January 31, 2021 and January 31, 2022	$	8,449