Nextpower Inc.NXT

Nextpower Inc. Goodwill & Intangibles Disclosure

10-KFiled May 22, 20253 min read
Goodwill and intangible assets
Goodwill
As of March 31, 2025 and 2024, goodwill totaled $371.0 million and $265.2 million, respectively and is not deductible for tax purposes. During fiscal year 2025, the additions to the Company’s goodwill are driven by its acquisitions of Ojjo, Inc. (“Ojjo”) and the solar foundations business held by Solar Pile International (“SPI”) as further described below in Note 15.
There were no changes in goodwill during the fiscal year ended March 31, 2024. The following table summarizes the activity in the Company’s goodwill during the fiscal year ended March 31, 2025 (in thousands):
Balance as of March 31, 2024$265,153
Additions103,565 
Purchase accounting adjustments 2,300
Balance as of March 31, 2025$371,018
The Company evaluates goodwill for impairment at the reporting unit level annually, and in certain circumstances, such as when there is a change in reporting units or whenever there are indications that goodwill might be impaired. The Company performed its annual goodwill impairment assessment on January 1, 2025, and assessed qualitative factors to determine whether it is more likely or not that the fair value of its reporting units is less than its carrying amount. The qualitative assessment required management to make various judgmental assumptions including but not limited to macroeconomic conditions, industry and market considerations, cost factors, financial performances, change in stock price. Management assessed each factor and evaluated whether the evidence, in aggregate, would indicate that it is more likely than not that the Company's reporting unit is less than its carrying amount. As a result of the qualitative assessment of its goodwill, the Company determined that no impairment existed as of the date of the impairment test because the fair value of its reporting unit exceeded its carrying value.
Other intangible assets
Nextracker amortizes identifiable intangible assets consisting of developed technology, customer relationships, and trade names because these assets have finite lives. Nextracker’s intangible assets are amortized on a straight-line basis over the estimated useful lives. The basis of amortization approximates the pattern in which the assets are utilized over their estimated useful lives. No residual value is estimated for any intangible assets.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. An impairment loss is recognized when the carrying amount of an intangible asset exceeds its fair value. The fair value of Nextracker’s intangible assets is determined based on management’s estimates of cash flows and recoverability. Nextracker reviewed the carrying value of its intangible assets as of March 31, 2025 and 2024, and concluded that such amounts continued to be recoverable.
The components of identifiable intangible assets are as follows (in thousands):
As of March 31, 2025As of March 31, 2024
Weighted-average remaining useful life (in years)Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount		Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount
Developed technology9.4$39,200$(2,394)$36,806$—$—$—
Customer relationships4.218,000(2,779)15,221———
Trade name and other intangibles3.43,018(1,804)1,2143,000(1,454)1,546
Total$60,218$(6,977)$53,241$3,000$(1,454)$1,546
The gross carrying amount of intangible assets are removed when fully amortized. Total intangible asset amortization expense recognized in operations during the fiscal years ended March 31, 2025, 2024 and 2023 are as follows:
Fiscal year ended March 31,
202520242023
(In thousands)
Cost of sales$2,744$275$250
Selling general and administrative expense2,779—957
Total amortization expense$5,523$275$1,207
The estimated future annual amortization expense for the acquired finite-lived intangible assets as of March 31, 2025 is as follows:
Fiscal year ending March 31,Amount
(In thousands)
2026$7,893
20277,870
20287,841
20297,695
20304,741
Thereafter17,183
Total amortization expense$53,223
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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.

Other Available Disclosures

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