Mastech Digital, Inc. Goodwill & Intangibles Disclosure
Goodwill of $8.4 million related to our IT Staffing Services segment resulted from the 2015 acquisition of Hudson IT. Goodwill related to our Data and Analytics Services segment includes our 2017 acquisition of the services division of InfoTrellis, which totaled $27.4 million, and our 2020 acquisition of AmberLeaf, which totaled $6.4 million. The Company recorded a $5.3 million goodwill impairment related to the Data and Analytics Services segment in 2023 and a $9.7 million goodwill impairment in 2018. The impairments were primarily attributable to declines in revenue levels and lower future revenue projections.
A reconciliation of the beginning and ending amounts of goodwill by operating segment for the three years ended December 31, 2025 is as follows:
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|
Years Ended December 31, |
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|
2025 |
|
|
2024 |
|
|
2023 |
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|||
|
|
(Amounts in thousands) |
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|||||||||
IT Staffing Services: |
|
|
|
|
|
|
|
|
|
|||
Beginning balance |
|
$ |
8,427 |
|
|
$ |
8,427 |
|
|
$ |
8,427 |
|
Goodwill recorded |
|
— |
|
|
— |
|
|
— |
|
|||
Impairment |
|
— |
|
|
— |
|
|
— |
|
|||
Ending balance |
|
$ |
8,427 |
|
|
$ |
8,427 |
|
|
$ |
8,427 |
|
|
|
Years Ended December 31, |
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|
|
2025 |
|
|
2024 |
|
|
2023 |
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|||
|
|
(Amounts in thousands) |
|
|||||||||
Data and Analytics Services: |
|
|
|
|
|
|
|
|
|
|||
Beginning balance |
|
$ |
18,783 |
|
|
$ |
18,783 |
|
|
$ |
24,083 |
|
Goodwill recorded |
|
— |
|
|
— |
|
|
— |
|
|||
Impairment |
|
— |
|
|
— |
|
|
|
(5,300 |
) |
||
Ending balance |
|
$ |
18,783 |
|
|
$ |
18,783 |
|
|
$ |
18,783 |
|
The Company is amortizing the identifiable intangible assets on a straight-line basis over estimated average lives ranging from 3 to 12 years. Identifiable intangible assets were comprised of the following as of December 31, 2025 and 2024:
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|
As of December 31, 2025 |
|
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(Amounts in thousands) |
|
Amortization |
|
Gross |
|
|
Accumulative |
|
|
Net Carrying |
|
|||
IT Staffing Services: |
|
|
|
|
|
|
|
|
|
|
|
|||
Client relationships |
|
12 |
|
$ |
7,999 |
|
|
$ |
7,028 |
|
|
$ |
971 |
|
Covenant-not-to-compete |
|
5 |
|
|
319 |
|
|
|
319 |
|
|
|
— |
|
Trade name |
|
3 |
|
|
249 |
|
|
|
249 |
|
|
|
— |
|
Data and Analytics Services: |
|
|
|
|
|
|
|
|
|
|
|
|||
Client relationships |
|
12 |
|
|
19,641 |
|
|
|
13,050 |
|
|
|
6,591 |
|
Covenant-not-to-compete |
|
5 |
|
|
1,201 |
|
|
|
1,201 |
|
|
|
— |
|
Trade name |
|
5 |
|
|
1,711 |
|
|
|
1,711 |
|
|
|
— |
|
Technology |
|
7 |
|
|
1,979 |
|
|
|
1,786 |
|
|
|
193 |
|
Total Intangible Assets |
|
|
|
$ |
33,099 |
|
|
$ |
25,344 |
|
|
$ |
7,755 |
|
|
|
As of December 31, 2024 |
|
|||||||||||
(Amounts in thousands) |
|
Amortization |
|
Gross |
|
|
Accumulative |
|
|
Net Carrying |
|
|||
IT Staffing Services: |
|
|
|
|
|
|
|
|
|
|
|
|||
Client relationships |
|
12 |
|
$ |
7,999 |
|
|
$ |
6,361 |
|
|
$ |
1,638 |
|
Covenant-not-to-compete |
|
5 |
|
|
319 |
|
|
|
319 |
|
|
|
— |
|
Trade name |
|
3 |
|
|
249 |
|
|
|
249 |
|
|
|
— |
|
Data and Analytics Services: |
|
|
|
|
|
|
|
|
|
|
|
|||
Client relationships |
|
12 |
|
|
19,641 |
|
|
|
11,413 |
|
|
|
8,228 |
|
Covenant-not-to-compete |
|
5 |
|
|
1,201 |
|
|
|
1,135 |
|
|
|
66 |
|
Trade name |
|
5 |
|
|
1,711 |
|
|
|
1,637 |
|
|
|
74 |
|
Technology |
|
7 |
|
|
1,979 |
|
|
|
1,677 |
|
|
|
302 |
|
Total Intangible Assets |
|
|
|
$ |
33,099 |
|
|
$ |
22,791 |
|
|
$ |
10,308 |
|
Amortization expense for the three years ended December 31, 2025, 2024 and 2023 totaled $2.6 million, $2.7 million and $2.8 million, respectively and is included in selling, general and administrative expenses in the Consolidated Statement of Operations.
The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2026 through 2030 is as follows:
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|
Years Ended December 31, |
|
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|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|||||
|
|
(Amounts in thousands) |
|
|||||||||||||||||
Amortization expense |
|
$ |
2,413 |
|
|
$ |
2,025 |
|
|
$ |
1,637 |
|
|
$ |
1,000 |
|
|
$ |
248 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 18, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 27, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 30, 2020 | |
| 2018 | Mar 29, 2019 | |
| 2017 | Mar 23, 2018 | |
| 2016 | Mar 24, 2017 | |
| 2015 | Mar 25, 2016 | |
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.