Convertible Notes, Net |
6 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Convertible Notes, Net | Convertible Notes, Net 2030 Notes In May 2025, the Company issued $2.75 billion aggregate principal amount of 0% Convertible Senior Notes due 2030 (the “2030 Notes”). The total proceeds from the issuance of the 2030 Notes, net of debt issuance costs, were approximately $2.72 billion. The 2030 Notes are senior, unsecured obligations of the Company and will mature on May 15, 2030, unless earlier repurchased, redeemed, or converted, and are governed by the terms of an indenture (the "Indenture"), dated as of May 30, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes do not bear regular cash interest. Special interest and additional interest, if any, may accrue on the 2030 Notes at a combined rate per annum not exceeding 0.50% upon the occurrence of certain events relating to the failure to file certain reports with the SEC or to remove certain restrictive legends from the 2030 Notes. Holders of the 2030 Notes may convert all or any portion of their 2030 Notes at their option prior to November 15, 2029, under the following circumstances: a.during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2025, if the last reported sale price per share of the Company’s Class A common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; b.during the 5 consecutive business days after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of the 2030 Notes for each trading day of such 10-day period was less than 98% of the product of the last reported sale price per share of the Company’s Class A common stock and the conversion rate on each such trading day; or c.upon the occurrence of specified corporate events or distributions on the Company’s Class A common stock, in each case, as set forth in the Indenture. Holders of the 2030 Notes may also convert their 2030 Notes (i) if the Company calls such 2030 Notes for redemption; and (ii) at any time on or after November 15, 2029 until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion of any 2030 Notes, the conversion value will be paid in cash up to at least the principal amount of the 2030 Notes being converted. Any amount of the conversion value in excess of the principal portion of such 2030 Notes may be settled in cash or shares of the Company’s Class A common stock, or a combination thereof, at the Company’s option. The 2030 Notes are convertible at an initial conversion rate of 3.425 shares of the Company's Class A common stock per $1,000 principal amount of the 2030 Notes, which is equivalent to an initial conversion price of approximately $291.97 per share of the Company's Class A common stock. The conversion rate may be subject to certain anti-dilution adjustments and/or a make-whole adjustment upon the occurrence of specified events set forth in the Indenture. As of June 30, 2026, there have been no changes to the initial conversion price of the 2030 Notes since the issuance date. Based on the closing price of the Company’s Class A common stock of $184.53 on the last trading day of the quarter, the if-converted value of the 2030 Notes did not exceed the principal value of the 2030 Notes as of June 30, 2026. The Company may not redeem the notes prior to May 20, 2028. The 2030 Notes will be redeemable, in whole or in part (subject to certain limitations set forth in the Indenture), for cash, at the Company’s option, on or after May 20, 2028 and on or before the 20th scheduled trading day immediately before the maturity date, but only if (i) the 2030 Notes are “Freely Tradable” (as defined in the Indenture), and all accrued and unpaid additional interest, if any, has been paid as of the date the Company sends the related redemption notice and (ii) the last reported sale price per share of the Company’s Class A common stock exceeds 130% of the conversion price on each of at least 20 trading days (whether or not consecutive) including the last trading day, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends such redemption notice. The redemption price will be equal to 100% of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date. In addition, calling any 2030 Notes for redemption will constitute a "Make-Whole Fundamental Change" (as defined in the Indenture) with respect to such 2030 Notes, in which case the conversion rate applicable to the conversion of such 2030 Notes will be increased in certain circumstances if it is converted after it is called for redemption. If the Company undergoes a “Fundamental Change” (as defined in the Indenture), then holders of the 2030 Notes may require the Company to repurchase for cash all or any portion of their 2030 Notes at a repurchase price equal to 100% of the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the fundamental change repurchase date. The Indenture contains customary events of default and limited covenants. No sinking fund is required to be provided for the 2030 Notes. As of June 30, 2026, none of the conditions described in the paragraphs above relating to convertibility or mandatory redemption were met. Therefore, the 2030 Notes are classified as long-term debt. The net carrying value, net of the 2030 Notes consisted of the following as of June 30, 2026 (in millions):
The effective interest rate of the 2030 Notes is 0.22% per annum. The fair value of the 2030 Notes was $2.7 billion as of June 30, 2026 and was determined based on the quote price in markets that are not active, which is considered a Level 2 valuation input. 2030 Note Hedges and Warrant Transactions In May 2025, in connection with the offering of the 2030 Notes, the Company entered into privately negotiated convertible note hedge transactions whereby the Company has the option to purchase an initial total of approximately 9.4 million shares of its Class A common stock at an initial strike price of approximately $291.97 per share (the “Note Hedges”). The total cost of the Note Hedges was approximately $680 million. In addition, the Company sold warrants whereby the holders of the warrants have the option to purchase an initial total of approximately 9.4 million shares of the Company’s Class A common stock at an initial strike price of $512.225 per share (the “Warrants”). The Company received approximately $341 million in cash proceeds from the sale of the Warrants. Both the number of shares underlying the Note Hedges and the Warrants and the strike prices of the instruments are subject to customary anti-dilution adjustments. The Note Hedges are expected generally to reduce potential dilution to the Company's Class A common stock upon the conversion of any 2030 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of any converted 2030 Notes, as the case may be, to the extent the market price per share of the Company’s Class A common stock exceeds the then-applicable strike price of the Note Hedges. The Warrants may separately have a dilutive effect with respect to the Company’s Class A common stock to the extent the market price per share of the Company’s Class A common stock exceeds the then-applicable strike price of the Warrants, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. The Note Hedges and the Warrants are equity-classified instruments as a result of being indexed to the Company’s Class A common stock and meeting equity classification criteria, and the instruments will not be remeasured in subsequent periods as long as they continue to meet these accounting criteria. The net cost of approximately $339 million for the purchase of the Note Hedges and sale of the Warrants was recorded as a reduction to additional paid-in capital in the Company’s condensed consolidated balance sheets.
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