National Energy Services Reunited Corp. Goodwill & Intangibles Disclosure
8. GOODWILL, INTANGIBLE, AND OTHER ASSETS
Goodwill
Changes in the carrying amount of goodwill of the Company between December 31, 2024, and December 31, 2025, are as follows (in US$ thousands):
| Production Services | Drilling and Evaluation Services | Goodwill | ||||||||||
| Balance as of December 31, 2024 | $ | 459,710 | $ | 185,385 | $ | 645,095 | ||||||
| Not applicable | ||||||||||||
| Balance as of December 31, 2025 | $ | 459,710 | $ | 185,385 | $ | 645,095 | ||||||
Intangible assets subject to amortization, net
The following is the weighted average amortization period for intangible assets of the Company subject to amortization (in years):
| Amortization | ||||
| Customer contracts & relationships | 10.0 | |||
| Trademarks and trade names | 7.9 | |||
| Total intangible assets | 9.7 | |||
The details of our intangible assets subject to amortization are set forth below (in US$ thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||||
| Customer contracts & relationships | $ | 153,500 | $ | (107,742 | ) | $ | 45,758 | $ | 153,500 | $ | (92,322 | ) | $ | 61,178 | ||||||||||
| Trademarks and trade names | 25,940 | (24,612 | ) | 1,328 | 25,940 | (21,422 | ) | 4,518 | ||||||||||||||||
| Total intangible assets | $ | 179,440 | $ | (132,354 | ) | $ | 47,086 | $ | 179,440 | $ | (113,744 | ) | $ | 65,696 | ||||||||||
The aggregate amortization expense remaining for each of the five years subsequent to December 31, 2025, is $16.8 million for 2026, $15.4 million for 2027, $8.1 million for 2028, $2.9 million for 2029, and $2.9 million for 2030.
Equity method investments
On July 1, 2022, NESR acquired a minority stake in WDVGE, a premier Reservoir Characterization and G&G laboratory and consulting business.
The following table presents our investments at the dates indicated (in US$ thousands):
| Segment | Ownership | December 31, 2025 | December 31, 2024 | |||||||||||
| WDVGE | Production Services | 46.2 | % | $ | 3,225 | |||||||||
During the years ended December 31, 2025, 2024 and 2023, NESR recorded other than temporary impairments of $3.0 million, $3.7 million, and $7.0 million, respectively, in its investment in WDVGE. During the years ended December 31, 2024, and 2023, the Company determined that its investment in WDVGE was not fully recoverable on account of slower than anticipated customer and revenue growth as compared to NESR’s original expectations. NESR’s investment in WDVGE was fair valued using a discounted cash flow approach within a scenario analysis.
The following table presents earnings (loss) from equity investments for the periods indicated (in US$ thousands):
| Segment | Year ended December 31, 2025 | Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||||||
| W. D. Von Gonten Engineering LLC | Production Services | $ | (237.5 | ) | $ | 28.7 | $ | (454.1 | ) | |||||
Summarized combined financial information for our equity method investments is as follows for the periods indicated (amounts represent 100% of investee financial information in US$ thousands):
| December 31, 2025 | December 31, 2024 | |||||||
| Balance Sheet data: | ||||||||
| Current assets | $ | 4,044 | 5,242 | |||||
| Noncurrent assets | 12,451 | 15,236 | ||||||
| Total assets | $ | 16,495 | 20,478 | |||||
| Current liabilities | $ | 2,543 | 2,555 | |||||
| Other liabilities | 9,068 | 10,976 | ||||||
| Combined equity | 4,884 | 6,947 | ||||||
| Total liabilities and combined equity | $ | 16,495 | 20,478 | |||||
| Year ended | Year ended | Year ended | ||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||
| Statement of operations data: | ||||||||||||
| Revenue | $ | 17,824 | $ | 20,016 | $ | 19,263 | ||||||
| Operating income | (2,063 | ) | 62 | (1,041 | ) | |||||||
| Net income | (2,063 | ) | 62 | (983 | ) | |||||||
Other equity investments
To date, the Company has not incurred significant expenditures on research and development activities, other than through strategic investments and partnerships intended to expand its NESR Environmental and Decarbonization Applications (“NEDA”), a service line within our Production Services segment, and Drilling & Evaluation portfolios. These investments are individually insignificant but in the aggregate totaled $25.2 million and $24.3 million as of December 31, 2025, and December 31, 2024, respectively.
The Company accounts for these investments under the measurement alternative in Accounting Standards Codification (“ASC”) 321, Investments – Equity Securities, and records them at cost, net of impairment, as none of the investments have readily determinable fair values. In accordance with ASC 321, the Company monitors these investments for indicators of impairment, including recent transactions involving the investees, liquidity position, operating performance, and other qualitative and quantitative factors.
For the year ended December 31, 2025, the Company recorded an impairment charge of $5.1 million related to one investment that is expected to exhaust its remaining cash during 2026 and currently has limited ability to recapitalize. In addition, the Company identified two investments with heightened risk of impairment, with potential exposure of up to $7.1 million, for the year ending December 31, 2026, due to stressed liquidity conditions in one instance and uncertainty surrounding the ultimate realization of earn-out consideration in another instance. No impairments or other downward adjustments were recorded for the years ended December 31, 2024 and December 31, 2023.
Subsequent to December 31, 2025, the Company contributed an additional $1.0 million to one of its investments, increasing the carrying value of the overall portfolio to $26.2 million.
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.