It’s the second big impairment charge from the acquisition.
During the three and six months ended June 30, 2019, the Company recognized an impairment charge of $17.9 million relating primarily to premium domain name intangible assets acquired in 2014, which was recorded in cost of revenue in the consolidated statement of operations and comprehensive loss. The impairment resulted from recent market conditions that have adversely impacted cash flows from these assets, and these market conditions are expected to continue. The Company valued its premium domain name assets based on discounted projected cash flows from these assets using a discount rate of 11.6%, which resulted in an impairment of $16.2 million. The balance of the impairment charge was primarily related to developed technology intangible assets associated with the premium domain business which were valued using a relief from royalty approach.
This isn’t the first big impairment charge for the acquisition. In 2017, it took at $13.8 million impairment charge.
Endurance CEO Jeffrey Fox mentioned last week that the premium domain business is trending weaker for the company.