Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

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Goodwill and Intangible Assets
 12 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
Changes in the carrying amount of goodwill by segment follows:
ODS AGP Total
Goodwill as of March 31, 2023
 $ 80,176  $ 481,400  $ 561,576 
Purchase price adjustment related to business acquisitions —  (65) (65)
Foreign currency translation —  (4,799) (4,799)
Impairment of goodwill $ —  $ (336,640) $ (336,640)
Goodwill as of March 31, 2024
 $ 80,176  $ 139,896  $ 220,072 

The Company evaluates goodwill for impairment at least annually or upon the occurrence of events or circumstances that indicate they would more likely than not reduce the fair value of a reporting unit below its carrying value. As a result of the triggering event described below, the Company performed a goodwill impairment evaluation as of September 30, 2023. In addition to this, the Company performed its annual impairment evaluation as of March 31, 2024. For both periods evaluated, the Company determined that the fair value of the AGP reporting unit was below its carrying value. As a result of these evaluations, the Company recorded two separate impairment charges during fiscal year 2024.

During the three months ended September 30, 2023, as a result of sustained decline in the quoted market price of the Company’s common stock, increase in interest rates, and the Company’s forecasted operating trends, the Company identified interim indicators of impairment related to the goodwill assigned to the AGP reporting unit. The Company completed an interim impairment assessment of its goodwill, and as a result of this review, recorded a $147,181 non-deductible, non-cash goodwill impairment charge for the AGP reporting unit as of September 30, 2023.

Additionally, the Company performed its annual goodwill impairment evaluation as of March 31, 2024, noting continued trends in quoted market price, interest rates, and the Company’s forecast as described above. The Company completed the annual impairment assessment of its goodwill, and as a result, recorded an additional $189,459 non-deductible, non-cash goodwill impairment charge for the AGP reporting unit as of March 31, 2024.

For each goodwill impairment evaluation performed at September 30, 2023 and March 31, 2024, respectively, the fair value of each reporting unit was estimated using a weighted combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach (the “Guideline Public Company Method”). The Company’s interim and annual testing reflected a 75%/25% allocation between the income and market approaches. The Company believes the 75% weighting to the income approach is appropriate, as it directly reflects its future growth and profitability expectations.

The discounted cash flow method requires significant assumptions and estimates, the most significant of which are projected future growth rates, capital expenditures, tax rates, gross margins and terminal values. In addition, the Company determines its weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. For the September 30, 2023 impairment evaluation, as compared to the Company’s annual evaluation as of March 31, 2023, the Company reduced its estimated future cash flows used in the impairment assessment, including revenues, gross profits, and EBITDA to reflect its best estimates at that time. For the March 31, 2024 annual impairment evaluation, as compared to the Company’s interim evaluation as of September 30, 2023, the Company further reduced its estimated future cash flows, including revenues, gross profits, and EBITDA to reflect its best estimates at this time. In each evaluation, the Company also updated key inputs for the discounted cash flow models, including the weighted-average cost of capital, which incrementally increased due to higher interest rates, market volatility, and the company specific premium.

The market approach estimates the fair value of the reporting unit by applying multiples of operating performance measures to the reporting unit’s operating performance. These multiples are derived from comparable publicly-traded companies with similar investment characteristics. For the September 30, 2023 impairment evaluation, as compared to the March 31, 2023 testing, the Company reduced its revenue and EBITDA market multiples, reflecting declining valuations across the Company’s selected peer group. For the March 31, 2024 impairment evaluation, as compared to the September 30, 2023 evaluation, the Company further reduced its revenue and EBITDA market multiples, reflecting declining valuations across the Company’s selected peer group. These updates, along with those made to the discounted cash flow models described above, had significant impacts on the estimated fair values of the Company’s reporting units.

There was no impairment of goodwill for the ODS reporting unit during the fiscal year.
As of March 31, 2024, the Company recorded a purchase price adjustment of $65 associated with the acquisition of In App Video.
Intangible Assets
The components of intangible assets were as follows as of the periods indicated:
 
As of March 31, 2024
Weighted-Average Remaining Useful Life Cost Accumulated Amortization Net
Customer relationships 12.04 years $ 168,349  $ (59,222) $ 109,127 
Developed technology 4.31 years 146,524  (59,470) 87,054 
Trade names 1.33 years 69,957  (45,470) 24,487 
Publisher relationships 16.86 years 108,860  (16,023) 92,837 
Total $ 493,690  $ (180,185) $ 313,505 
 
As of March 31, 2023
Weighted-Average Remaining Useful Life Cost Accumulated Amortization Net
Customer relationships 12.06 years $ 170,281  $ (39,925) $ 130,356 
Developed technology 5.28 years 146,596  (38,813) 107,783 
Trade names 2.33 years 69,983  (27,115) 42,868 
Publisher relationships 17.83 years 109,028  (10,403) 98,625 
Total $ 495,888  $ (116,256) $ 379,632 
During the fiscal years ended March 31, 2024, 2023, and 2022, the Company recorded amortization expense of $64,358, $64,608, and $48,420, respectively, in general and administrative expenses on the consolidated statements of operations and comprehensive (loss) income. As of March 31, 2022, the Company changed the useful lives of all its trade names intangible assets to approximately 3.33 years due to the rebranding of the Company’s past acquisitions.
Estimated amortization expense in future fiscal years is expected to be:
Fiscal year 2025 $ 55,639 
Fiscal year 2026 41,381 
Fiscal year 2027 35,260 
Fiscal year 2028 35,260 
Fiscal year 2029 18,375 
Thereafter 127,590 
Total $ 313,505