v3.26.1
Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

The Company measures fair value based on the prices 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. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy.

 

 

March 31, 2026

 

(in thousands)

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Liabilities measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

186

 

 

$

—

 

 

$

186

 

 

$

—

 

Total liabilities measured at fair value

 

$

186

 

 

$

—

 

 

$

186

 

 

$

—

 

 

 

 

December 31, 2025

 

(in thousands)

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Liabilities measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

476

 

 

$

—

 

 

$

476

 

 

$

—

 

Total liabilities measured at fair value

 

$

476

 

 

$

—

 

 

$

476

 

 

$

—

 

 

Interest Rate Collar and Cap Agreements

The Company has interest rate collar contracts with an aggregate notional value of principal of $700.0 million as of March 31, 2026, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities. Interest rate collar contracts with notional value of principal of $300.0 million matured on April 5, 2026, and interest rate collar contracts with notional values of principal of $200 million each will mature on April 5, 2027 and 2028.

Effective April 8, 2026, the Company entered into an interest rate collar with a $100.0 million notional amount that matures on April 8, 2029, providing a 4.50% cap and a 2.89% floor based on one‑month term SOFR. No premium was paid at inception. The interest rate collar was entered into to mitigate exposure to changes in interest rates on floating‑rate debt.

As of March 31, 2026, the fair value of the Company’s outstanding interest collars of $0.2 million was included in “Other long-term liabilities” in the condensed consolidated balance sheets. As of December 31, 2025 the fair value of the Company’s outstanding interest rate caps and collars of $0.5 million was included in “Other long-term liabilities” in the condensed consolidated balance sheets. Changes in fair value of the Company's outstanding interest rate caps and collars are recognized as a component of “Interest expense, net” in the condensed consolidated statements of operations and comprehensive loss.

During the three months ended March 31, 2026 and 2025, the Company recorded a gain of $0.3 million and a loss of $1.6 million, respectively, within “Interest expense, net,” related to changes in the fair value of its derivative instruments.

Long-term Debt

The following tables set forth the carrying values and fair values of the Company’s financial liabilities measured on a recurring basis, categorized by input level within the fair value hierarchy:

(in thousands)

 

Carrying Value

 

 

Fair Value
(Level 2)

 

Balance at March 31, 2026

 

 

 

 

 

 

Term Loan Facility

 

$

1,028,116

 

 

$

804,556

 

6.5% Senior Secured Notes

 

 

2,007

 

 

 

1,558

 

9.0% Senior Secured Notes due 2030

 

 

561,444

 

 

 

425,345

 

Total long-term debt

 

$

1,591,567

 

 

$

1,231,459

 

 

(in thousands)

 

Carrying Value

 

 

Fair Value
(Level 2)

 

Balance at December 31, 2025

 

 

 

 

 

 

Term Loan Facility

 

$

1,092,745

 

 

$

928,880

 

6.5% Senior Secured Notes

 

 

595,087

 

 

 

483,776

 

Total long-term debt

 

$

1,687,832

 

 

$

1,412,656