Acquisitions, Acquired Intangible Assets, and Goodwill

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions, Acquired Intangible Assets, and Goodwill

Acquisitions, Acquired Intangible Assets, and Goodwill

Acquisitions

Backlinko

On January 13, 2022, the Company completed an asset purchase agreement with Backlinko, LLC (“Backlinko”), acquiring certain of Backlinko’s assets for cash consideration of $4,000. The purpose of this asset acquisition was to acquire valuable content and to access an existing revenue stream in Backlinko’s SEO courses.

The Company accounted for this transaction as an asset acquisition and allocated the cost of the asset acquisition to the individual assets acquired. The Company allocated $3,915 to the acquired intangible assets and the remaining cost of the acquisition was allocated to the other assets acquired, which were not material. The identifiable intangible assets consisted of trade names and intellectual property, which the Company amortizes over the assets’ useful lives using a straight-line amortization method. The Company assigned useful lives to the acquired trade name and content of five years and four years, respectively.

Kompyte

On March 14, 2022, the Company executed a purchase agreement with Intellikom, Inc., which does business under the name Kompyte (“Kompyte”) to acquire 100% of Kompyte’s assets for cash consideration of $10,000. The purpose of the acquisition of Kompyte was to acquire Kompyte’s assets, including its competitive intelligence automation platform. Aggregate acquisition-related costs associated with this business combination were not material for the year ended December 31, 2022, and were included in general and administrative expenses in the consolidated statement of operations and comprehensive loss. The results of operations of Kompyte have been included in the Company’s consolidated financial statements from the date of acquisition.

The Company has accounted for this transaction as a business combination under the acquisition method. The total purchase price was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values. The Company recorded the excess of the purchase price over those fair values as goodwill that is not deductible for tax purposes. The following table presents the purchase price allocation recorded in the Company’s consolidated balance sheet as of the acquisition date, which was final as of June 30, 2022:

	Purchase Price
Assets acquired	Allocation
Fair value of tangible assets:
Other assets	$	328
Goodwill	4,928
Identifiable intangible assets	5,500
Total assets acquired	$	10,756
Liabilities assumed
Current and non-current liabilities	$	756
Total liabilities assumed	$	756
Net assets acquired	$	10,000

The Company allocated $5,500 of the purchase price to identifiable intangible assets consisting of developed technology, trade names, and customer relationships, which it amortizes over the assets’ useful lives using a straight-line amortization method. The Company assigned useful lives to acquired developed technology, trade names, and customer relationships of six years, six years, and three years, respectively.

This business combination did not have a material impact on the Company’s consolidated financial statements. Therefore, actual results of operations subsequent to the acquisition date and pro forma results of operations have not been presented.

Intangible Assets

Intangible assets consist of intangible assets resulting from the Company’s acquisitions and its capitalized internal-use software development costs. Intangible assets consist of the following:

	As of December 31, 2022
	Weighted
	Average
	Remaining	Gross				Net
	Useful Life	Carrying		Accumulated		Carrying
	(years)	Amount		Amortization		Amount
Developed technology	4.8	$	4,007	$	(765)	$	3,242
Trade name	4.6	3,810		(656)		3,154
Content	3.1	1,958		(471)		1,487
Customer relationships	2.3	600		(159)		441
Capitalized internal-use software	2.6	3,415		(1,453)		1,962
Total as of December 31, 2022		$	13,790	$	(3,504)	$	10,286

	As of December 31, 2021
	Weighted
	Average
	Remaining	Gross				Net
	Useful Life	Carrying		Accumulated		Carrying
	(years)	Amount		Amortization		Amount
Developed technology	4.7	$	1,194	$	(266)	$	928
Trade name	1.7	68		(30)		38
Capitalized internal-use software	2.5	2,964		(1,005)		1,959
Total as of December 31, 2021		$	4,226	$	(1,301)	$	2,925

During the years ended December 31, 2022, 2021, and 2020, the Company capitalized $1,760, $1,403, and $1,032, respectively, of internal-use software development costs which are classified as intangible assets on the accompanying consolidated balance sheets, and recorded associated amortization expense of $570, $482, and $305.

Amortization expense for acquired intangible assets was $1,880, $227, and $69 for the years ended December 31, 2022, 2021, and 2020, respectively.

As of December 31, 2022, future amortization expense is expected to be as follows:

Fiscal Year Ended December 31,	Amount
2023	$	2,486
2024	2,265
2025	2,104
2026	1,721
2027 and thereafter	1,710
Total	$	10,286

Goodwill

The changes in the carrying value of goodwill during the year ended December 31, 2022 were as follows:

	Amount
Balance as of January 1, 2022	$	1,991
Kompyte acquisition	4,928
Foreign currency translation adjustment	(390)
Balance as of December 31, 2022	$	6,529