v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]  
Fair Value Measurements

5. FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):

 

 

Fair Value Measured as of

 

 

 

June 30, 2026

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds(1)

 

$

1,243,290

 

 

$

—

 

 

$

—

 

 

$

1,243,290

 

U.S. government and agency

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total cash, cash equivalents and restricted cash

 

$

1,243,290

 

 

$

—

 

 

$

—

 

 

$

1,243,290

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

—

 

 

 

531

 

 

 

—

 

 

 

531

 

U.S. government and agency

 

 

—

 

 

 

882,709

 

 

 

—

 

 

 

882,709

 

Total short-term investments

 

$

—

 

 

$

883,240

 

 

$

—

 

 

$

883,240

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency

 

 

—

 

 

 

840,365

 

 

 

—

 

 

 

840,365

 

Total long-term investments

 

$

—

 

 

$

840,365

 

 

$

—

 

 

$

840,365

 

Other noncurrent assets:

 

 

 

 

 

 

 

 

 

 

 

 

Strategic investments

 

 

137,268

 

 

 

—

 

 

 

71,346

 

 

 

208,614

 

Total other noncurrent assets

 

$

137,268

 

 

$

—

 

 

$

71,346

 

 

$

208,614

 

Total assets

 

$

1,380,558

 

 

$

1,723,605

 

 

$

71,346

 

 

$

3,175,509

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

 

—

 

 

 

—

 

 

 

3,035

 

 

 

3,035

 

Strategic investments

 

 

—

 

 

 

—

 

 

 

487

 

 

 

487

 

Total accrued expenses and other current liabilities

 

$

—

 

 

$

—

 

 

$

3,522

 

 

$

3,522

 

Other noncurrent liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

 

—

 

 

 

—

 

 

 

17,403

 

 

 

17,403

 

Total other noncurrent liabilities

 

$

—

 

 

$

—

 

 

$

17,403

 

 

$

17,403

 

Warrant liabilities

 

$

44,071

 

 

$

—

 

 

$

3,008,327

 

 

$

3,052,398

 

Total liabilities

 

$

44,071

 

 

$

—

 

 

$

3,029,252

 

 

$

3,073,323

 

 

 

 

Fair Value Measured as of

 

 

 

December 31, 2025

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds(1)

 

$

538,195

 

 

$

—

 

 

$

—

 

 

$

538,195

 

U.S. government and agency

 

 

—

 

 

 

499,553

 

 

 

—

 

 

 

499,553

 

Total cash, cash equivalents and restricted cash

 

$

538,195

 

 

$

499,553

 

 

$

—

 

 

$

1,037,748

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate notes and bonds

 

 

—

 

 

 

1,999

 

 

 

—

 

 

 

1,999

 

U.S. government and agency

 

 

—

 

 

 

1,359,292

 

 

 

—

 

 

 

1,359,292

 

Total short-term investments

 

$

—

 

 

$

1,361,291

 

 

$

—

 

 

$

1,361,291

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency

 

 

—

 

 

 

944,643

 

 

 

—

 

 

 

944,643

 

Total long-term investments

 

$

—

 

 

$

944,643

 

 

$

—

 

 

$

944,643

 

Other noncurrent assets:

 

 

 

 

 

 

 

 

 

 

 

 

Strategic investments

 

 

—

 

 

 

—

 

 

 

61,010

 

 

$

61,010

 

Total other noncurrent assets

 

$

—

 

 

$

—

 

 

$

61,010

 

 

$

61,010

 

Total assets

 

$

538,195

 

 

$

2,805,487

 

 

$

61,010

 

 

$

3,404,692

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liabilities

 

$

44,168

 

 

$

—

 

 

$

2,427,409

 

 

$

2,471,577

 

Total liabilities

 

$

44,168

 

 

$

—

 

 

$

2,427,409

 

 

$

2,471,577

 

 

(1)
Includes money market funds associated with the Company’s overnight investment sweep account and cash collateralizing the Company’s financial guarantees and certain other obligations.

The following table summarizes changes in Level 3 assets and liabilities measured at fair value for the six months ended June 30, 2026 (in thousands):

 

 

 

Strategic Investments(1)

 

 

Contingent Consideration(2)

 

 

Warrant Liabilities(3)

 

Fair value as of December 31, 2025

 

$

61,010

 

 

$

—

 

 

$

(2,427,409

)

Purchases

 

 

30,500

 

 

 

—

 

 

 

—

 

Issuances

 

 

—

 

 

 

(24,502

)

 

 

—

 

Transfer out of Level 3(4)

 

 

(22,846

)

 

 

—

 

 

 

—

 

Changes in fair value included in net income (loss)

 

 

2,195

 

 

 

4,064

 

 

 

(580,918

)

Changes in fair value included in other comprehensive income (loss)

 

 

—

 

 

 

—

 

 

 

—

 

Fair value as of June 30, 2026

 

$

70,859

 

 

$

(20,438

)

 

$

(3,008,327

)

 

(1)
The change in fair value of strategic investments is recorded in other income (expense), net in the condensed consolidated statements of operations.
(2)
The change in fair value of contingent consideration is recorded in general and administrative expenses in the condensed consolidated statements of operations.
(3)
The change in fair value of warrant liabilities is recorded in gain (loss) on change in fair value of warrant liabilities in the condensed consolidated statements of operations.
(4)
During the three months ended June 30, 2026, the Company transferred one of its strategic investments from Level 3 to Level 1 due to the conversion of the convertible debt securities into publicly-traded equity securities.

Warrant Liabilities

The Company’s warrant liabilities are comprised of the public warrants and the Series A and Series B private warrants. As of June 30, 2026, there were 1,065,043 public warrants outstanding and there were 79,053,330 of Series A and Series B private warrants outstanding. No warrants have been redeemed by the Company as of June 30, 2026.

The fair value of the Series A and Series B private warrants was determined using Level 3 inputs. Management determined the fair value of the Series A and Series B private warrants using unobservable inputs in the Black-Scholes option-pricing model. Inherent in the valuation were assumptions related to the expected term, risk-free interest rate, dividend yield, and expected stock-price volatility, which was determined based on the Company’s historical and implied stock price volatility. The expected stock-price volatility was 100.0% and 95.0% as of June 30, 2026 and December 31, 2025, respectively.

Contingent Consideration

The fair value of the revenue milestone contingent consideration, which is liability-classified, was determined using Level 3 inputs. Management determined the fair value of the revenue milestone contingent consideration using unobservable inputs in the Monte Carlo simulation model, including forecasted revenue, expected payment timing, discount rate, and revenue volatility, which was determined based on the historical revenue volatility of comparable peer companies. The discount rate was 6.6% and 5.8% as of June 30, 2026 and the acquisition date, respectively, and the revenue volatility was 30.0% and 25.0% as of June 30, 2026 and the acquisition date, respectively.

The fair value of the technical milestone contingent consideration, which is equity-classified, was determined using Level 3 inputs. Management determined the fair value of the technical milestone contingent consideration as of the acquisition date using unobservable inputs in a scenario-based model, including probability of achievement ranging from 50% to 95%.

Strategic Investments

The Company enters into strategic investment agreements (“Investment Agreements”) to purchase equity securities of publicly-traded companies and to purchase equity securities, convertible debt securities, and SAFE investments of privately-held companies (each, an “Investee”). Strategic investments are composed of the following (in thousands):

 

 

 

June 30,
2026

 

 

December 31,
2025

 

Publicly-traded equity securities

 

$

137,268

 

 

$

—

 

Convertible debt securities

 

 

23,701

 

 

 

36,000

 

Privately-held equity securities

 

 

30,000

 

 

 

30,000

 

SAFE investments

 

 

47,159

 

 

 

25,000

 

Total strategic investments

 

$

238,128

 

 

$

91,000

 

 

The Company recognized net unrealized gains of $63.0 million and $50.2 million for the three and six months ended June 30, 2026, respectively, on publicly-traded equity securities. The Company has agreed to enter into a customary lock-up agreements with respect to its investments in publicly-traded equity securities, which are expected to lapse within 6 to 15 months. The fair values of publicly-traded equity securities are based on observable inputs and are classified as Level 1 in the hierarchy, and the fair values of convertible debt securities and SAFEs are based on unobservable inputs and are classified as Level 3 in the hierarchy.

In connection with the Investment Agreements, each Investee and the Company entered into a commercial contract for access to the Company’s products and services. The Company assessed the commercial contracts under the guidance within ASC 606, Revenue from Contracts with Customers, as well as the commercial substance of the arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under the contract. Based on its assessment, the Company concluded the commercial contracts are within the scope of ASC 606 and the Company will apply the principles within ASC 606 to measure and recognize revenue. During the three and six months ended June 30, 2026, the Company recognized $3.4 million and $8.7 million of revenue from the commercial contracts, respectively.