Pattern Group Inc.PTRN

Pattern Group Inc. Goodwill & Intangibles Disclosure

10-KFiled Mar 6, 20262 min read
5. Goodwill & Intangible Assets
Goodwill
The goodwill resulting from the acquisition activity is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill resulting from the acquisition activity is generally not deductible for tax purposes.
The following table summarizes our goodwill activity:
(in thousands)
Amount
Goodwill - December 31, 2023$25,938 
Acquisition activity— 
Goodwill - December 31, 202425,938 
Acquisition activity11,831 
Goodwill - December 31, 2025$37,769 
Intangible Assets, net
Intangible assets, net consisted of the following:
December 31, 2024
(in thousands, except for years data)
Gross Carrying Value
Accumulated Amortization
Net Book Value
Weighted Average Remaining Useful Life (in years)
Developed technology
$7,284 $(4,026)$3,258 2.3
Customer relationships
3,619 (1,893)1,726 3.8
Tradenames
3,111 (1,705)1,406 4.0
Non-competition agreements
1,907 (1,535)372 0.5
Domain names
234 (90)144 9.3
Intangible assets, net
$16,155 $(9,249)$6,906 
December 31, 2025
(in thousands, except for years data)
Gross Carrying Value
Accumulated Amortization
Net Book Value
Weighted Average Remaining Useful Life (in years)
Developed technology
$12,713 $(5,482)$7,231 2.5
Customer relationships
5,036 (334)4,702 4.6
Tradenames
3,964 (1,606)2,358 4.4
Non-competition agreements
4,121 (1,847)2,274 3.0
Domain names
234 (105)129 8.0
Intangible assets, net
$26,068 $(9,374)$16,694 
Amortization expense recorded for intangible assets was approximately $3.7 million, $3.1 million and $2.5 million for the years ended December 31, 2023, 2024 and 2025, respectively.
The expected future amortization expense for intangible assets as of December 31, 2025 is as follows:
(in thousands)Amount
2026$5,660 
20274,583 
20284,031 
20291,194 
20301,178 
Thereafter
48 
Total amortization expense
$16,694 
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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.

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