Digital Turbine, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

Intangible Assets

9 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

We complete our annual impairment tests in the fourth quarter of each fiscal year and perform an assessment quarterly to evaluate whether events or circumstances indicate an impairment may have occurred. Based on the results of the quarterly impairment assessment performed during the third quarter of fiscal year 2016, the Company determined that no impairment existed at December 31, 2015.

The components of intangible assets at December 31, 2015 and March 31, 2015 were as follows:



	As of December 31, 2015
	Cost		Accumulated Amortization			Net
Software	$	11,544	$	(4,347	)	$	7,197
Trade name/trademark	380		(200		)	180
Customer list	11,300		(4,255		)	7,045
License agreements	354		(207		)	147
Total	$	23,578	$	(9,009	)	$	14,569



	As of March 31, 2015
	Cost		Accumulated Amortization			Net
Software	$	13,480	$	(2,489	)	$	10,991
Trade name/trademark	380		(14		)	366
Customer list	14,755		(1,379		)	13,376
License agreements	355		(152		)	203
Total	$	28,970	$	(4,034	)	$	24,936

The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenues. All intangible amortization is included in cost of revenues.

The Company recorded amortization expense of $1,704 and $8,453 during the three and nine months ended December 31, 2015, respectively. Included in the $8,453 amortization expense recorded during the nine months ended December 31, 2015 is $2,404 of amortization expense recorded for customer relationship intangible assets related to a customer relationship the Company terminated from our September 2012 acquisition of Logia Mobile Ltd. The Company recorded amortization expense of $413 and $1,102 during the three and nine months ended December 31, 2014, respectively, with the increase from 2014 to 2015 primarily due to the increase in intangible assets of $17,780 from the acquisition of DT Media (Appia, Inc.).

In connection with the Company's investment in Sift, the Company recorded approximately a $2,000 reduction to software intangibles, which resulted in a new adjusted cost basis of $11,544 as the licensing technology in the Sift agreement was specifically tied to software acquired in the Appia transaction which was subsequently designated as internal use software; as such, any proceeds related to licensing this technology must first be applied to the intangibles until such cost basis is recovered. We do not expect any further adjustments to the software intangibles related to this transaction.

Based on the amortizable intangible assets as of December 31, 2015, we estimate amortization expense for the next five years to be as follows:



	Amortization
Twelve Month Period Ending December 31,	Expense

2016	$	7,659
2017	3,475
2018	1,931
2019	671
2020	114
Future	719
Total	$	14,569