Goodwill and Intangible Assets

9 Months Ended

Sep. 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 September 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	327
Balance as of September 30, 2024	$	282,331

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(1) The sum of these amounts represents the accumulated goodwill impairment balance in our operating segment as of September 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. WildHealth was divested in June 2024. Refer to Note 19 - Divestitures for additional information.

There were no impairments of goodwill in the Company’s Business reporting unit during the three and nine months ended September 30, 2024.

As of September 30, 2023, the Company’s reporting units consisted of Business and WildHealth. Based on the Company’s 2023 annual goodwill impairment test, the Company recorded a non-cash impairment charge of $11.9 million in the condensed consolidated statements of operations during the three months ended September 30, 2023, representing a portion of goodwill related to the WildHealth reporting unit. There were no impairments of the Company’s Business reporting unit during the three and nine months ended September 30, 2023.

Intangible Assets, Net

Intangible assets are summarized as follows as of the dates presented:


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

	(In thousands)						(In years)
Amortizing intangible assets:
Technology	$	94,586	$	(70,923)	$	23,663	5.0
Customer relationships	32,066		(21,143)		10,923		10.0
Patents	17,088		(2,394)		14,694		12.6
Trademarks	1,404		(863)		541		5.0
Trade names	1,045		(1,045)		—		2.8
Other	914		(835)		79		4.1
Total	$	147,103	$	(97,203)	$	49,900


	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 purchased intangible assets and finance leases, net was $3.7 million and $5.5 million for the three months ended September 30, 2024 and 2023, respectively, and $11.6 million and $16.4 million for the nine months ended September 30, 2024 and 2023, respectively. Of these amounts, amortization expense included in Cost of revenue in the condensed consolidated statements of operations was $2.9 million and $4.6 million for the three months ended September 30, 2024 and 2023, respectively, and $9.2 million and $13.7 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable and the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows that are expected to result from the use of the asset. There were no impairments of intangible assets during the three months ended September 30, 2024. During the first quarter of 2024, the Company recognized a non-cash impairment charge related to WildHealth of $2.2 million included in Impairment of intangibles and other assets in the condensed consolidated statements of operations. During the three months ended September 30, 2023, the Company recognized a non-cash impairment charge related to WildHealth of $3.0 million included in Impairment of intangibles and other assets in the condensed consolidated statements of operations. WildHealth was divested in June 2024. Refer to Note 19 - Divestitures for additional information.

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


	Estimated Amortization Expense
	(In thousands)
Remainder of 2024	$	3,660
2025	14,230
2026	11,544
2027	1,436
2028	1,368
Thereafter	17,662
Total	$	49,900