Qnity Electronics, Inc.Q

Qnity Electronics, Inc. Goodwill & Intangibles Disclosure

10-KFiled Feb 26, 20262 min read
GOODWILL AND OTHER INTANGIBLE ASSETS
The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024:
In millionsSemiconductor TechnologiesInterconnect SolutionsTotal
Balance at December 31, 2023$4,487 $2,969 $7,456 
Currency Translation Adjustment(34)(46)(80)
Other— 3 3 
Balance at December 31, 2024$4,453 $2,926 $7,379 
Currency Translation Adjustment89 54 143 
Balance at December 31, 2025$4,542 $2,980 $7,522 
Annual Goodwill Impairment Testing
Effective in the first quarter of 2025, in anticipation of the Separation, DuPont realigned its segment structure. The realignment of DuPont’s segments served as a triggering event requiring the Company to perform an impairment analysis related to goodwill prior to and subsequent to the realignment. As part of the realignment, the Company assessed and redefined certain reporting units, including reallocation of goodwill on a relative fair value basis, as applicable, to the reporting units impacted. Goodwill impairment analyses were then performed for reporting units impacted and no impairments were identified.

As part of its annual impairment test at October 1, 2025, the Company performed qualitative testing on its two reporting units. The results of the qualitative assessments indicated that it is not more likely than not that the fair values of the two reporting units were less than their carrying values.

Other Intangible Assets
The gross carrying amounts and accumulated amortization of other intangible assets with finite lives, by major class are as follows:
December 31, 2025December 31, 2024
In millionsGross
Carrying
Amount		Accumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Intangible assets with finite lives:
  Developed technology $544 $(349)$195 $605 $(357)$248 
  Trademarks55 (38)17 55 (34)21 
  Customer-related2,125 (1,226)899 2,353 (1,336)1,017 
Total other intangible assets$2,724 $(1,613)$1,111 $3,013 $(1,727)$1,286 

During the fiscal year 2025, the Company retired fully amortized assets of $74 million of developed technology intangible assets and $273 million of customer-related intangible assets. During the fiscal year 2024, the Company retired fully amortized assets of $65 million of developed technology intangible assets and $27 million of trademark intangible assets.

The following table provides the net carrying value of other intangible assets by segment:
Net IntangiblesDecember 31, 2025December 31, 2024
In millions
Semiconductor Technologies$264 $314 
Interconnect Solutions847 972 
Total$1,111 $1,286 

The aggregate pre-tax amortization expense for intangible assets was $207 million, $232 million and $262 million, for the years ended December 31, 2025, 2024, and 2023, respectively.

Total estimated amortization expense for the next five fiscal years is as follows:
Estimated Amortization Expense
In millions
2026$199 
2027$169 
2028$143 
2029$109 
2030$89 
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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

Income TaxesRevenueEarnings Per ShareFair ValuePP&ELeasesSegmentsDebtCommitmentsNew Standards