XML 54 R15.htm IDEA: XBRL DOCUMENT v3.25.0.1
Goodwill, Long-Lived Assets, and Other Intangible Assets
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Long-Lived Assets, and Other Intangible Assets Goodwill, Long-Lived Assets, and Other Intangible Assets
Goodwill
Changes in the carrying amount of goodwill by reporting unit during the year ended December 31, 2024, consisted of the following (in thousands):
Array Legacy Operations(1)
STI OperationsTotal
Beginning balance
$69,727 $365,864 $435,591 
Foreign currency translation— (39,402)(39,402)
Impairment charge— (236,000)(236,000)
Ending balance
$69,727 $90,462 $160,189 
(1) Goodwill attributable to Array Legacy Operations is net of impairment charges of $51.9 million. Prior to 2024, no impairment charges have been recorded for STI Operations.

The Company performs it’s annual goodwill impairment test, utilizing a qualitative or quantitative impairment analysis during the fourth quarter of each year, and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying amount may be impaired.

During the third and fourth quarters of 2024, the Company experienced a sustained decline in its stock price, which hit a 52-week low during the third quarter of 2024 and again during the fourth quarter of 2024, resulting in a decrease in market capitalization. In addition, the Company updated its long-term projections for the Company’s reporting units during the third and fourth quarter of 2024, and evaluated the execution risk associated with the Company’s projections and the local market conditions. As a result, the Company identified indicators of impairment related to the Company’s reporting units as of September 30, 2024 and December 31, 2024, respectively. Management, with the assistance of a third-party valuation specialist, performed quantitative goodwill impairment tests of the Legacy Array Operations and STI Operations reporting units as of September 30, 2024 and December 31, 2024.

The fair value of the Array Legacy Operations and STI Operations reporting units were determined using the income approach and then compared to the Guideline publicly traded companies (“GPC”) marketplace EBITDA multiples to corroborate the fair value of the reporting unit. As a result of these tests, the Company recorded impairments to goodwill totaling $236.0 million during 2024, related to STI Operations reporting unit. The estimated fair value of the STI Operations reporting unit was estimated to be $251.2 million as of December 31, 2024.

Subsequent to recording the impairments of goodwill, the Company reconciled the overall market capitalization of the Company, within a reasonable range, to the sum of the estimated fair values of both of the Company’s reporting units. The estimated fair value of the Array Legacy Operations reporting unit was significantly higher than the carrying balance of the reporting unit at each testing date.

The significant assumptions used in determining the fair value of the STI Operations reporting unit primarily relate to the revenue growth rate, the forecasted EBITDA margin, and the selected discount rate used in the discounted cash flow model under the income approach. Under the GPC method, the selection of EBITDA multiple to be used requires significant judgement. To the extent that the discount rate used in determining the present value of our cash flows increases, if we do not meet the cash flow projections for the reporting unit, or GPC multiples in the future decrease, additional impairment charges may be recorded in the future. In addition,
a further decrease in the Company’s common stock share price and market capitalization could be an indication that there has been a further decrease in the fair value of the Company’s reporting units.

Long-Lived Assets
As discussed above, there were indicators of impairment that required an interim impairment test for the Legacy Array and STI Operations reporting units. Management considered these events to be a triggering event requiring the long-lived assets associated with the STI Operations asset groups be tested for impairment (which includes the amortizable intangible assets) as of the same dates that the goodwill was tested for impairment.

The sum of the future undiscounted cash flows for one of the STI Operations asset groups indicated that the carrying amount of the asset groups was not recoverable as of December 31, 2024. As a result, with the assistance of a third-party valuation specialist, management estimated the fair value of the asset group, which was less than the carrying value of the asset group. The fair value of the asset group was determined using the income approach and then compared to GPC marketplace EBITDA multiples to corroborate the fair value of the reporting unit. An impairment loss of $91.9 million was recognized based on the difference between the carrying value of the asset group and its estimated fair value. The Company impaired $83.0 million of customer relationships, $7.3 million of trade names, and $1.6 million of plant and equipment.

The loss was allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets. In determining the fair value of the asset group, the Company performed a DCF analysis using the income approach. The significant assumptions used in determining the fair value of the asset group are similar to the significant assumptions used in determining the fair value the Company’s reporting units.

As of December 31, 2024 and 2023, no events or circumstances were noted that would indicate the carrying amount of any of Legacy Array’s asset groups may not be recoverable.
Other Intangible Assets
Other intangible assets consisted of the following (in thousands, except for useful lives):
December 31,
Estimated Useful Life (Years)20242023
Amortizable:
Developed technology14$203,800 $203,800 
Computer software315,826 5,267 
Customer relationships10179,166 336,134 
Backlog116,877 54,438 
Trade name2015,117 27,061 
Total amortizable intangibles430,786 626,700 
Accumulated amortization:
Developed technology123,462 108,905 
Computer software14,552 1,274 
Customer relationships102,541 115,444 
Backlog16,877 54,322 
Trade name2,245 2,666 
Total accumulated amortization259,677 282,611 
Total amortizable intangibles, net171,109 344,089 
Non-amortizable:
Trade name10,300 10,300 
Total other intangible assets, net$181,409 $354,389 

Amortization expense related to intangible assets was $48.4 million, $52.2 million and $98.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, of which $14.6 million was included in amortization of developed technology, a component of cost of revenue, in all three periods. The remaining amortization expense of $33.8 million, $37.6 million and $83.8 million, respectively, was included in depreciation and amortization, on the accompanying consolidated statements of operations.

The following table presents estimated future annual amortization expense (in thousands):
Amount
2025$34,844 
202630,370 
202725,350 
202825,232 
202925,232 
Thereafter30,081 
$171,109