ESCO TECHNOLOGIES INC Goodwill & Intangibles Disclosure
4. Goodwill and Other Intangible Assets
Included on the Consolidated Balance Sheets at September 30, 2025 and 2024 are the following intangible assets gross carrying amounts and accumulated amortization from continuing operations:
(Dollars in thousands) |
| 2025 |
| 2024 | |
Goodwill | $ | 761,931 | 529,935 | ||
| |||||
Intangible assets with determinable lives: |
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Patents |
| ||||
Gross carrying amount | $ | 7,607 | 2,638 | ||
Less: accumulated amortization |
| 1,775 | 1,415 | ||
Net | $ | 5,832 | 1,223 | ||
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Capitalized software |
| ||||
Gross carrying amount | $ | 138,144 | 126,721 | ||
Less: accumulated amortization |
| 100,818 | 89,558 | ||
Net | $ | 37,326 | 37,163 | ||
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Customer Relationships |
| ||||
Gross carrying amount | $ | 625,535 | 330,328 | ||
Less: accumulated amortization |
| 159,543 | 132,135 | ||
Net | $ | 465,992 | 198,193 | ||
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Other |
| ||||
Gross carrying amount | $ | 76,991 | 15,182 | ||
Less: accumulated amortization |
| 24,829 | 11,173 | ||
Net | $ | 52,162 | 4,009 | ||
Intangible assets with indefinite lives: |
| ||||
Trade names | $ | 162,661 | 162,936 | ||
We performed our annual evaluation of goodwill and intangible assets for impairment during the fourth quarter of 2025 and concluded that no impairment existed at September 30, 2025. There were no accumulated impairment losses as of September 30, 2025.
The changes in the carrying amount of goodwill attributable to each business segment from continuing operations for 2025 and 2024 are as follows:
(Dollars in millions) |
| A&D |
| Test |
| USG |
| Total | ||
Balance as of September 30, 2023 | $ | 105.6 | 34.0 | 353.6 | 493.2 | |||||
Acquisition activity | — | 30.9 | — | 30.9 | ||||||
Foreign currency translation and other | — | 2.5 | 3.3 | 5.8 | ||||||
Balance as of September 30, 2024 | $ | 105.6 | 67.4 | 356.9 | 529.9 | |||||
Acquisition activity | 226.5 | — | — | 226.5 | ||||||
Foreign currency translation and other | 1.9 | 0.4 | 3.2 | 5.5 | ||||||
Balance as of September 30, 2025 | $ | 334.0 | 67.8 | 360.1 | 761.9 | |||||
Amortization expense related to intangible assets with determinable lives was $53.3 million, $32.8 million and $29.0 million in 2025, 2024 and 2023, respectively. Patents are amortized over the life of the patents, generally to twenty years. Capitalized software is amortized over the estimated useful life of the software, generally to seven years. Customer relationships are generally amortized over to twenty years. Intangible asset amortization for fiscal years 2026 through 2030 is estimated as follows: approximately $80 million in 2026, approximately $67 million in 2027, and approximately $46 in 2028 - . The weighted-average amortization period of the acquired intangible assets subject to amortization is twelve years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 1, 2025 | Showing above |
| 2024 | Nov 29, 2024 | |
| 2023 | Nov 29, 2023 | |
| 2022 | Nov 29, 2022 | |
| 2021 | Nov 29, 2021 | |
| 2020 | Nov 30, 2020 | |
| 2019 | Nov 29, 2019 | |
| 2018 | Nov 29, 2018 | |
| 2017 | Nov 29, 2017 | |
| 2016 | Nov 29, 2016 | |
| 2015 | Nov 30, 2015 | |
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.