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Goodwill and Intangible Assets | 3 Months Ended
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Mar. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, Smith Micro reviews the recoverability of the carrying value of the Company's single reporting unit goodwill at least annually or whenever events or circumstances indicate a potential impairment. The annual impairment testing date is December 31 of each year. Recoverability of goodwill is determined by comparing the estimated fair value of the reporting unit to the carrying value of the underlying net assets in the reporting unit. If the estimated fair value of a reporting unit is determined to be less than the carrying value, goodwill is deemed impaired, and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the fair value. During the three months ended March 31, 2024, the Company performed an interim quantitative impairment test on its goodwill as of February 29, 2024 and as a result of this interim assessment, including the impact of the projections of revenue growth, earnings before interest taxes depreciation and amortization (“EBITDA”), and discount rates along with market multiples, the Company recorded a goodwill impairment charge totaling $24.0 million. The fair value of the reporting unit was determined based on a combination of the income approach using estimated discounted cash flows and a market-based valuation methodology. The assessment utilized level 3 inputs including estimates of revenue growth, EBITDA contribution and discount rates. Subsequent to this impairment charge, the fair value of the Company's single reporting unit approximated its carrying value. If current projections are not achieved or specific valuation factors outside the Company's control, such as discount rates and economic and industry challenges, significantly change, goodwill could be subject to future impairment. The components of the Company’s intangible assets were as follows for the periods presented (unaudited, except for December 31, 2024, in thousands, except for useful life data):
| March 31, 2025
| Weighted Average Remaining Useful Life (in Years) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Book Value
Purchased technology | 4 |  | $ | 13,330 |  |  | $ | (9,121) |  |  | $ | 4,209 |
Customer relationships | 9 |  | 27,548 |  |  | (11,954) |  |  | 15,594 |
Customer contracts | 0 |  | 7,000 |  |  | (6,767) |  |  | 233 |
Software license | 4 |  | 5,419 |  |  | (3,305) |  |  | 2,114 |
Patents | 2 |  | 600 |  |  | (429) |  |  | 171 |
Total |  |  | $ | 53,897 |  |  | $ | (31,576) |  |  | $ | 22,321 |
| December 31, 2024
| Weighted Average Remaining Useful Life (in Years) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Book Value
Purchased technology | 4 |  | $ | 13,330 |  |  | $ | (8,762) |  |  | $ | 4,568 |
Customer relationships | 9 |  | 27,548 |  |  | (11,280) |  |  | 16,268 |
Customer contracts | 0 |  | 7,000 |  |  | (6,725) |  |  | 275 |
Software license | 4 |  | 5,419 |  |  | (3,126) |  |  | 2,293 |
Patents | 2 |  | 600 |  |  | (407) |  |  | 193 |
Total |  |  | $ | 53,897 |  |  | $ | (30,300) |  |  | $ | 23,597 |
The Company amortizes intangible assets over the pattern of economic benefit expected to be generated from the use of the assets, with a total weighted average amortization period of approximately seven years as of March 31, 2025 and eight years as of December 31, 2024. During the three months ended March 31, 2025 and 2024, intangible asset amortization expense was $1.3 million and $1.8 million, respectively. As of March 31, 2025, estimated amortization expense for the remainder of 2025 and thereafter was as follows (unaudited, in thousands):
Year Ending December 31, |  | Amortization Expense
2025 |  | $ | 3,828 |
2026 |  | 4,709 |
2027 |  | 3,834 |
2028 |  | 2,790 |
2029 |  | 2,095 |
2030 and thereafter |  | 5,065 |
Total |  | $ | 22,321 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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