O REILLY AUTOMOTIVE INC Goodwill & Intangibles Disclosure
NOTE 7 – GOODWILL AND OTHER INTANGIBLES
Goodwill:
Goodwill is reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist. Goodwill is not amortizable for financial statement purposes. The Company did not record any goodwill impairment during the years ended December 31, 2025, 2024, or 2023.
The following table identifies the changes in goodwill, which were included in “Goodwill” on the accompanying Consolidated Balance Sheets for the years ended December 31, 2025 and 2024 (in thousands):
| 2025 | | 2024 | |||
Goodwill, balance at January 1, | $ | 930,161 | $ | 897,696 | ||
Change in goodwill related to acquisitions |
| 4,657 |
| 52,105 | ||
Foreign currency translation | 13,390 | (19,640) | ||||
Goodwill, balance at December 31, | $ | 948,208 | $ | 930,161 | ||
Intangibles Other than Goodwill:
The following table identifies the components of the Company’s intangible assets, inclusive of foreign currency translation adjustments, which were included in “Other assets, net” on the accompanying Consolidated Balance Sheets for the years ended December 31, 2025 and 2024 (in thousands):
December 31, 2025 | December 31, 2024 | |||||||||||||||||
| Cost of | | Accumulated | Net | Cost of | | Accumulated | | Net | |||||||||
Intangibles | Amortization | Intangibles | Intangibles | Amortization | Intangibles | |||||||||||||
Finite-lived intangible assets: |
| |
| | | |
| |
| | ||||||||
Trade names (1) | $ | 2,933 | $ | (2,230) | $ | 703 | $ | 2,536 | $ | (1,612) | $ | 924 | ||||||
Non-compete agreements (2) | 2,141 | (1,736) | 405 | 2,161 | (1,548) | 613 | ||||||||||||
Customer relationships (3) | 41,506 | (10,023) | 31,483 | 38,758 | (6,193) | 32,565 | ||||||||||||
Total finite-lived intangible assets | 46,580 | (13,989) | 32,591 | 43,455 | (9,353) | 34,102 | ||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||
Trade names | 39,103 | — | 39,103 | 33,810 | — | 33,810 | ||||||||||||
Total intangible assets | $ | 85,683 | $ | (13,989) | $ | 71,694 | $ | 77,265 | $ | (9,353) | $ | 67,912 | ||||||
(1) | Weighted-average remaining useful life of approximately 1.9 years as of December 31, 2025. |
(2) | Weighted-average remaining useful life of approximately 2.5 years as of December 31, 2025. |
(3) | Weighted-average remaining useful life of approximately 11.9 years as of December 31, 2025. |
During the years ended December 31, 2025 and 2024, the Company recorded non-compete agreement assets in conjunction with small acquisitions in the amount of less than $0.1 million for each year. Other than the non-compete agreement assets, the Company did not record additional finite-lived assets during the year ended December 31, 2025, or indefinite-lived intangible assets during the years ended December 31, 2025 and 2024. During the year ended December 31, 2024, the Company recorded a finite-lived asset, related to customer relationships from the Vast Auto acquisition, in the amount of $32.8 million. For the year ended December 31, 2025, 2024, and 2023, the Company recorded aggregate amortization expense related to its intangible assets in the amounts of $3.6 million, $3.6 million and $3.0 million, respectively.
Indefinite-lived intangible assets, such as trade names, are reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist. The Company did not record any indefinite-lived intangible asset impairment during the years ended December 31, 2025, 2024, or 2023.
The following table identifies the estimated amortization expense of the Company’s intangibles for each of the next five years, and the aggregate thereafter, and reconciles to net, finite-lived intangible assets included in “Other assets, net” on the accompanying Consolidated Balance Sheets as of December 31, 2025 (in thousands):
December 31, 2025 | |||
| Amortization Expense | ||
2026 | $ | 3,654 | |
2027 |
| 3,516 | |
2028 |
| 3,176 | |
2029 |
| 3,009 | |
2030 |
| 2,140 | |
Thereafter | 17,096 | ||
Total net, finite-lived intangible assets | $ | 32,591 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 26, 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.