HEALTHSTREAM INC Goodwill & Intangibles Disclosure
7. GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 are as follows (in thousands):
| 2025 | ||||
| Balance at January 1, 2025 | $ | 191,220 | ||
| Acquisition of Virsys12 | 6,108 | |||
| Acquisition of MissionCare | 19,613 | |||
| Effect of exchange rate changes | 577 | |||
| Balance at December 31, 2025 | $ | 217,518 | ||
| 2024 | ||||
| Balance at January 1, 2024 | $ | 191,379 | ||
| Acquisition of TCPS | 690 | |||
| Acquisition of The Clinical Hub | 194 | |||
| Effect of exchange rate changes | (1,043 | ) | ||
| Balance at December 31, 2024 | $ | 191,220 | ||
Intangible assets other than goodwill that are considered to have finite useful lives include customer-related intangibles consisting of customer relationships, which are amortized over their estimated useful lives ranging from to years, and other intangible assets consisting of developed technology, non-competition agreements, and trade names, which are amortized over their estimated useful lives ranging from to years. Amortization of intangible assets was $13.7 million, $13.4 million, and $14.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Identifiable intangible assets are comprised of the following (in thousands):
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||
| Gross Amount | Accumulated Amortization | Net | Gross Amount | Accumulated Amortization | Net | |||||||||||||||||||
| Customer related | $ | 116,589 | $ | (67,377 | ) | $ | 49,212 | $ | 106,001 | $ | (58,536 | ) | $ | 47,465 | ||||||||||
| Developed Technology | 18,790 | (5,411 | ) | 13,379 | 23,400 | (17,307 | ) | 6,093 | ||||||||||||||||
| Other | 4,066 | (1,727 | ) | 2,339 | 4,465 | (2,475 | ) | 1,990 | ||||||||||||||||
| Total | $ | 139,445 | $ | (74,515 | ) | $ | 64,930 | $ | 133,866 | $ | (78,318 | ) | $ | 55,548 | ||||||||||
The expected future annual amortization expense for the years ending December 31, is as follows (in thousands):
| 2026 | $ | 13,650 | ||
| 2027 | 12,845 | |||
| 2028 | 9,631 | |||
| 2029 | 7,936 | |||
| 2030 | 6,245 | |||
| Thereafter | 14,623 | |||
| Total | $ | 64,930 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2022 | Feb 28, 2023 | |
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.