v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Measurements  
Fair Value Measurements

Note 4. Fair Value Measurements

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.

The valuation of assets and liabilities is subject to fair value measurements using a three-tiered approach and fair value measurements are classified and disclosed by the Company in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands):

 

 

 

 

 

At June 30, 2026

 

 

 

 

 

Quoted prices in

 

 

 

 

 

 

 

 

 

 

 

active markets

 

 

Significant

 

 

Significant

 

 

June 30,

 

 

for identical

 

 

other observable

 

 

unobservable

 

 

2026

 

 

assets (Level 1)

 

 

inputs (Level 2)

 

 

inputs (Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds (i)

 

$

25,440

 

 

$

25,440

 

 

$

-

 

 

$

-

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury securities (ii)(v)

 

 

75,695

 

 

 

-

 

 

 

75,695

 

 

 

-

 

Bank certificates of deposit (ii)

 

 

40,872

 

 

 

-

 

 

 

40,872

 

 

 

-

 

Corporate notes (ii)

 

 

46,264

 

 

 

-

 

 

 

46,264

 

 

 

-

 

Commercial paper (ii)(vi)

 

 

709

 

 

 

-

 

 

 

709

 

 

 

-

 

Asset-backed securities (ii)

 

 

12,691

 

 

 

-

 

 

 

12,691

 

 

 

-

 

Municipal bonds (ii)

 

 

309

 

 

 

-

 

 

 

309

 

 

 

-

 

Investments held for deferred compensation plans (iii)

 

 

23,428

 

 

 

-

 

 

 

23,428

 

 

 

-

 

Total Assets

 

$

225,408

 

 

$

25,440

 

 

$

199,968

 

 

$

-

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deferred compensation plans (iv)

 

$

22,348

 

 

$

-

 

 

$

22,348

 

 

$

-

 

Contingent consideration (vii)

 

 

8,714

 

 

 

-

 

 

 

-

 

 

 

8,714

 

Total Liabilities

 

$

31,062

 

 

$

-

 

 

$

22,348

 

 

$

8,714

 

 

(i)
Included in cash and cash equivalents with a maturity of three months or less from date of purchase on the condensed consolidated balance sheets.
(ii)
Included in short-term investments on the condensed consolidated balance sheets.
(iii)
Included in deposits and other assets on the condensed consolidated balance sheets.
(iv)
Included in other liabilities on the condensed consolidated balance sheets.
(v)
Two U.S. treasury securities totaling $4,090 (in thousands) are included in cash and cash equivalents on the condensed consolidated balance sheets, as the investment has a maturity of three months or less from the date of purchase on the consolidated balance sheets.
(vi)
One commercial paper security totaling $709 (in thousands) is included in cash and cash equivalents on the condensed consolidated balance sheets, as the investment has a maturity of three months or less from the date of purchase on the consolidated balance sheets.
(vii)
Of the total $8.7 million, $7.8 million and $0.9 million are included in other liabilities and accrued liabilities, respectively, on the condensed consolidated balance sheets.

 

 

 

 

 

At December 31, 2025

 

 

 

 

 

Quoted prices in

 

 

 

 

 

 

 

 

 

 

 

active markets

 

 

Significant

 

 

Significant

 

 

December 31,

 

 

for identical

 

 

other observable

 

 

unobservable

 

 

2025

 

 

assets (Level 1)

 

 

inputs (Level 2)

 

 

inputs (Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds (i)

 

$

28,301

 

 

$

28,301

 

 

$

-

 

 

$

-

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury securities (ii)

 

 

67,170

 

 

 

-

 

 

 

67,170

 

 

 

-

 

Commercial paper (ii)

 

 

10,813

 

 

 

-

 

 

 

10,813

 

 

 

-

 

Bank certificates of deposit (ii)

 

 

61,006

 

 

 

-

 

 

 

61,006

 

 

 

-

 

Corporate notes (ii)

 

 

36,110

 

 

 

-

 

 

 

36,110

 

 

 

-

 

Asset-backed securities (ii)

 

 

10,623

 

 

 

-

 

 

 

10,623

 

 

 

-

 

      Municipal bonds (ii)

 

 

2,225

 

 

 

-

 

 

 

2,225

 

 

 

-

 

Investments held for deferred compensation plans (iii)

 

 

19,541

 

 

 

-

 

 

 

19,541

 

 

 

-

 

Total Assets

 

$

235,789

 

 

$

28,301

 

 

$

207,488

 

 

$

-

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deferred compensation plans (iv)

 

$

18,493

 

 

$

-

 

 

$

18,493

 

 

$

-

 

Contingent consideration (v)

 

 

9,265

 

 

 

-

 

 

 

-

 

 

 

9,265

 

Total Liabilities

 

$

27,758

 

 

$

-

 

 

$

18,493

 

 

$

9,265

 

 

(i)
Included in cash and cash equivalents with a maturity of three months or less from date of purchase on the condensed consolidated balance sheets.
(ii)
Included in short-term investments on the condensed consolidated balance sheets.
(iii)
Included in deposits and other assets on the condensed consolidated balance sheets.
(iv)
Included in other liabilities on the condensed consolidated balance sheets.
(v)
Of the total $9.3 million, $8.7 million and $0.6 million are included in other liabilities and accrued liabilities, respectively, on the condensed consolidated balance sheets.

Money market funds are highly-liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

U.S. treasury securities, bank certificates of deposit, commercial paper, municipal bonds, corporate notes and asset-backed securities are measured at fair value using Level 2 inputs. The Company reviews trading activity and pricing for these investments as of each measurement date. Pursuant to the Company’s deferred compensation plan (the Deferred Compensation Plan), the Company has also established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The investments of the rabbi trust and Deferred Compensation Plan liability consist of company-owned life insurance policies (COLIs) and the pricing on these investments can be independently evaluated. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from third party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level 2 of the fair value hierarchy.

The Company’s acquisitions may include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on significant inputs not observable in the market, which include the present value of the contingent payments to be made using a Monte Carlo simulation model, computation of net sales volatility, discount rates derived using internal rate of return analysis, the probability and timing of achieving certain future milestones, and to a lesser extent, Glaukos’ credit rating. Contingent consideration represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes a market participant would make. The Company assesses these estimates on an ongoing basis as it obtains additional data impacting the assumptions. Should actual results increase or decrease as compared to the assumptions used in the analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Any changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within other (expense) income, net in the condensed consolidated statements of operations.

As of June 30, 2026 and December 31, 2025 the contingent consideration liability was $8.7 million and $9.3 million, respectively. A roll forward of activity for the six months ended June 30, 2026 is as follows:

 

 

 

June 30,

 

 

 

2026

 

Balance at December 31, 2025

 

$

9,265

 

Additions

 

 

-

 

Payments

 

 

(551

)

Balance at June 30, 2026

 

$

8,714

 

There were no transfers between levels within the fair value hierarchy during the periods presented.