Forward Air Corporation Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2026

Intangible Asset, Goodwill and Other [Abstract]

The Company has historically performed its annual goodwill impairment test as of June 30 and on an interim basis when events or circumstances indicate that the fair value of a reporting unit may be below its carrying value. As disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, the Company had commenced preliminary discussions with its largest customer (the “Customer”) during the first quarter of 2026 regarding a potential transition of a portion of the Customer’s contract logistics business to other suppliers. Based on the preliminary status of those discussions and the other facts and circumstances then known to management, the Company concluded that no triggering event had occurred with respect to any of its reporting units as of March 31, 2026.

During the second quarter of 2026, these discussions progressed and the Company and the Customer engaged in more advanced negotiations regarding the potential transition of a portion of the Customer's contract logistics business to other suppliers for reasons related to the Customer's operations and supplier diversification initiatives. As a result of these continued discussions, the Company was, for the first time, able to reasonably estimate the scope and timing of the potential transition. The portion of the business that is expected to be transitioned to third parties is expected to begin in December 2026 with the transition continuing through 2027. In addition, the Company's stock price decreased significantly in May 2026 and remained at decreased levels throughout the month of May. Subsequent to the measurement date, the Company received additional clarity and currently expects to retain a majority of the Customer’s business.

Based on the anticipated decrease in future revenues from the Customer, together with a sustained decrease in the Company's stock price since early May 2026, management determined that a triggering event had occurred during the second quarter of 2026 and performed an interim goodwill impairment test as of May 31, 2026.

The Company’s impairment analyses were performed as of May 31, 2026 for all reporting units given the stock price decrease negatively impacts the fair values of all reporting units. The estimated fair values of the Company's reporting units were determined using the discounted cash flow (“DCF”) method and a guideline public company method with the assistance of a third-party valuation specialist engaged by management. Under the DCF method, the fair value of a reporting unit is the present value of estimated future cash flows and is based on all known or knowable information at the measurement date. The inputs to the DCF method include estimates of future cash flows, an estimated growth rate and a discount rate. Under the guideline public company method, the fair value is based upon market multiples derived from publicly-traded companies with similar operating and investment characteristics as the reporting unit. The inputs to both the DCF and guideline public company methods are considered Level 3 valuation inputs. Additionally, the overall valuation considers the Company's market capitalization as of the assessment date, which was lower relative to the previous goodwill impairment test.

The estimated fair values for the LTL, Truckload and Intermodal reporting units notably exceeded the respective reporting unit's carrying value; therefore, no impairment charge was required for the goodwill allocated to these reporting units. The LTL and Truckload reporting units operate within the Expedited Freight reportable segment.

The Omni Logistics reporting unit’s calculated fair value was less than its carrying value. As a result, the Company recorded a non-cash goodwill impairment charge of $244,006 during the three months ended June 30, 2026 in connection with the preparation and review of the condensed consolidated financial statements of the Company as of and for the three months ended June 30, 2026, which reduced the carrying value of the goodwill allocated to the Omni Logistics reporting unit to zero. The goodwill impairment expense is included in Impairment of goodwill on the condensed consolidated statement of operations and comprehensive loss.

Additionally, during the second quarter of 2026, the Company made the decision to voluntarily change the date of its annual goodwill impairment assessment from June 30 to October 1 to more closely align the annual goodwill impairment assessment date with the timing of its annual budgeting process. The Company determined the change in measurement date represents an immaterial change in the method of applying an accounting principle and no goodwill impairment assessment was omitted or delayed as a result of the change.

During the second quarter of 2026, in connection with the preparation and review of the condensed consolidated financial statements, the Company also performed an impairment test for its long-lived assets, which include property and equipment, net and other intangible assets, net. No impairment charges were identified for long-lived assets for the six months ended June 30, 2026.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable assets acquired in business combinations.

Changes in the carrying amount of goodwill are summarized as follows:


	Expedited Freight		Omni Logistics		Intermodal		Total
Balance as of December 31, 2025
Goodwill	$	167,406	$	1,272,403	$	136,986	$	1,576,795
Accumulated impairment charges (1)	(25,686)		(1,028,397)		—		(1,054,083)
Reported goodwill as of December 31, 2025	141,720		244,006		136,986		522,712
Impairment	—		(244,006)		—		(244,006)
Balance as of June 30, 2026
Goodwill	$	167,406	$	1,272,403	$	136,986	$	1,576,795
Accumulated impairment charges	(25,686)		(1,272,403)		—		(1,298,089)
Reported goodwill as of June 30, 2026	$	141,720	$	—	$	136,986	$	278,706

(1)The Expedited Freight and Omni Logistics impairments were recorded during 2016 and 2024, respectively.

Other Intangible Assets, Net

Changes in the carrying amount of other intangible assets, net are summarized as follows:


	June 30, 2026
	Gross Carrying Amount		Accumulated Amortization		Other Intangible Assets, Net
Customer Relationships	$	1,157,714	$	(314,652)	$	843,062
Non-Compete Agreements	25,930		(19,508)		6,422
Trade Names	23,500		(12,069)		11,431
Total other intangible assets, net	$	1,207,144	$	(346,229)	$	860,915


	December 31, 2025
	Gross Carrying Amount		Accumulated Amortization		Other Intangible Assets, Net
Customer Relationships	$	1,157,714	$	(274,408)	$	883,306
Non-Compete Agreements	25,930		(16,690)		9,240
Trade Names	24,600		(10,355)		14,245
Total other intangible assets, net	$	1,208,244	$	(301,453)	$	906,791

Amortization expense related to other intangible assets was $22,588 and $45,358 for the three and six months ended June 30, 2026, respectively, and $23,104 and $46,209 for the three and six months ended June 30, 2025, respectively.

In January 2025, the Board of Directors (the “Board”) announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value. During the second quarter of 2026, the Company completed the sale of a business unit within its Omni Logistics segment as part of these efforts and recognized a $3,649 gain on the sale, which is included in Other income (expense), net in the condensed consolidated statement of operations and comprehensive loss.