Goodwill and Intangible Assets, Net
Goodwill

During the year ended December 31, 2023, a decline in our financial performance, overall negative trend in the video service provider channel and an uncertain economic environment contributed to a significant decline in our market capitalization. We considered this to be an impairment trigger. We, therefore, performed a quantitative valuation analysis under an income approach to estimate our reporting unit's fair value. The income approach used projections of estimated operating results and cash flows that were discounted using a discount rate based on the weighted-average cost of capital. The main assumptions supporting the cash flow projections include, but are not limited to, revenue growth, margins, discount rate, and terminal growth rate. The financial projections reflect our best estimate of economic and market conditions over the projected period, including forecasted revenue growth, margins, capital expenditures, depreciation and amortization. In addition to our valuation analysis under an income approach, we also considered the implied control premium compared to our market capitalization. We determined that the implied control premium over our market capitalization to be substantial; therefore, we recorded an impairment charge of $49.1 million during the year ended December 31, 2023.

Intangible Assets, Net

The components of intangible assets, net were as follows: 
December 31,
 20252024
(In thousands)
Gross (1)
Accumulated
Amortization (1)
Net (1)
Gross (1)
Accumulated
Amortization (1)
Net (1)
Capitalized software development costs$1,675 $(677)$998 $2,575 $(1,150)$1,425 
Customer relationships 6,340 (5,250)1,090 6,340 (4,526)1,814 
Developed and core technology 740 (493)247 740 (398)342 
Patents 35,171 (15,557)19,614 34,758 (14,339)20,419 
Trademarks and trade names50 (31)19 450 (412)38 
Total intangible assets, net$43,976 $(22,008)$21,968 $44,863 $(20,825)$24,038 
(1)This table excludes the gross value of fully amortized intangible assets totaling $52.5 million and $49.3 million on December 31, 2025 and 2024, respectively.

Amortization expense is recorded in SG&A expenses, except amortization expense related to capitalized software development costs, which is recorded in cost of sales. Amortization expense by statement of operations caption was as follows:
 Year Ended December 31,
(In thousands)202520242023
Cost of sales$650 $729 $443 
Selling, general and administrative expenses4,412 4,438 4,440 
Total amortization expense$5,062 $5,167 $4,883 
 
Estimated future annual amortization expense related to our intangible assets at December 31, 2025 is as follows: 
(In thousands) 
2026$4,913 
20274,176 
20283,122 
20292,972 
20302,371 
Thereafter4,414 
Total$21,968 

The remaining weighted average amortization period of our intangible assets at December 31, 2025 is 6.1 years.

Historical Timeline

Fiscal YearFiled
2025Mar 12, 2026Showing above
2024Mar 11, 2025
2023Mar 14, 2024
2022Mar 8, 2023
2021Mar 4, 2022
2020Mar 5, 2021
2019Mar 16, 2020
2018Mar 15, 2019
2017Mar 13, 2018
2016Mar 9, 2017
2015Mar 11, 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.