Crocs, Inc.CROX
Crocs, Inc. Goodwill & Intangibles Disclosure
GOODWILL AND INTANGIBLE ASSETS, NET
During the second quarter of the fiscal year ended 2025, there was a triggering event for the HEYDUDE Brand indefinite-lived intangible assets (which consists solely of the HEYDUDE trademark) (the “trademark”) and the HEYDUDE Brand reporting unit (the “reporting unit”) goodwill. The triggering event was due to downward revisions during the second quarter of the fiscal year ended 2025, to our internal HEYDUDE Brand forecast as a result of the extended time we believed it would take us to stabilize the HEYDUDE Brand and return it to growth. This was partly due to the current and projected impact of a weak U.S. consumer and the disproportionate impact of tariffs on HEYDUDE Brand products, which became evident in the second quarter of the fiscal year ended 2025. As a result, we completed quantitative assessments for the trademark and the reporting unit goodwill in the second quarter of the fiscal year ended 2025.
For the quantitative assessments, we compared the estimated fair values of the trademark and reporting unit with their respective carrying values. If the carrying value of the trademark or reporting unit exceeded the estimated fair value, an impairment charge was recorded. The quantitative assessments for the trademark and reporting unit goodwill were performed by management with the assistance of third-party valuation specialists.
The quantitative assessment of the trademark was performed using the Multi-Period Excess Earnings approach. The primary assumptions developed by management and used in the assessment included annual revenue growth rates averaging approximately 8%, projected earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins averaging approximately 20%, and a market-based discount rate of 15.0%, which was based on, most significantly, a risk-free rate of return, an equity market risk premium, and a company-specific risk premium. The estimated fair value of the trademark did not exceed its carrying value. In the second quarter of the fiscal year ended 2025, we recorded an impairment charge of $430.0 million within ‘Asset impairments’ in our condensed consolidated statements of operations related to the trademark, after which the estimated fair value equaled its carrying value. This impairment charge reflects lower than previously expected annual revenue growth rates and EBITDA as well as increases in market-based discount rates, specifically the risk-free rate of return, when compared to those used in our most recent annual impairment test completed prior to the second quarter of 2025.
We performed the quantitative assessment for the reporting unit goodwill using the discounted cash flow method. The primary assumptions developed by management and used in the assessment included annual revenue growth rates, projected EBITDA margins, and a market-based discount rate. The estimated fair value of the reporting unit goodwill did not exceed its carrying value. In the second quarter of the fiscal year ended 2025, we recorded an impairment charge of $307.0 million within ‘Goodwill impairment’ in our condensed consolidated statements of operations related to the reporting unit goodwill, after which the estimated fair value equaled its carrying value. This impairment charge reflects lower than previously expected annual revenue growth rates and EBITDA as well as increases in market-based discount rates, specifically the risk-free rate of return, when compared to those used in our most recent annual impairment test completed in the fourth quarter of 2024.
For the year ended December 31, 2025, we also performed a quantitative assessment for the HEYDUDE Brand reporting unit goodwill and the HEYDUDE Brand indefinite-lived intangible assets as of the first day of the fourth quarter, which is our annual impairment testing date. The estimated fair values of the HEYDUDE Brand reporting unit goodwill and indefinite-lived trademark exceeded their carrying values. For the year ended December 31, 2024, we performed a quantitative assessment for the HEYDUDE Brand reporting unit goodwill and the HEYDUDE Brand indefinite-lived intangible assets, which indicated the estimated fair values exceeded their carrying values. For the year ended December 31, 2023, we performed a qualitative and quantitative assessment for the HEYDUDE Brand reporting unit goodwill, and we performed a quantitative assessment for the HEYDUDE Brand indefinite-lived intangible assets, each of which indicated the estimated fair values exceeded their carrying values. Additionally for the years ended December 31, 2025, 2024, and 2023, we performed a qualitative assessment for the goodwill in our Crocs Brand reporting unit, which indicated that it was more likely than not that the estimated fair value exceeded its carrying value.
We did not record any impairment charges in the years ended December 31, 2024, or 2023, based on the results of our goodwill and indefinite-lived intangible assets impairment testing, and we did not record any additional impairment charge based on the results of the annual 2025 goodwill and indefinite-lived intangible assets impairment testing.
Goodwill
The changes in goodwill for the years ended December 31, 2025, and 2024, were:
| Goodwill | |||||||||||||||||
Crocs Brand | HEYDUDE Brand | Total | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Net Goodwill at December 31, 2023 | $ | 1,553 | $ | 710,035 | $ | 711,588 | |||||||||||
| Changes during the year ended December 31, 2024 | |||||||||||||||||
| Foreign currency translation | (96) | (1) | (97) | ||||||||||||||
| Impairment | — | — | — | ||||||||||||||
| Gross goodwill at December 31, 2024 | 2,226 | 710,034 | 712,260 | ||||||||||||||
| Accumulated impairment | (769) | — | (769) | ||||||||||||||
| Net goodwill at December 31, 2024 | 1,457 | 710,034 | 711,491 | ||||||||||||||
| Changes during the year ended December 31, 2025 | |||||||||||||||||
| Foreign currency translation | 198 | — | 198 | ||||||||||||||
| Impairment | — | (307,000) | (307,000) | ||||||||||||||
| Gross goodwill at December 31, 2025 | 2,424 | 710,034 | 712,458 | ||||||||||||||
| Accumulated impairment | (769) | (307,000) | (307,769) | ||||||||||||||
| Net goodwill at December 31, 2025 | $ | 1,655 | $ | 403,034 | $ | 404,689 | |||||||||||
Intangible Assets, Net
‘Intangible assets, net’ reported in the consolidated balance sheets consist of the following:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Gross | Accumulated Amortization | Accumulated Impairment | Net | Gross | Accumulated Amortization | Accumulated Impairment | Net | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Intangible assets subject to amortization: | |||||||||||||||||||||||||||||||||||||||||||||||
| Capitalized software | $ | 145,954 | $ | (126,000) | $ | — | $ | 19,954 | $ | 139,569 | $ | (117,001) | $ | — | $ | 22,568 | |||||||||||||||||||||||||||||||
| Customer relationships | 210,000 | (54,250) | — | 155,750 | 210,000 | (40,250) | — | 169,750 | |||||||||||||||||||||||||||||||||||||||
| Patents, copyrights, and trademarks | 9,767 | (4,240) | — | 5,527 | 4,916 | (3,791) | — | 1,125 | |||||||||||||||||||||||||||||||||||||||
Intangible assets not subject to amortization: | |||||||||||||||||||||||||||||||||||||||||||||||
| HEYDUDE trademark | 1,570,000 | — | (430,000) | 1,140,000 | 1,570,000 | — | — | 1,570,000 | |||||||||||||||||||||||||||||||||||||||
| In progress | 2,676 | — | — | 2,676 | 12,644 | — | — | 12,644 | |||||||||||||||||||||||||||||||||||||||
| Other | 773 | — | — | 773 | 993 | — | — | 993 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,939,170 | $ | (184,490) | $ | (430,000) | $ | 1,324,680 | $ | 1,938,122 | $ | (161,042) | $ | — | $ | 1,777,080 | |||||||||||||||||||||||||||||||
At December 31, 2025, the weighted average useful life of intangibles subject to amortization was approximately 13.8 years.
Amortization Expense
Amortization expense related to definite-lived intangible assets, reported in ‘Cost of sales’ and ‘Selling, general and administrative expenses’ was:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of sales | $ | 2,223 | $ | 2,395 | $ | 3,080 | |||||||||||
| Selling, general and administrative expenses | 21,348 | 20,539 | 19,539 | ||||||||||||||
| Total amortization expense | $ | 23,571 | $ | 22,934 | $ | 22,619 | |||||||||||
Estimated future annual amortization expense of intangible assets is:
As of December 31, 2025 | |||||
| (in thousands) | |||||
| 2026 | $ | 22,507 | |||
| 2027 | 20,409 | ||||
| 2028 | 18,486 | ||||
| 2029 | 16,696 | ||||
| 2030 | 14,889 | ||||
| Thereafter | 88,244 | ||||
| Total | $ | 181,231 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 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.