Ameresco, Inc.AMRC
Ameresco, Inc. Goodwill & Intangibles Disclosure
GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill, Net
Our annual goodwill impairment review is performed during the fourth quarter each year-end using a quantitative approach. We tested goodwill for impairment at the reporting unit level utilizing the income approach which included a discounted cash flow method with a market approach, and we determined that there was no goodwill impairment for the year ended December 31, 2024. All reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 49% as of December 31, 2024.
During our assessment during the fourth quarter ended December 31, 2023, one reporting unit had a fair value that was 2% less than the carrying value and we recorded a $1,644 goodwill impairment, which was $2,222 after taking into account the effect of
deferred income taxes. The impairment was primarily driven by a decline in projected cash flows, including revenues and profitability. The impairment charges are included in the asset impairments within the consolidated statements of income for the year ended December 31, 2023. All other reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 16% as of December 31, 2023. There was no goodwill impairment for the year ended December 31, 2022.
The changes in the goodwill balances by reportable segment are as follows:
| North America Regions | U.S. Federal | Europe | Other | Total | |||||||||||||||||||||||||
| Carrying Value of Goodwill | |||||||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | 42,829 | $ | 3,981 | $ | 5,932 | $ | 17,891 | $ | 70,633 | |||||||||||||||||||
| Goodwill acquired during the year | — | — | 6,855 | — | 6,855 | ||||||||||||||||||||||||
| Remeasurement adjustments | — | — | (165) | — | (165) | ||||||||||||||||||||||||
| Impairment charges, net of tax | (2,222) | — | — | — | (2,222) | ||||||||||||||||||||||||
| Foreign currency translation | 73 | — | 413 | — | 486 | ||||||||||||||||||||||||
| Balance, December 31, 2023 | 40,680 | 3,981 | 13,035 | 17,891 | 75,587 | ||||||||||||||||||||||||
| Fair value allocation for change in reportable segments | (1,474) | — | — | 1,474 | — | ||||||||||||||||||||||||
Goodwill disposed of through sale of business (1) | — | — | — | (8,529) | (8,529) | ||||||||||||||||||||||||
| Foreign currency translation | (257) | — | (496) | — | (753) | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | 38,949 | $ | 3,981 | $ | 12,539 | $ | 10,836 | $ | 66,305 | |||||||||||||||||||
(1) See Note 4. Business Acquisitions and Divestitures for additional information. | |||||||||||||||||||||||||||||
| Accumulated Goodwill Impairment | |||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | (2,222) | $ | — | $ | (1,016) | $ | — | $ | (3,238) | |||||||||||||||||||
| Balance, December 31, 2024 | $ | (2,222) | $ | — | $ | (1,016) | $ | — | $ | (3,238) | |||||||||||||||||||
Intangible Assets, Net
Definite-lived intangible assets, net consisted of the following:
| As of December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Gross carrying amount | |||||||||||
| Customer contracts | $ | 6,898 | $ | 8,859 | |||||||
| Customer relationships | 17,572 | 21,182 | |||||||||
| Non-compete agreements | 2,535 | 3,013 | |||||||||
| Technology | 1,754 | 2,723 | |||||||||
| Tradenames | 927 | 1,370 | |||||||||
| Subsurface land easements | 4,274 | — | |||||||||
| Total gross carrying amount | 33,960 | 37,147 | |||||||||
| Accumulated Amortization | |||||||||||
| Customer contracts | 6,898 | 8,859 | |||||||||
| Customer relationships | 13,318 | 14,979 | |||||||||
| Non-compete agreements | 2,535 | 3,013 | |||||||||
| Technology | 1,753 | 2,723 | |||||||||
| Tradenames | 642 | 765 | |||||||||
| Total accumulated amortization | 25,146 | 30,339 | |||||||||
| Intangible assets, net | $ | 8,814 | $ | 6,808 | |||||||
Customer contracts are amortized ratably over the period of the acquired customer contracts ranging in periods from approximately to eight years. All other intangible assets are amortized over periods ranging from approximately to twenty years, as defined by the nature of the respective intangible asset.
Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives. We annually assess whether a change in the useful life is necessary, or more frequently if events or circumstances warrant. During the year ended December 31, 2024, we included purchased subsurface land easements in intangible assets, which shall be amortized over the twenty-year life of the pipelines. No other changes to useful lives were made during the years ended December 31, 2024, 2023, and 2022.
The table below sets forth amortization expense:
| Year Ended December 31, | |||||||||||||||||||||||
| Location | 2024 | 2023 | 2022 | ||||||||||||||||||||
| Customer contracts | Cost of revenues | $ | — | $ | — | $ | 551 | ||||||||||||||||
| Customer relationships | Selling, general and administrative expenses | 1,833 | 2,141 | 1,303 | |||||||||||||||||||
| Technology | Selling, general and administrative expenses | — | — | 1 | |||||||||||||||||||
| Tradenames | Selling, general and administrative expenses | 296 | 225 | 3 | |||||||||||||||||||
| Subsurface land easements | Selling, general and administrative expenses | 5 | — | — | |||||||||||||||||||
| Total amortization expense | $ | 2,134 | $ | 2,366 | $ | 1,858 | |||||||||||||||||
Amortization expense for our definite-lived intangible assets for the next five years to be included in selling, general, and administrative expenses is as follows:
| Estimated Amortization Expense | |||||
| 2025 | $ | 2,238 | |||
| 2026 | 1,895 | ||||
| 2027 | 821 | ||||
| 2028 | 369 | ||||
| 2029 | 214 | ||||
| Thereafter | 3,277 | ||||
| Total | $ | 8,814 | |||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 28, 2025 | Showing above |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Mar 4, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 7, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 4, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.