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Acquisitions, Intangible Assets and Goodwill
 12 Months Ended
Dec. 31, 2022
Acquisitions, Intangible Assets And Goodwill [Abstract]  
Acquisitions, Intangible Assets and Goodwill Acquisitions, Intangible Assets and Goodwill
2022 Acquisitions
During the year ended December 31, 2022, the Company entered into four purchase agreements for acquisitions of businesses, each of which were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $8.2 million and goodwill in the amount of $56.6 million based on the respective estimated fair values. The resulting goodwill from each of the agreements is not deductible for income tax purposes. Pro forma results of operations from these acquisitions have not been presented because they were not material to the consolidated results of operations.
2021 Acquisitions
In October and December 2021, the Company entered into two purchase agreements for acquisitions of businesses, each of which were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $4.3 million and goodwill in the amount of $36.6 million based on the respective estimated fair values. The resulting goodwill from both agreements is not deductible for income tax purposes. Pro forma results of operations from these acquisitions have not been presented because they were not material to the consolidated results of operations.
In April 2021, the Company entered into a stock purchase agreement whereby the Company acquired all of the issued and outstanding shares of a SaaS based security platform company. The consideration was approximately $219.4 million, comprising cash and Class A common stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $12.0 million and goodwill in the amount of $204.3 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes. Intangible assets consisted of developed technology in the amount of $8.7 million and customer relationships in the amount of $3.3 million. The useful life for developed technology and customer relationships are three and four years, respectively. Additionally, there was a one-time severance charge of $1.3 million recorded on the acquisition date.
In February 2021, the Company entered into a stock purchase agreement whereby the Company acquired all of the issued and outstanding shares of an observability data pipeline tool company with the purchase price paid in cash and Class A common stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $1.7 million and goodwill in the amount of $34.3 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes.
Pro forma results of operations for this acquisition have not been presented because they were not material to the consolidated results of operations.
2020 Acquisition
During the year ended December 31, 2020, the Company completed an acquisition with the purchase price in cash and stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $1.5 million and goodwill in the amount of $7.8 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes.
Intangible Assets
Intangible assets, net consisted of the following (in thousands):
December 31, 2022
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Amortization
Period
Developed technology$24,460 $(9,970)$14,490 3 years
Customer relationships3,300 (1,425)1,875 4 years
Total$27,760 $(11,395)$16,365 
December 31, 2021
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Amortization
Period
Developed technology$17,186 $(4,182)$13,004 3 years
Customer relationships3,300 (600)2,700 4 years
Total$20,486 $(4,782)$15,704 
Intangible amortization expense was approximately $7.6 million, $4.4 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization of developed technology and customer relationships are included in cost of revenue on the Company’s consolidated statement of operations and comprehensive loss.
As of December 31, 2022, future amortization expense by year is expected to be as follows (in thousands):
Amount
2023$8,741 
20245,740 
20251,884 
Total$16,365 
Goodwill
The changes in the carrying amount of goodwill were as follows (in thousands):
Amount
Balance as of December 31, 2021$292,176 
2022 Acquisitions56,553 
Foreign currency translation adjustments(452)
Balance as of December 31, 2022$348,277 
Acquisitions, Intangible Assets and Goodwill Acquisitions, Intangible Assets and Goodwill
2022 Acquisitions
During the year ended December 31, 2022, the Company entered into four purchase agreements for acquisitions of businesses, each of which were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $8.2 million and goodwill in the amount of $56.6 million based on the respective estimated fair values. The resulting goodwill from each of the agreements is not deductible for income tax purposes. Pro forma results of operations from these acquisitions have not been presented because they were not material to the consolidated results of operations.
2021 Acquisitions
In October and December 2021, the Company entered into two purchase agreements for acquisitions of businesses, each of which were accounted for as business combinations in accordance with ASC 805, Business Combinations. The Company does not consider these acquisitions to be material, individually or in aggregate. The total purchase price was allocated to intangible assets in the amount of $4.3 million and goodwill in the amount of $36.6 million based on the respective estimated fair values. The resulting goodwill from both agreements is not deductible for income tax purposes. Pro forma results of operations from these acquisitions have not been presented because they were not material to the consolidated results of operations.
In April 2021, the Company entered into a stock purchase agreement whereby the Company acquired all of the issued and outstanding shares of a SaaS based security platform company. The consideration was approximately $219.4 million, comprising cash and Class A common stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $12.0 million and goodwill in the amount of $204.3 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes. Intangible assets consisted of developed technology in the amount of $8.7 million and customer relationships in the amount of $3.3 million. The useful life for developed technology and customer relationships are three and four years, respectively. Additionally, there was a one-time severance charge of $1.3 million recorded on the acquisition date.
In February 2021, the Company entered into a stock purchase agreement whereby the Company acquired all of the issued and outstanding shares of an observability data pipeline tool company with the purchase price paid in cash and Class A common stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $1.7 million and goodwill in the amount of $34.3 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes.
Pro forma results of operations for this acquisition have not been presented because they were not material to the consolidated results of operations.
2020 Acquisition
During the year ended December 31, 2020, the Company completed an acquisition with the purchase price in cash and stock. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The purchase price was allocated to intangible assets in the amount of $1.5 million and goodwill in the amount of $7.8 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes.
Intangible Assets
Intangible assets, net consisted of the following (in thousands):
December 31, 2022
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Amortization
Period
Developed technology$24,460 $(9,970)$14,490 3 years
Customer relationships3,300 (1,425)1,875 4 years
Total$27,760 $(11,395)$16,365 
December 31, 2021
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Amortization
Period
Developed technology$17,186 $(4,182)$13,004 3 years
Customer relationships3,300 (600)2,700 4 years
Total$20,486 $(4,782)$15,704 
Intangible amortization expense was approximately $7.6 million, $4.4 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization of developed technology and customer relationships are included in cost of revenue on the Company’s consolidated statement of operations and comprehensive loss.
As of December 31, 2022, future amortization expense by year is expected to be as follows (in thousands):
Amount
2023$8,741 
20245,740 
20251,884 
Total$16,365 
Goodwill
The changes in the carrying amount of goodwill were as follows (in thousands):
Amount
Balance as of December 31, 2021$292,176 
2022 Acquisitions56,553 
Foreign currency translation adjustments(452)
Balance as of December 31, 2022$348,277