GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill is recorded as a result of business combinations. The following is a reconciliation of Goodwill by business segment for the years ended December 31, 2024 and December 31, 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Imaging Center | | Digital Health | | Total |
| Balance as of December 31, 2023 | | $ | 594,257 | | | $ | 85,206 | | | $ | 679,463 | |
| Goodwill from acquisitions | | $ | 34,697 | | | $ | — | | | $ | 34,697 | |
| | | | | | |
| Currency translation | | (417) | | | (3,080) | | | (3,497) | |
| | | | | | |
| Balance as of December 31, 2024 | | $ | 628,537 | | | $ | 82,126 | | | $ | 710,663 | |
| Goodwill from acquisitions | | 111,622 | | 76,617 | | 188,239 |
| Measurement period and other adjustments | | — | | | 87 | | | 87 | |
| Currency translation | | 1,734 | | 6,940 | | 8,674 |
| Balance as of December 31, 2025 | | $ | 741,893 | | | $ | 165,770 | | | $ | 907,663 | |
The amount of goodwill that is expected to be deductible for tax purposes as for 2025 is $232.8 million.
Other intangible assets are primarily related to our business combinations and software development. They include the estimated fair values of such items as service agreements, customer lists, covenants not to compete, acquired technologies, and trade names.
Total amortization expense was $16.1 million, $12.5 million, and $12.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Intangible assets are amortized using the straight-line method over their useful life determined at acquisition. Management service agreements are amortized over 25 years using the straight line method. Software development is capitalized and amortized over the useful life of the software when placed into service. Trade names are reviewed annually for impairment.
The following table shows annual amortization expense, by asset classes that will be recorded over each of the next five years and thereafter (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2026 | | 2027 | | 2028 | | 2029 | | 2030 | | Thereafter | | Total | | Weighted average amortization period remaining in years |
| Management Service Contracts | $ | 2,287 | | | $ | 2,287 | | | $ | 2,287 | | | $ | 2,287 | | | $ | 2,287 | | | $ | 2,096 | | | $ | 13,531 | | | 5.8 |
| Covenant not to compete and other contracts | 2,039 | | | 1,745 | | | 1,655 | | | 1,195 | | | 119 | | | — | | | 6,753 | | | 3.6 |
| Customer Relationships | 3,914 | | | 3,736 | | | 3,694 | | | 3,694 | | | 3,694 | | | 43,016 | | | 61,748 | | | 16.9 |
| Patent and Trademarks | 763 | | | 391 | | | 326 | | | 67 | | | 43 | | | 83 | | | 1,673 | | | 3.1 |
| Developed Technology & Software | 9,712 | | | 9,177 | | | 9,177 | | | 3,958 | | | 3,227 | | | 5,770 | | | 41,021 | | | 5.0 |
| Trade Names amortized | 394 | | | 394 | | | 359 | | | 252 | | | 127 | | | 336 | | | 1,862 | | | 5.6 |
| Certifications | 1867 | | | — | | | — | | | — | | | — | | | — | | | 1,867 | | | 0.8 |
| Others | 438 | | | 438 | | | 438 | | | 219 | | | — | | | — | | | 1,533 | | | 3.4 |
| Trade Names indefinite life | — | | | — | | | — | | | — | | | — | | | 8,500 | | | 8,500 | | | |
| IPR&D | — | | | — | | | — | | | — | | | — | | | 10,020 | | | 10,020 | | | |
| Total Annual Amortization | $ | 21,414 | | | $ | 18,168 | | | $ | 17,936 | | | $ | 11,672 | | | $ | 9,497 | | | $ | 69,821 | | | $ | 148,508 | | | |
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.