Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill — During the six months ended June 30, 2025, there were no additions or impairments to goodwill. As of June 30, 2025 and December 31, 2024, our goodwill balance was $487 million.

Goodwill is evaluated at least annually on July 31, or more frequently if impairment indicators arise. Goodwill is tested at the reporting unit level, which is at or one level below our operating segments. We determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value after considering qualitative, market and other factors. Any necessary goodwill impairment is determined using a quantitative impairment test. If the resulting fair value of goodwill is less than the carrying value of goodwill, an impairment loss would be recognized for the amount of the shortfall. The fair value of a reporting unit is determined using significant unobservable inputs, or level 3 in the fair value hierarchy. These inputs are based on forecasts and significant judgment.

We determined our drilling products operating segment consists of a single reporting unit to which the goodwill from our 2023 acquisition of Ulterra Drilling Technologies, L.P. was allocated. We determined our completion services operating segment consisted of two reporting units; completion services, which was primarily comprised of our hydraulic fracturing operations and other integrated service offerings, and cementing services.

Goodwill Impairment Assessment — During the second quarter of 2025, we viewed the reduction in activity forecasts combined with the decline in the market price of our common stock as a triggering event that warranted a quantitative assessment for goodwill impairment.

We estimated the fair value of the drilling products and cementing services reporting units using the income approach. Under this approach, we used a discounted cash flow model, which utilized present values of cash flows to estimate fair value. Forecasted cash flows reflected known market conditions in the second quarter of 2025 and the expected market outlook. Future cash flows were projected based on estimates of revenue growth rates, gross profit, selling, general and administrative expense, changes in working capital, and capital expenditures. The terminal period used within the discounted cash flow model consisted of a growth estimate. Future cash flows were then discounted using a market-participant, risk-adjusted weighted average cost of capital. Financial and credit market volatility directly impacts our fair value measurement through the weighted average cost of capital used to determine a discount rate. During times of volatility, significant judgment must be applied to determine whether credit market changes are a short-term or long-term trend.

The forecast for the cementing services reporting unit assumed lower activity in 2026 compared to estimated average activity levels for full year 2025 and moderate growth estimates thereafter. Those estimates were based on future drilling rig count forecasts during the second quarter of 2025 and estimated market share. Based on the results of the goodwill impairment test, the fair value of the cementing services reporting unit exceeded its carrying value with a substantial cushion. Accordingly, no impairment was recorded.

The forecast for the drilling products reporting unit assumed lower activity during 2025 relative to 2024, with growth estimates thereafter. The increases in estimated activity assumed growth in both domestic and international markets. Those growth estimates were based on drilling rig count forecasts and estimated market share. Geopolitical instability in regions in which we expect to maintain and grow market share, an unfavorable legal proceeding outcome, a global decrease in the demand of drilling products or other unforeseen macroeconomic considerations could negatively impact the key assumptions used in our goodwill assessment for our drilling products reporting unit. Based on the results of the goodwill impairment test, the fair value of the drilling products reporting unit exceeded its carrying value by approximately 8%. Accordingly, no impairment was recorded.

Intangible Assets — The following table presents the gross carrying amount and accumulated amortization of our intangible assets as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025						December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	783,182	$	(130,993)	$	652,189	$	782,789	$	(95,785)	$	687,004
Developed technology	202,771		(76,887)		125,884		202,772		(56,562)		146,210
Trade name	101,000		(18,406)		82,594		101,000		(14,097)		86,903
Other	17,250		(5,967)		11,283		12,986		(3,493)		9,493
Intangible assets, net	$	1,104,203	$	(232,253)	$	871,950	$	1,099,547	$	(169,937)	$	929,610

Amortization expense on intangible assets of approximately $31.9 million and $30.9 million was recorded for the three months ended June 30, 2025 and 2024, respectively. Amortization expense on intangible assets of approximately $62.8 million and $61.3 million was recorded for the six months ended June 30, 2025 and 2024, respectively.