GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 6 GOODWILL AND INTANGIBLE ASSETS

Due to the Acquisition, we recognized increases to our goodwill and intangible assets balances as of September 30, 2025. The goodwill and intangible assets recognized as a result of the Acquisition are considered final as of September 30, 2025. During the fiscal year ended September 30, 2025, goodwill increased by $15.8 million due to certain measurement period adjustments which primarily consisted of a $17.4 million increase resulting from the finalization of deferred tax liabilities and a $4.0 million decrease resulting from the refinement of the fair value calculation of the inventory and intangible asset balances. For additional information regarding the completion of the Acquisition, refer to Note 3—Business Combination.

Goodwill

Goodwill represents the excess of the purchase price over the fair values of the assets acquired and liabilities assumed in a business combination, at the date of acquisition. Goodwill is not amortized but is tested for potential impairment at the reporting unit level, at a minimum on an annual basis in the fourth fiscal quarter, or when indications of potential impairment exist. Our reporting units with goodwill are H&P Technologies (within our North America Solutions segment), International Solutions, Offshore Solutions, and BENTEC™ (within Other).

During the third fiscal quarter of 2025, due primarily to the sustained decline in our share price and market capitalization, we identified indicators of potential impairment of goodwill and performed an interim impairment test. We estimated the fair value of each reporting unit using a market approach, incorporating significant unobservable, or Level 3, inputs, as defined by the fair value hierarchy. We employed a combination of the guideline public company method and the guideline transactions method, leveraging company comparisons and analyst reports from the energy industry, which supported a range of fair values derived from annualized earnings before interest, income taxes, depreciation and amortization ("EBITDA") multiples between 2.5x and 5.5x for guideline public companies and between 3.4x and 7.6x for guideline transactions. We then derived an estimated fair value of each reporting unit based on an EBITDA multiple at or below the peer-median trading multiple.

Based on our interim goodwill impairment test as of June 30, 2025, we concluded that the International Solutions and BENTEC™ (formally Kenera) reporting units' carrying value exceeded their respective estimated fair value. As a result, we recorded a non-cash goodwill impairment charge of $128.4 million and $44.9 million, respectively, which represented a full impairment of the goodwill allocated to these reporting units. The estimated fair values of our H&P Technologies and Offshore Solutions reporting units as of June 30, 2025 exceeded their respective carrying values by approximately 76 percent and 20 percent, respectively. During the three months ended September 30, 2025, primarily as a result of measurement period adjustments discussed above, we recorded an additional $4.4 million and $14.5 million in impairment expense related to the International Solutions and BENTEC™ reporting units, respectively. Our annual review of goodwill during the fourth fiscal quarter of 2025 did not result in any additional impairments.

The following table sets forth our goodwill balance by segment for the periods indicated:


(in thousands)	North America Solutions		International Solutions		Offshore Solutions		Other		Total
Goodwill balance at September 30, 2024	$	45,653	$	—	$	—	$	—	$	45,653
Acquisition of KCA Deutag	—		131,351		121,906		44,907		298,164
Measurement period adjustments	—		1,369		6,457		7,949		15,775
Currency translation adjustment	—		—		8,838		6,610		15,448
Impairment charges	—		(132,720)		—		(59,466)		(192,186)
Goodwill balance at September 30, 2025	$	45,653	$	—	$	137,201	$	—	$	182,854

Intangible Assets

Finite-lived intangible assets are amortized using the straight-line method over the period in which these assets contribute to our cash flows and are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with our policies for valuation of long-lived assets. After initial recognition, in-process research and development ("IPR&D") assets are considered indefinite-lived until the abandonment or completion of the associated research and development effort. During the year ended September 30, 2025, we reclassified $1.2 million to Property, plant and equipment, net on our Consolidated Balance Sheets upon the completion of related projects. Acquired IPR&D is not amortized, but is subject to an annual impairment assessment. Our intangible assets consist of the following:


		September 30, 2025								September 30, 2024
(in thousands)	Weighted Average Estimated Useful Lives	Gross Carrying Amount		Accumulated Amortization		Currency Translation Adjustment		Net		Gross Carrying Amount		Accumulated Amortization		Net
Finite-lived intangible assets:
Developed technology	14 years	$	110,516	$	47,278	$	—	$	63,238	$	89,096	$	40,047	$	49,049
Customer relationships	9 years	432,200		42,077		14,202		404,325		—		—		—
Intellectual property	13 years	2,000		821		—		1,179		2,000		662		1,338
Trade name	13 years	16,725		3,088		—		13,637		5,865		2,105		3,760
Indefinite-lived intangible asset:						—
In-process research and development	Indefinite	3,161		—				3,161		—		—		—
		$	564,602	$	93,264	$	14,202	$	485,540	$	96,961	$	42,814	$	54,147

Amortization expense in the Consolidated Statements of Operations was $50.6 million for fiscal year 2025, $6.4 million for fiscal year 2024 and $6.6 million for fiscal year 2023.

Over the next five years, amortization expense is estimated to be as follows:


(in thousands)
Fiscal year:
2026	$	74,198
2027	72,718
2028	72,711
2029	47,894
2030	35,106