Repay Holdings Corp Goodwill & Intangibles Disclosure
9. Goodwill
The Company’s reporting units for goodwill impairment evaluation purposes are the same as its reportable segments. The Company concluded that goodwill was impaired for the Business Payments segment as of December 31, 2023. As of December 31, 2023, accumulated impairment loss was $75.7 million for the Business Payments segment. As of December 31, 2022 and 2021, there were no accumulated impairment losses for either the Consumer Payments or Business Payments segment.
The following table presents changes to goodwill by business segment, for the years ended December 31, 2023 and 2022:
($ in thousands) |
|
Consumer Payments |
|
|
Business Payments |
|
|
Total |
|
|||
Balance at December 31, 2021 |
|
$ |
743,608 |
|
|
$ |
80,473 |
|
|
$ |
824,081 |
|
Measurement period adjustment |
|
|
3,732 |
|
|
|
— |
|
|
|
3,732 |
|
Reallocation |
|
|
(138,201 |
) |
|
|
138,201 |
|
|
|
— |
|
Balance at December 31, 2022 |
|
$ |
609,139 |
|
|
$ |
218,674 |
|
|
$ |
827,813 |
|
Dispositions |
|
|
(35,270 |
) |
|
|
— |
|
|
|
(35,270 |
) |
Impairments |
|
|
— |
|
|
|
(75,750 |
) |
|
|
(75,750 |
) |
Balance at December 31, 2023 |
|
$ |
573,869 |
|
|
$ |
142,924 |
|
|
$ |
716,793 |
|
During the year ended December 31, 2023, the Company recognized a reduction in goodwill of $35.3 million related to the disposition of BCS. In addition, the Company recognized an impairment of $75.7 million related to the Business Payments reporting unit during the annual goodwill impairment testing. Determining the fair value of a reporting unit is subject to uncertainty, as the Business Payments reporting unit was primarily impacted by a change in the discount rate. The impairment
loss was recognized within Impairment loss in the Company’s Consolidated Statements of Operations. The fair value of the Business Payments reporting unit is considered a level 3 fair value measurement as it includes certain unobservable inputs.
During the year ended December 31, 2022, the Company recognized a $3.7 million measurement period adjustment in accordance with the BillingTree acquisition, primarily related to a $4.7 million increase in deferred tax liability as a result of the finalization of the tax basis balance sheet. An increase in accounts receivable of $1.0 million was also recognized related to updated collection information on the acquired receivables. The goodwill reallocation of $138.2 million between the Consumer Payments and Business Payments segments resulted from the relative fair value allocation of the new reporting units structure as of December 31, 2022.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Feb 29, 2024 | Showing above |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 16, 2020 | |
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.