v3.25.4
Debt
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt Debt
Outstanding debt obligations as of December 31, 2025 and 2024 were as follows (in thousands, except for percentages):
Maturities
Interest Rates as of December 31, 2025
December 31, 2025December 31, 2024
Convertible senior notes due 2025 (the “2025 Notes”)
May 2025—%$— $390,175 
Convertible senior notes due 2029 (the “2029 Notes”)
March 20290.625%452,421 450,081 
Convertible senior notes due 2030 (the “2030 Notes”)
September 2030
0%
488,542 — 
Non-revolving Loan20267.61%16 510 
Master Vehicle Loan
2026 - 2028
5.85% - 7.10%
112,032 154,281 
Total long-term debt, including current maturities$1,053,011 $995,047 
Less: Convertible senior notes, current(1)
— 390,175 
Less: Long-term debt, current(2)
50,607 38,904 
Total long-term debt$1,002,404 $565,968 
_______________
(1)This balance is included within convertible senior notes, current on the consolidated balance sheets.
(2)This balance is included within accrued and other current liabilities on the consolidated balance sheets and is primarily related to vehicles.
The following table sets forth the primary components of interest expense as reported on the consolidated statements of operations (in thousands):
Year Ended December 31,
202520242023
Contractual interest expense related to the 2025 Notes and 2029 Notes(1)
$5,028 $9,181 $11,212 
Amortization of debt discount and issuance costs related to the 2025 Notes, 2029 Notes and 2030 Notes
3,655 3,737 2,877 
Vehicle loans and other interest expense12,072 16,003 12,134 
Interest expense$20,755 $28,921 $26,223 
_______________
(1)There is no contractual interest expense related to the 2030 Notes as the 2030 Notes have a 0% interest rate.
Convertible Senior Notes due 2025
In May 2020, the Company issued $747.5 million aggregate principal amount of 1.50% convertible senior notes due 2025 (the “2025 Notes”), pursuant to an indenture, dated May 15, 2020, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee. The net proceeds from this offering were approximately $733.2 million, after deducting the initial purchasers’ discounts and commissions and debt issuance costs. Debt issuance costs related to the 2025 Notes totaled $14.3 million at inception and were comprised of discounts and commissions payable to the initial purchasers and third-party offering costs and were amortized to interest expense using the effective interest method over the contractual term. Prior to maturity, the 2025 Notes were senior unsecured obligations of the Company with interest payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2020, at a rate of 1.50% per year.
In February 2024, the Company, through privately negotiated agreements in connection with the issuance of the 2029 Notes (as defined below), repurchased approximately $356.8 million in aggregate principal amount of 2025 Notes for an aggregate repurchase price of approximately $350.0 million. The Company recognized this repurchase as an extinguishment of debt and recorded a gain on extinguishment of $5.1 million in other income, net on the consolidated statement of operations.
The 2025 Notes matured on May 15, 2025. Upon maturity, the Company fully settled the outstanding $390.7 million aggregate principal amount of 2025 Notes and $2.9 million of accrued interest in cash.
Convertible Senior Notes due 2029
In February 2024, the Company issued $460.0 million aggregate principal amount of 0.625% convertible senior notes due 2029 (the “2029 Notes”) pursuant to an indenture, dated February 27, 2024 (the “2029 Notes Indenture”) between the Company and U.S. Bank Trust Company, National Association, as trustee.
The 2029 Notes mature on March 1, 2029, unless earlier converted, redeemed or repurchased. The 2029 Notes are senior unsecured obligations of the Company with interest payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024, at a rate of 0.625% per year. The net proceeds from this offering were approximately $448.2 million, after deducting the initial purchasers’ discounts and commissions and debt issuance costs. The 2029 Notes were not issued at a substantial premium, therefore, the Company did not recognize an equity component at issuance.
The initial conversion rate for the 2029 Notes is 47.4366 shares of the Company’s Class A common stock per $1,000 principal amount of 2029 Notes, which is equivalent to an initial conversion price of approximately $21.08 per share of the Class A common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the 2029 Notes Indenture.
The 2029 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 1, 2028 only under the following circumstances:
•During any fiscal quarter commencing after the fiscal quarter ending June 30, 2024 (and only during such fiscal quarter), if the last reported sale price of the Company’s Class A common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
•During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2029 Notes Indenture) per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;
•If the Company calls such 2029 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
•Upon the occurrence of specified corporate events.
On or after December 1, 2028, the 2029 Notes will be convertible at the option of the holder until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will satisfy its conversion obligation by paying cash up to the aggregate principal amount of the 2029 Notes to be converted and by paying and/or delivering, as the case may be, cash, shares of the Company’s Class A common stock or a combination of cash and shares of the Company’s Class A common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2029 Notes Indenture.
Holders of the 2029 Notes who convert their 2029 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the 2029 Notes Indenture) are, under certain circumstances, entitled to an increase in the conversion rate. Additionally in the event of a corporate event constituting a fundamental change (as defined in the 2029 Notes Indenture), holders of the 2029 Notes may require the Company to repurchase all or a portion of their 2029 Notes at a repurchase price equal to 100% of the principal amount of the 2029 Notes being repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.
Debt issuance costs related to the 2029 Notes totaled $11.8 million at inception and were comprised of discounts and commissions payable to the initial purchasers and third-party offering costs and will be amortized to interest expense using the effective interest method over the contractual term. As of December 31, 2025 and 2024, the unamortized debt discount and debt issuance cost of the 2029 Notes was $7.6 million and $9.9 million, respectively, on the consolidated balance sheets. The effective interest rate during the years ended December 31, 2025 and 2024 was 1.16%.
During the year ended December 31, 2025, the 2029 Notes did not meet any of the circumstances that would allow for a conversion.
Based on the last reported sale price of the Company’s Class A common stock on December 31, 2025, the if-converted value of the 2029 Notes was $422.7 million, which would not exceed the outstanding principal amount.
Convertible Senior Notes due 2030
In September 2025, the Company issued $500.0 million aggregate principal amount of 0% convertible senior notes due 2030 (the “2030 Notes” together with the 2025 Notes and 2029 Notes, the “Notes”) pursuant to an indenture, dated September 5, 2025 (the “2030 Notes Indenture”) between the Company and U.S. Bank Trust Company, National Association, as trustee.
The 2030 Notes mature on September 15, 2030, unless earlier converted, redeemed or repurchased. The 2030 Notes are senior unsecured obligations of the Company that do not bear interest and the principal amount of the 2030 Notes will not accrete. The 2030 Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations and failure to timely remove the restrictive legend from the 2030 Notes. The net proceeds from this offering were approximately $487.8 million, after deducting the initial purchasers’ discounts and commissions and debt issuance costs. The 2030 Notes were not issued at a substantial premium, therefore, the Company did not recognize an equity component at issuance.
The initial conversion rate for the 2030 Notes is 42.5170 shares of the Company’s Class A common stock per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of approximately $23.52 per share of the Class A common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the 2030 Notes Indenture.
The 2030 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding June 15, 2030 only under the following circumstances:
•During any fiscal quarter commencing after the fiscal quarter ending December 31, 2025 (and only during such fiscal quarter), if the last reported sale price of the Company’s Class A common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
•During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2030 Notes Indenture) per $1,000 principal amount of 2030 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;
•If the Company calls such 2030 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
•Upon the occurrence of specified corporate events.
On or after June 15, 2030, the 2030 Notes will be convertible at the option of the holder until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will satisfy its conversion obligation by paying cash up to the aggregate principal amount of the 2030 Notes to be converted and by paying and/or delivering, as the case may be, cash, shares of the Company’s Class A common stock or a combination of cash and shares of the Company’s Class A common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2030 Notes Indenture.
Holders of the 2030 Notes who convert their 2030 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the 2030 Notes Indenture) are, under certain circumstances, entitled to an increase in the conversion rate. Additionally in the event of a corporate event constituting a fundamental change (as defined in the 2030 Notes Indenture), holders of the 2030 Notes may require the Company to repurchase all or a portion of their 2030 Notes at a repurchase price equal to 100% of the principal amount of the 2030 Notes being repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.
Debt issuance costs related to the 2030 Notes totaled $12.2 million at inception and were comprised of discounts and commissions payable to the initial purchasers and third-party offering costs and will be amortized to interest expense using the effective interest method over the contractual term. As of December 31, 2025, the unamortized debt discount and debt issuance cost of the 2030 Notes was $11.5 million on the consolidated balance sheets. The effective interest rate during the year ended December 31, 2025 was 0.49%.
During the quarter ended December 31, 2025, the 2030 Notes did not meet any of the circumstances that would allow for a conversion.
Based on the last reported sale price of the Company’s Class A common stock on December 31, 2025, the if-converted value of the 2030 Notes was $411.8 million, which would not exceed the outstanding principal amount.
The net carrying amounts of the Notes were as follows (in thousands):
December 31,
20252024
2025 Notes
Principal$— $390,719 
Unamortized debt discount and debt issuance costs— (544)
Net carrying amount of liability component$— $390,175 
2029 Notes
Principal$460,000 $460,000 
Unamortized debt discount and debt issuance costs(7,579)(9,919)
Net carrying amount of liability component$452,421 $450,081 
2030 Notes
Principal$500,000 $— 
Unamortized debt discount and debt issuance costs(11,458)— 
Net carrying amount of liability component$488,542 $— 
As of December 31, 2025, the total estimated fair value (which represents a Level 2 valuation) of the 2029 Notes and 2030 Notes was approximately $553.6 million and $565.4 million, respectively. The estimated fair value of the 2029 Notes and 2030 Notes was determined based on a market approach which was determined based on the actual bids and offers of the 2029 Notes and 2030 Notes in an over-the-counter market on the last trading day of the period.
The Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or restrictions on the issuance or repurchase of securities by the Company.
Capped Calls
In connection with the issuance of the 2025 Notes, the Company entered into privately negotiated capped call transactions with certain of the initial purchasers or their respective affiliates at a cost of approximately $132.7 million (the “2025 Capped Calls”). The 2025 Capped Calls covered, subject to anti-dilution adjustments, the number of shares of Class A common stock underlying the 2025 Notes sold in the offering. By entering into the 2025 Capped Calls, the Company expected to reduce the potential dilution to its
Class A common stock (or, in the event a conversion of the 2025 Notes was settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2025 Notes the trading price of the Company’s Class A common stock price exceeded the conversion price of the 2025 Notes. The cap price of the 2025 Capped Calls was initially $73.83 per share, subject to certain adjustments under the terms of the 2025 Capped Calls. The 2025 Capped Calls expired in May 2025.
In connection with the issuance of the 2029 Notes, the Company entered into privately negotiated capped call transactions with certain financial institutions at a cost of approximately $47.9 million (the “2029 Capped Calls”). The 2029 Capped Calls cover, subject to anti-dilution adjustments, the number of shares of Class A common stock underlying the 2029 Notes sold in the offering. By entering into the 2029 Capped Calls, the Company expects to reduce the potential dilution to its Class A common stock (or, in the event a conversion of the 2029 Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2029 Notes, the trading price of the Company’s Class A common stock price exceeds the conversion price of the 2029 Notes. The cap price of the 2029 Capped Calls is initially $31.82 per share and is subject to certain adjustments under the terms of the 2029 Capped Calls.
In connection with the issuance of the 2030 Notes, the Company entered into privately negotiated capped call transactions with certain financial institutions at a cost of approximately $42.0 million (the “2030 Capped Calls” and together with the 2025 Capped Calls and 2029 Capped Calls, the “Capped Calls”). The 2030 Capped Calls cover, subject to anti-dilution adjustments, the number of shares of Class A common stock underlying the 2030 Notes sold in the offering. By entering into the 2030 Capped Calls, the Company expects to reduce the potential dilution to its Class A common stock (or, in the event a conversion of the 2030 Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2030 Notes, the trading price of the Company’s Class A common stock price exceeds the conversion price of the 2030 Notes. The cap price of the 2030 Capped Calls is initially $33.60 per share and is subject to certain adjustments under the terms of the 2030 Capped Calls. The Company elected to integrate the 2030 Capped Calls with the 2030 Notes for federal income tax purposes. Accordingly, the gross cost of the 2030 Capped Calls is deductible for income tax purposes as original discount interest over the term of the 2030 Notes.
The Capped Calls meet the criteria for classification in equity, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within the consolidated balance sheets, along with the offsetting deferred tax impact of $11.1 million associated with the integration of the 2030 Capped Calls with the 2030 Notes.
Non-revolving Loan
Flexdrive has a Loan and Security Agreement dated March 11, 2019, as amended (the “Non-revolving Loan”) with a third-party lender pursuant to which Flexdrive may request advances to purchase new Hyundai and Kia vehicles, or for other purposes approved by the lender. On September 26, 2025, the Non-revolving Loan was amended, reducing the lender’s maximum commitment from $50.0 million to $19.0 million and extending the Company’s ability to draw through September 30, 2026. Advances paid or prepaid under the Non-revolving Loan may not be reborrowed. Repayment terms for each advance include equal monthly installments sufficient to fully amortize the advances over the term, with an option for the final installment to be greater than the others. The repayment term for each advance ranges from 24 months to 48 months. Interest is payable monthly in arrears at a fixed interest rate equal to the two-year U.S. Treasury note yield plus a spread of 3.4% for a 24-month term, the three-year U.S. Treasury note yield plus a spread of 3.4% for a 36 month term, and the average of the three and five-year U.S. Treasury note yields plus a spread of 3.4% for a 48 month term. At the end of the initial repayment term of an advance, Flexdrive may refinance such advance with a new advance which fully amortizes over a term of 24 months with an interest rate equal to the two-year U.S. Treasury note yield plus a spread of 3.4%. The Non-revolving Loan is secured by all vehicles financed under the Non-revolving Loan. As of December 31, 2025, there was an immaterial amount drawn under the Non-revolving Loan.
The Non-revolving Loan also contains customary affirmative and negative covenants that, among other things, limit Flexdrive’s ability to enter into certain acquisitions or consolidations or engage in certain asset dispositions. Upon the occurrence of certain events of default, including bankruptcy and insolvency events with respect to Flexdrive or the Company, all amounts due under the Non-revolving Loan may become immediately due and payable, among other remedies. As of December 31, 2025, the Company was in compliance with all covenants related to the Non-revolving Loan in all material aspects. Further, the Company continued to guarantee the payments of Flexdrive for any amounts borrowed.
Master Vehicle Loan
Flexdrive has a Master Vehicle Acquisition Financing and Security Agreement, dated February 7, 2020 as amended (the “Master Vehicle Loan”) with a third-party lender. Pursuant to the term of the Master Vehicle Loan, Flexdrive may request loans up to a maximum principal amount of $50 million to purchase vehicles and additional capacity may be requested. Flexdrive has made requests for advances above that maximum amount which were granted by the lender. Repayment terms for each loan include equal monthly installments sufficient to amortize the loan over the term, with an option for the final installment to be greater than the others and is typically equal to the residual value guarantee the Company provides to the lender. The repayment term for each loan ranges from 12 months to 48 months. Interest is payable monthly in advance at a fixed interest rate equal to the three-year swap rate plus a spread of 2.10% on the date of the loan. Principal amounts outstanding related to the Master Vehicle Loan may be fully or partially prepaid at the option of Flexdrive and must be prepaid under certain circumstances. However, if a loan is terminated for any reason
prior to the last day of the minimum loan term Flexdrive will be obligated to pay to the lender, an early termination fee in an amount which is equal to the interest which would otherwise be payable by Flexdrive to the lender for the remainder of the minimum loan term for that loan. The Master Vehicle Loan is secured by all vehicles financed under the Master Vehicle Loan as well as certain amounts held in escrow for the benefit of the lender. Amounts held in escrow are recorded as restricted cash on the consolidated balance sheets.
The Master Vehicle Loan contains customary affirmative and negative covenants that, among other things, limit Flexdrive’s ability to enter into certain acquisitions or consolidations or engage in certain asset dispositions. Upon the occurrence of certain events of default, including bankruptcy and insolvency events with respect to Flexdrive or the Company, all amounts due under the Master Vehicle Loan may become immediately due and payable, among other remedies. As of December 31, 2025, Flexdrive was in compliance with all covenants related to the Master Vehicle Loan in all material respects. Further, the Company continued to guarantee the payments of Flexdrive for any amounts borrowed following the acquisition.
The fair values of the Non-revolving Loan were immaterial as of December 31, 2025 and 2024. The fair values of the Master Vehicle Loan were $113.4 million and $154.5 million, respectively, as of December 31, 2025 and 2024. These were determined based on quoted prices in markets that are not active, which are considered a Level 2 valuation input.
Maturities of long-term debt outstanding, including current maturities, as of December 31, 2025 were as follows (in thousands):
2026$50,607 
202749,229 
202812,212 
2029452,421 
2030488,542 
Thereafter— 
Total long-term debt outstanding$1,053,011 
Vehicle Procurement Agreement
Flexdrive has a Vehicle Procurement Agreement (“VPA”), as amended, with a third-party vehicle procurement provider (the “Procurement Provider”). Procurement services under the VPA include purchasing and upfitting certain motor vehicles as specified by Flexdrive, providing interim financing and providing certain fleet management services, including without limitation vehicle titling, registration and tracking services on behalf of Flexdrive. Pursuant to the terms of the VPA, Flexdrive will make the applicable payments to the Procurement Provider under the VPA either directly from its own funds or with the proceeds of advances made to Flexdrive under one of its credit facilities used by Flexdrive to finance the payment of such amounts. Interest on interim financings under the VPA is based on the prime rate.
The Procurement Provider has a security interest in vehicles purchased on behalf of Flexdrive until the full specified amounts due by Flexdrive in connection therewith have been paid to the Procurement Provider. The VPA includes customary affirmative and negative covenants applicable to Flexdrive. As of December 31, 2025, the Company was in compliance with all of its covenants under the VPA and as of December 31, 2025, there was $56.4 million of outstanding borrowings from interim financings under the VPA, which is included within accrued and other current liabilities on the consolidated balance sheets.
In March 2019, the Procurement Provider entered into a $95.0 million revolving credit facility with a third-party lender to finance its acquisition of motor vehicles on behalf of Flexdrive under the VPA, and in connection therewith, Flexdrive entered into a Limited Non-Recourse Secured Continuing Guaranty and Subordination Agreement pursuant to which Flexdrive guarantees the Procurement Provider’s payment and performance obligations under that revolving credit facility. On September 17, 2020, the revolving credit facility was amended, extending the stated maturity date to December 31, 2021 and reducing the borrowing capacity to $50.0 million. The revolving credit facility renews annually and was most recently amended in September 2025, to extend the stated maturity date to September 2026. As of December 31, 2025, there were no amounts outstanding under the revolving credit facility, the repayment of which is guaranteed by Flexdrive.
Revolving Credit Facility & Other Financings
On November 3, 2022, Lyft, Inc. entered into a revolving credit agreement (the “Revolving Credit Agreement”) by and among the Company, as the borrower, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto from time to time. The Company amended the Revolving Credit Agreement on December 12, 2023, and on February 21, 2024, entered into Amendment No. 2 to Revolving Credit Agreement to, among other things: (a) solely for the purposes of the financial covenant test, replace total leverage with total net leverage, which allows the Company to subtract the lesser of (i)(x) to the extent free cash flow for the most recently ended trailing four quarters is greater than $100.0 million, $300.0 million and (y) otherwise, $200.0 million and (ii) the amount of unrestricted cash and cash equivalents (as defined in Amendment No. 2 to the Revolving Credit Agreement) on its
consolidated balance sheets as of the calculation date and (b) permit the Company to repurchase up to a specified amount of the Company’s common stock with the proceeds of a convertible note offering.
The Revolving Credit Agreement provides the Company with a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $420.0 million that matures on November 3, 2027. The Company’s Liquidity (as defined in the Revolving Credit Agreement) minus the aggregate principal amount of the Company’s 2025 Convertible Notes (as defined in the Revolving Credit Agreement) outstanding was not less than $1.25 billion as of February 13, 2025. As such, the Revolving Credit Facility did not mature on such date based on the terms of the Revolving Credit Agreement. Subject to certain conditions precedent, the Revolving Credit Agreement also grants the Company the option to increase the commitment under the Revolving Credit Facility by or obtain incremental term loans in an aggregate principal amount of up to $300.0 million, plus, after June 30, 2024, an unlimited amount so long as the senior secured leverage ratio does not exceed 2.50:1.00. The Revolving Credit Facility provides for borrowings up to the amount of the facility, with a sublimit of $168 million for the issuance of letters of credit.
Under the Revolving Credit Agreement, loans bear interest, at the Company’s option, at an annual rate equal to either (i) the sum of (x) the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement) plus (y) a variable rate based on the Company’s total leverage ratio, ranging from 1.50% to 2.25% or (ii) the sum of (x) the highest of (A) the rate of interest last quoted by The Wall Street Journal as the prime rate in effect in the United States, (B) the greater of the rate calculated by the Federal Reserve Bank of New York as the federal funds effective rate or the rate that is published by the Federal Reserve Bank of New York as the overnight bank funding rate, in either case, plus 0.50%, and (C) the one-month Adjusted Term SOFR Rate plus 1.00% and (y) a variable rate based on the Company’s total leverage ratio, ranging from 0.05% to 1.25%. The Company is required to pay a commitment fee between 0.225% and 0.375%, depending on the Company’s total leverage ratio, per annum on the undrawn portion available under the Revolving Credit Facility.
The Revolving Credit Agreement contains customary affirmative and negative covenants and restrictions typical for a financing of this type that, among other things, restrict the Company and its restricted subsidiaries’ ability to incur additional indebtedness, create liens, merge or consolidate or make certain dispositions, pay dividends and make distributions or other restricted payments, engage in transactions with affiliates, and make certain investments and acquisitions. The Revolving Credit Agreement also contains financial covenants that require the Company to maintain (a) a minimum liquidity amount of at least $1.5 billion, tested on a quarterly basis, commencing with the quarter ending December 31, 2022 through the quarter ending June 30, 2024, (b) a total net leverage ratio not to exceed 3.50:1.00 commencing with the quarter ending September 30, 2024 through the quarter ending December 31, 2024 and commencing with the quarter ending March 31, 2025, a ratio not to exceed 3.00:1.00 (with an increase to 3.50:1.00 if the Company has an acquisition for cash consideration greater than $75 million for the fiscal quarter during which such acquisition takes place and the three fiscal quarters immediately following such acquisition), and (c) a fixed charge coverage ratio of at least 1.25:1.00, commencing with the quarter ending September 30, 2024. The Revolving Credit Agreement contains customary events of default relating to, among other things, payment defaults, breach of representation or warranty or covenants, cross default to material indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events. Non-compliance with one or more of the covenants and restrictions or the occurrence of an event of default could result in the full or partial principal balance of the Revolving Credit Agreement becoming immediately due and payable and termination of the commitments.
The Company’s obligations under the Revolving Credit Agreement are guaranteed by certain of the Company’s present and future material domestic subsidiaries. The Company’s obligations under, and each guarantor’s obligations under its guaranty of, the Revolving Credit Agreement are secured by a first priority interest on substantially all of the Company’s or such guarantor’s respective assets.
As of December 31, 2025, the Company was in compliance with all covenants related to the Revolving Credit Agreement and no amounts had been drawn under the Revolving Credit Agreement.
As of December 31, 2025, there were no other balances outstanding.