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ACQUISITIONS
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
ACQUISITIONS ACQUISITIONS
Acquisition of Hatchify Inc. (“Hatch”)
On February 2, 2026, the Company acquired Hatch, an artificial intelligence (“AI”) lead management platform, to complement the Company’s AI capabilities and strategy.
In connection with the acquisition, all outstanding capital stock and options to purchase capital stock of Hatch were converted into the right to receive an aggregate of approximately $271.2 million in cash, subject to customary post-closing adjustments. Of the total amount of consideration, the following amounts were held back: $1.0 million, which was initially held back for a 120-day period after closing and subsequently extended through August 2026; $0.7 million, which is being held back for a 12-month period after closing; and $2.8 million, which is being held back for a 36-month period after closing. The Company recorded $1.7 million and $2.8 million of holdbacks in accounts payable and other accrued expenses and other long-term liabilities, respectively, in the condensed consolidated balance sheets as of June 30, 2026. Pursuant to the Agreement and Plan of Merger, the Company is also providing certain continuing Hatch employees with acquisition- and integration-related payments valued at an aggregate of $30.0 million, which will be paid out over two to three years. Because these payments are contingent on future service, provide benefits to the Company after the closing date, and are not attributable to pre-acquisition ownership interests, they are accounted for as post-combination expenses rather than as part of the purchase consideration.
The acquisition was accounted for as a business combination in accordance with Accounting Standards Codification Topic 805, “Business Combinations,” with the results of Hatch’s operations included in the Company’s condensed consolidated financial statements from February 2, 2026. The Company’s allocation of the purchase price is preliminary as the fair value of net assets acquired and the effects of any net working capital adjustments are still being finalized. Any material measurement period adjustments will be recorded in the period in which the adjustment is identified. During the three months ended June 30, 2026, the Company recorded a measurement period adjustment relating to post-closing adjustments that resulted in a $0.6 million increase in accounts payable and accrued liabilities and a corresponding decrease in goodwill.
The updated preliminary purchase price allocation, subject to finalization during the measurement period, is as follows (in thousands):
February 2, 2026
Fair value of purchase consideration:
Cash:
Total merger consideration
$266,797 
Holdbacks4,425 
Total purchase consideration$271,222 
Fair value of net assets acquired:
Cash and cash equivalents$3,197 
Accounts receivable410 
Prepaid expenses and other current assets
261 
Operating lease right-of-use assets
3,184 
Goodwill220,397 
Intangibles55,000 
Total assets acquired282,449 
Accounts payable and accrued liabilities(3,085)
Operating lease liabilities — current
(758)
Deferred revenue
(1,529)
Operating lease liabilities — long-term
(2,353)
Other long-term liabilities(1)
(3,502)
Total liabilities assumed(11,227)
Net assets acquired$271,222 
(1)    Represents non-current deferred tax liabilities (“DTLs”). Deferred tax assets (“DTAs”) are netted against DTLs within the same jurisdiction.
The amounts assigned to each class of intangible assets acquired and their estimated useful lives are as follows:
Intangible Asset TypeAmount AssignedUseful Life
Developed technology
$30,000 4.0 years
Business relationships
23,000 6.2 years
Trademarks
2,000 4.0 years
Weighted average4.9 years
The Company estimated the fair value of intangible assets acquired using an income approach. Significant assumptions used include forecasted revenue and expenses, customer attrition rate, technology obsolescence, royalty rates and discount rates. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement within the fair value hierarchy. The intangible assets are amortized on a straight-line basis, which reflects the pattern in which the economic benefits of the intangible assets are being utilized. The goodwill results from expected synergies between the Company and Hatch. None of the goodwill is deductible for tax purposes.
For the three and six months ended June 30, 2026, the Company recorded acquisition and integration costs of approximately $3.5 million and $7.9 million, respectively. These amounts include accrued compensation related to acquisition and integration activities and were classified within general and administrative expenses in the accompanying condensed consolidated statements of operations.
The Company has not presented supplemental pro forma information for revenue and earnings related to its acquisition of Hatch because the acquisition is not material to the Company’s condensed consolidated financial statements during the periods presented. From the date of acquisition through June 30, 2026, revenue included in the Company’s condensed consolidated statements of operations attributable to Hatch was $8.5 million and $14.1 million for the three and six months ended June 30,
2026, respectively. Due to the integration of the combined businesses since the date of acquisition, it is impracticable to determine the earnings attributable to Hatch.
Acquisition of RepairPal, Inc. (“RepairPal”)
On November 26, 2024, the Company acquired auto services platform RepairPal. The key purpose underlying the Company’s acquisition of RepairPal was to accelerate its efforts in Services categories by expanding its offerings in the auto services advertising vertical. RepairPal’s results of operations are included in the Company’s consolidated financial statements from November 26, 2024.
In connection with the acquisition, all outstanding capital stock, options and warrants to purchase capital stock of RepairPal were converted into the right to receive total purchase consideration of $80.0 million in cash, including approximately $12.3 million in aggregate holdback liability. Of the total amount of consideration, the following amounts were initially held back to secure the Company’s right of indemnity under the Agreement and Plan of Merger: (1) $8.0 million, which was initially held back for a 15-month period after closing (the “general holdback”), $1.2 million of which was released to the Company as a post-closing purchase price adjustment and the remainder of which the Company is retaining through December 31, 2026 pending the resolution of certain claims by the Company against it; (2) $2.0 million, which is being held back for a 24-month period after closing (the “tax holdback”); and (3) $3.5 million, which was to be held back until 30 days following the final, non-appealable resolution of certain legal matters (the “indemnity holdback”). During the year ended December 31, 2025, the Company incurred approximately $5.0 million in indemnifiable legal expenses (originally recorded in general and administrative expenses), $3.5 million of which was recovered from the indemnity holdback and the remainder of which was recovered from the general holdback. As a result, as of June 30, 2026 and December 31, 2025, $5.3 million of the general holdback and $2.0 million of the tax holdback remained, both of which were classified as accounts payable and accrued liabilities on the consolidated balance sheets.
The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed was completed as of November 25, 2025, based on estimated fair values as follows (in thousands):
November 25, 2025
Fair value of purchase consideration:
Cash:
Distributed to RepairPal stockholders$63,935 
Paid on behalf of RepairPal stockholders3,812 
Holdbacks12,294 
Total purchase consideration$80,041 
Fair value of net assets acquired:
Cash and cash equivalents$1,565 
Accounts receivable3,057 
Intangibles53,600 
Goodwill28,825 
Other assets620 
Total assets acquired87,667 
Accounts payable and accrued liabilities(3,816)
Deferred tax liability(3,767)
Other liabilities(43)
Total liabilities assumed(7,626)
Net assets acquired$80,041 
The amounts assigned to each class of intangible assets acquired and their estimated useful lives are as follows (in thousands, except years):
Intangible Asset TypeAmount AssignedUseful Life
Business relationships$36,000 8.8 years
Developed technology14,600 4.5 years
Trademarks3,000 11.0 years
Weighted average7.7 years
The Company estimated the fair value of intangible assets acquired using an income approach. Significant assumptions used include forecasted revenue and expenses, customer attrition rate, royalty rates and discount rates. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement within the fair value hierarchy. The intangible assets are amortized on a straight-line basis, which reflects the pattern in which the economic benefits of the intangible assets are being utilized. The goodwill results from expected synergies between the Company and RepairPal. None of the goodwill is deductible for tax purposes.
RepairPal’s results of operations are included in the Company’s condensed consolidated financial statements from November 26, 2024 and the purchase price allocation was finalized on November 25, 2025. Acquisition and integration costs, which were included in general and administrative expenses in the accompanying condensed consolidated statements of operations, were not significant for the periods presented. Measurement period adjustments were not significant and were included in the period in which they occurred.
The Company has not presented the supplemental pro forma information for revenue and earnings related to the acquisition, as the acquisition is not material to the Company’s consolidated financial statements during the periods presented.