ICF International, Inc. Goodwill & Intangibles Disclosure
NOTE 6 - GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill for the fiscal years ended December 31 were as follows:
|
|
2025 |
|
|
2024 |
|
||
Balance as of January 1 |
|
$ |
1,248,855 |
|
|
$ |
1,219,476 |
|
Add: Goodwill resulting from business combinations |
|
|
380 |
|
|
|
30,200 |
|
Effect of foreign currency translation |
|
|
2,972 |
|
|
|
(821 |
) |
Balance as of December 31 |
|
$ |
1,252,207 |
|
|
$ |
1,248,855 |
|
See “Note 15 - Acquisitions and Divestitures” for the details of the business combination and divestiture resulting in the changes in goodwill.
Other Intangible Assets
Other intangible assets consists of (i) intangible assets with definite lives previously acquired through mergers and acquisitions, purchased software, and internally-developed software (completed and in the process of completion), and (ii) a domain name with an indefinite life. The intangible assets with definite lives are amortized over periods ranging from approximately 1 to 12 years. The customer-related intangible assets, which consist of customer contracts, backlog, and non-contractual customer relationships, are amortized based on estimated cash flows and respective estimated economic benefit of the assets or straight-line over the estimated lives.
As of December 31, 2025, the weighted-average periods of amortization are as follows:
Customer-related |
|
5.3 years |
Software |
|
5.0 years |
Developed technology |
|
6.5 years |
Trade name |
|
0.6 years |
Total amortizable intangible assets |
|
5.3 years |
The carrying values of other intangible assets are as follows at December 31, 2025 and 2024:
|
|
2025 |
|
|||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net Carrying |
|
|||
Customer-related |
|
$ |
187,837 |
|
|
$ |
(143,674 |
) |
|
$ |
44,163 |
|
Software |
|
|
36,925 |
|
|
|
(23,321 |
) |
|
|
13,604 |
|
Developed technology |
|
|
8,902 |
|
|
|
(2,904 |
) |
|
|
5,998 |
|
Trade name |
|
|
1,570 |
|
|
|
(1,570 |
) |
|
|
— |
|
Total amortizable intangible assets |
|
|
235,234 |
|
|
|
(171,469 |
) |
|
|
63,765 |
|
Software in development |
|
|
17,696 |
|
|
|
— |
|
|
|
17,696 |
|
Intangible with indefinite life |
|
|
94 |
|
|
|
— |
|
|
|
94 |
|
Total other intangible assets |
|
$ |
253,024 |
|
|
$ |
(171,469 |
) |
|
$ |
81,555 |
|
|
|
2024 |
|
|||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net Carrying |
|
|||
Customer-related |
|
$ |
188,410 |
|
|
$ |
(108,215 |
) |
|
$ |
80,195 |
|
Software |
|
|
27,318 |
|
|
|
(18,204 |
) |
|
|
9,114 |
|
Developed technology |
|
|
8,902 |
|
|
|
(1,279 |
) |
|
|
7,623 |
|
Trade name |
|
|
1,570 |
|
|
|
(1,220 |
) |
|
|
350 |
|
Total amortizable intangible assets |
|
|
226,200 |
|
|
|
(128,918 |
) |
|
|
97,282 |
|
Software in development |
|
|
14,325 |
|
|
|
— |
|
|
|
14,325 |
|
Intangible with indefinite life |
|
|
94 |
|
|
|
— |
|
|
|
94 |
|
Total other intangible assets |
|
$ |
240,619 |
|
|
$ |
(128,918 |
) |
|
$ |
111,701 |
|
Amortization expense of amortizable intangible assets for the years ended December 31, 2025, 2024, and 2023, totaled $43.2 million, $37.5 million, and $42.3 million, respectively. The estimated future amortization expense relating to amortizable other intangible assets is as follows:
Year ending December 31, |
|
|
|
|
2026 |
|
$ |
27,412 |
|
2027 |
|
|
11,458 |
|
2028 |
|
|
9,283 |
|
2029 |
|
|
5,631 |
|
2030 |
|
|
5,030 |
|
Thereafter |
|
|
4,951 |
|
Total |
|
$ |
63,765 |
|
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.