v3.26.1
CONVERTIBLE DEBT
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
CONVERTIBLE DEBT CONVERTIBLE DEBT
The composition of the Company’s convertible senior notes are as follows (in thousands):
June 30, 2026December 31, 2025
0.50% convertible senior notes due 2032
$525,000 $— 
2.25% convertible senior notes due 2029
94,875 316,250 
Unamortized debt issuance costs - 0.50% convertible senior notes due 2032
(15,906)— 
Unamortized debt issuance costs - 2.25% convertible senior notes due 2029
(1,188)(4,526)
Total convertible senior notes, net of unamortized debt issuance costs$602,781 $311,724 
Convertible Senior Notes Due 2032
On May 11, 2026, the Company completed a registered underwritten public offering of $525.0 million aggregate principal amount of 0.50% Convertible Senior Notes due 2032 (“2032 Notes”), which includes $50.0 million aggregate principal amount of 2032 Notes sold pursuant to the full exercise of the underwriters’ over-allotment option. The Company issued the 2032 Notes under an indenture, dated as of May 11, 2026, as supplemented by the first supplemental indenture, dated as of May 11, 2026 (collectively, the “2032 Indenture”). The Company received net proceeds from the issuance of the 2032 Notes of $509.3 million, after deducting commissions and offering expenses of $16.3 million. The 2032 Notes will mature on May 15, 2032, unless earlier repurchased, redeemed, or converted. The 2032 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 0.50%, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2026.
At June 30, 2026, accrued interest on the 2032 Notes of $0.4 million is included in accrued expenses in the accompanying Consolidated Balance Sheets. The 2032 Notes comprise the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness, including the 2029 Notes; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2032 Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, of the Company's subsidiaries.
Holders may convert their 2032 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 per share of the Company’s common stock for each of at least 20 trading days, whether or not consecutive, during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on the applicable trading day; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $1,000 principal amount of 2032 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions of the Company’s common stock; (4) if the Company calls the 2032 Notes for redemption; and (5) at any time from, and including, February 17, 2032 until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate for the 2032 Notes is 15.4078 shares of the Company’s common stock per $1,000 principal amount of 2032 Notes, which represents an initial conversion price of approximately $64.90 per share. If a “make-whole fundamental change” (as defined in the 2032 Indenture) occurs, then the Company will, in certain circumstances, increase the conversion rate for a specified period of time.
The 2032 Notes will be redeemable, in whole or in part at the Company’s option at any time, and from time to time, on or after May 21, 2029 and, in the case of any partial redemption, on or before the 30th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2032 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding 2032 Notes unless at least $75.0 million aggregate principal amount of 2032 Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. In addition, calling any 2032 Note for redemption will constitute a make-whole fundamental change with respect to that 2032 Note, in which case the conversion rate applicable to the conversion of that 2032 Note will be increased in certain circumstances if it is converted after it is called for redemption. If a fundamental change (as defined in the 2032 Indenture) occurs, then, except as described in the 2032 Indenture, holders may require the Company to repurchase their 2032 Notes at a cash repurchase price equal to the principal amount of the 2032 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
The Company incurred approximately $16.3 million of debt issuance costs relating to the issuance of the 2032 Notes, which were recorded as a reduction to the 2032 Notes on the Consolidated Balance Sheets. The debt issuance costs are being amortized and recognized as additional interest expense over the expected life of the 2032 Notes using the effective interest method. The Company determined the expected life of the debt is equal to the six-year term of the 2032 Notes. The effective interest rate on the 2032 Notes is 1.0%.
Convertible Senior Notes Due 2029
On March 11, 2022, the Company completed a registered underwritten public offering of $316.3 million aggregate principal amount of 2.25% Convertible Senior Notes due 2029 (“2029 Notes”), which includes $41.3 million aggregate principal amount of 2029 Notes sold pursuant to the full exercise of the underwriters’ option to purchase additional 2029 Notes. The Company issued the 2029 Notes under an indenture, dated as of September 10, 2018, as
supplemented by the second supplemental indenture, dated as of March 11, 2022 (collectively, the “2029 Indenture”). The Company received net proceeds from the issuance of the 2029 Notes of $306.4 million, after deducting commissions and offering expenses of $9.9 million. The 2029 Notes will mature on March 1, 2029, unless earlier repurchased, redeemed, or converted. The 2029 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 2.25%, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2022.
At June 30, 2026, accrued interest on the 2029 Notes of $0.7 million is included in accrued expenses in the accompanying Consolidated Balance Sheets. The 2029 Notes comprise the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness, including the 2032 Notes; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2029 Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, of the Company's subsidiaries.
Holders may convert their 2029 Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2022 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock for each of at least 20 trading days, whether or not consecutive, during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on the applicable trading day; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions of the Company’s common stock; (4) if the Company calls the 2029 Notes for redemption; and (5) at any time from, and including, December 1, 2028 until the close of business on the scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate for the 2029 Notes is 31.3740 shares of the Company’s common stock per $1,000 principal amount of 2029 Notes, which represents an initial conversion price of approximately $31.87 per share. If a “make-whole fundamental change” (as defined in the 2029 Indenture) occurs, then the Company will, in certain circumstances, increase the conversion rate for a specified period of time.
The 2029 Notes will be redeemable, in whole or in part at the Company’s option at any time, and from time to time, on or after March 2, 2026 and, in the case of any partial redemption, on or before the 40th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding 2029 Notes unless at least $100.0 million aggregate principal amount of 2029 Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. In addition, calling any 2029 Note for redemption will constitute a make-whole fundamental change with respect to that 2029 Note, in which case the conversion rate applicable to the conversion of that 2029 Note will be increased in certain circumstances if it is converted after it is called for redemption. If a fundamental change (as defined in the 2029 Indenture) occurs, then, except as described in the 2029 Indenture, holders may require the Company to repurchase their 2029 Notes at a cash repurchase price equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
The Company incurred approximately $9.9 million of debt issuance costs relating to the issuance of the 2029 Notes, which were recorded as a reduction to the 2029 Notes on the Consolidated Balance Sheets. The debt issuance costs are being amortized and recognized as additional interest expense over the expected life of the 2029 Notes using the effective interest method. The Company determined the expected life of the debt is equal to the seven-year term of the 2029 Notes. The effective interest rate on the 2029 Notes is 2.74%.
On May 11, 2026, the Company completed its repurchase of $221.4 million aggregate principal amount of 2029 Notes for cash, including accrued and unpaid interest, for a total of $350.9 million. The Company evaluated the transaction in accordance with amended accounting guidance under ASU 2024-04 and accounted for the repurchase as an induced conversion. As a result of the repurchase, the Company recognized inducement expense of $40.0 million, which was recorded as other expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2026. The inducement expense primarily represents the difference between the if-converted value of the 2029 Notes and the fair value of the 2029 Notes at the time that the debt repurchase terms were accepted by noteholders. The remaining $91.3 million of the premium, which represents the difference between the if-converted value and carrying value of the repurchased 2029 Notes and $2.8 million unamortized debt issuance costs related to the repurchased 2029 Notes were accounted for as reductions to additional paid-in capital in the Consolidated Balance Sheet. After giving effect to the repurchase, the total remaining principal amount outstanding under the 2029 Notes as of June 30, 2026 was $94.9 million.
The 2029 Notes and 2032 Notes are accounted for in accordance with ASC 470-20, Debt with conversion and Other Options (“ASC 470-20”) and ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 815-40, to qualify for equity classification (or nonbifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of equity classification guidance. Based upon the Company’s analysis, it was determined that the 2029 Notes and 2032 Notes do not contain embedded features requiring recognition as derivatives and bifurcation, and therefore are measured at amortized cost and recorded as liabilities on the Consolidated Balance Sheets.
The 2029 Notes and 2032 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. There were no events of default for the 2029 Notes or 2032 Notes at June 30, 2026.
The 2029 Notes and 2032 Notes are classified as long-term convertible debt on the Company's Consolidated Balance Sheets at June 30, 2026.
Convertible Senior Notes Due 2025
On September 10, 2018, the Company completed a registered underwritten public offering of $276.0 million aggregate principal amount of 2.50% Convertible Senior Notes due 2025 ("2025 Notes"), and entered into a base indenture and supplemental indenture agreement (collectively, the "2025 Indenture") with respect to the 2025 Notes.
The net proceeds from the issuance of the 2025 Notes were approximately $267.2 million, after deducting commissions and the offering expenses of $8.8 million payable by the Company. On March 11, 2022, the Company completed its repurchase of $207.1 million aggregate principal amount of 2025 Notes for cash, including accrued and unpaid interest, for a total of $213.8 million. After giving effect to the repurchase, the total remaining principal amount outstanding under the 2025 Notes was $68.9 million. On September 15, 2025, the 2025 Notes matured and the Company repaid the remaining principal amount outstanding of $68.9 million plus accrued interest.
Interest Expense
The following table sets forth total interest expense recognized related to the 2025, 2029 and 2032 Notes (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Contractual interest expense$1,438 $2,210 $3,217 $4,419 
Amortization of debt issuance costs541 433 895 866 
Total interest expense$1,979 $2,643 $4,112 $5,285 
Total interest expense recognized for the three and six months ended June 30, 2026 was $2.1 million and $4.4 million, respectively, and $2.8 million and $5.7 million for the three and six months ended June 30, 2025, respectively.