Goodwill

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

The following table summarizes the changes in goodwill for the three months ended September 30, 2022 (in thousands):


	Goodwill
Balance at June 30, 2022	$	59,775
Impairment	59,775
Balance at September 30, 2022	$	—

The Company assesses recoverability of goodwill on an annual basis or when events or changes in circumstances indicate that the carrying value may not be recoverable, such as a deterioration in macroeconomic conditions and a sustained decrease in stock price. The Company performs its annual goodwill impairment assessment as of December 31. Since 2021, the Company’s business has been negatively impacted by the global automotive semiconductor chip shortage, and more recently, by rising interest rates. During the three months ended September 30, 2022, the Company’s stock price experienced high volatility, causing a further decline in its market capitalization since we last tested goodwill for impairment at June 30, 2022. As a result of the further decline in market capitalization and the continued macroeconomic disruptions, the Company concluded a triggering event had occurred.

The Company performed an interim quantitative impairment test as of September 30, 2022 utilizing an income approach. Under the income approach, the Company used a discounted cash flow analysis. Determining fair value requires the exercise of significant assumptions and judgments, which are considered Level 3 inputs under the fair value hierarchy, including the amount and timing of expected future cash flows, long-term growth rates, and the discount rates. The Company also performed a reconciliation of the fair value of the reporting unit to the Company’s market capitalization as of September 30, 2022. The market capitalization reconciliation included the estimation of a reasonable control premium and other market factors such as control premiums observed in market transactions. Based on the results of the impairment test, the Company concluded that the carrying value of its single reporting unit exceeded the fair value and, accordingly, recorded a non-cash impairment charge of $59.8 million for the three and nine months ended September 30, 2022.