Goodwill |
3 Months Ended | |||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
| Goodwill | 5. Goodwill The following table represents a roll forward of goodwill balances:
As of March 31, 2025, the gross carrying amount and accumulated impairment losses of goodwill were $1.2 billion and $665.0 million, respectively. Goodwill impairment test Informa TechTarget tests whether goodwill is impaired at least annually, during the fourth quarter, or when events and circumstances indicate an impairment may have occurred (a “triggering event”). The Company identified a sustained decline in share price during the first quarter of 2025 that, along with other qualitative considerations including the continued impact from the conditions in the macroeconomic environment, constituted an impairment triggering event for all reporting units. Accordingly, Informa TechTarget performed a quantitative goodwill impairment assessment on its reporting units using the following key assumptions in the fair value calculations: • Projected cash flows: Management used a two-stage valuation approach to project impairment test cash flows, which included key assumptions of forecasted revenue growth rate and EBITDA margin. The first stage consisted of approved projected financial information for a period of three years, followed by a steady state period of long-term growth. Forecasts for the first stage and second stage include management expectations of Informa TechTarget's financial performance with key assumptions of forecasted revenue growth rate and EBITDA margin and represent the best estimate of the future performance of the relevant reporting units. • Discount rate: A post-tax discount rate using a weighted average cost of capital methodology. For the cost of debt, Informa TechTarget considered market rates, based on entities with a comparable credit rating. The cost of equity is calculated using the Capital Asset Pricing Model methodology. The discount rates include appropriate risk premiums to reflect additional risks of the specific reporting units being tested. • Long-term growth rate: Long-term growth rates are based on external factors such as long-term Consumer Price Index rates and external market reports for the main geographic markets in which each reporting unit operates. Long-term growth rates have not been risk adjusted to reflect any of the business uncertainties noted above, as these uncertainties are already reflected in the discount rates used. • Tax rate: For the first quarter of 2025, the tax rate is based on external reports of the weighted-average corporate tax rates for the main geographic markets in which each reporting unit operates. • Net working capital rate: The net working capital rate is based on the market participant level of cash free net working capital, and a comparison of guideline public companies. • Capital expenditures rate: For the first quarter of 2025, the capital expenditures rate is based on the Company’s historical depreciation expense. These estimates can be affected by several factors, including general economic, industry, and regulatory conditions; the risk-free interest rate environment; and Informa TechTarget's ability to achieve its forecasted operating results. At March 31, 2025, Informa TechTarget recognized impairment charges related to its Canalys, Industry Dive, Bluefin Legacy and legacy TechTarget reporting units of $19.7 million, $127.4 million, $123.5 million and $188.5 million, respectively, which after the impairment had remaining goodwill of $30.8 million, $141.7 million(1), $53.3 million and $248.2 million, respectively. For the Company’s NetLine reporting unit, no goodwill impairment was identified as the fair value was greater than its carrying value at March 31, 2025. Throughout the remainder of the fiscal year 2025, the Company will continue to monitor relevant facts and circumstances, including any future declines in its stock price, along with other qualitative considerations, if any, including the continued impact from the conditions in the macroeconomic environment. As a result, the Company may be required to record additional goodwill impairment charges. While management cannot predict if or when additional goodwill impairments may occur, future goodwill impairments could have material adverse effects on the Company's results of operations and financial condition. Please refer to Note 13 Subsequent Events for further information. Fair value assessments of a reporting unit are considered a Level 3 measurement due to the significance of unobservable inputs used in their estimate. For the three months ended March 31, 2025, the discount rate used in the impairment test for the reporting units ranged from 10.0% to 12.0%. For the three months ended March 31, 2025, the long-term growth rate used in the impairment tests was 3.0%. |
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