Goodwill and Acquired Intangible Assets

Note 5 - Goodwill and Acquired Intangible Assets

The following table presents the changes in the carrying amount of goodwill for the six months ended June 30, 2026:


(in millions)	Total
Balance at December 31, 2025	$	1,692.7
Impairment loss	(650.5)
Balance at June 30, 2026	$	1,042.2

As of June 30, 2026, accumulated goodwill impairment losses were $650.5 million. There were no accumulated goodwill impairment losses as of December 31, 2025.

During the second quarter of 2026, the Company assessed both the events that occurred and circumstances that changed since its latest annual impairment assessment. Based on the totality of those events and circumstances, which included a sustained decrease in share price, industry considerations, and a decline in planned revenues and earnings as a result of key changes in strategy, the Company concluded that, in accordance with ASC 350, a triggering event occurred during the second quarter of 2026 indicating that potential impairment existed. As a result, the Company was required to conduct an interim test.

The Company subsequently determined that the carrying amount of its reporting unit exceeded its fair value, resulting in a goodwill impairment loss of $650.5 million for both the three and six months ended June 30, 2026, which is presented as a separate line item within operating expenses in the Consolidated Statements of Operations.

The Company estimated the fair value of its reporting unit using an equal weighting of an income approach, employing a discounted cash flow model, and a market approach, employing a guideline public company approach. The discounted cash flow model required the Company to make various assumptions regarding the timing and amount of cash flows, including growth rates, operating margins and capital expenditures, as well as the terminal value, of the Company at the end of the projection period. The terminal value was estimated using a long-term growth rate, which was based on expected trends and inflation data. Additionally, a discount rate was determined for the reporting unit based on the risks of achieving the future cash flows, including risk applicable to the industry and market as a whole, as well as the capital structure of guideline public companies. Under the guideline public company approach, fair value was estimated by calculating operating data from guideline public companies. From the comparable companies, a representative market multiple is selected, which is applied to the Company’s financial metrics to estimate the fair value. Fair value estimates are based on a complex series of judgments about future events and rely heavily on estimates and assumptions that the Company believes are reasonable.

Intangible assets, other than goodwill, consisted of the following as of June 30, 2026 and December 31, 2025, respectively:


(in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangible assets subject to amortization:
Customer relationships	$	288.1	$	(163.3)	$	124.8
Acquired technology	331.3		(298.4)		32.9
Brand portfolio	11.5		(9.5)		2.0
Total intangible assets subject to amortization	$	630.9	$	(471.2)	$	159.7

Intangible assets not subject to amortization
Pre-Acquisition ZI brand portfolio	$	33.0	$	—	$	33.0
Total intangible assets not subject to amortization	$	33.0	$	—	$	33.0

Total intangible assets	$	663.9	$	(471.2)	$	192.7


(in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Intangible assets subject to amortization:
Customer relationships	$	288.1	$	(153.4)	$	134.7
Acquired technology	331.3		(284.2)		47.1
Brand portfolio	11.5		(9.0)		2.5
Total intangible assets subject to amortization	$	630.9	$	(446.6)	$	184.3

Intangible assets not subject to amortization:
Pre-Acquisition ZI brand portfolio	$	33.0	$	—	$	33.0
Total intangible assets not subject to amortization	$	33.0	$	—	$	33.0

Total intangible assets	$	663.9	$	(446.6)	$	217.3

As a result of the interim test conducted during the second quarter of 2026, the Company first tested its indefinite-lived intangible assets for impairment in accordance with ASC 350, concluding no impairment was necessary.

There were no events or circumstances indicating that indefinite-lived intangible assets might be impaired as of December 31, 2025.

Amortization expense was $12.0 million and $14.7 million for the three months ended June 30, 2026 and 2025, respectively. Amortization expense was $24.6 million and $29.4 million for the six months ended June 30, 2026 and 2025, respectively.