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Marketable Securities and Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Disclosure Text Block [Abstract]  
Marketable Securities and Fair Value Measurements
2.
Marketable Securities and Fair Value Measurements

Marketable Securities

In the fourth quarter of 2025, the Company invested in marketable securities, in the form of U.S. Treasury Bills. As of March 31, 2026 and December 31, 2025, the Company’s marketable securities were classified as available-for-sale investments and mature within one year from the balance sheet date. During the three months ended March 31, 2026, the Company did not have any realized gains or

losses. During the three months ended March 31, 2026, the Company did not recognize credit losses related to the available-for-sale securities, and there was no allowance for credit losses recorded as of March 31, 2026 and December 31, 2025.

The following tables summarize the Company's marketable securities as of March 31, 2026 and December 31, 2025:

 

 

March 31, 2026

 

 

 

Amortized Cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Estimated Fair Value

 

 

 

(Amounts in thousands)

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bills

 

$

201,941

 

 

$

5

 

 

$

(65

)

 

$

201,881

 

Total

 

$

201,941

 

 

$

5

 

 

$

(65

)

 

$

201,881

 

 

 

 

December 31, 2025

 

 

 

Amortized Cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Estimated Fair Value

 

 

 

(Amounts in thousands)

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bills

 

$

201,554

 

 

$

55

 

 

$

(2

)

 

$

201,607

 

Total

 

$

201,554

 

 

$

55

 

 

$

(2

)

 

$

201,607

 

Fair Value Measured on a Recurring Basis

The Company uses various valuation approaches in determining the fair value of its assets and liabilities required to be recorded or disclosed at fair value. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

 

Level 1 -

Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

 

 

Level 2 -

Valuations based on observable market based inputs or unobservable inputs that are corroborated by market data, each either directly or indirectly.

 

 

Level 3 -

Valuations based on inputs that are unobservable or significant to the overall fair value measurement.

 

 

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement.

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of March 31, 2026 and December 31, 2025:

 

 

March 31, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(Amounts in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Cash (1)

 

$

91,042

 

 

$

—

 

 

$

—

 

 

$

91,042

 

Money market accounts

 

 

491,608

 

 

 

—

 

 

 

—

 

 

 

491,608

 

Total

 

$

582,650

 

 

$

—

 

 

$

—

 

 

$

582,650

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bills

 

$

—

 

 

$

201,881

 

 

$

—

 

 

$

201,881

 

Total

 

$

—

 

 

$

201,881

 

 

$

—

 

 

$

201,881

 

Total assets

 

$

582,650

 

 

$

201,881

 

 

$

—

 

 

$

784,531

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

—

 

 

$

5,226

 

 

$

—

 

 

$

5,226

 

Noncurrent contingent consideration

 

 

—

 

 

 

—

 

 

 

778

 

 

 

778

 

Total liabilities

 

$

—

 

 

$

5,226

 

 

$

778

 

 

$

6,004

 

 

 

 

 

December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(Amounts in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Cash (1)

 

$

88,148

 

 

$

—

 

 

$

—

 

 

$

88,148

 

Money market accounts

 

 

477,873

 

 

 

—

 

 

 

—

 

 

 

477,873

 

Total

 

 

566,021

 

 

 

—

 

 

 

—

 

 

 

566,021

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bills

 

 

—

 

 

 

201,607

 

 

 

—

 

 

 

201,607

 

Total

 

$

—

 

 

$

201,607

 

 

$

—

 

 

$

201,607

 

Total assets

 

$

566,021

 

 

$

201,607

 

 

$

—

 

 

$

767,628

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

—

 

 

$

—

 

 

$

5,049

 

 

$

5,049

 

Noncurrent contingent consideration

 

 

—

 

 

 

—

 

 

 

1,304

 

 

 

1,304

 

Total liabilities

 

$

—

 

 

$

—

 

 

$

6,353

 

 

$

6,353

 

(1) Cash and cash equivalents are recorded at carrying value, which approximate fair value.

Contingent Consideration – Earnout

In connection with the acquisition of Tantti Laboratory Inc. (“Tantti”), the Company has an obligation to pay a maximum of $54.5 million (undiscounted) in contingent consideration earnouts in cash over a three-year earnout period beginning January 1, 2025 and ending December 31, 2027. As of March 31, 2026 the estimated fair value of the obligation is $6.0 million, of which $5.2 million is classified as current within the condensed consolidated balance sheet. As of March 31, 2026, the current balance was transferred from Level 3 to Level 2 representing the approximate earnout to be paid in 2026.

A reconciliation of the change in fair value of contingent consideration – earnout is included in the following table (amounts in thousands):

Balance at December 31, 2025

 

$

6,353

 

Decrease in fair value of contingent consideration earnouts

 

 

(146

)

Cumulative translation adjustment

 

 

(203

)

Balance at March 31, 2026

 

$

6,004

 

The recurring Level 3 fair value measurement of the contingent consideration obligation for Tantti includes the following significant unobservable inputs (amounts in thousands, except percent data):

Contingent Consideration Earnout

 

Fair Value as of
March 31, 2026

 

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average(1)

Commercialization-based payments

 

 

 

 

Probability-weighted present value

 

Probability of Success

 

0% - 100%

 

83%

 

 

$

774

 

 

 

 

Earnout Discount Rate

 

4.3% - 4.6%

 

4.4%

Revenue and Volume-
based payments

 

 

 

 

Monte Carlo
Simulation

 

Volatility

 

34.8%

 

34.8%

 

 

 

 

 

 

 

Revenue & Volume
Discount Rate

 

16.6%

 

16.6%

 

 

$

4

 

 

 

 

Earnout Discount Rate

 

4.3% - 4.9%

 

4.8%

(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability.

Changes in the projected performance of the acquired business could result in a higher or lower contingent consideration obligation in the future.

Fair Value Measured on a Nonrecurring Basis

During the three months ended March 31, 2026, there were no re-measurements to fair value of financial assets and liabilities that are measured at fair value on a nonrecurring basis.

Convertible Senior Notes

At March 31, 2026 and December 31, 2025, the fair value of the Company’s 1.00% Convertible Senior Notes due 2028 (the “2023 Notes”) was $607.4 million and $603.1 million, respectively. The fair value of the 2023 Notes is a Level 1 valuation and was determined based on the most recent trade activity of the 2023 Notes as of March 31, 2026 and December 31, 2025. See Note 8, “Convertible Senior Notes”, for additional information.