Debt |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Debt Disclosure [Abstract] | |
| Debt | Note 6—Debt Credit Facility On June 15, 2021, the Company and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”). The Credit Facility consisted of a $450 million revolving loan facility, with a $20 million sublimit for swingline borrowings and a $15 million sublimit for the issuance of letters of credit. Under certain circumstances, the Company had the right to increase the Credit Facility by an amount not to exceed $300 million. The Credit Facility was collateralized by substantially all of the Company’s assets, including a pledge of certain of its accounts receivable, deposit accounts, intellectual property, investment property and equipment. On December 17, 2021, the Company amended the Credit Facility to expand the process for issuing letters of credit and the related invoicing, particularly with respect to letters of credit not denominated in U.S. Dollars. On February 9, 2023, the Company further amended its Credit Facility (as amended, the “Amended Credit Facility”) to transition from a variable interest rate based on the London Interbank Offered Rate (“LIBOR”) to a variable interest rate based on the Secured Overnight Financing Rate (“SOFR”). Loans under the Amended Credit Facility bore interest at a rate equal to, at the Company’s option, an annual rate of either a Base Rate or an adjusted term SOFR rate (defined as SOFR for a specified term plus a credit spread adjustment of 10 basis points, subject to a 0% floor), plus an applicable margin (“Base Rate Borrowings” and “Term SOFR Borrowings”). The Base Rate was defined as a rate per annum for any day equal to the greatest of (1) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (2) the New York Federal Reserve Bank (“NYFRB”) Rate in effect on such day plus half of 1%, and (3) the adjusted term SOFR rate for a one-month interest period on such day plus 1%. The applicable margin was between 0.25% to 1.25% for Base Rate Borrowings and between 1.25% and 2.25% for Term SOFR Borrowings based on the Company maintaining certain leverage ratios. The fee for undrawn amounts under the Amended Credit Facility ranged, based on the applicable leverage, from 0.200% to 0.350%. The Company was also required to pay customary letter of credit fees, as necessary. The Amended Credit Facility contained customary conditions to borrowings, events of default and covenants, including covenants that restricted the Company’s ability to sell assets, make changes to the nature of the Company’s business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Amended Credit Facility also required the Company to maintain compliance with a maximum ratio of consolidated funded debt to consolidated EBITDA of 3.50 to 1.00. On April 14, 2026, the Company entered into an amended and restated loan and security agreement, among the Company, as borrower, and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent and arranger (the “Restated Loan and Security Agreement”), which amends and restates the terms of the Company’s Amended Credit Facility (as so amended and restated, the “Revolving Facility”). Pursuant to the terms of the Restated Loan and Security Agreement, the Revolving Facility consists of a $750 million revolving loan facility, with a $100 million sublimit for the issuance of letters of credit and a $75 million sublimit for swingline borrowings. Under certain circumstances, including receipt of additional lender commitments, the Company has the right to increase the Revolving Facility by an additional amount not to exceed $750 million. The Restated Loan and Security Agreement is collateralized by substantially all of the Company’s assets, subject to customary exceptions and subject to a collateral release mechanism upon the Company achieving certain investment grade ratings. Loans under the Revolving Facility bear interest through maturity at a variable rate based upon, at the Company’s option, an annual rate of either a Base Rate or a term SOFR rate (defined as SOFR for a specified term, subject to a 0% floor), plus an applicable margin (“Base Rate Borrowings” and “SOFR Rate Borrowings”, respectively). The Base Rate is defined as a rate per annum for any day equal to the greatest of (1) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (2) the NYFRB Rate in effect on such day plus half of 1%, and (3) the term SOFR rate for a one-month interest period on such day plus 1%. The applicable margin ranges from 0.125% to 0.500% for Base Rate Borrowings and ranges from 1.125% to 1.500% for SOFR Rate Borrowings, depending on the Company’s total net leverage ratio. The fee for undrawn amounts under the Revolving Facility ranges from 0.125% to 0.200% depending on the Company’s total net leverage ratio. The Company is also required to pay customary letter of credit fees, as necessary. Outstanding letters of credit under the Amended Credit Facility continued in full and unchanged subsequent to the execution of the Restated Loan and Security Agreement. No outstanding debt balance existed under the Amended Credit Facility at the time of the execution of the Restated Loan and Security Agreement. The Company paid immaterial accrued interest and fees upon execution of the Restated Loan and Security Agreement. The Revolving Facility has a scheduled maturity of April 14, 2031, at which time all outstanding amounts become due and payable, subject to certain extension mechanics set forth in the Restated Loan and Security Agreement. As of June 30, 2026, the Company did not have an outstanding debt balance under the Revolving Facility. Availability under the Revolving Facility was $745 million as of June 30, 2026, which is net of outstanding letters of credit of $5 million. The Restated Loan and Security Agreement contains customary conditions to borrowings, events of default and covenants, including covenants that restrict the Company’s ability to sell all or substantially all of its assets, engage in fundamental changes, incur, create or permit to exist liens, engage in sale and leaseback transactions or permit its subsidiaries to assume or incur additional indebtedness and guarantees. The Restated Loan and Security Agreement also requires the Company to maintain compliance with a maximum ratio of consolidated funded debt, net of certain unrestricted cash and cash equivalents up to $250 million, to consolidated EBITDA of 3.50 to 1.00, subject to a temporary increase of such ratio in connection with certain material transactions. As of June 30, 2026, the Company was in compliance with all covenants.
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