LIVEPERSON INCLPSN
LIVEPERSON INC Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets, Net
Goodwill
Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment at the reporting unit level using either a qualitative or quantitative assessment on an annual basis, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets.
The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 are as follows:
Goodwill | Accumulated Impairment | Balance | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Balance as of December 31, 2022 | $ | 296,214 | $ | — | $ | 296,214 | |||||||||||
Goodwill impairment | — | (11,895) | (11,895) | ||||||||||||||
| Foreign exchange adjustment | 1,312 | — | 1,312 | ||||||||||||||
| Balance as of December 31, 2023 | 297,526 | (11,895) | 285,631 | ||||||||||||||
Goodwill impairment | — | (60,551) | (60,551) | ||||||||||||||
| Foreign exchange adjustment | (2,526) | — | (2,526) | ||||||||||||||
| Balance as of December 31, 2024 | $ | 295,000 | $ | (72,446) | $ | 222,554 | |||||||||||
In connection with the annual impairment test completed on October 1, 2024, using the quantitative “Step 1” assessment, the Company determined the fair value of its reporting unit using both an income approach and a market approach. The Company applied an equal weighting to the value conclusions resulting from the two employed approaches, because there was sufficient information to estimate the fair value of the reporting unit under both methods. Estimated fair values of reporting units are Level 3 measures in the fair value hierarchy. The fair value determination using an income approach requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and the discount rate. The discount rate used in the income approach model was 13%. The fair value determination using a market approach requires management to make significant assumptions related to marketplace multiples from within a peer public company group. In connection with the Company’s annual budget process in the fourth quarter of 2024, management completed a comprehensive review of the Company’s operations, which resulted in reduced estimated future cash flows. The revised projections were used as a key input into the annual goodwill impairment test performed in the fourth quarter of 2024.
As a result of this impairment test, the Company recorded a non-cash impairment charge of $56.9 million in the consolidated statements of operations during the year ended December 31, 2024, to recognize the impairment of goodwill in the Company’s one reporting unit.
In addition, during the first quarter of 2024, the Company recorded a non-cash impairment charge of $3.6 million in the consolidated statements of operations, to recognize a full impairment of goodwill associated with its WildHealth reporting unit, which was sold during the second quarter of fiscal 2024.
As a result of the Company’s annual goodwill impairment test in the third quarter of 2023, the Company recorded a non-cash impairment charge of $11.9 million in the consolidated statements of operations during the year ended December 31, 2023, to recognize the impairment of goodwill in the WildHealth reporting unit. There were no impairments in the Company’s Business reporting unit during the year ended December 31, 2023, as the fair value of this reporting unit substantially exceeded its carrying value. No impairment losses were recorded during the fiscal year ended December 31, 2022.
Intangible Assets, Net
Intangible assets, net are summarized as follows as of the dates presented:
| December 31, 2024 | |||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Amortization Period | ||||||||||||||||||||
| (In thousands) | (In years) | ||||||||||||||||||||||
| Amortizing intangible assets: | |||||||||||||||||||||||
| Patents | $ | 17,609 | $ | (2,539) | $ | 15,070 | 12.7 | ||||||||||||||||
| Total | $ | 17,609 | $ | (2,539) | $ | 15,070 | |||||||||||||||||
| December 31, 2023 | |||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Amortization Period | ||||||||||||||||||||
| (In thousands) | (In years) | ||||||||||||||||||||||
| Amortizing intangible assets: | |||||||||||||||||||||||
| Technology | $ | 94,549 | $ | (60,465) | $ | 34,084 | 5.0 | ||||||||||||||||
| Customer relationships | 32,025 | (19,542) | 12,483 | 10.0 | |||||||||||||||||||
| Patents | 15,350 | (1,916) | 13,434 | 12.9 | |||||||||||||||||||
| Trademarks | 1,400 | (707) | 693 | 5.0 | |||||||||||||||||||
| Trade names | 1,044 | (672) | 372 | 2.8 | |||||||||||||||||||
| Other | 914 | (355) | 559 | 4.1 | |||||||||||||||||||
| Total | $ | 145,282 | $ | (83,657) | $ | 61,625 | |||||||||||||||||
Amortization expense is calculated over the estimated useful life of the asset. Aggregate amortization expense for purchased intangible assets and finance leases, net was $12.0 million, $22.2 million, and $22.1 million for the years ended December 31, 2024, 2023, and 2022, respectively, and $9.2 million, $18.7 million, and $18.4 million, respectively, of this amortization was included in Cost of revenue in the consolidated statements of operations.
Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable and the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows that are expected to result from the use of the asset. In connection with the Company’s annual budget process in the fourth quarter of 2024, management completed a comprehensive review of the Company’s operations, which resulted in reduced estimated future cash flows. The revised projections were used as a key input into the annual impairment test performed in the fourth quarter of 2024. As a result of this impairment test, the Company recognized a non-cash impairment charge of $35.2 million included in Impairment of intangibles and other assets in the consolidated statements of operations. The fair value was determined using a combination of income and market approach. This non-cash charge resulted in a full impairment of the following intangible assets acquired in connection with historical business combination transactions: developed technology in the amount of $23.7 million, customer relationships in the amount of $11.0 million and trademarks in the amount of $0.5 million.
During the first quarter of 2024, the Company recognized a non-cash impairment charge related to WildHealth of $2.2 million included in Impairment of intangibles and other assets in the consolidated statements of operations.
During the year ended December 31, 2023, the Company recognized a non-cash impairment charge of $3.0 million included in Impairment of intangibles and other assets in the consolidated statements of operations related to developed technology associated with WildHealth. There were no impairment losses during the year ended December 31, 2022.
As of December 31, 2024, estimated annual amortization expense for the next five years and thereafter is as follows:
| Estimated Amortization Expense | |||||
| (In thousands) | |||||
| 2025 | $ | 654 | |||
| 2026 | 618 | ||||
| 2027 | 585 | ||||
| 2028 | 584 | ||||
| 2029 | 568 | ||||
| Thereafter | 12,061 | ||||
| Total | $ | 15,070 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 14, 2025 | Showing above |
| 2023 | Mar 4, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Feb 28, 2022 | |
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.