v3.26.1
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
•Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment.
•Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The following table presents assets and liabilities measured at fair value on a recurring basis using the above input categories:
June 30, 2026December 31, 2025
(In thousands)
Level 1Level 2Level 3Level 1Level 2Level 3
Assets:
Cash equivalents:
Money market funds$55,122 $— $— $186,677 $— $— 
Commercial paper— — — — 14,985 — 
U.S. Treasuries— — — — 29,885 — 
Marketable securities:
Certificates of deposit— 6,201 — — 14,515 — 
Commercial paper— 2,945 — — 12,908 — 
Corporate notes and bonds— 146,460 — — 373,383 — 
U.S. Treasuries— — — — 63,754 — 
U.S. Government agency securities— 252,758 — — 573,976 — 
Other current assets:
Investments in debt securities— — 29,353 — — — 
Other assets:
Investments in debt securities— 5,705 52,890 — 6,300 55,046 
Investment in equity instruments— — 5,000 — — 5,000 
Investment in tax equity fund— — 475 — — 754 
Total assets measured at fair value$55,122 $414,069 $87,718 $186,677 $1,089,706 $60,800 
Liabilities:
Warranty obligations:
Current$— $— $23,311 $— $— $23,259 
Non-current— — 162,136 — — 169,963 
Total warranty obligations measured at fair value— — 185,447 — — 193,222 
Total liabilities measured at fair value$— $— $185,447 $— $— $193,222 
Notes due 2028
The Company carries the Notes due 2028 (as defined in Note 11, “Debt”) at face value less unamortized debt issuance costs on its condensed consolidated balance sheets. The fair value as of June 30, 2026 was determined based on the closing trading price per $100 principal amount as of the last day of trading for the period. The Company considers the fair value of the Notes due 2028 to be a Level 2 measurement as they are not actively traded. As of June 30, 2026, the carrying amount and fair value of the Notes due 2028 was as follows:
Carrying AmountFair Value
(In thousands)
Notes due 2028$572,836 $534,750 
Investments in debt securities
Investments in debt securities are recorded in “Other current assets” and “Other assets” on the condensed consolidated balance sheets. The changes in the balance of investments in debt securities were as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
(In thousands)
Balance at beginning of period$61,346 $65,157 $61,346 $64,834 
Secured revolving credit facility29,000 — 29,000 — 
Fair value adjustments included in other income (expense), net(2,398)(9,464)(2,398)(9,141)
Balance at end of period$87,948 $55,693 $87,948 $55,693 
In September 2021, the Company invested approximately $13.0 million in secured convertible promissory notes issued by the stockholders of a privately-held company. In February 2026, the notes were amended to extend the maturity date and modify certain other contractual terms. The notes are classified as debt securities, and the Company has elected the fair value option, with changes in fair value recognized in “Other income (expense), net” in the condensed consolidated statements of operations. The fair value option was elected to reduce the operational complexity of accounting for embedded features that would otherwise require bifurcation as a separate unit of account. The notes are categorized as Level 3 within the fair value hierarchy, as the valuation incorporates significant unobservable inputs. The fair value of $10.2 million and $11.0 million as of June 30, 2026 and December 31, 2025, respectively, was estimated using a discounted cash flow methodology, which included assumptions related to implied yield and estimated duration.
In July 2023, the Company invested approximately $15.0 million in a secured convertible promissory note issued by the stockholders of a privately-held company. In July 2026, the notes were amended to extend the maturity date and modify certain other contractual terms. The notes are classified as debt securities, and the Company has elected the fair value option, with changes in fair value recognized in “Other income (expense), net” in the condensed consolidated statements of operations. The fair value option was elected to reduce the operational complexity of accounting for embedded features that would otherwise require bifurcation as a separate unit of account. The notes are categorized as Level 3 within the fair value hierarchy, as the valuation incorporates significant unobservable inputs. The fair value of $14.5 million as of both June 30, 2026 and December 31, 2025 was determined using discounted cash flow methodology, which included assumptions related to implied yield and estimated duration.
Loan receivables
The loan receivables represent financing arrangements provided to certain direct and indirect customers. These loan receivables have contractual maturities ranging from one to three years and are recorded on an amortized cost basis. Interest income is accrued and recognized based on the stated coupon rate, included in “Other income (expense), net” on the condensed consolidated statements of operations. The principal outstanding under the loan receivables were as follows:
June 30,
2026
(In thousands)
Current$40,939 
Non-current1,500 
Loan receivables$42,439 
There was no activity in the allowance for credit losses related to loan receivables during the three and six months ended June 30, 2026.
Variable Interest Entities
The Company holds a non-controlling variable interest in a residential solar and storage finance entity and has extended financing to that entity and one of its wholly owned special-purpose subsidiaries (together, the "Investee"). The Company has determined that the Investee is a variable interest entity (“VIE”). The Company is not the primary beneficiary of the Investee because it does not have the power to direct the activities that most significantly impact the Investee’s economic performance and accordingly does not consolidate the Investee.
The following arrangements were in place as of June 30, 2026:
ArrangementOrigination DateRateMaturityFair Value
(In thousands)
Non-controlling equity investment (19.99%)
October 23, 2025——$5,000 
$1.5 million secured loan receivable — Loan 1
August 12, 2025
15% (cash)
December 31, 2027$1,712 
$1.0 million secured loan receivable — Loan 2
March 15, 2026
15% (cash)
December 31, 2026$1,044 
$30.0 million secured revolving credit facility (drawn: $29.0 million)
April 10, 2026
9% PIK
April 30, 2027$29,353 
The Company elected the fair value option for these instruments and measures them at fair value at each reporting date in accordance with ASC 820. The fair value option was elected to eliminate measurement inconsistencies that would otherwise arise from applying different accounting bases across its variable interests in the Investee. The Company has classified these instruments as Level 3 measurements as their fair values are estimated using significant unobservable inputs. The fair values were determined using the discounted cash flow methodology, including key unobservable inputs: (i) market yield reflecting the credit risk, (ii) projected cash flows, and (iii) estimated timing and amount of distributions on the equity investment.
The Company's maximum exposure to loss is limited to the carrying amounts above. On July 3, 2026, the Company amended the secured revolving credit facility agreement (the “Credit Agreement”) to increase available aggregate principal amount from $30.0 million to $50.0 million, subject to borrowing base availability, satisfaction of conditions precedent, and lender approval mechanics under the Credit Agreement, as defined. Advances under the Credit Agreement are restricted to permitted expenditures, as defined. The outstanding balance under the Credit Agreement will increase over time as payment in kind (“PIK”) interest at 9.0% per annum is capitalized quarterly to the principal balance prior to maturity.
Changes in fair value of the equity investment and Credit Agreement, and interest income on loan receivables (accounted for at amortized cost), are recognized within Other income (expense), net, in the condensed consolidated statements of operations. Loan 2 and the secured revolving credit facility are included within Prepaid expenses and other current assets and Loan 1 and the non-controlling equity investment are included in Other long-term assets.
Warranty Obligations
Fair Value Option for Warranty Obligations Related to Products Sold Since January 1, 2014
The Company made an irrevocable election to account for all eligible warranty obligations associated with products sold since January 1, 2014 at fair value. This election was made to reflect the underlying economics of the time value of money for an obligation that will be settled over an extended period of up to 25 years. The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of return rates and replacement costs, the Company used certain Level 3 inputs, which are unobservable and significant to the overall fair value measurement. Such additional assumptions are based on the Company’s credit-adjusted risk-free rate (“discount rate”) and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation.
The following table provides information regarding changes in non-financial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs designated as Level 3 for the periods indicated:
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
(In thousands)
Balance at beginning of period$185,454 $180,053 $193,222 $170,916 
Accruals for warranties issued during period6,018 7,597 11,268 14,896 
Changes in estimates(273)3,250 (6,963)7,876 
Settlements(3,808)(4,920)(7,923)(9,818)
Increase due to accretion expense3,370 3,246 6,882 6,306 
Change in profit element and risk premium— — (3,526)781 
Change in discount rate(3,332)(5,715)(3,332)(5,715)
Other(1,982)(1,332)(4,181)(3,063)
Balance at end of period$185,447 $182,179 $185,447 $182,179 
Quantitative and Qualitative Information about Level 3 Fair Value Measurements
As of June 30, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 were as follows:
Percent Used
(Weighted Average)
Item Measured at Fair ValueValuation TechniqueDescription of Significant Unobservable InputJune 30,
2026		December 31,
2025
Warranty obligations for products sold since January 1, 2014Discounted cash flowsProfit element and risk premium14.9%17.5%
Credit-adjusted risk-free rate7.5%7.3%
Sensitivity of Level 3 Inputs - Warranty Obligations
Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on the requirements of a third-party participant willing to assume the Company’s warranty obligations, which decreased in the six months ended June 30, 2026, contributing to a $3.5 million change in warranty benefit captured in “Change in profit element and risk premium” in the table above. The discount rate is determined by reference to the Company’s own credit standing at the fair value measurement date, which increased in the three and six months ended June 30, 2026 and 2025 due to the increase in the risk free rate and market spreads, contributing to the $3.3 million and $5.7 million, respectively, change in warranty benefit captured in “Change in discount rate” in the table above. Under the expected present value technique, increasing the profit element and risk premium input by 100 basis points would result in a $1.4 million increase to the liability. Decreasing the profit element and risk premium by 100 basis points would result in a $1.4 million reduction to the liability. Increasing the discount rate by 100 basis points would result in a $12.4 million decrease to the liability. Decreasing the discount rate by 100 basis points would result in a $13.9 million increase to the liability.