v3.26.1
Fair Value Measurements
 3 Months Ended
Apr. 03, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6. Fair Value Measurements

ASC 820, “Fair Value Measurements,” establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the third is considered unobservable:

•
Level 1: Quoted prices for identical assets or liabilities in active markets which the Company can access
•
Level 2: Observable inputs other than those described in Level 1
•
Level 3: Unobservable inputs

Current Assets and Liabilities

The Company’s cash equivalents are highly liquid investments with original maturities of three months or less, which represent assets measured at fair value on a recurring basis. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets. The fair values of cash equivalents, accounts receivable, income taxes receivable, accounts payable, income taxes payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature.

Foreign Currency Contracts

The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain balance sheet foreign currency transaction exposures. The Company uses foreign currency forward contracts as a part of its strategy to manage exposures related to foreign currency denominated monetary assets and liabilities. The fair value of these foreign currency forward contracts is reported either in other current assets or in other current liabilities as of the end of the reporting period.

Contingent Considerations

On April 8, 2025, the Company completed the acquisition of Keonn. Pursuant to the purchase and sale agreement, the former shareholders of Keonn (the “Sellers”) are eligible to receive contingent consideration based on the achievement of specified revenue targets by Keonn during fiscal years 2025 through 2027. Payment of this contingent consideration is also subject to Keonn maintaining certain minimum gross margin percentage during the applicable periods. The undiscounted range of potential contingent consideration is between €0 and €20.0 million (approximately $21.9 million). If the performance conditions are met, the contingent consideration will be payable annually, with the first payment due in the first half of 2026. As of the acquisition date, the estimated fair value of the contingent consideration was €4.1 million (approximately $4.5 million), determined using the Monte Carlo valuation method. This amount was recorded as part of the purchase price. Subsequent changes in the estimated fair value are recognized in the consolidated statement of operations in restructuring, acquisition, and related costs until the liability is fully settled. During 2025, the fair value of the contingent consideration was adjusted to €4.9 million ($5.7 million). The Company made the first installment payment of €3.8 million ($4.4 million) in March 2026. Based on the revenue performance and revenue projections as of April 3, 2026, the Company made no further adjustments to the fair value of the remaining contingent consideration during the three months ended April 3, 2026. The installment payment has been reported as cash outflows from financing activities in the consolidated statement of cash flows for the respective periods.

Summary by Fair Value Hierarchy

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of April 3, 2026 (in thousands):

 

 

 

 

Quoted Prices in

 

 

 

 

 

Significant Other

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money market funds

$

269,339

 

 

$

269,339

 

 

$

—

 

 

$

—

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts

 

133

 

 

 

—

 

 

 

133

 

 

 

—

 

 

$

269,472

 

 

$

269,339

 

 

$

133

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Current

$

63

 

 

$

—

 

 

$

—

 

 

$

63

 

Contingent considerations - Long term

 

1,210

 

 

 

—

 

 

 

—

 

 

 

1,210

 

Foreign currency forward contracts

 

98

 

 

 

—

 

 

 

98

 

 

 

—

 

 

$

1,371

 

 

$

—

 

 

$

98

 

 

$

1,273

 

 

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 (in thousands):

 

 

 

 

Quoted Prices in

 

 

 

 

 

Significant Other

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money market funds

$

291,629

 

 

$

291,629

 

 

$

—

 

 

$

—

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts

 

110

 

 

 

—

 

 

 

110

 

 

 

—

 

 

$

291,739

 

 

$

291,629

 

 

$

110

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Current

$

4,465

 

 

$

—

 

 

$

—

 

 

$

4,465

 

Contingent considerations - Long term

 

1,291

 

 

 

—

 

 

 

—

 

 

 

1,291

 

Foreign currency forward contracts

 

134

 

 

 

—

 

 

 

134

 

 

 

—

 

 

$

5,890

 

 

$

—

 

 

$

134

 

 

$

5,756

 

Changes in the fair value of Level 3 contingent considerations during the three months ended April 3, 2026 were as follows (in thousands):

 

Contingent Considerations

 

Balance at December 31, 2025

$

5,756

 

Payments

 

(4,393

)

Effect of foreign exchange rates

 

(90

)

Balance at April 3, 2026

$

1,273

 

The following table provides qualitative information associated with the fair value measurement of the Company’s Level 3 liabilities:

Liability

April 3, 2026 Fair Value

(in thousands)

Valuation Technique

Unobservable Inputs

Percentage Applied

Contingent consideration (Keonn)

$1,210

Monte Carlo method

Historical and projected revenue and gross profit margin from fiscal year 2025 to 2027

N/A

 

 

 

 

 

 

Gross Profit Premium

 

9.3%

 

 

 

 

 

 

Revenue risk premium

 

8.4%

 

 

 

 

 

 

Gross Profit Volatility

 

38.5%

 

 

 

 

 

 

Revenue Volatility

 

35.0%

 

 

 

 

 

 

Credit spread

 

1.9%

See Note 10 to Consolidated Financial Statements for a discussion of the estimated fair value of the Company’s outstanding debt.