The Company enters into foreign currency forward contracts with certain financial institutions to mitigate the impact of foreign currency fluctuations on future cash flows and earnings. Derivative instruments that hedge the exposure to variability in expected future cash flows are designated as cash flow hedges. The Company records changes in the fair value of these derivatives as a component of accumulated other comprehensive income (loss) (“AOCI”) and subsequently reclassifies the related gains or losses into cost of revenue or operating expense in the same period, or periods, during which the hedged transaction affects earnings. The Company classifies cash flows related to its cash flow hedges as operating activities in its condensed consolidated statements of cash flows.

Derivative instruments used to hedge exposures to fair value changes in assets or liabilities, or to hedge foreign currency exposures in certain non-USD denominated monetary assets and liabilities, are not designated as hedges for financial reporting purposes. The Company records changes in the fair value of these derivatives in other income (expense), net in the condensed consolidated statements of operations. The Company classifies cash flows related to these derivatives as operating activities in its condensed consolidated statements of cash flows.

The following table summarizes the notional amounts of the Company’s derivative instruments (in thousands):


	March 31, 2025		December 31, 2024
Foreign currency forward contracts designated as hedging instruments	$	181,874	$	180,754
Foreign currency forward contracts not designated as hedging instruments		135,833		95,191
Total derivative instruments	$	317,707	$	275,945

The Company has master netting agreements with each of its counterparties, which permit net settlement of multiple, separate derivative contracts with a single payment. The Company does not have collateral requirements with any of its counterparties. Although the Company is allowed to present the fair value of derivative instruments on a net basis according to master netting arrangements, the Company has elected to present its derivative instruments on a gross basis in its condensed consolidated financial statements. The Company’s derivative instruments generally have maturities of 18 months or less. The Company does not use derivative instruments for trading or speculative purposes. The following table summarizes the fair value of the Company’s derivative instruments on the condensed consolidated balance sheets (in thousands):


	Balance Sheet Location	March 31, 2025		December 31, 2024
Derivative Assets:
Foreign currency forward contracts designated as hedging instruments	Prepaid expenses and other current assets	$	704	$	205
Foreign currency forward contracts not designated as hedging instruments	Prepaid expenses and other current assets		470		716
Foreign currency forward contracts designated as hedging instruments	Other assets, non-current		1,020		141
Total derivative assets		$	2,194	$	1,062
Derivative Liabilities:
Foreign currency forward contracts designated as hedging instruments	Accrued expenses and other liabilities	$	1,166	$	3,829
Foreign currency forward contracts not designated as hedging instruments	Accrued expenses and other liabilities		1,422		1,368
Foreign currency forward contracts designated as hedging instruments	Other liabilities, non-current		-		717
Total derivative liabilities		$	2,588	$	5,914

The following table presents the activity of foreign currency forward contracts designated as hedging instruments and the impact of these derivatives on AOCI (in thousands):


	Three Months Ended March 31,
	2025			2024
Beginning balance	$	(4,200	)	$	2,280
Net gain (loss) recognized in other comprehensive income (loss)		3,797			(1,612	)
Net loss (gain) reclassified from AOCI to earnings		962			(125	)
Ending balance	$	559		$	543

As of March 31, 2025, $0.6 million of net unrealized gains were included in the balance of accumulated other comprehensive income (loss) related to foreign currency forward contracts designated as hedging instruments. The Company expects to reclassify $0.5 million of unrealized losses from accumulated other comprehensive income (loss) into earnings over the next 12 months.

The following table summarizes the effect of foreign currency forward contracts on the condensed consolidated statements of operations (in thousands):


	Derivatives Designated as Hedging Instruments					Derivatives Not Designated as Hedging Instruments
	Three Months Ended March 31,					Three Months Ended March 31,
	2025			2024		2025		2024
Cost of revenue - subscription	$	(74	)	$	24	$	-	$	-
Cost of revenue - services		(55	)		8		-		-
Research and development		(354	)		31		-		-
Sales and marketing		(563	)		33		-		-
General and administrative		(77	)		29		-		-
Other income (expense), net		-			-		1,258		(807	)
Total (losses) gains recognized in earnings	$	(1,123	)	$	125	$	1,258	$	(807	)