Derivatives

3 Months Ended

Mar. 31, 2026

Derivatives

Note 6—Derivatives

We are directly and indirectly affected by changes in interest rates, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes.

We pay interest on our Credit Agreement at rates that fluctuate based on changes in benchmark interest rates. In order to mitigate the risk of increases in benchmark rates on our term loans, we entered into an interest rate swap agreement whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount. The interest rate swaps were designated as cash flow hedges. Cash flows related to the interest rate swap agreement are included in interest expense, net.

We determine the fair value of our interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data. We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure. All derivatives are carried at fair value in our condensed consolidated balance sheets. We consider the risk of counterparty default to be minimal. We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

The following table summarizes the terms and fair value of our outstanding cash flow hedges as of March 31, 2026 and December 31, 2025:


		March 31, 2026			December 31, 2025
Notional Amount		$	200,000		$	250,000
Derivative Assets Fair Value		$	1,607		$	1,338
Derivative Liabilities Fair Value		$	—		$	—
Maturity Date			March 2027			March 2027
Classification			other current assets			other assets, net

The notional amount of the interest rate swaps represents the amount in effect at the end of the period. Based on contractual terms, the notional amount will decrease in increments of $50 million on the last business day of March of each year until the maturity date.

The following table summarizes the effect of cash flow hedge accounting on our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025:


		Three Months Ended
		March 31,
		2026			2025
Amount of Gain Recognized in Other Comprehensive Income (Loss)		$	791		$	(1,078)
Location of Gain Reclassified from Accumulated Other Comprehensive Loss into Income		Interest expense, net			Interest expense, net
Total Amount of Expense Line Items Presented in the Condensed Consolidated Statements of Operations in Which the Effects are Recorded		$	32,348		$	24,214
Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Income		$	522		$	1,110

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.