Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment at the reporting unit level using either a qualitative or quantitative assessment on an annual basis, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets.

The changes in the carrying amount of goodwill as of June 30, 2024 and December 31, 2023 are as follows:


	Consolidated

	(In thousands)
Balance as of December 31, 2022	$	296,214
Adjustments to goodwill:
Goodwill impairment (1)	(11,895)
Foreign exchange adjustment	1,312
Balance as of December 31, 2023	$	285,631
Adjustments to goodwill:

Goodwill impairment (1)	(3,627)
Foreign exchange adjustment	(1,278)
Balance as of June 30, 2024	$	280,726

——————————————

(1) The sum of these amounts represents the accumulated goodwill impairment balance in our operating segment as of June 30, 2024.

As a result of the Company’s intention to sell or dispose of its WildHealth reporting unit, during the first quarter of 2024, the Company recorded a non-cash impairment charge of $3.6 million in the condensed consolidated statements of operations, to recognize a full impairment of goodwill associated with its WildHealth reporting unit. There were no impairments of goodwill in the Company’s Business reporting unit during the three and six months ended June 30, 2024. There were no impairments of goodwill during the three and six months ended June 30, 2023.

Intangible Assets, Net

Intangible assets are summarized as follows:


	June 30, 2024
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period

	(In thousands)						(In years)
Amortizing intangible assets:
Technology	$	94,559	$	(67,998)	$	26,561	5.0
Customer relationships	32,060		(20,593)		11,467		10.0
Patents	16,497		(2,226)		14,271		13.6
Trademarks	1,404		(826)		578		5.0
Trade names	1,044		(1,044)		—		2.8
Other	914		(835)		79		4.1
Total	$	146,478	$	(93,522)	$	52,956


	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period

	(In thousands)						(In years)
Amortizing intangible assets:
Technology	$	94,549	$	(60,465)	$	34,084	5.0
Customer relationships	32,025		(19,542)		12,483		10.0
Patents	15,350		(1,916)		13,434		12.9
Trademarks	1,400		(707)		693		5.0
Trade names	1,044		(672)		372		2.8
Other	914		(355)		559		4.1
Total	$	145,282	$	(83,657)	$	61,625

Amortization expense is calculated over the estimated useful life of the asset. Aggregate amortization expense for intangible assets and finance leases, net was $3.7 million and $5.5 million for the three months ended June 30, 2024 and 2023, respectively, and $7.9 million and $10.9 million for the six months ended June 30, 2024 and 2023, respectively. Of these amounts, amortization expense included in cost of revenue in our condensed consolidated statements of operations was $3.0 million and $4.6 million for the three months ended June 30, 2024 and 2023, respectively, and $6.3 million and $9.1 million for the six months ended June 30, 2024 and 2023, respectively.

As a result of our impairment test during the first quarter of 2024, the Company recognized an immaterial non-cash impairment charge of $2.2 million included in impairment of intangibles and other assets in the condensed consolidated statements of operations, related to intangible assets associated with its WildHealth reporting unit, due to a plan to sell or dispose of the WildHealth reporting unit, as discussed above. There were no impairments of intangible assets during the three and six months ended June 30, 2023.

As of June 30, 2024, estimated annual amortization expense for the next five years and thereafter is as follows:


	Estimated Amortization Expense
	(In thousands)
Remainder of 2024	$	7,307
2025	14,205
2026	11,519
2027	1,411
2028	1,343
Thereafter	17,171
Total	$	52,956