Annual report pursuant to Section 13 and 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

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GOODWILL AND OTHER INTANGIBLE ASSETS
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill

The following table sets forth the changes in the carrying amount of the Company’s goodwill on the consolidated balance sheets as of December 31, 2023, and 2022:
(in thousands) Total
Goodwill, gross $ 384,202 
Accumulated currency translation (787)
Balance as of January 1, 2022, net $ 383,415 
Acquisitions during the year 44,859 
Impairment losses (58,074)
Currency translation (494)
(13,709)
Goodwill, gross $ 429,061 
Accumulated impairment losses (58,074)
Accumulated currency translation (1,281)
Balance as of December 31, 2022, net $ 369,706 
Acquisitions during the year 3,243 
Impairment losses (78,257)
Currency translation 282 
(74,732)
Goodwill, gross $ 432,304 
Accumulated impairment losses (136,331)
Accumulated currency translation (999)
Balance as of December 31, 2023, net $ 294,974 

2023 Goodwill impairment loss

During the third quarter of 2023, the Company identified circumstances prior to its annual impairment test that indicated that it was “more likely than not” that the fair value of the Company’s goodwill was below its carrying value. The primary qualitative impairment indicator noted was that of a significant and sustained decline in the Company’s share price from that of the second quarter of 2023. The Company therefore performed a long-lived asset and goodwill impairment test during the third quarter of 2023 and determined that goodwill was impaired. The Company recorded a goodwill impairment charge of $78.3 million. No impairment was indicated for long-lived assets.

The fair value of the Company’s goodwill was estimated by equally weighing the results of an income approach and market approach. Valuation techniques utilized were substantially considered Level 3 inputs in the fair value hierarchy. These inputs included the Company’s internal forecasts of its future results, cash flows, and its weighted average cost of capital. Key assumptions used in the impairment analysis included projected revenue growth rates, discount rates, and market factors such as earnings multiples from comparable publicly traded companies.

Long-lived assets and goodwill were not determined to be further impaired as of the annual impairment test date on October 1, 2023.

2022 Goodwill impairment loss

During the fourth quarter of 2022, the Company identified circumstances subsequent to its annual impair test that indicated that it was “more likely than not” that the fair value of the Company’s goodwill was below its carrying value. These impairment indicators included increased interest rates impacting the Company’s weighted average cost of capital, an increase in the Company’s specific risk premium, an increase in debt-free net working capital needs, and a significant and sustained decline in the Company’s share price from the third quarter of 2022. The Company therefore performed a long-lived asset and goodwill impairment test during the fourth quarter of 2022 and determined that goodwill was impaired. The Company recorded a goodwill impairment charge of $58.1 million. No impairment was indicated for long-lived assets,

The fair value of the Company’s goodwill was estimated by equally weighing the results of an income approach and market approach. Valuation techniques utilized were substantially considered Level 3 inputs in the fair value hierarchy. These inputs included the Company’s internal forecasts of its future results, cash flows, and its weighted average cost of capital. Key assumptions used in the impairment analysis included projected revenue growth rates, discount rates, and market factors such as earnings multiples from comparable publicly traded companies.
Other Intangible Assets

The following tables set forth the details of other intangible assets included on the consolidated balance sheets as of December 31, 2023 and 2022:

(in thousands) Gross Carrying Value Accumulated
Amortization 		Net Carrying Value
Customer relationships $ 334,543  $ (227,456) $ 107,087 
Internally developed computer software 82,950  (47,166) 35,784 
Carrier contracts 70,210  (54,561) 15,649 
Technology 50,366  (45,978) 4,388 
Trademarks 17,449  (12,918) 4,531 
Non-compete agreement 5,604  (5,456) 148 
Balance as of December 31, 2023 $ 561,122  $ (393,535) $ 167,587 

(in thousands) Gross Carrying Value Accumulated
Amortization 		Net Carrying Value
Customer relationships $ 327,317  $ (197,483) $ 129,834 
Internally developed computer software 66,459  (36,579) 29,880 
Carrier contracts 70,210  (47,483) 22,727 
Technology 46,978  (42,348) 4,630 
Trademarks 16,214  (11,060) 5,154 
Non-compete agreement 5,604  (5,325) 279 
Balance as of December 31, 2022 $ 532,782  $ (340,278) $ 192,504 

As of December 31, 2023, the weighted average remaining useful lives were 4.7 years for customer relationships; 5.4 years for internally developed computer software; 2.8 years for carrier contracts; 4.5 years for technology; 4.2 years for trademarks; and 1.1 years for non-compete agreements.

Amortization expense for the years ended December 31, 2023 and 2022 was $52.8 million, and $50.8 million, respectively.

The following table sets forth the estimated amortization expense for amortizing intangible assets for the next five years and thereafter as of December 31, 2023:

(in thousands) Estimated Amortization Expense
2024 $ 51,305 
2025 47,269 
2026 33,273 
2027 13,053 
2028 10,156 
Thereafter 12,531 
Total $ 167,587