Derivatives |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Derivatives | Derivatives Due to the global nature of the Company’s operations, a portion of revenue and operating expense are denominated in currencies other than the U.S. dollar, exposing the Company to foreign currency exchange rate fluctuations. To mitigate the impact of these fluctuations, the Company uses foreign currency forward contracts to hedge a portion of its forecasted international revenue and operating expense. The Company’s foreign currency forward contracts are denominated primarily in Euros, Swiss Francs and Canadian dollars. As of June 30, 2025, foreign currency forward contracts outstanding had durations ranging from to three months. These contracts are designated as cash flow hedges. Unrealized gains or losses on these contracts are recorded in accumulated other comprehensive income (loss) (AOCI). Realized gains and losses of such contracts are recognized in revenue and operating expenses in the same period during which the hedged transactions affect the consolidated results of operations. The Company recognizes all cash flow hedge reclassifications from AOCI and fair value changes of excluded portions in the same line item in the condensed consolidated statements of income that has been impacted by the hedged item. The cash flow effects of our derivative contracts in the condensed consolidated statements of cash flows are included in net cash provided by operating activities. All derivative instruments are used solely for risk management purposes and are not for speculative trading purposes for up to a 90-day duration. For the periods presented, the Company did not have any non-designated hedges. The notional value of foreign currency forward contracts outstanding related to forecasted transactions was $37.7 million as of June 30, 2025. The unrealized loss of foreign currency forward contracts was $0.6 million for the three and six months ended June 30, 2025. The following table summarizes the effect of foreign currency forward contracts designated as hedging instruments in our condensed consolidated statements of income (in thousands):
The Company did not enter into any foreign currency forward contracts that qualified for hedge accounting in 2024, and therefore there were no derivative assets or liabilities, nor adjustments to revenue or operating expense as a result of cash flow hedges during the three and six months ended June 30, 2024.
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