GOODWILL AND INTANGIBLE ASSETS
The Company tests goodwill for impairment on the first day of the Company's fourth fiscal quarter each year, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual qualitative and quantitative assessment tests performed in the three years ended December 31, 2025 indicated there was no goodwill impairment.
There was no change in the net carrying amount of goodwill as of December 31, 2024. The change in the net carrying amount of goodwill as of December 31, 2025 is as follows (in thousands):
| | | | | | |
| Balance at December 31, 2024 | $ | 1,656,926 | | |
| Acquisition | 20,228 | | |
| Balance at December 31, 2025 | $ | 1,677,154 | | |
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Other identifiable intangible assets consist of the following:
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| | As of December 31, 2025 | | As of December 31, 2024 |
| (In thousands) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| Contract backlogs and recompetes | | $ | 395,800 | | | $ | (287,235) | | | $ | 108,565 | | | $ | 393,300 | | | $ | (210,084) | | | $ | 183,216 | |
| Customer contracts | | 182,705 | | | (51,510) | | | 131,195 | | | 177,722 | | | (37,870) | | | 139,852 | |
| Trade names and other | | 1,100 | | | (1,100) | | | — | | | 1,260 | | | (1,260) | | | — | |
| Total intangible assets | | $ | 579,605 | | | $ | (339,845) | | | $ | 239,760 | | | $ | 572,282 | | | $ | (249,214) | | | $ | 323,068 | |
Intangible amortization expense was approximately $90.6 million, $90.8 million, and $90.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the weighted-average intangible asset amortization period was 6.8 years.
The estimated future annual amortization expense for intangible assets is as follows:
| | | | | | | | | | | |
| (In thousands) | | Amortization |
| 2026 | | $ | 91,785 | |
| 2027 | | 21,024 | |
| 2028 | | 18,522 | |
| 2029 | | 17,444 | |
| 2030 | | 17,358 | |
| After 2030 | | 73,627 | |
| Total | | $ | 239,760 | |
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.