Long-Term Debt |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Line of Credit Facility [Abstract] | |
| Long-Term Debt | Long-Term Debt 2030 Convertible Senior Notes In March 2025, the Company issued $225.0 million aggregate principal amount of 2.75% Convertible Senior Notes due 2030 (the “2030 Notes”). The Company received net proceeds from the offering of approximately $217.7 million. The 2030 Notes will mature on April 1, 2030, unless earlier converted, redeemed or repurchased. The 2030 Notes bear interest at the stated rate of 2.75% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2025. The 2030 Notes are convertible into solely cash or a combination of cash and shares of common stock, at the Company’s election, at an initial conversion rate of 42.6257 shares of common stock per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of $23.46003 per share of common stock. The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2030 Notes (the “2030 Notes Indenture”). Special interest and additional interest will accrue on the 2030 Notes in the circumstances and at the rates described in the 2030 Notes Indenture. The debt issuance costs are amortized to interest expense applying the effective interest method. The 2030 Notes do not contain financial maintenance covenants. The holders may convert their 2030 Notes at their option only in the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of 2030 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 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 on the Company’s common stock, as described in the 2030 Notes Indenture; (4) if the Company calls such 2030 Notes for redemption; and (5) at any time from, and including, December 1, 2029 until the close of business on the 2nd scheduled trading day immediately before the maturity date. If the Company undergoes a fundamental change (as defined in the 2030 Notes Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2030 Notes, at a fundamental change repurchase price equal to 100% of the principal amount of the 2030 Notes to be repurchased, plus any accrued and unpaid special interest and additional interest, if any, up to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their 2030 Notes in connection with such corporate event or during the relevant redemption period. The conditions described in clause (1) of the preceding sentence were satisfied in the second quarter of 2026, and accordingly, the 2030 Notes are convertible at the option of the holder thereof beginning July 1, 2026 until September 30, 2026. As of June 29, 2026, the last reported sale price of our common stock satisfied the applicable conversion threshold under the indenture governing the 2030 Notes, triggering the right of holders to elect to convert their 2030 Notes at their option during the third calendar quarter of 2026. As a result of this triggering event, we reclassified the $219.5 million carrying amount of the 2030 Notes from long-term debt to a current liability on our condensed consolidated balance sheet as of June 30, 2026. Under the terms of the indenture, we have the option to settle our conversion obligation in cash or a combination of cash and shares. If holders elect to convert their 2030 Notes and we elect to settle all or a portion of our conversion obligation in cash, we would be required to use a portion of our cash and cash equivalents and marketable securities, which totaled $54.7 million and $302.7 million, respectively, as of June 30, 2026, or seek additional financing, to fund that obligation, and if we elect to settle any portion in shares of our common stock, such issuance would dilute the ownership interests of our existing stockholders. We believe our existing cash, cash equivalents and marketable securities, together with cash expected to be provided by operating activities, would be sufficient to satisfy a cash settlement obligation with respect to the 2030 Notes if holders were to elect conversion during the current conversion period. However, the extent and timing of any such elections are outside of our control, and satisfying a significant cash settlement obligation could reduce the cash resources available to fund our other liquidity needs, including our stock repurchase program and quarterly cash dividend, and could require us to seek additional financing on terms that may not be favorable to us, or at all. The 2030 Notes are redeemable, in whole or in part (subject to certain limitations), for cash at Company’s option at any time, and from time to time, on or after April 5, 2028 and on or before the 60th scheduled trading day immediately before the maturity date, but only if (i) the 2030 Notes are “freely tradable” (as defined in the 2030 Notes Indenture) and all accrued and unpaid additional interest, if any, has been paid in full; and (ii) the last reported sale price per share of common stock is at least 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid special and additional interest, if any, to, but excluding, the redemption date. The 2030 Notes have customary provisions relating to the occurrence of “events of default” (as defined in the 2030 Notes Indenture). The occurrence of such events of default may result in the acceleration of all amounts due under 2030 Notes. No sinking fund is provided for the 2030 Notes. The 2030 Notes are general unsecured obligations of the Company and rank senior in right of payment to all of Company’s existing and future indebtedness that is expressly subordinated in the right of payment to the 2030 Notes; equal in right of payment with all of the Company’s existing and future senior, unsecured indebtedness; effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity if any, of the Company’s current or future subsidiaries. The Company accounted for the issuance of the 2030 Notes as a single liability measured at its amortized cost, as no embedded features require bifurcation and recognition as derivatives. The carrying value of the 2030 Notes, net of unamortized debt issuance costs of $5.5 million, was $219.5 million as of June 30, 2026. Interest expense related to the amortization of debt issuance costs was $1.9 million for both of the three months ended June 30, 2026 and 2025, respectively, and was $3.8 million and $2.2 million for the six months ended June 30, 2026 and 2025, respectively. The effective interest rate on the 2030 Notes is 3.43%. Commencing on July 1, 2026, the 2030 Notes became eligible for optional conversion during the third quarter of 2026. As a result, we reclassified the 2030 Notes to current liabilities from long-term debt as of June 30, 2026.
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