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Note 4 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Text Block]

4. Goodwill and Other Intangible Assets:

Goodwill

Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions.

Goodwill consists of the following (Dollar amounts in thousands of U.S. dollars):

	*Ting*		*Wavelo*		*Tucows Domains*		*Total*

Balances, December 31, 2023	$	22,724	$	-	$	107,686	$	130,410
Balances, December 31, 2024	$	22,724	$	-	$	107,686	$	130,410

The Company's Goodwill balance is $130.4 million as of December 31, 2024 and December 31, 2023. The Company's goodwill relates 83% ($107.7 million) to its Tucows Domains operating segment and 17% ($22.7 million) to its Ting operating segment.

Goodwill is not amortized, but is subject to an annual impairment test. The Company performed a qualitative impairment analysis as outlined in “Note 2(h) – Significant Accounting Policies” and determined it was not more likely than not that Goodwill was impaired for Fiscal 2024 and Fiscal 2023.

Other Intangible Assets

Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized, but are subject to an annual impairment assessment, during which the Company evaluates whether changes in circumstances indicate potential impairment. Additionally, throughout the year, management assessed specific domain names acquired through the acquisition of Mailbank.com Inc. in June 2006, that were due for renewal, and decided to renew. During the years ended December 31, 2024, December 31, 2023, and December 31, 2022, no impairment of indefinite life intangible assets was recorded.

Finite-life intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of two to fifteen years. The weighted average amortization period for all finite-life intangible assets is 5.4 years.

Throughout 2024, the Company purchased $0.6 million in customer relationship assets through hosting agreements whereby customer assets and domain names were obtained. These customer assets are being amortized over seven years.

Acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):

	*December 31, 2024*						*December 31, 2023*
	*Gross Carrying Value*		*Accumulated Amortization*		*Total Net Book Value*		*Gross Carrying Value*		*Accumulated Amortization*		*Total Net Book Value*
Brand	$	15,764		15,340	$	424	$	15,764		14,894	$	870
Customer relationships		66,467		56,719		9,748		65,892		52,589		13,303
Technology		10,157		8,631		1,526		10,157		8,009		2,148
Network Rights		1,515		730		785		1,515		631		884
Surname domain names		11,145		-		11,145		11,151		-		11,151
Direct navigation domain names		1,127		-		1,127		1,128		-		1,128
	$	106,175	$	81,420	$	24,755	$	105,607	$	76,123	$	29,484

	*Surname domain names*			*Direct navigation domain names*			*Brand*			*Customer relationships*			*Technology*			*Network rights*			*Total*
Amortization period	*indefinite life*			*indefinite life*			*7 years*			*3 - 7 years*			*2 -7 years*			*15 years*

Balances, December 31, 2022	$	11,155		$	1,129		$	2,940		$	20,813		$	2,770		$	983		$	39,790
Acquisition of customer relationship		-			-			-			528			-			-			528
Additions to/(disposals from) domain portfolio, net		(4	)		(1	)		-			-			-			-			(5	)
Amortization expense		-			-			(2,070	)		(8,038	)		(622	)		(99	)		(10,829	)
Balances December 31, 2023	$	11,151		$	1,128		$	870		$	13,303		$	2,148		$	884		$	29,484
Acquisition of customer relationship		-			-			-			575			-			-			575
Additions to/(disposals from) domain portfolio, net		(6	)		(1	)		-			-			-			-			(7	)
Amortization expense		-			-			(446	)		(4,130	)		(622	)		(99	)		(5,297	)
Balances December 31, 2024	$	11,145		$	1,127		$	424		$	9,748		$	1,526		$	785		$	24,755

The following table shows the estimated amortization expense for each of the next 5 years and thereafter, assuming no further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):

	*Year ending*
	*December 31,*
2025	$	5,691
2026		2,682
2027		1,634
2028		1,435
2028		232
Thereafter		809
Total	$	12,483