v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements

5. Fair Value Measurements

Financial instruments, including cash, cash equivalents, accounts receivable, net, other current assets, other assets, restricted cash, accounts payable, and accrued expenses, are presented at amounts that approximate fair value as of June 30, 2025 and December 31, 2024.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value and is not a measure of credit quality. The hierarchy defines three levels of valuation inputs:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 - Unobservable inputs that reflect the assumptions market participants would use in pricing the asset or liability

Items classified as Level 2 consist of corporate debt securities, commercial paper and U.S. government and agency securities. We estimate the fair value of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

The following tables present information about our financial assets that have been measured at fair value and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

 

 

 

As of June 30, 2025

 

 

Quoted
Prices
in Active
Markets for Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

21,931

 

 

$

21,931

 

 

$

—

 

 

$

—

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

12,972

 

 

 

—

 

 

 

12,972

 

 

 

—

 

 

$

34,903

 

 

$

21,931

 

 

$

12,972

 

 

$

—

 

 

 

 

As of December 31, 2024

 

 

Quoted
Prices
in Active
Markets for Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

46,990

 

 

$

46,990

 

 

$

—

 

 

$

—

 

Commercial paper

 

 

5,072

 

 

 

—

 

 

 

5,072

 

 

 

—

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

39,091

 

 

 

—

 

 

 

39,091

 

 

 

—

 

Commercial paper

 

 

3,166

 

 

 

—

 

 

 

3,166

 

 

 

—

 

U.S. government and agency securities

 

 

3,979

 

 

 

—

 

 

 

3,979

 

 

 

—

 

 

$

98,298

 

 

$

46,990

 

 

$

51,308

 

 

$

—

 

In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are classified as Level 3. The following liabilities are measured at fair value at the end of each reporting period, with changes in fair value recognized as a component of other (expense) income, net on our condensed consolidated statements of operations. See Note 10, “Long-Term Obligations” to our condensed consolidated financial statements for further discussion of these liabilities:

(1)
The embedded derivative liabilities (the “2029 Notes Derivatives”) associated with the 2029 Notes are included as a component of the 2029 Notes on our condensed consolidated balance sheets. The valuation method for the 2029 Notes Derivatives incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock price and (ii) our estimated credit spread.
(2)
The warrants to purchase up to 3.1 million shares of our common stock issued in May 2024 (the “May 2024 Warrants”) are classified as a long-term liability on our condensed consolidated balance sheets. The valuation method for the May 2024 Warrants incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock price and (ii) an estimate of when the May 2024 Warrants will be exercised based on an option pricing model.

The following table sets forth a summary of the changes in the estimated fair value of these liabilities, which are all classified as Level 3 (in thousands):

 

 

 

2029 Notes Derivatives

 

 

May 2024 Warrants

 

Balance as of December 31, 2024

 

$

13,688

 

 

$

12,582

 

Change in fair value

 

 

(9,680

)

 

 

(8,249

)

Balance as of June 30, 2025

 

$

4,008

 

 

$

4,333