v3.25.2
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The following table presents the fair value of the Company's financial instruments that are measured or disclosed at fair value on a recurring basis (in thousands):
 June 30, 2025
Level 1Level 2Level 3
Assets:
Cash equivalents
Treasury bills$39,057 $— $— 
Money market funds100,692 — — 
Other non-current assets
Derivative$— $— $2,289 
Total assets$139,749 $— $2,289 
Liabilities:
Contingent acquisition liabilities
Contingent earnout consideration
— — 142,113 
Total liabilities$— $— $142,113 
December 31, 2024
Level 1Level 2Level 3
Assets:
Cash equivalents
Treasury bills$38,070 $— $— 
Money market funds131,767 — — 
Other non-current assets
Derivative$— $— $110 
Total assets$169,837 $— $110 
Liabilities:
Other current liabilities
Contingent holdback consideration
$— $— $4,076 
Contingent acquisition liabilities
Contingent earnout consideration
— — 286,898 
Total liabilities$— $— $290,974 

Escrow Consideration

Derivative

The reconciliation of the Company's derivative measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

Balance as of December 31, 2024$110 
Change in the fair value of derivative$1,289 
Balance as of March 31, 2025$1,399 
Change in the fair value of derivative$890 
Balance as of June 30, 2025$2,289 
The Company accounted for the Escrow Consideration under Amelia acquisition as equity-classified shares issued as part of the consideration transferred. Upon the settlement of any valid indemnification claims against the selling shareholders,
the escrow agent will return a number of shares to the Company equal to the dollar value of the indemnified loss divided by the reference price of $5.35 as stipulated in the purchase agreement. The Company concluded that this variability in settlement value is a derivative that is required to be remeasured to fair value due to changes in stock price. During the three and six months ended June 30, 2025, the Company recognized $0.9 million and $2.2 million gains, respectively, related to the change in fair value of derivative under other income in the condensed consolidated statement of operations and comprehensive income (loss).
Contingent Acquisition Liabilities
Contingent Holdback Consideration
The reconciliation of the Company's Contingent Holdback Consideration measured at fair value, including the effect of measurement period adjustments, on a recurring basis using unobservable inputs (Level 3) is as follows:
Balance as of December 31, 2024$4,076 
Change in the fair value of liability(2,349)
Balance as of March 31, 2025$1,727 
Change in the fair value of liability2,393 
Settlement(4,120)
Balance as of June 30, 2025$— 
Balance as of December 31, 2023$— 
Acquisition of SYNQ3981 
Change in the fair value of liability1,570 
Balance as of March 31, 2024$2,551 
Measurement period adjustments(554)
Change in the fair value of liability(1,224)
Balance as of June 30, 2024$773 
The fair value of the cash portion of the Contingent Holdback Consideration was estimated based upon the holdback period of 15 months, and discounted using the risk-free interest rate based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the 15-month holdback period. The fair value of the equity portion of the Contingent Holdback Consideration was estimated based upon the value of the Company’s Class A Common Stock price. The fair value of the Contingent Holdback Consideration was initially measured on January 3, 2024, the date on which the Company completed the acquisition of SYNQ3. For the three and six months ended June 30, 2025, the Company recognized a loss of $2.4 million and a gain of less than $0.1 million, respectively, related to the Contingent Holdback Consideration. For the three and six months ended June 30, 2024, the Company recognized a gain of $1.2 million and a loss of $0.3 million, respectively, related to the Contingent Holdback Consideration.
The fair value of the Contingent Holdback Consideration has been estimated as of the Closing Date, June 30, 2024 and June 30, 2025, under the following assumptions:
January 3, 2024June 30, 2024
Risk-free interest rate4.6 %4.9 %
Holdback period1.25 years0.75 years
Contingent Earnout Consideration
The reconciliation of the Company's contingent earnout consideration measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:
Balance as of December 31, 2024$286,898 
Change in the fair value of liability(173,751)
Balance as of March 31, 2025$113,147 
Change in the fair value of liability28,966 
Balance as of June 30, 2025$142,113 
Balance as of December 31, 2023$— 
Acquisition of SYNQ31,676 
Change in the fair value of liability2,592 
Balance as of March 31, 2024$4,268 
Change in the fair value of liability$142 
Balance as of June 30, 2024$4,410 
For the three and six months ended June 30, 2025, the Company recognized a loss of $29.0 million and a gain of $144.8 million, respectively, related to the Contingent Earnout Consideration. For the three and six months ended June 30, 2024, the Company recognized a loss of $0.1 million and $2.7 million, respectively, related to the Contingent Earnout Consideration. These gains and losses are reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive income (loss).
The Company utilizes a Monte Carlo simulation to value the contingent earnout consideration. The Company selected this model as it believes it is reflective of all significant assumptions that market participants would likely consider in negotiating the transfer of the contingent earnout consideration. Such assumptions include, among other inputs, expected stock price volatility, risk-free rates, and change in control assumptions. The Company estimates the expected volatility of its common stock based on historical volatility of a peer group, considering the remaining term of the contingent earnout consideration. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the contingent earnout consideration. The expected life of the contingent earnout consideration is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
The fair value of the Contingent SYNQ3 Earnout Consideration acquired from SYNQ3 Acquisition has been estimated as of the Closing Date, June 30, 2024 and June 30, 2025, with the following assumptions for the unobservable inputs:
January 3, 2024June 30, 2024June 30, 2025
Discount rate12.6 %13.0 %12.8 %
Expected stock price volatility115.3 %130.0 %120.0 %
Risk-free interest rate4.2 %4.6 %3.8 %
Expected dividend yield0.0 %0.0 %0.0 %
Expected life
0.5 - 2.5 years
0.25 - 2 years
0.25 - 1 years
The fair value of the Contingent Amelia Earnout Consideration acquired from Amelia Acquisition has been estimated as of the Closing Date and June 30, 2025, with the following assumptions for the unobservable inputs:
August 6, 2024June 30, 2025
Metric specific discount rate8.0 %7.5 %
Earnout payment discount rate3.8 %3.7 %
Expected stock price volatility73.0 %123.0 %
Expected metric volatility11.0 %13.0 %
Risk-free interest rate for target revenue4.0 %3.9 %
Risk-free interest rate for stock price3.8 %3.8 %
Expected dividend yield0.0 %0.0 %
Expected life
1.4 - 2.4 years
0.5 - 1.5 years
There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the three and six months ended June 30, 2025 and 2024.