PC CONNECTION INC Goodwill & Intangibles Disclosure
4. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill is held by the Company’s Enterprise Solutions and Business Solutions segments. Goodwill and intangible assets with indefinite lives are subject to an annual impairment test as of November 30 and tested more frequently if events or circumstances occur that would indicate a potential decline in fair value.
In 2025 and 2024, the Company performed a qualitative “step 0” analysis. Accounting Standards Codification 350—Intangible – Goodwill and Other states that an entity may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. This analysis allows the Company to consider qualitative factors that might impact the carrying amount of its goodwill to determine whether a more detailed quantitative analysis would be necessary. Factors considered when performing the impairment assessment included the Company’s performance relative to historical and projected future operating results, macroeconomic conditions, industry and market trends, cost factors that may have a negative impact on earnings and cash flows, changes in the Company’s stock price and market capitalization, and other relevant entity-specific events.
Based on the above qualitative analysis, the Company determined goodwill was not impaired as of December 31, 2025 and 2024.
The carrying amount of goodwill for the periods presented is detailed below (in thousands):
Balance at December 31, 2025 | | Enterprise | | Business | | Public Sector | | Total | ||||
Goodwill, gross | $ | 66,236 | $ | 8,539 | $ | 7,634 | $ | 82,409 | ||||
Accumulated impairment losses |
| ─ |
| (1,173) |
| (7,634) |
| (8,807) | ||||
Net balance | $ | 66,236 | $ | 7,366 | $ | — | $ | 73,602 | ||||
Balance at December 31, 2024 | | Enterprise | | Business | | Public Sector | | Total | ||||
Goodwill, gross | $ | 66,236 | $ | 8,539 | $ | 7,634 | $ | 82,409 | ||||
Accumulated impairment losses |
| ─ |
| (1,173) |
| (7,634) |
| (8,807) | ||||
Net balance | $ | 66,236 | $ | 7,366 | $ | — | $ | 73,602 | ||||
Intangible Assets
At December 31, 2025 and 2024, the Company’s intangible assets included a domain name for $450, which has an indefinite life and is not subject to amortization. In addition, in 2016 the Company acquired customer relationships from its Softmart and GlobalServe acquisitions, which are amortized on a straight-line basis over their estimated useful lives of 10 years. The Company’s remaining intangible assets are amortized in proportion to the estimates of the future cash flows underlying the valuation of the assets. Intangible assets and related accumulated amortization are detailed below (dollars in thousands):
December 31, 2025 | December 31, 2024 | |||||||||||||||||||
| Estimated | | Gross | | Accumulated | | Net | | Gross | | Accumulated | | Net | |||||||
Useful Lives | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||
Customer list | 8 | $ | 3,400 | $ | 3,400 | $ | — | $ | 3,400 | $ | 3,400 | $ | — | |||||||
Tradename | 5 |
| 1,190 |
| 1,190 | — |
| 1,190 |
| 1,190 | — | |||||||||
Customer relationships | 10 |
| 12,200 |
| 11,661 | 539 |
| 12,200 |
| 10,441 | 1,759 | |||||||||
Total intangible assets | $ | 16,790 | $ | 16,251 | $ | 539 | $ | 16,790 | $ | 15,031 | $ | 1,759 | ||||||||
In 2025, 2024, and 2023, the Company recorded amortization expense of $1,220, $1,219, and $1,220, respectively. The estimated amortization expense relating to intangible assets in each of the five succeeding years and thereafter is as follows (in thousands):
For the Years Ended December 31, | | ||
2026 | $ | 539 | |
2027 |
| — | |
2028 |
| — | |
2029 | — | ||
2030 and thereafter |
| — | |
$ | 539 |
.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Mar 7, 2024 | |
| 2022 | Mar 6, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Feb 6, 2020 | |
| 2018 | Feb 7, 2019 | |
| 2017 | Mar 9, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 3, 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.