PATENTS AND GOODWILL
Patents
As of December 31, 2025 and 2024, patents consisted of the following (in thousands, except for useful life data):
| | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| Weighted average estimated useful life (years) | 9.9 | | 9.9 |
| Gross patents | $ | 1,183,333 | | | $ | 1,102,412 | |
| Accumulated amortization | (864,576) | | | (793,782) | |
| Patents, net | $ | 318,757 | | | $ | 308,630 | |
Amortization expense related to capitalized patent costs was $70.7 million, $66.1 million, and $73.1 million in 2025, 2024, and 2023, respectively. These amounts are recorded within the "Research and portfolio development" expense line of our consolidated statements of income.
The estimated aggregate amortization expense for the next five years related to our patents balance as of December 31, 2025 is as follows (in thousands):
| | | | | |
| 2026 | $ | 66,469 | |
| 2027 | 61,612 | |
| 2028 | 41,999 | |
| 2029 | 37,674 | |
| 2030 | 31,263 | |
Goodwill
The following table shows the change in the carrying amount of our goodwill balance from December 31, 2023 to December 31, 2025, all of which is allocated to our one reportable segment (in thousands):
| | | | | |
| Goodwill balance as of December 31, 2023 | $ | 22,421 | |
| Activity | — | |
Goodwill balance as of December 31, 2024 | $ | 22,421 | |
| Activity | 1,652 | |
| Goodwill balance as of December 31, 2025 | $ | 24,073 | |
In October 2025, we acquired Deep Render, an AI startup with a team of world-class AI experts focusing on video codecs for cash considerations. We believe the acquisition adds significant depth to our existing AI expertise and strengthens the company’s leadership in video compression. The transaction also adds Deep Render’s patent portfolio in AI-based video coding to our market-leading video portfolio. As part of the deal, a team of AI experts joined our Video Lab. Founded in London in 2018, Deep Render has pioneered the use of AI in video and image compression to change the way that video is processed and ultimately distributed to connected devices and services.
As part of the transaction, the vast majority of the acquired value was assigned to patents, with the remaining resulting in the recognition of goodwill. The goodwill is included in the “Other non-current assets, net" in the consolidated balance sheet.
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.