TUCOWS INC /PA/ Goodwill & Intangibles Disclosure
4. Goodwill and Other Intangible Assets:
Goodwill
Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions.
Goodwill consists of the following (Dollar amounts in thousands of U.S. dollars):
| Ting | Wavelo | Tucows Domains | Total | |||||||||||||
| Balances, December 31, 2024 | $ | 22,724 | $ | - | $ | 107,686 | $ | 130,410 | ||||||||
| Balances, December 31, 2025 | $ | 22,724 | $ | - | $ | 107,686 | $ | 130,410 | ||||||||
The Company's Goodwill balance is $130.4 million as of December 31, 2025 and December 31, 2024. The Company's goodwill relates 83% ($107.7 million) to its Tucows Domains operating segment and 17% ($22.7 million) to its Ting operating segment.
Goodwill is not amortized, but is subject to an annual impairment test. The Company performed an impairment analysis as outlined in “Note 2(h). Significant Accounting Policies.” For the year ended December 31, 2025 ("Fiscal 2025") and the year ended December 31, 2024 ("Fiscal 2024"), the Company performed a qualitative assessment to determine whether events or changes in circumstances indicated that it was more likely than not that the fair value of any reporting unit was less than its carrying amount. Based on this assessment, for the year ended December 31, 2025, the Company identified indicators of potential impairment and therefore performed a quantitative impairment test in the Ting operating segment (reporting unit). The Company determined that the estimated fair value of the reporting unit exceeded its carrying value, and accordingly, no goodwill impairment charge was recorded for Fiscal 2025.
Other Intangible Assets
Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized, but are subject to an annual impairment assessment, during which the Company evaluates whether changes in circumstances indicate potential impairment. Additionally, throughout the year, management assessed specific domain names acquired through the acquisition of Mailbank.com Inc. in June 2006, that were due for renewal, and decided to renew. During the years ended December 31, 2025, December 31, 2024, and December 31, 2023, no impairment of indefinite life intangible assets was recorded.
Finite-life intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of to years. The weighted average amortization period for all finite-life intangible assets is 5.4 years.
Throughout 2025, the Company purchased $0.2 million in customer relationship assets through hosting agreements whereby customer assets and domain names were obtained. These customer assets are being amortized over years.
Acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Total Net Book Value | Gross Carrying Value | Accumulated Amortization | Total Net Book Value | |||||||||||||||||||
| Brand | $ | 15,765 | 15,675 | $ | 90 | $ | 15,764 | 15,340 | $ | 424 | ||||||||||||||
| Customer relationships | 64,148 | 58,361 | 5,787 | 66,467 | 56,719 | 9,748 | ||||||||||||||||||
| Technology | 10,157 | 9,264 | 893 | 10,157 | 8,631 | 1,526 | ||||||||||||||||||
| Network Rights | 1,468 | 798 | 670 | 1,515 | 730 | 785 | ||||||||||||||||||
| Surname domain names | 11,139 | - | 11,139 | 11,145 | - | 11,145 | ||||||||||||||||||
| Direct navigation domain names | 1,124 | - | 1,124 | 1,127 | - | 1,127 | ||||||||||||||||||
| $ | 103,801 | $ | 84,098 | $ | 19,703 | $ | 106,175 | $ | 81,420 | $ | 24,755 | |||||||||||||
| Surname domain names | Direct navigation domain names | Brand | Customer relationships | Technology | Network rights | Total | ||||||||||||||||||||||
| Amortization period | indefinite life | indefinite life | 7 years | 3 - 7 years | 2 -7 years | 15 years | ||||||||||||||||||||||
| Balances, December 31, 2023 | $ | 11,151 | $ | 1,128 | $ | 870 | $ | 13,303 | $ | 2,148 | $ | 884 | $ | 29,484 | ||||||||||||||
| Acquisition of customer relationship | - | - | - | 575 | - | - | 575 | |||||||||||||||||||||
| Additions to/(disposals from) domain portfolio, net | (6 | ) | (1 | ) | - | - | - | - | (7 | ) | ||||||||||||||||||
| Amortization expense | - | - | (446 | ) | (4,130 | ) | (622 | ) | (99 | ) | (5,297 | ) | ||||||||||||||||
| Balances December 31, 2024 | $ | 11,145 | $ | 1,127 | $ | 424 | $ | 9,748 | $ | 1,526 | $ | 785 | $ | 24,755 | ||||||||||||||
| Acquisition of customer relationship | - | - | - | 206 | - | - | 206 | |||||||||||||||||||||
| Additions to/(disposals from) domain portfolio, net | (6 | ) | (3 | ) | - | - | - | - | (9 | ) | ||||||||||||||||||
|
| - | - | - | (136 | ) | (12 | ) | (17 | ) | (165 | ) | |||||||||||||||||
| Disposal of Cedar intangible assets | - | - | - | (417 | ) | - | - | (417 | ) | |||||||||||||||||||
| Amortization expense | - | - | (334 | ) | (3,614 | ) | (621 | ) | (98 | ) | (4,667 | ) | ||||||||||||||||
| Balances December 31, 2025 | $ | 11,139 | $ | 1,124 | $ | 90 | $ | 5,787 | $ | 893 | $ | 670 | $ | 19,703 | ||||||||||||||
The following table shows the estimated amortization expense for each of the next 5 years and thereafter, assuming no further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):
| Year ending | ||||
| December 31, | ||||
| 2026 | $ | 3,469 | ||
| 2027 | 1,896 | |||
| 2028 | 1,520 | |||
| 2029 | 306 | |||
| 2030 | 151 | |||
| Thereafter | 98 | |||
| Total | $ | 7,440 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 3, 2021 | |
| 2019 | Mar 4, 2020 | |
| 2018 | Mar 5, 2019 | |
| 2017 | Mar 6, 2018 | |
| 2016 | Mar 8, 2017 | |
| 2015 | Mar 9, 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.