v3.26.1
Business Combinations
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations
Note 3. Business Combinations
Kenzo Security, Inc.
On March 26, 2026, we acquired all of the equity interest of Kenzo Security, Inc. ("Kenzo"), a United States-based agentic AI security platform built to scale autonomous security investigations, for a purchase price with an aggregate fair value of $25.5 million. The purchase consideration consisted of $24.2 million in cash paid at closing and $1.3 million of deferred cash payments related to certain indemnities outlined in the purchase agreement. The acquisition further enhances our Command Platform, accelerating managed detection and response ("MDR") services from AI-assisted workflows to AI-driven, machine-speed security operations.
In connection with the acquisition, we committed to issue an aggregate value of $25.3 million of our common stock to two key employees of Kenzo (the "Key Employee Consideration"), subject to continued employment. These shares will be issued in three equal annual installments over a 36-month period, starting on the first anniversary of the closing date of the transaction. The Key Employee Consideration will be recognized as stock-based compensation expense over the required employment period. For the three months ended March 31, 2026, we recognized stock-based compensation expense related to the Key Employee Consideration of approximately $0.1 million. The number of shares to be issued at each issuance date will be determined by dividing the aggregate value by the 30-day average closing price per share of our common stock as of the issuance date. The Company's obligations with respect to the Key Employee Consideration will be presented as a liability on our unaudited condensed consolidated balance sheet during the vesting period.
The preliminary allocation of the purchase price is based on our initial estimates of the fair values of assets acquired and liabilities assumed and is subject to revision. The primary areas of the purchase price allocation that are not yet finalized relate to the fair values of the developed technology intangible asset and goodwill. These valuations are pending the completion of third-party appraisals.
The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Consideration:
Cash$24,167 
Deferred cash consideration1,348 
Fair value of total consideration transferred$25,515 
Recognized amount of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents$821 
Accounts receivable134 
Prepaid and other current assets46 
Property and equipment, net10 
Accrued expenses and other current liabilities(10)
Deferred revenue(152)
Other long-term liabilities(600)
Intangible asset7,200 
Total identifiable net assets assumed$7,449 
Goodwill18,066 
Total purchase price allocation$25,515 
We identified developed technology as the sole acquired intangible asset. The estimated fair value of the developed technology intangible asset was $7.2 million with an estimated useful life of the developed technology is 6 years, which was based on a preliminary valuation using a probability weighted expected return model (“PWERM”). As part of the PWERM, we made certain assumptions regarding the present value of the after-tax cash flows attributed to the developed technology at discount rate which reflected any risks associated with the developed technology and our weighted average cost of capital. Any future adjustments made to the fair value of the developed technology, any assets acquired, or liabilities assumed will be adjusted in the period they are determined and recognized with a corresponding adjustment to goodwill.
The excess of the purchase price over the tangible assets acquired, identifiable intangible asset acquired and assumed liabilities was recorded as goodwill. We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the integration of the technology acquired with our existing product offerings and being able to successfully market and sell these new features to our customer base. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible asset were not deductible for tax purposes.

In the three months ended March 31, 2026, we recorded $0.5 million, of acquisition-related transaction costs related to the acquisition of Kenzo to general and administrative expense.

Our revenue and net income attributable to the Kenzo business for the three months ended March 31, 2026 was not material.
Noetic Cyber, Inc.
On July 3, 2024, we acquired Noetic Cyber, Inc, (“Noetic”) for an aggregate fair value of $51.2 million, which included a contingent consideration arrangement (the “Earnout Consideration”) of up to $20.0 million, measured annually over a three-year period (the "Earnout Period") based on the achievement of certain performance targets and continued employment requirements. If all performance targets are achieved, approximately $13.1 million of Earnout Consideration will be paid in cash, and the remaining $6.9 million will be settled in common stock, with the stock settled portion recognized as stock-based compensation expense over the required employment period. The cash-settled portion was included in purchase consideration at acquisition and is remeasured each reporting period, with changes recorded to general and administrative expense.
On October 3, 2025, we distributed $6.0 million as Earnout Consideration related to the initial Earnout Period. Of this amount, $4.1 million was settled in cash, while the remaining $1.9 million was settled through the issuance of 94,229 common stock units. As of March 31, 2026, the fair value of the contingent purchase consideration was $8.9 million which was recorded within accrued expenses and other current liabilities in our unaudited condensed consolidated balance sheet. For the three months ended March 31, 2026, we recorded approximately $0.1 million of accretion expense related to the contingent purchase consideration to general and administrative expense. In the three months ended March 31, 2026, we also recognized stock-based compensation expense related to these share-based awards in the amount of $1.0 million.
Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding the Noetic business combination.
Our revenue and net income attributable to the Noetic business for the three months ended March 31, 2026 was not material.