EXTREME NETWORKS INC Goodwill & Intangibles Disclosure
6. Goodwill and Intangible Assets
The following table reflects the changes in the carrying amount of goodwill (in thousands):
|
|
June 30, |
|
|
June 30, |
|
||
Balance at beginning of period |
|
$ |
393,709 |
|
|
$ |
394,755 |
|
Foreign currency translation |
|
|
5,865 |
|
|
|
(1,046 |
) |
Balance at end of period |
|
$ |
399,574 |
|
|
$ |
393,709 |
|
The following tables summarize the components of gross and net intangible asset balances (in thousands, except years):
|
|
Weighted Average |
|
|
|
|
|
|
|
|
|
|||
|
|
Remaining Amortization |
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|||
|
|
Period |
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|||
June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|||
Developed technology |
|
3.0 years |
|
$ |
170,480 |
|
|
$ |
165,908 |
|
|
$ |
4,572 |
|
Customer relationships |
|
1.0 years |
|
|
64,824 |
|
|
|
62,961 |
|
|
|
1,863 |
|
Trade names |
|
0.0 years |
|
|
10,700 |
|
|
|
10,700 |
|
|
|
— |
|
License agreements |
|
1.4 years |
|
|
1,282 |
|
|
|
1,176 |
|
|
|
106 |
|
Total intangible assets, net* |
|
|
|
$ |
247,286 |
|
|
$ |
240,745 |
|
|
$ |
6,541 |
|
* The carrying amount of foreign intangible assets are affected by foreign currency translation |
|
|
|
|
||||||||||
|
|
Weighted Average |
|
|
|
|
|
|
|
|
|
|||
|
|
Remaining Amortization |
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|||
|
|
Period |
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|||
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|||
Developed technology |
|
3.0 years |
|
$ |
169,247 |
|
|
$ |
162,708 |
|
|
$ |
6,539 |
|
Customer relationships |
|
2.0 years |
|
|
64,671 |
|
|
|
60,776 |
|
|
|
3,896 |
|
Trade names |
|
0.0 years |
|
|
10,700 |
|
|
|
10,700 |
|
|
|
— |
|
License agreements |
|
2.4 years |
|
|
1,282 |
|
|
|
1,104 |
|
|
|
178 |
|
Total intangible assets, net* |
|
|
|
$ |
245,901 |
|
|
$ |
235,288 |
|
|
$ |
10,613 |
|
* The carrying amount of foreign intangible assets are affected by foreign currency translation |
|
|
|
|
||||||||||
The following table summarizes the amortization expense of intangible assets for the periods presented (in thousands):
|
|
Year Ended |
|
|||||||||
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|||
Amortization of intangible assets revenues” |
|
$ |
2,471 |
|
|
$ |
3,272 |
|
|
$ |
12,941 |
|
Amortization of intangible assets in “Total operating expenses” |
|
|
2,043 |
|
|
|
2,041 |
|
|
|
2,047 |
|
Total amortization expense |
|
$ |
4,514 |
|
|
$ |
5,313 |
|
|
$ |
14,988 |
|
The amortization expense that is recognized in “Total cost of revenues” primarily consists of amortization related to developed technology, license agreements and other intangibles.
The estimated future amortization expense to be recorded for each of the respective future fiscal years is as follows (in thousands):
|
|
Amount |
|
|
For the fiscal year ending June 30: |
|
|
|
|
2026 |
|
$ |
3,391 |
|
2027 |
|
|
1,520 |
|
2028 |
|
|
1,349 |
|
2029 |
|
|
281 |
|
Total |
|
$ |
6,541 |
|
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 18, 2025 | Showing above |
| 2024 | Aug 16, 2024 | |
| 2023 | Aug 24, 2023 | |
| 2022 | Aug 29, 2022 | |
| 2018 | Aug 29, 2018 | |
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.