Acquisitions, Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Purchase Price Allocation

The following table sets forth the components and the preliminary allocation of the purchase price for the business combination and summarizes the preliminary fair values of the assets acquired and liabilities assumed at the Acquisition Date:

Total consideration:
Consideration Paid	$	100,716
Amount due from seller	(317)
Total consideration transferred	$	100,399
Cash and cash equivalents	$	1,376
Accounts receivable	1,042
Prepayments and other current assets	193
Property and equipment	4,515
Operating lease right-of-use asset, net	4,398
Finance lease right-of-use asset, net	11,958
Other Long Term Assets	367
Intangible assets	37,690
Accounts payable and accrued expenses	(1,445)
Deferred revenue	(105)
Operating lease liabilities- Current	(1,475)
Operating lease liabilities- Non-Current	(2,923)
Finance lease liabilities- Current	(5,707)
Finance lease liabilities- Non-Current	(6,251)
Deferred tax liabilities	(1,074)
Net identifiable assets acquired	42,559
Goodwill	57,840
Total fair value of net assets acquired	$	100,399

The following table sets forth the components and the allocation of the purchase price for the business combination and summarizes the fair values of the assets acquired and liabilities assumed at the Acquisition Date:

Total consideration:
Cash paid to Cloudways sellers	$	278,187
Cash contributed to escrow accounts	42,000
Other expenses	150
Less: Cash pre-funded from contingent compensation	(9,100)
Total consideration paid	$	311,237
Cash and cash equivalents	$	5,827
Accounts receivable	4,753
Prepayments and other current assets	547
Other long term assets	9
Identifiable intangible assets	72,000
Accounts payable	(1,820)
Accrued expenses	(957)
Deferred revenue	(1,013)
Deferred tax liabilities	(3,417)
Other current liabilities	(23,243)
Net identifiable assets acquired	52,686
Goodwill	258,551
Total fair value of net assets acquired	$	311,237

Schedule of Intangible Assets Acquired

The preliminary fair values allocated to the identifiable intangible assets and their estimated useful lives are as follows:

Intangible assets	Preliminary fair value		Weighted Av. Useful Life (yrs)
Trademark/Trade Name	$	300	1
Developed Technology	24,120		5
Customer Relationships	13,270		5
Total identifiable intangible assets	$	37,690

The fair values allocated to the identifiable intangible assets and their estimated useful lives are as follows:

Intangible assets	Fair Value		Weighted Average Useful Life in Years
Trade name	$	9,500	10
Developed technology	31,500		5
Customer relationships	31,000		7
Total identifiable intangible assets	$	72,000

Schedule of Pro Forma Information

The unaudited pro forma information below summarizes the combined results of the Company and Paperspace as if the Company’s acquisition of Paperspace closed on January 1, 2022 but does not necessarily reflect the combined actual results of operations of the Company and Paperspace that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Paperspace, including additional amortization of acquired assets and the timing of nonrecurring acquisition and integration related costs, and other adjustments the Company believes are reasonable for the pro forma presentation. If Paperspace had been acquired on January 1, 2022 and included in the Company’s results for 2022 and 2023, it would not have had a material impact to revenue.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Pro-forma net income (loss)	$	17,708	$	2,935	$	(7,500)	$	(41,433)

The unaudited pro forma information below summarizes the combined results of the Company and Cloudways as if the Company’s acquisition of Cloudways closed on January 1, 2021 but does not necessarily reflect the combined actual results of operations of the Company and Cloudways that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Cloudways, including additional amortization adjustments for the fair value of the assets acquired and liabilities assumed and other adjustments the Company believes are reasonable for the pro forma presentation.

	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Pro-forma revenue	$	160,457	$	444,193
Pro-forma net income (loss)	10,010		(24,837)

Schedule of Movements in Goodwill

Movements in goodwill during the nine months ended September 30, 2023 were as follows:

Balance at December 31, 2022	$	315,168
Acquisition of Paperspace	57,840
Measurement period adjustments	(24,686)
Balance at September 30, 2023	$	348,322