Oportun Financial CorpOPRT

Oportun Financial Corp Goodwill & Intangibles Disclosure

10-KFiled Mar 15, 20242 min read
6.
Capitalized Software and Other Intangibles

Capitalized software, net consists of the following:

December 31,
(in thousands)20232022
Capitalized software, net:
System development costs$158,577 $135,303 
Acquired developed technology48,500 48,500 
Less: Accumulated amortization(119,810)(79,679)
Total capitalized software, net$87,267 $104,124 

Capitalized software, net

Amortization of system development costs and acquired developed technology for years ended December 31, 2023 and 2022 was $42.3 million and $34.2 million, respectively. System development costs capitalized in the years ended December 31, 2023 and 2022 were $31.0 million and $51.5 million, respectively.

The Company recognized a non-cash pre-tax impairment charge of $5.6 million related to the write-off of embedded finance, investing and retirement products. The non-cash impairment charge is included in Technology and Facilities in the Consolidated Statements of Operations.

Acquired developed technology was $48.5 million and is related to the acquisition of Digit.

Intangible Assets

The gross carrying amount and accumulated amortization, in total and by major intangible asset class are as follows:

December 31,December 31,
(in thousands)20232022
Intangible assets:
Member relationships34,500 $34,500 
Trademarks5,626 6,426 
Other3,000 3,000 
Less: Accumulated amortization
(15,658)$(8,249)
Total intangible assets, net
27,468 $35,677 

On March 8, 2023, the Company revealed its rebranding of Oportun and Oportun Savings (formerly known as Digit) as a single brand. Therefore, the Company wrote off its $0.8 million Digit trademark. Amortization of intangible assets for the years ended December 31, 2023 and 2022 was $7.7 million and $7.9 million.

Expected future amortization expense for intangible assets as of December 31, 2023 is as follows:

(in thousands)Fiscal Years
2024
$7,538 
2025
4,929 
2026
4,929 
2027
4,929 
2028
4,780 
Thereafter— 
Total
$27,105 

Historical Timeline

Fiscal YearFiled
2023Mar 15, 2024Showing above
2022Mar 14, 2023
2021Mar 1, 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.

Other Available Disclosures

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