Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis on September 1 of each fiscal year or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

The carrying value of the reporting unit, including goodwill, is compared with the estimated fair value of the reporting unit as determined utilizing a combination of the income and market approach. The income approach, which is a level 3 fair value measurement, is based on projected debt-free cash flow estimates which are discounted to the present value using discount rates that consider the timing and risk of those cash flows. The market approach is based on the guideline public company method, which uses market multiples to value our reporting units as applicable. We weight the approaches in a manner considering the risks of the underlying cash flows. The key assumptions used in estimating the fair value of our reporting units utilizing the income approach include management's best estimate of revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin, and discount rate. The key assumptions used in estimating the fair value of our reporting units utilizing the market approach include revenue multiples, and EBITDA multiples. Accordingly, a change in market conditions or other factors could have a material effect on the estimated values. There are inherent uncertainties related to the assumptions used and to management's application of these assumptions.

We performed our annual impairment testing as of September 1, 2025. The results of the testing indicated that the fair value exceeded the carrying value of our reporting unit which contained goodwill. As a result, no impairment charge was recorded during the fiscal year ended September 30, 2025.

As a result of our annual impairment test as of September 1, 2024, we recorded an impairment charge of $16.3 million. The results of the testing indicated that the carrying value of a reporting unit within Water Management Solutions exceeded the fair value primarily due to lower forecasted revenues and profitability based on a change, during the fourth quarter of 2024, in the forecasted product portfolio.

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets are tested for impairment on an annual basis on September 1 of each fiscal year or more frequently if events or circumstances indicate that it is more likely than not that the asset is impaired. We test our trade name indefinite-lived intangible assets for impairment using a “royalty savings method”, which is an income approach using a variation of the discounted cash flow method. This method estimates a fair value by calculating an estimated discounted future cash flow stream from the hypothetical licensing of the indefinite-lived intangible assets. If the estimated fair value exceeds the carrying value, no impairment is indicated. If the estimated fair value is less than the carrying value, impairment is indicated. This analysis is dependent on management’s best estimates of future revenue and the selection of reasonable discount rates and hypothetical royalty rates.

We performed our annual impairment testing as of September 1, 2025 based on quantitative factors and, as a result, no impairment charge was recorded.

Intangible Assets

Direct internal and external costs to develop software used in the provision of services to customers by Water Management Solutions are capitalized and amortized over the six-year estimated useful life of the software, beginning when the software is ready for its intended use. As of September 30, 2025, the remaining weighted-average amortization period for this software was 4.4 years. Amortization expense related to such software assets was $2.2 million in 2025, $2.6 million in 2024, and $2.9 million in 2023. Amortization expense for each of the next five years is expected to be $2.3 million in 2026, $1.8 million in 2027, $1.5 million in 2028, $1.1 million in 2029 and $0.7 million in 2030.

As of September 30, 2025, the remaining weighted-average amortization periods for business combination-related finite-lived customer relationships and technology intangible assets were 6.7 years and 6.2 years, respectively. Amortization expense related to these assets was $5.0 million, $24.9 million and $25.2 million for 2025, 2024 and 2023, respectively. Amortization expense for each of the next five years is scheduled to be $4.9 million in 2026, $4.7 million in 2027, $4.4 million in 2028, $3.8 million in 2029 and $3.6 million in 2030.

Intangible assets are presented below:


	September 30,
	2025		2024
	(in millions)
Capitalized internal-use software:
Cost	$	42.3	$	40.1
Accumulated amortization	(34.4)		(32.4)
Capitalized internal-use software, net	$	7.9	$	7.7

Business combination-related:
Cost:
Finite-lived intangible assets:
Technology	$	122.4	$	118.6
Customer relationships and other	371.9		371.5
Indefinite-lived intangible assets:
Trade names and trademarks	273.0		272.5
	$	767.3	$	762.6
Accumulated amortization:
Technology	$	(103.2)	$	(97.9)
Customer relationships and other	(364.7)		(362.7)
	(467.9)		(460.6)
Business combination-related intangible assets, net	299.4		302.0
Intangible assets, net	$	307.3	$	309.7

Goodwill

As of September 30, 2025, our remaining goodwill balance is within our Water Management Solutions segment. Changes in the carrying amount of goodwill for the years ended September 30, 2025, and 2024 were as follows (in millions):


Balance as of September 30, 2023:
Goodwill	$	817.8
Accumulated impairment	(724.1)
Net goodwill	93.7
2024 Activity:
Goodwill impairment	(16.3)
Change in foreign currency exchange rates	3.3
Balance as of September 30, 2024:
Goodwill	821.1
Accumulated impairment	(740.4)
Net goodwill	80.7
2025 Activity:

Change in foreign currency exchange rates	8.5
Balance as of September 30, 2025:
Goodwill	829.6
Accumulated impairment	(740.4)
Net goodwill	$	89.2