v3.26.1
FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The Company carries certain assets and liabilities at fair value on a recurring basis on its condensed consolidated balance sheets. The following table presents the fair values of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026:
As of March 31, 2026
BalanceLevel 1Level 2Level 3
Foreign exchange derivative assets$1,184 $— $1,184 $— 
Total assets measured at fair value on a recurring basis$1,184 $— $1,184 $— 
Foreign exchange derivative liabilities$13,129 $— $13,129 $— 
Contingent consideration liabilities13,381 — — 13,381 
Total liabilities measured at fair value on a recurring basis
$26,510 $— $13,129 $13,381 
The following table presents the fair values of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025:
As of December 31, 2025
BalanceLevel 1Level 2Level 3
Foreign exchange derivative assets$1,981 $— $1,981 $— 
Total assets measured at fair value on a recurring basis$1,981 $— $1,981 $— 
Foreign exchange derivative liabilities$4,602 $— $4,602 $— 
Contingent consideration liabilities22,835 — — 22,835 
Total liabilities measured at fair value on a recurring basis
$27,437 $— $4,602 $22,835 
The foreign exchange derivatives are valued using pricing models and discounted cash flow methodologies based on observable foreign exchange data at the measurement date. See Note 5 “Derivative Financial Instruments” for additional information regarding derivative financial instruments.
The fair value of the contingent consideration liabilities was determined using a probability-weighted expected return method and is based on the expected future payments to be made to the sellers of the acquired businesses in accordance with the provisions outlined in the respective purchase agreements. Although there is significant judgment involved, the Company believes its estimates and assumptions are reasonable. In determining fair value, the Company considered a variety of factors, including future performance of the acquired businesses using financial projections developed by the Company and market risk assumptions that were derived for revenue growth and earnings before interest and taxes. The Company estimated future payments using the earnout formula and performance targets specified in the purchase agreements and adjusted those estimates to reflect the probability of their achievement. Those weighted average estimated future payments were then discounted to present value using a rate based on the weighted average cost of capital of guideline companies. The discount rates used to determine the fair value of contingent consideration for the Company’s acquisitions were between 12% and 20%.
Changes in financial projections, market risk assumptions, discount rates or probability assumptions related to achieving the various earnout criteria would result in a change in the fair value of the recorded contingent liabilities. Such changes, if any, are recorded within Interest and other income, net in the Company’s condensed consolidated statements of income.
A reconciliation of the beginning and ending balances of Level 3 contingent consideration liabilities using significant unobservable inputs for the three months ended March 31, 2026 is as follows:
Amount
Contingent consideration liabilities as of January 1, 2026
$22,835 
Changes in fair value of contingent consideration included in Interest and other income, net985 
Payment of contingent consideration for previously acquired businesses(10,424)
Effect of foreign currency exchange rate changes, net(15)
Contingent consideration liabilities as of March 31, 2026
$13,381 
Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis
The following tables present the estimated fair values of the Company’s financial assets and liabilities not measured at fair value on a recurring basis as of the dates indicated:
Fair Value Hierarchy
BalanceEstimated Fair ValueLevel 1Level 2Level 3
March 31, 2026
Financial Assets:
Cash equivalents:
Time deposits$14,233 $14,233 $— $14,233 $— 
Financial Liabilities:
Borrowings under the 2025 Credit Agreement
$165,000 $165,000 $— $165,000 $— 
Deferred consideration for asset acquisitions$18,066 $18,066 $— $18,066 $— 
Fair Value Hierarchy
BalanceEstimated Fair ValueLevel 1Level 2Level 3
December 31, 2025
Financial Assets:
Cash equivalents:
Money market funds$5,402 $5,402 $5,402 $— $— 
Time deposits37,441 37,441 — 37,441 — 
Total cash equivalents$42,843 $42,843 $5,402 $37,441 $— 
Financial Liabilities:
Borrowings under the 2025 Credit Agreement
$25,000 $25,000 $— $25,000 $— 
Deferred consideration for asset acquisitions$29,532 $29,532 $— $29,532 $— 
Non-Marketable Securities Without Readily Determinable Fair Values
The Company holds investments in equity securities that do not have readily determinable fair values. These investments are recorded at cost and are remeasured to fair value based on certain observable price changes or impairment events as they occur. The carrying amount of these investments was $36.7 million as of March 31, 2026 and December 31, 2025 and is classified as Other noncurrent assets in the Company’s condensed consolidated balance sheets.