Goodwill and Other Intangible Assets, Net

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

Goodwill and Other Intangible Assets, Net

Goodwill

Changes in the carrying amount of goodwill by operating segment during the nine months ended September 30, 2023, consisted of the following (in thousands):

	Array Legacy Operations(1)		STI Operations		Total
Beginning balance	$	69,727	$	346,457	$	416,184
Adjustment to goodwill (see Note 1)	—		2,000		2,000
Foreign currency translation	—		8,357		8,357
Ending balance	$	69,727	$	356,814	$	426,541

(1) Goodwill attributable to Array Legacy Operations is net of impairment of $51.9 million.

Each quarter the Company evaluates if facts and circumstances indicate that it is more-likely-than-not that the fair value of its reporting units is less than their carrying value, which would require the Company to perform an interim goodwill impairment test. During our most recent evaluation, we concluded there were no indicators of impairment as of September 30, 2023.

Other Intangible Assets, Net

Other intangible assets consisted of the following (in thousands, except useful lives):

	Estimated Useful Lives (Years)	September 30, 2023		December 31, 2022
Amortizable:
Developed technology	14	$	203,800	$	203,800
Customer relationships	10	327,008		321,935
Backlog	1	52,443		51,015
Trade name	20	26,014		25,682
Total amortizable intangibles		609,265		602,432
Accumulated amortization:
Developed technology		105,265		94,347
Customer relationships		105,697		81,268
Backlog		52,443		49,507
Trade name		2,237		1,246
Total accumulated amortization		265,642		226,368
Total amortizable intangibles, net		343,623		376,064
Non-amortizable:
Trade name		10,300		10,300
Total other intangible assets, net		$	353,923	$	386,364

Amortization expense related to intangible assets was $12.6 million and $24.6 million for the three months ended September 30, 2023 and 2022, respectively, of which $3.6 million was included in amortization of developed technology, a component of cost of revenue, in both periods and $9.0 million and $21.0 million, respectively, was included in depreciation and amortization, on the accompanying condensed consolidated statements of operations.

Amortization expense related to intangible assets was $38.8 million and $73.5 million for the nine months ended September 30, 2023 and 2022, respectively, of which $10.9 million was included in amortization of developed technology, a component of cost of revenue, in both periods and $27.9 million and $62.6 million, respectively, was included in depreciation and amortization, on the accompanying condensed consolidated statements of operations.

Estimated future amortization expense of intangible assets as of September 30, 2023, is as follows (in thousands):

	Amount
Remainder of 2023	$	12,384
2024	49,538
2025	49,538
2026	45,232
2027	40,588
Thereafter	146,343
	$	343,623

Long-lived assets, including both amortizable and non-amortizable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. As of September 30, 2023, no events or circumstances were noted that would indicate the carrying amount of any of our asset groups may not be recoverable.