7. Convertible Senior Notes

On December 19, 2024, the Company issued $172.5 million aggregate principal amount of convertible senior notes due 2030 (the "Senior Convertible Notes"), in a Rule 144A private placement to qualified institutional buyers pursuant to an indenture dated December 19, 2024, by and between the Company and U.S. Bank Trust Company, National Association (the “Indenture”).

The Senior Convertible Notes will mature on February 1, 2030, unless earlier repurchased, redeemed, or converted. The proceeds from the issuance of the Senior Convertible Notes were approximately $167.7 million, net of initial purchaser discounts and other debt issuance costs totaling $4.8 million.

The Senior Convertible Notes bear interest at a rate of 2.50% per year and interest is payable semiannually in arrears on August 1 and February 1 of each year. For the three months ended March 31, 2026, the Company made $2.2 million in interest payments. The Company did not make any interest payments for the three months ended March 31, 2025. The initial conversion rate was 8.3521 shares of common stock per $1,000 principal amount of the Senior Convertible Notes, which represents an initial conversion price of approximately $119.73 per share of common stock and a premium of approximately 30% over the closing price of the Company’s common stock on December 16, 2024. In connection with the most recent payment made by the Company on March 26, 2026 of a quarterly cash dividend of $0.25 per share (an increase from the quarterly dividend amount of $0.16 per share as of the time of issuance of the Senior Convertible Notes), the conversion rate of the Senior Convertible Notes was increased to 8.3746 shares of common stock per $1,000 principal amount of the Senior Convertible Notes, which represents a conversion price of approximately $119.41 per share of common stock. A similar adjustment to the conversion rate will be made by the Company upon payment of the quarterly cash dividend of $0.25 on June 4, 2026, and upon payment of subsequent quarterly dividends in excess of $0.16 per share. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events as described in the Indenture.

Noteholders may convert all or a portion of their Senior Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period in which the trading price per $1,000 principal amount of Senior Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the Indenture; (4) if the Company calls (or is deemed to have called) any Senior Convertible Notes for redemption; and (5) at any time from, and including, August 1, 2029, until the close of business on the second scheduled trading day immediately before the maturity date. The Company has the right to elect to settle conversions either in cash, shares of its common stock, or in a combination of cash and shares of its common stock.

Additional interest of up to 0.5% per annum is payable if the Company fails to timely file required documents or reports with the SEC or the Senior Convertible Notes become not freely tradable (as defined in the Indenture). The Company determined that the higher interest payments required in certain circumstances were embedded derivatives that should be bifurcated and accounted for at fair value. The Company assessed the value of the embedded derivatives at each balance sheet date and determined they had de minimis value.

Prior to February 5, 2028, the Senior Convertible Notes will not be redeemable. On or after February 5, 2028, until the 40th trading day immediately before the maturity date, the Company may redeem for cash all or any portion of the Senior Convertible Notes (subject to the partial redemption limitation set forth in the Indenture), at its option, if the last reported sale price of the

Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30-consecutive-trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. In addition, calling any Senior Convertible Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) with respect to that Senior Convertible Note, in which case the conversion rate applicable to the conversion of that Senior Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.

During the three months ended March 31, 2026, the Company recognized $1.1 million in interest expense related to the 2.50% cash coupon of the Senior Convertible Notes and $0.2 million of amortization expense of the debt issuance costs. During the three months ended March 31, 2025, the Company recognized $1.1 million in interest expense related to the 2.50% cash coupon of the Senior Convertible Notes and $0.2 million of amortization expense of the debt issuance costs. As of March 31, 2026, the estimated fair value of the Senior Convertible Notes was $194.6 million compared to $172.3 million as of December 31, 2025. The fair value was determined based on the quoted price of the last trade of the Senior Convertible Notes prior to the end of the reporting period in an inactive market, which is considered as Level 2 in the fair value hierarchy.