Hub Group, Inc. Goodwill & Intangibles Disclosure
NOTE 6. Goodwill and Other Intangible Assets
Our goodwill is allocated between two reporting units, ITS and Logistics. In accordance with the FASB issued guidance in the Intangibles-Goodwill and Other Topic of the Codification, we completed the required annual impairment assessment, concluding it was not more-likely-than-not that the fair value of either of our reporting units was less than the respective carrying value. There were no accumulated impairment losses of goodwill at the beginning of the period.
The following table presents the carrying amount of Goodwill by segment (in thousands):
|
ITS |
|
Logistics |
|
Consolidated |
|
|||
Balance at December 31, 2022 |
$ |
371,641 |
|
$ |
257,761 |
|
$ |
629,402 |
|
Acquisitions |
|
- |
|
|
104,293 |
|
|
104,293 |
|
Balance at December 31, 2023 |
$ |
371,641 |
|
$ |
362,054 |
|
$ |
733,695 |
|
Acquisitions |
|
43,398 |
|
|
38,510 |
|
|
81,908 |
|
Currency translation adjustment |
|
(1,295 |
) |
|
- |
|
|
(1,295 |
) |
Balance at December 31, 2024 |
$ |
413,744 |
|
$ |
400,564 |
|
$ |
814,309 |
|
The components of the "Other intangible assets” are as follows (in thousands):
|
|
|
|
|
Net |
|
|
|||
|
Gross |
|
Accumulated |
|
Carrying |
|
|
|||
As of December 31, 2024: |
Amount |
|
Amortization |
|
Value |
|
Life |
|||
Customer relationships |
$ |
372,690 |
|
$ |
119,146 |
|
$ |
253,544 |
|
10-15 years |
|
|
|
|
|
|
|
|
|||
Carrier network and independent contractor relationships |
|
15,000 |
|
|
12,300 |
|
|
2,700 |
|
4 years |
|
|
|
|
|
|
|
|
|||
Developed technology |
|
12,700 |
|
|
6,531 |
|
|
6,169 |
|
2-7 years |
|
|
|
|
|
|
|
|
|||
Trade name |
|
11,200 |
|
|
6,256 |
|
|
4,944 |
|
18 months to 15 years |
Consolidated Total |
$ |
411,590 |
|
$ |
144,233 |
|
$ |
267,357 |
|
|
|
|
|
|
|
Net |
|
|
|||
|
Gross |
|
Accumulated |
|
Carrying |
|
|
|||
As of December 31, 2023: |
Amount |
|
Amortization |
|
Value |
|
Life |
|||
Customer relationships |
$ |
376,956 |
|
$ |
92,827 |
|
$ |
284,129 |
|
5-15 years |
|
|
|
|
|
|
|
|
|||
Carrier network and independent contractor relationships |
|
15,000 |
|
|
8,563 |
|
|
6,437 |
|
4 years |
|
|
|
|
|
|
|
|
|||
Developed technology |
|
17,223 |
|
|
3,247 |
|
|
13,976 |
|
4-7 years |
|
|
|
|
|
|
|
|
|||
Trade name |
|
6,200 |
|
|
6,135 |
|
|
65 |
|
18 months |
Consolidated Total |
$ |
415,379 |
|
$ |
110,772 |
|
$ |
304,607 |
|
|
The above intangible assets are amortized using the straight-line method. Amortization expense was $33.5 million and $27.2 million for the years ended December 31, 2024 and 2023, respectively. The remaining weighted average life of all definite lived intangible assets was 9.69 years and 11.32 years for the years ended December 31, 2024 and 2023, respectively.
Amortization expense for the next five years is expected to be as follows (in thousands):
|
Total |
|
|
Year 1 |
$ |
34,260 |
|
Year 2 |
|
30,985 |
|
Year 3 |
|
30,697 |
|
Year 4 |
|
29,406 |
|
Year 5 |
|
22,696 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 25, 2025 | Showing above |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 24, 2017 | |
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.