v3.26.1
Fair Value Measurement
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
The following tables summarize significant assets and liabilities measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets for each of the fair value measurement levels (in thousands):
Fair Value Measurement at Reporting Date Using
June 30, 2026Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$190,793 $— $— $190,793 
Other current assets:
Interest rate swaps$— $6,025 $— $6,025 
Heating oil derivatives— 1,077 — 1,077 
Total assets$190,793 $7,102 $— $197,895 
Current liabilities:
Embedded conversion option derivative liability$— $— $630,473 $630,473 
Total liabilities$— $— $630,473 $630,473 
Fair Value Measurement at Reporting Date Using
December 31, 2025Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$231,865 $— $— $231,865 
Other current assets:
Interest rate swaps$— $830 $— $830 
Total assets$231,865 $830 $— $232,695 
Accrued and other current liabilities:
Heating oil derivatives$— $122 $— $122 
Total liabilities$— $122 $— $122 
Interest Rate Swaps
In September 2025, we entered into two interest rate swaps designated as cash flow hedges with an effective date of January 2026. The two cash flow hedges had a combined initial notional amount of $350 million and mature in January of 2029. The interest rate swaps are designed to convert the interest rate on our Term Loan (as defined below) under our Fifth Amended and Restated Credit Agreement (the “Credit Agreement”) (See Note 14) from a variable interest rate of Secured Overnight Financing Rate (“SOFR”) plus an applicable margin to a fixed rate of 3.218% plus the same applicable margin. The interest rate swap is measured at fair value on the consolidated balance sheet using the income approach, which discounts the future net cash settlements expected under the derivative contracts to a present value. These valuations primarily utilize indirectly observable inputs, including contractual terms, interest rates, and yield curves observable at commonly quoted intervals.
Commodity Derivatives
We enter into derivative contracts to reduce our price exposure to commodity price fluctuations. Our outstanding heating oil derivative contracts have maturity dates through December 2027. These contracts were not designated as hedges and are treated as mark-to-market derivative instruments through their maturity dates with gains and losses recognized in the Condensed Consolidated Statements of Operations in cost of revenue. During the three and six months ended June 30, 2026 and 2025, we recognized immaterial amounts related to the commodity derivatives.
Embedded Conversion Option Derivative Liability
On May 19, 2026 (the “Call Notice Date”), we called the outstanding $273.7 million aggregate principal amount of the 3.75% convertible senior notes due 2028 (“3.75% Convertible Notes”) for redemption on August 10, 2026, and elected to settle conversions on or after the Call Notice Date and through the close of business on August 6, 2026 by paying cash up to $2,617.40 per $1,000 principal amount of the 3.75% Convertible Notes to be converted and delivering shares of our common stock in respect of the remainder, if any, of the conversion obligation in excess thereof (the “Conversion Election”). The Conversion Election caused the embedded conversion option of the 3.75% Convertible Notes to no longer qualify for the “own-equity” scope exception under ASC 815, Derivatives and Hedging (“ASC 815”). As a result, the embedded conversion option was required to be bifurcated from the 3.75% Convertible Notes (see Note 14). The resulting derivative liability reflects the incremental value attributable to the holders' ability to convert the 3.75% Convertible Notes under the terms of the Conversion Election. As our stock price increases or decreases, the economic benefit associated with the conversion option increases or decreases, resulting in a higher or lower derivative value. The derivative liability was measured at fair value upon bifurcation and as of June 30, 2026 with changes in fair value recognized in the Condensed Consolidated Statements of Operations in loss on convertible debt transactions, net.
Rollforward of Level 3 Derivative Liability (in thousands):
Fair value at May 19, 2026$527,863 
Loss on derivative remeasurement102,610 
Fair value as of June 30, 2026$630,473 
The embedded conversion option derivative liability is measured at fair value on the consolidated balance sheet using a with-and-without approach. Under this methodology, the fair value of the 3.75% Convertible Notes including the conversion option was based on the observable market price of the 3.75% Convertible Notes as of June 30, 2026. The fair value of the 3.75% Convertible Notes excluding the conversion option was estimated using a discounted cash flow analysis
to determine the value of a comparable non-convertible debt instrument. Certain significant assumptions that are not directly observable in the market place were utilized, including the market yield that investors would require to hold a comparable Granite debt instrument and assumptions regarding the potential variability of such yields over time.
Unobservable InputsJune 30, 2026
Market yield for comparable non-convertible debt instrument4.18%
Variability in market yields for comparable debt instruments26.0%
Other Assets and Liabilities
The carrying values and estimated fair values of financial instruments that are not required to be recorded at fair value in the Condensed Consolidated Balance Sheets were as follows:
June 30, 2026December 31, 2025
(in thousands)Fair Value HierarchyCarrying ValueFair
Value		Carrying ValueFair
Value
Assets:
Held-to-maturity marketable securities (1)
Corporate notes and bondsLevel 1$47,500 $47,522 $59,477 $59,757 
U.S. Government and agency obligationsLevel 1$— $— $10,001 $10,006 
Commercial paperLevel 1$49,871 $49,863 $39,202 $39,198 
Municipal notes and bondsLevel 1$6,901 $6,896 $11,875 $11,890 
Liabilities (including current maturities):
6.375% Senior Notes (2)
Level 2$600,000 $611,250 $— $— 
3.75% Convertible Notes (2)
Level 2$273,747 $904,705 $373,750 $950,013 
3.25% Convertible Notes (2)
Level 2$373,750 $788,979 $373,750 $597,206 
Credit Agreement - Term Loan (2)Level 3$600,000 $605,202 $600,000 $602,265 
(1) All marketable securities were classified as held-to-maturity as of the periods presented. Of the above balances, $36.9 million and $71.0 million were short-term marketable securities on our Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, respectively and $17.6 million were long-term marketable securities on our Condensed Consolidated Balance Sheets as of June 30, 2026. Our long-term marketable securities have varying maturities between one and three years.
(2) The fair values of our 6.375% senior unsecured notes due 2034 (the “6.375% Senior Notes”), our 3.25% convertible senior notes due 2030 (the “3.25% Convertible Notes”) and our 3.75% Convertible Notes are based on the median price of the notes in an active market. The fair value of the Credit Agreement is based on borrowing rates available to us for long-term loans with similar terms, average maturities and credit risk. See Note 14 for more information about our senior notes, convertible notes and the Credit Agreement.
During the six months ended June 30, 2026 and 2025, we had no material nonfinancial asset and liability fair value adjustments.