|9 Months Ended
Sep. 30, 2023
|Goodwill and Intangible Assets Disclosure [Abstract]
The Company tests goodwill for impairment on an annual basis on October 1 of each year, or when events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. During the third quarter of 2023, the Company identified circumstances prior to its annual goodwill test that indicated that it was “more likely than not” that the fair value of the reporting unit (the Company) was below its carrying value. The Company therefore performed qualitative and quantitative goodwill impairment tests during the third quarter of 2023. The primary qualitative impairment indicator noted was a sustained decline in the Company’s share price from the second quarter of 2023.
The fair value of the Company 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.
As a result of the Company’s goodwill impairment testing, the Company concluded that the carrying value of the Company exceeded its estimated fair value, and recorded a goodwill impairment loss of approximately $78.3 million, which represents the accumulated impairment loss subsequent to December 31, 2022, for both the three and nine months ended September 30, 2023. No such impairment charges were recorded for the three and nine months ended September 30, 2022.