The Company has identified its laboratory services business and its therapeutic development business as its two operating segments, and the Company determined that the operating segments represented the two reporting units.

As of June 30, 2026, the Company identified indicators requiring an interim goodwill impairment assessment for its Therapeutic Development and Laboratory Services reporting units, including the loss of a significant customer within its ANP business and a sustained disconnect between the Company's market capitalization and its tangible net asset value. As a result, the Company engaged a third-party valuation specialist and performed an interim quantitative goodwill impairment test for both reporting units, and a corresponding quantitative recoverability test for its indefinite-lived in-process research and development ("IPR&D").

The change in goodwill for the laboratory services segment reflects goodwill arising from the Bako Acquisition, including a post-closing purchase price adjustment. The newly acquired entity, Bako, is considered part of the laboratory services segment. See Note 15. Business Combinations, for further details.

The fair values of the Company’s laboratory services reporting unit remain higher than the carrying value recorded. The fair value of this reporting unit was $1,045.0 million and exceeded the carrying value of $943.5 million by approximately 11%.

Based upon the results of the quantitative assessments the Company performed as of June 30, 2026, the Company concluded that the fair values of the laboratory services reporting unit, were greater than the carrying values and that there was no impairment. However, this remains at heightened risk of future impairment given the narrow margin between estimated fair value and carrying value. While no impairment was recorded as of June 30, 2026, future developments such as deterioration in business performance and the ability to achieve revenue growth targets as well as projected cost of revenue and operating expense targets could reduce the fair value of this reporting unit and lead to impairment in a future period.

The decrease in goodwill for the therapeutic development segment reflects a measurement period adjustment related to the ANP acquisition, resulting from the finalization of deferred tax liabilities. See Note 15. Business Combinations, for further details.

During the year ended December 31, 2025, the Company recorded $2.3 million of customer relationships and $3.9 million of IPR&D attributable to the acquisition of ANP. During the three months ended June 30, 2026, the Company identified a triggering event with respect to a finite-lived customer relationship intangible asset acquired as part of the ANP acquisition, resulting from loss of a significant customer relationship. As a result, the Company recorded an impairment charge of $2.2 million during the three months ended June 30, 2026, representing the remaining net carrying value of the intangible asset after accumulated amortization since the ANP acquisition date, effectively writing off the asset in its entirety. The impairment charge is reflected within a separate line item in the Condensed Consolidated Statements of Operations.

The fair value of the Company’s therapeutic development reporting unit was calculated using the income approach weighted at 100% with a WACC of 47%. The fair value of the IPR&D was appraised using the income approach known as multi-period excess earnings method with a WACC of 49%.

The fair values of the Company’s therapeutic development reporting unit and IPR&D remain substantially higher than the carrying value recorded. The fair value of this reporting unit was $270.0 million and exceeded the carrying value of $54.6 million by approximately 395%, and the fair value of IPR&D was $265.0 million and exceeded the carrying value of $68.5 million by approximately 287%.

Based upon the results of the quantitative assessments the Company performed as of June 30, 2026, the Company concluded that the fair values of the therapeutic development reporting unit and the IPR&D asset at June 30, 2026, were greater than the carrying values and that there was no additional impairment.

There can be no assurance that the estimates and assumptions management made for the purposes of the goodwill or IPR&D impairment analysis will prove to be accurate predictions of future performance. It is possible that the conclusions regarding impairment or recoverability of goodwill or intangible assets could change in future periods. Management will continue to monitor the therapeutic development reporting unit. For all IPR&D projects, there are major risks and uncertainties associated with the timely and successful completion of development and commercialization of these product candidates, including the ability to confirm their efficacy based on data from clinical trials, the ability to obtain necessary regulatory approvals, and the ability to successfully complete these tasks within budgeted costs. The Company is not able to market a human therapeutic product without obtaining regulatory approvals, and such approvals require completing clinical trials that demonstrate a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from insurance payors, including government healthcare programs and private insurance plans, impact the revenues a product can generate. Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values.

Summaries of intangible assets balances as of June 30, 2026, and December 31, 2025, were as follows:


	Weighted-Average Amortization Period	June 30, 2026			December 31, 2025
		(in thousands)
Laboratory Services
Customer relationships	12 Years	$	105,170		$	83,135
Less: accumulated amortization			(29,439	)		(25,633	)
Customer relationships, net			75,731			57,502

Royalty-free technology	10 Years		5,453			5,291
Less: accumulated amortization			(2,818	)		(2,469	)
Royalty-free technology, net			2,635			2,822

Trade name	7 Years		4,490			3,790
Less: accumulated amortization			(2,201	)		(1,896	)
Trade name, net			2,289			1,894

Laboratory information system platform	5 Years		1,860			1,860
Less: accumulated amortization			(1,829	)		(1,643	)
Laboratory information system platform, net			31			217

In-place lease intangible assets	5 Years		360			360
Less: accumulated amortization			(290	)		(255	)
In-place lease intangible assets, net			70			105

Purchased patent	10 Years		29			29
Less: accumulated amortization			(16	)		(14	)
Purchased patent, net			13			15
Total			80,769			62,555

Therapeutic Development
Customer relationships	18 Years		2,300			2,300
Less: accumulated amortization			(128	)		(64	)
Less: accumulated impairment			(2,172	)		—
Customer relationships, net			—			2,236

In-process research & development	n/a		68,490			68,490
Total			68,490			70,726
Total intangible assets, net		$	149,259		$	133,281

Acquisition-related intangibles included in the above tables are generally finite-lived and are carried at cost less accumulated amortization, except for IPR&D, which is related to the acquisitions of Fulgent Pharma in 2022 and ANP in 2025, and has an indefinite life until research and development efforts are completed or abandoned. All other finite-lived acquisition-related intangibles related to the business combinations are amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

During the six months ended June 30, 2026, the Company recorded $22.0 million of customer relationships and $0.7 million of trade name attributable to the acquisition of Bako. See more details in Note 15. Business Combinations.

Amortization of intangible assets was $2.6 million and $4.6 million in each of the three and six months ended June 30, 2026, respectively, and $2.0 million and $4.0 million in each of the three and six months ended June 30, 2025, respectively.