Goodwill and Intangible Assets, net

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The gross carrying amount and accumulated amortization of the Company’s intangible assets as of September 30, 2023 were as follows:


(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Estimated Useful Life (Years)
Developed technology	$	91,629	$	(61,694)	$	29,935	3-10
Customer relationships	18,230		(10,147)		8,083		5-10
Trademarks	11,510		(5,157)		6,353		15
Capitalized software	16,532		(3,368)		13,164		3-5
Non-compete agreement	5,844		(1,182)		4,662		3
Patents	2,929		(484)		2,445		3-19
Total intangible assets	$	146,674	$	(82,032)	$	64,642

The gross carrying amount and accumulated amortization of the Company’s intangible assets as of December 31, 2022 were as follows:


(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Estimated Useful Life (Years)
Developed technology	$	73,188	$	(54,422)	$	18,766	3-8
Customer relationships	18,089		(7,602)		10,487		5-10
Trademarks	10,907		(4,119)		6,788		15
Capitalized software	9,620		(1,507)		8,113		3-5
Non-compete agreement	776		(395)		381		3
Patents	2,226		(375)		1,851		3-19
Total intangible assets	$	114,806	$	(68,420)	$	46,386

The change in the carrying value of goodwill for the nine months ended September 30, 2023 is as follows:


(in thousands)
December 31, 2022	$	124,593

Foreign currency translation impact	86
September 30, 2023	$	124,679

In February 2023, the Company acquired all of the outstanding shares of Esthetic Medical, Inc. (“EMI”) in exchange for (i) a cash payment of $11.8 million and (ii) 109,625 shares of Class A Common Stock of the Company ($1.3 million). In addition, Dr. Lawrence Groop (the “Seller”) is entitled to receive up to an additional $3.2 million in contingent consideration based upon the achievement of certain conditions defined in the purchase agreement, of which $1.9 million was considered probable as of the acquisition date. Applicable tax guidance was used to apply the simultaneous equation method to incrementally assign $4.6 million to the book value of the intangible asset in excess of the purchase price. The Company accounted for this transaction as an asset acquisition and allocated substantially all of the purchase price and the tax basis difference totaling $19.9 million to intangible assets, primarily related to developed technology.

In July 2023, EMI obtained clearance from the U.S. Food and Drug Administration that the SkinStylus Sterilock MicroSystem is cleared for use as a treatment to improve the appearance of facial acne scars in Fitzpatrick skin types I, II, and III in adults aged 22 years and older (the “Facial Indication Approval”). Obtaining the Facial Indication Approval triggered a $1.3 million contingent payment made in July 2023 by the Company to the Seller, which was previously not considered probable of payment.

In addition, in March 2023, the Company acquired assets from Anacapa Aesthetics LLC and recognized approximately $5 million of intangible assets, primarily related to non-compete agreements.