Health Catalyst, Inc.HCAT
Health Catalyst, Inc. Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
During the year ended December 31, 2025, we identified indicators of impairment, including overall declines in our stock price and market capitalization, and concluded that triggering events had occurred that required interim quantitative goodwill impairment assessments of our professional services and technology reporting units.
As part of our interim goodwill impairment assessments, the fair value of the reporting units were estimated based upon weightings of the income approach and a market-based approach. The income approach utilizes a discounted cash flow analysis. The market-based approach utilizes comparable public company information, key valuation multiples, and considers a market control premium associated with cost synergies and other cash flow benefits that arise from obtaining control over a reporting unit, and guideline transactions, when applicable. The significant assumptions used in these approaches include revenue growth rates, profit margins, projected future cash flows, and discount rates under the income approach as well as valuation multiples derived from comparable public trading companies under the market-based approach.
Based on our interim impairment tests of goodwill, it was determined that the fair values of our technology and professional services reporting units were below their respective carrying values as of June 30, 2025 and December 31, 2025, and we recorded total non-cash goodwill impairment charges of $105.4 million during the year ended December 31, 2025. The goodwill impairment charges were recorded as part of the impairment of goodwill and intangible assets line item in our consolidated statements of operations. There were no goodwill impairment charges during years ended December 31, 2024 and 2023.
Changes in the carrying amount of goodwill by reporting unit for the years ended December 31, 2025 and 2024 were as follows (in thousands):
Technology | Professional Services | Total | |||||||||||||||
Balance as of December 31, 2023 | $ | 189,870 | $ | 782 | $ | 190,652 | |||||||||||
2024 acquisitions | 63,747 | 5,887 | 69,634 | ||||||||||||||
Foreign currency translation adjustments | (527) | — | (527) | ||||||||||||||
Balance as of December 31, 2024 | 253,090 | 6,669 | 259,759 | ||||||||||||||
Upfront acquisition | 52,912 | — | 52,912 | ||||||||||||||
| (98,717) | (6,669) | (105,386) | |||||||||||||||
Foreign currency translation adjustments | 1,788 | — | 1,788 | ||||||||||||||
Balance as of December 31, 2025 | $ | 209,073 | $ | — | $ | 209,073 | |||||||||||
As of December 31, 2025, intangible assets consisted of the following (in thousands):
| Gross | Accumulated Amortization | Net | |||||||||||||||
| Developed technologies | $ | 141,101 | $ | (110,621) | $ | 30,480 | |||||||||||
| Client relationships and contracts | 115,808 | (72,750) | 43,058 | ||||||||||||||
| Computer software licenses | 13,600 | (11,329) | 2,271 | ||||||||||||||
| Trademarks | 5,367 | (3,498) | 1,869 | ||||||||||||||
| Total intangible assets | $ | 275,876 | $ | (198,198) | $ | 77,678 | |||||||||||
As of December 31, 2024, intangible assets consisted of the following (in thousands):
Gross | Accumulated Amortization | Net | |||||||||||||||
Developed technologies | $ | 124,109 | $ | (93,611) | $ | 30,498 | |||||||||||
| Client relationships and contracts | 108,824 | (57,020) | 51,804 | ||||||||||||||
Computer software licenses | 11,149 | (9,503) | 1,646 | ||||||||||||||
Trademarks | 4,694 | (2,590) | 2,104 | ||||||||||||||
Total intangible assets | $ | 248,776 | $ | (162,724) | $ | 86,052 | |||||||||||
Amortization expense of acquired intangible assets for the years ended December 31, 2025, 2024, and 2023 was $35.5 million, $28.7 million, and $29.6 million, respectively. Amortization expense for intangible assets is included in depreciation and amortization in the consolidated statements of operations.
As noted above, we identified indicators of impairment, including overall declines in our stock price and market capitalization, as well as downward revisions of our future forecasts, which triggered a recoverability test of the relevant asset groups. We performed the recoverability test by comparing the carrying value of each asset group to its estimated undiscounted cash flows. The analysis indicated that as of December 31, 2025, the carrying value exceeded the recoverable amounts for one asset group, requiring us to determine the fair value of this asset group. As a result, we measured and recognized total intangible asset of $4.8 million during the year ended December 31, 2025. The impairment charges were recorded as part of the impairment of goodwill and intangible assets line item in our consolidated statements of operations and relate to certain acquired client relationship intangible assets that had been partially allocated to our professional services operating segment. We did not incur any intangible asset impairment charges for the years ended December 31, 2024 and 2023.
The weighted-average remaining amortization period by type of intangible assets as of December 31, 2025 is as follows:
| Weighted-Average Remaining Amortization Period (years) | |||||
| Developed technologies | 2.1 | ||||
| Client relationships and contracts | 3.8 | ||||
| Computer software licenses | 2.1 | ||||
| Trademarks | 2.7 | ||||
As of December 31, 2025, future amortization expense for finite-lived intangible assets is estimated to be as follows (in thousands):
| Year Ending December 31, | |||||
| 2026 | $ | 30,566 | |||
| 2027 | 26,834 | ||||
| 2028 | 8,814 | ||||
| 2029 | 4,687 | ||||
| 2030 | 4,346 | ||||
| Thereafter | 2,431 | ||||
| Total future amortization expense | $ | 77,678 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
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.