PDF SOLUTIONS INC Goodwill & Intangibles Disclosure
4. GOODWILL AND INTANGIBLE ASSETS
The Company completed the acquisition of SecureWise LLC (“SecureWise”) on March 7, 2025. See Note 16, “Business Combination” for additional information related to the goodwill and intangible assets added from this acquisition.
The changes in goodwill were as follows (in thousands):
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance at the beginning of year | $ | 14,953 | $ | 15,029 | ||||
| Addition | 81,686 | — | ||||||
| Measurement period acquisition adjustment | (1,677 | ) | — | |||||
| Foreign currency translation adjustment | 44 | (76 | ) | |||||
| Balance at the end of year | $ | 95,005 | $ | 14,953 | ||||
Intangible assets were as follows (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||
| Amortization | Gross | Net | Gross | Net | |||||||||||||||||||||||
| Period | Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||||
| (Years) | Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||||
| Acquired intangible assets: | |||||||||||||||||||||||||||
| Customer relationships | 1 - 13 | $ | 38,404 | $ | (10,034 | ) | $ | 28,370 | $ | 9,499 | $ | (7,866 | ) | $ | 1,633 | ||||||||||||
| Developed technology | 4 - 9 | 46,215 | (28,466 | ) | 17,749 | 34,566 | (24,601 | ) | 9,965 | ||||||||||||||||||
| Tradename and trademarks | 2 - 10 | 8,198 | (2,267 | ) | 5,931 | 1,598 | (1,120 | ) | 478 | ||||||||||||||||||
| Patent | 6 - 10 | 2,100 | (1,956 | ) | 144 | 2,100 | (1,869 | ) | 231 | ||||||||||||||||||
| Noncompetition agreements | 3 | 848 | (848 | ) | — | 848 | (848 | ) | — | ||||||||||||||||||
| Total | $ | 95,765 | $ | (43,571 | ) | $ | 52,194 | $ | 48,611 | $ | (36,304 | ) | $ | 12,307 | |||||||||||||
The weighted average amortization period for acquired identifiable intangible assets was 8.6 years as of December 31, 2025. The amortization expense related to intangible assets was as follows (in thousands):
| Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Amortization of acquired technology (included in costs of revenues) | $ | 3,671 | $ | 2,335 | $ | 2,266 | ||||||
| Amortization of acquired intangible assets (presented separately under costs and expenses) | 3,584 | 896 | 1,285 | |||||||||
| Total amortization expense | $ | 7,255 | $ | 3,231 | $ | 3,551 | ||||||
The estimated future amortization expense of acquired intangible assets were as follows (in thousands):
| Year Ending December 31, | Amount | |||
| 2026 | $ | 8,098 | ||
| 2027 | 7,945 | |||
| 2028 | 7,640 | |||
| 2029 | 5,954 | |||
| 2030 | 4,511 | |||
| 2031 and thereafter | 18,046 | |||
| Total future amortization expense | $ | 52,194 | ||
There were no impairment charges for goodwill and intangible assets for the years ended December 31, 2025, 2024 and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 11, 2021 | |
| 2019 | Mar 10, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 9, 2017 | |
| 2015 | Mar 1, 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.