7. Goodwill and Intangible Assets
Goodwill
Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized but rather tested for impairment at least annually during the fourth quarter, or when indicators of impairment exist.
Goodwill consisted of the following (in thousands): | | | | | | |
| | | Goodwill |
| Balance as of June 30, 2023 | | $ | 727,211 | |
| Additions | | 561,372 | |
| Effect of change in exchange rates | | 173 | |
| Balance as of June 30, 2024 | | 1,288,756 | |
| Additions | | 14,022 | |
| Effect of change in exchange rates | | 1,667 | |
| Balance as of June 30, 2025 | | $ | 1,304,445 | |
During fiscal year 2025, the Company completed two acquisitions to expand the Company’s product and service offerings. These transactions were accounted for as business combinations and were not material individually or collectively to the consolidated financial statements.
Intangible Assets
Intangible assets consisted of the following as of June 30, 2025 (in thousands):
| | | | | | | | | | | | | | | | | |
| Gross Carrying Amount | | Accumulated Amortization | | Net |
| Acquired developed technology | $ | 466,932 | | | $ | (278,525) | | | $ | 188,407 | |
| Patents, trade names, and other rights | 70,928 | | | (37,337) | | | 33,591 | |
| Customer relationships | 135,687 | | | (112,845) | | | 22,842 | |
| Total Intangible Assets | $ | 673,547 | | | $ | (428,707) | | | $ | 244,840 | |
Intangible assets consisted of the following as of June 30, 2024 (in thousands):
| | | | | | | | | | | | | | | | | |
| Gross Carrying Amount | | Accumulated Amortization | | Net |
| Acquired developed technology | $ | 469,752 | | | $ | (242,137) | | | $ | 227,615 | |
| Patents, trade names, and other rights | 70,928 | | | (31,427) | | | 39,501 | |
| Customer relationships | 135,687 | | | (103,746) | | | 31,941 | |
| Total Intangible Assets | $ | 676,367 | | | $ | (377,310) | | | $ | 299,057 | |
The weighted-average remaining useful lives of the Company’s acquired intangible assets as of June 30, 2025 are as follows:
| | | | | | | | |
| | Weighted-Average Remaining Useful Lives (Years) |
| Acquired developed technology | | 5 |
| Patents, trade names, and other rights | | 6 |
| Customer relationships | | 3 |
Amortization expense for intangible assets was approximately $55.5 million, $49.7 million, and $33.1 million for fiscal years 2025, 2024, and 2023, respectively.
The following table presents the estimated future amortization expense related to intangible assets held as of June 30, 2025 (in thousands):
| | | | | | | | |
| Fiscal Years: | | |
| 2026 | | $ | 53,030 | |
| 2027 | | 47,861 | |
| 2028 | | 45,634 | |
| 2029 | | 40,128 | |
| 2030 | | 37,708 | |
| Thereafter | | 20,479 | |
| Total future amortization expense | | $ | 244,840 | |
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.