v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements
5. Fair Value Measurements
The Company measures and reports certain assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The three levels of inputs which may be used to measure fair value are as follows:
Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Valuations based on unobservable inputs to the valuation methodology and including data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances.
The carrying amounts of certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts receivable, and accounts payable approximate fair value due to their short-term maturities.
Recurring Fair Value Measurements
The Company measures and reports certain assets at fair value on a recurring basis. The fair value of these assets and liabilities as of June 30, 2025 and December 31, 2024 are classified as follows (in thousands):
As of June 30, 2025
Level 1Level 2Level 3Total
Assets:
Money market funds$384,706 $— $— $384,706 
Convertible Note Investment
— — 25,387 25,387 
Total assets$384,706 $— $25,387 $410,093 
As of December 31, 2024
Level 1Level 2Level 3Total
Assets:
Money market funds $133,959 $— $— $133,959 
Total assets$133,959 $— $— $133,959 

The change in fair value of the Level 3 instruments were as follows (in thousands):
As of June 30, 2025
Convertible Note Investment
Fair value, beginning of the year
$— 
Initial investment
25,000 
Changes in fair value387 
Fair value, end of period
$25,387 
Convertible Note Investment
On May 12, 2025, the Company entered into a series of transactions with Aura Consolidated Group, Inc (“Aura”) including (i) a 3 year advertising partnership and revenue sharing agreement intended to expand the Company's other revenue channels and subscription membership offerings, and (ii) a $25.0 million convertible note investment by the Company into Aura (“Convertible Note Investment”). The note bears zero interest and matures on May 12, 2030. The principal is due at maturity and includes both optional and mandatory conversion features, which may result in conversion into the issuer’s equity upon the occurrence of specific events, including financing events, change in control, or at maturity. The Company elected to apply the fair value option in accordance with ASC 825, Financial Instruments, to account for the hybrid instrument as a single financial instrument. As a result, the entire instrument is measured at fair value, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive income (loss) within other income (expense). The Convertible Note Investment is included within prepaid expenses and other assets, noncurrent on the condensed consolidated balance sheet.
The Company classifies the Convertible Note Investment as Level 3 due to the absence of relevant observable inputs. The fair value of the Convertible Note Investment was estimated using a scenario-based, probability-weighted option pricing model. Significant assumptions include the discount rate as well as the timing and probability weighting of each settlement scenario.
Non-Recurring Fair Value Measurements
The Company measures certain non-marketable equity securities and warrant investments at fair value on a nonrecurring basis in accordance with ASC 321, Investment - Equity Securities, which are included within prepaid expenses and other assets, noncurrent on the condensed consolidated balance sheet. For additional information, refer to Note 7, "Balance Sheet Components". Instruments are remeasured to fair value when observable price changes in orderly transactions for an identical or a similar investment of the same issuer occur are considered Level 2 investments.
Related Party Simple Agreement for Future Equity (“SAFE”) Conversion to Related Party Investment
In December 2024, the Company entered into a SAFE with Hubble Network, Inc., (“Hubble”) and invested $5.0 million (the “Related Party SAFE”). For additional information, refer to Note 14, "Related-Party Transactions". Under the terms of the SAFE, the Company held the right to receive equity upon the occurrence of specified future events. In April 2025, the related party completed a qualified equity financing and the SAFE was converted into shares of preferred stock in the related party (the “Related Party Investment”).
The conversion resulted in an observable price change based on the financing round for identical preferred shares. As a result, a $0.9 million gain on the change in the fair value of the investment was recorded within other income (expense), net on the condensed consolidated statements of operations and comprehensive income (loss) for both the three and six months ended June 30, 2025. The Related Party Investment balance as of June 30, 2025 was $5.9 million and is included within prepaid expenses and other assets, noncurrent on the condensed consolidated balance sheet.