v3.26.1
Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes long-term debt, net, at June 30, 2026 and December 31, 2025 (in thousands):
 June 30, 2026December 31, 2025
0.25% Convertible Senior Notes due 2028
Principal$69,000 $345,000 
Unamortized debt discount(465)(3,071)
Unamortized debt issuance costs(11)(71)
Total 0.25% Convertible Senior Notes due 2028, net
$68,524 $341,858 
0.75% Convertible Senior Notes due 2032
Principal$316,250 $— 
Unamortized debt discount(9,455)— 
Unamortized debt issuance costs(1,078)— 
Total 0.75% Convertible Senior Notes due 2032, net
$305,717 $— 
Total long-term debt, net$374,241 $341,858 
2032 Convertible Senior Notes
On June 22, 2026, the Company completed the sale of $316.3 million aggregate principal amount of Convertible Senior Notes with a stated interest rate of 0.75% and a maturity date of July 1, 2032 (the “2032 Convertible Notes”), unless earlier converted, redeemed, or repurchased. The total net proceeds from the issuance of the 2032 Convertible Notes and exercise of the over-allotment option was approximately $305.7 million, which is net of discount of approximately $9.5 million and net offering expenses of approximately $1.1 million. Offering expenses paid in cash through June 30, 2026 totaled approximately $1.4 million, which exceeds the approximately $1.1 million of net offering expense because a portion of such payments were expected to be reimbursed to the Company subsequent to June 30, 2026. On June 22, 2026, the Company entered into an indenture (the “2026 Indenture”), with U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), governing the 2032 Convertible Notes. The Company used a portion of the net proceeds from the offering to enter into capped call transactions (as described below under “2026 Capped Call Transactions”).
Prior to April 1, 2032, noteholders may convert their 2032 Convertible Notes at their option, only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2026 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130.0% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period during which the trading price per $1,000 principal amount of 2032 Convertible Notes for each trading day of the measurement period was less than 98.0% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the 2032 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after April 1, 2032 until the close of business on the second business day immediately preceding the maturity date, noteholders may convert their 2032 Convertible Notes at any time, regardless of the foregoing circumstances.
Based on the terms of the 2032 Convertible Notes, the holders cannot convert all or a portion of their 2032 Convertible Notes in the third quarter of 2026. When a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof. As the Company is not required to settle the 2032 Convertible Notes in cash, the 2032 Convertible Notes are classified as long-term debt as of June 30, 2026.
Upon conversion, the Company will pay or deliver, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, at its election. The initial conversion rate for the 2032 Convertible Notes is 70.6140 shares of common stock per $1,000 principal amount of 2032 Convertible Notes, which is equivalent to an initial conversion price of approximately $14.16 per share of common stock. The conversion rate is subject to adjustment as described in the 2026 Indenture. In addition, if certain corporate transactions that constitute a Make-Whole Fundamental Change (as defined in the 2026 Indenture) occur prior to the maturity date, or if the Company delivers a notice of Optional Redemption or Cleanup Redemption, the Company will, in certain circumstances, temporarily increase the applicable conversion rate for holders that elect to convert their notes in connection with such transaction or notice of redemption. The value of the 2032 Convertible Notes, if converted, exceeds the principal amount by $9.6 million based on a closing stock price of $14.59 on June 30, 2026.
The Company may not redeem the 2032 Convertible Notes prior to July 6, 2029, except in the event of a Cleanup Redemption (as described below). The Company may redeem for cash all or any portion of the 2032 Convertible Notes, at its option, subject to certain limitations, on or after July 6, 2029 and on or prior to the 51st scheduled trading day immediately preceding the maturity date, if the
last reported sale price of the Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of Optional Redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides the related notice of optional redemption (such redemption, an “Optional Redemption”), at a redemption price equal to 100% of the principal amount of the 2032 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the Optional Redemption date. In addition, the Company may redeem for cash all, but not less than all, of the 2032 Convertible Notes at any time at a redemption price equal to 100% of the principal amount of the 2032 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the Cleanup Redemption date if the amount of the 2032 Convertible Notes that remains outstanding is less than 15% of the aggregate principal amount of the 2032 Convertible Notes initially issued and certain other conditions are met (such redemption, a “Cleanup Redemption”). No sinking fund is provided for the 2032 Convertible Notes.
If an event involving bankruptcy, insolvency or reorganization events with respect to the Company occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2032 Convertible Notes then outstanding will immediately become due and payable. If any other default event occurs and is continuing, then noteholders of at least 25.0% of the aggregate principal amount of the 2032 Convertible Notes then outstanding, by notice to the Company, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2032 Convertible Notes then outstanding to become due and payable immediately. If the Company undergoes a Fundamental Change (as defined in the 2026 Indenture), then noteholders may require the Company to repurchase their 2032 Convertible Notes at a cash repurchase price equal to the principal amount of the 2032 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change Repurchase Date (as defined in the 2026 Indenture).
The 2032 Convertible Notes are the Company’s senior, unsecured obligations and will be equal in right of payment with its existing and future senior, unsecured indebtedness, senior in right of payment to its existing and future indebtedness that is expressly subordinated to the 2032 Convertible Notes and effectively junior to its existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The 2032 Convertible Notes will be structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, of its subsidiaries.
The interest expense recognized on the 2032 Convertible Notes includes $0.1 million, $38,000 and $4,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three and six months ended June 30, 2026. There were no such amounts for the three and six months ended June 30, 2025. The effective interest rate on the 2032 Convertible Notes is 1.33%, which includes the interest on the 2032 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2032 Convertible Notes bear interest at a rate of 0.75% per annum, payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2027.
At June 30, 2026, the estimated fair value (Level 2) and net carrying amount of the 0.75% 2032 Convertible Notes was $395.3 million and $305.7 million, respectively. There were no such amounts at December 31, 2025.
2026 Capped Call Transactions
In connection with the 2032 Convertible Notes offering, on June 16, 2026 and June 17, 2026, the Company entered into separate, privately negotiated capped call transactions (collectively, the “2026 Capped Call Transactions”) with option counterparties pursuant to capped call confirmations at a cost of approximately $28.7 million. As the 2026 Capped Call Transactions meet certain accounting criteria, the 2026 Capped Call Transactions were classified as equity, are not accounted for as derivatives and were recorded as a reduction of the Company’s additional paid-in capital in the accompanying Consolidated Financial Statements. The 2026 Capped Call Transactions are not part of the terms of the 2032 Convertible Notes and will not affect any holders’ rights under the 2032 Convertible Notes. The 2026 Capped Call Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the 2032 Convertible Notes. The number of shares underlying the 2026 Capped Call Transactions is 22.3 million.
The cap price of the 2026 Capped Call Transactions is initially $20.98 per share of the Company’s common stock, which represents a premium of 100.0% over the closing stock price on June 16, 2026, which was $10.49 per share, and is subject to certain adjustments under the terms of the 2026 Capped Call Transactions.
By entering into the 2026 Capped Call Transactions, the Company expects to reduce the potential dilution to its common stock (or, in the event a conversion of the 2032 Convertible Notes is settled in cash, to reduce its cash payment obligation) in the event that, at the time of conversion of the 2032 Convertible Notes, its common stock price exceeds the conversion price of the 2032 Convertible Notes.
2021 Capped Call Transactions
In connection with the repurchase of a portion of its 2028 Convertible Notes (as defined below) on June 22, 2026, the Company entered into partial termination agreements with the option counterparties to unwind a portion of the capped call transactions entered into in January 2021 (collectively, the “2021 Capped Call Transactions”) in connection with the issuance of the 2028 Convertible Notes.
Under the terms of these agreements, the number of options underlying the 2021 Capped Call Transactions was reduced by an amount corresponding to the principal amount of 2028 Convertible Notes repurchased, resulting in the termination of capped call options covering $276.0 million aggregate principal amount of the 2028 Convertible Notes. Following the partial unwind, the remaining 2021 Capped Call Transactions continue to cover the capped call options associated with the remaining outstanding 2028 Convertible Notes.
In connection with the partial unwind of the 2021 Capped call Transactions, the Company received aggregate cash proceeds of approximately $0.1 million from the option counterparties, which was recorded as an increase to additional paid-in capital in the Condensed Consolidated Balance Sheets. The partial unwind of the 2021 Capped Call Transactions was treated as an equity transaction and did not result in the recognition of any gain or loss in the Consolidated Statements of Operations.
2028 Convertible Senior Notes
On January 11, 2021, the Company completed the sale of $345.0 million aggregate principal amount of Convertible Senior Notes with a stated interest rate of 0.25% and a maturity date of January 15, 2028 (the “2028 Convertible Notes”), unless earlier converted, redeemed, or repurchased. On June 22, 2026, the Company used proceeds from the 2032 Convertible Notes offering to repurchase a portion of its 2028 Convertible Notes with a net carrying amount of $274.1 million for total cash consideration of $262.9 million. As a result of the transaction, the Company recognized a gain on extinguishment of debt of $11.2 million, net of the write-off of related unamortized debt discount of $1.9 million, accrued interest of $0.3 million, and debt issuance costs of $44,000. The gain was recognized in gain on extinguishment of debt in the Consolidated Statements of Operations.
The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended March 31, 2026. Based on the terms of the 2028 Convertible Notes, the holders could not have converted all or a portion of their 2028 Convertible Notes in the second quarter of 2026. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended June 30, 2026. Based on the terms of the 2028 Convertible Notes, the holders cannot convert all or a portion of their 2028 Convertible Notes in the third quarter of 2026. The value of the 2028 Convertible Notes, if-converted, does not exceed the principal amount based on a closing stock price of $14.59 on June 30, 2026.
The interest expense recognized on the 2028 Convertible Notes includes $0.2 million, $0.4 million and $8,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended June 30, 2026. The interest expense recognized on the 2028 Convertible Notes includes $0.4 million, $0.7 million and $16,600 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the six months ended June 30, 2026. The interest expense recognized on the 2028 Convertible Notes includes $0.2 million, $0.4 million and $8,600 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended June 30, 2025. The interest expense recognized on the 2028 Convertible Notes includes $0.4 million, $0.7 million and $17,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the six months ended June 30, 2025. The effective interest rate on the 2028 Convertible Notes is 0.70%, which includes the interest on the 2028 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2028 Convertible Notes bear interest at a rate of 0.25% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2021.
At June 30, 2026, the estimated fair value (Level 2) and net carrying amount of the 0.25% Convertible Senior Notes due 2028 was $64.6 million and $68.5 million, respectively. At December 31, 2025, the estimated fair value (Level 2) and net carrying amount of the 0.25% Convertible Senior Notes due 2028 was $307.1 million and $341.9 million, respectively.
2025 Convertible Senior Notes
On May 4, 2020, the Company completed the sale of $201.3 million of Convertible Senior Notes with a stated interest rate of 1.25% and a maturity date of May 1, 2025 (the “2025 Convertible Notes”), unless earlier converted, redeemed, or repurchased. On May 1, 2025, the Company paid the outstanding principal balance on the 2025 Convertible Notes of $201.3 million and outstanding interest of $1.3 million.
The interest expense recognized on the 2025 Convertible Notes includes $0.2 million, $0.1 million and $13,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended June 30, 2025. The interest expense recognized on the 2025 Convertible Notes includes $0.8 million, $0.4 million and $52,000 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the six months ended June 30, 2025. There were no such amounts for the three and six months ended June 30, 2026. The effective interest rate on the 2025 Convertible Notes was 1.96%, which included the interest on the 2025 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2025 Convertible Notes bore interest at a rate of 1.25% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, which began on November 1, 2020.