FAIR VALUE MEASUREMENTS AND CONCENTRATIONS OF CREDIT RISK |
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| FAIR VALUE MEASUREMENTS AND CONCENTRATIONS OF CREDIT RISK | 7.FAIR VALUE MEASUREMENTS AND CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company primarily invests its excess cash in low-risk, highly liquid U.S. Treasury securities and money market funds with major financial institutions. Fair Value Measurements The Company’s financial assets that are measured at fair value on a recurring basis are summarized as follows:
The Company’s investments in cash, money market funds and other cash equivalents that are highly liquid and low-risk have been classified as Level 1 as they are valued utilizing quoted prices (unadjusted) in active markets for identical assets. Investments in other cash equivalents, asset-backed securities, commercial paper, corporate bonds and U.S. Government debt securities that are valued using quoted prices in less active markets or other directly or indirectly observable inputs are classified as Level 2. Fair values of corporate bonds and U.S. Government debt securities were derived from a consensus or weighted-average price based on input of market prices from multiple sources for the reporting period. With regard to commercial paper, all of the securities had high credit ratings and one year or less to maturity; therefore, fair value was derived from accretion of purchase price to face value over the term of maturity or quoted market prices for similar instruments, if available. As of December 31, 2025, the investment in private company, as described in Note 6. Investments, was classified as Level 3 in the fair value hierarchy because it relied significantly on inputs that were unobservable in the market. The Company assessed the fair value of this investment by reviewing the private company’s recent operating results and trends and confirming the absence of any observable transactions of its equity securities and other publicly available data. Valuations of private companies are inherently more complex due to the lack of readily available market data. As such, the Company believes that providing a sensitivity analysis is not practicable. During the three and six months ended June 30, 2026, there were no transfers of financial assets between Level 1 and Level 2. There were no transfers of Level 3 instruments during the three and six months ended June 30, 2026. Concentrations of Credit Risk Significant customers are those that represent more than 10% of the Company’s total revenue for the applicable reporting period or more than 10% of the gross accounts receivable balance or gross unbilled receivables balance at each balance sheet date. For the three and six months ended June 30, 2026, the Company had one customer that accounted for $4.0 million and $8.0 million, or 26% and 27%, of total revenue, respectively. For the three months ended June 30, 2025, two customers accounted for $6.5 million and $2.1 million, or 34% and 11%, of total revenue, respectively. For the six months ended June 30, 2025, one customer accounted for $11.4 million, or 33%, of total revenue. As of June 30, 2026, the Company had one customer that accounted for $3.2 million, or 39%, of gross accounts receivable, compared to $3.9 million, or 47%, as of December 31, 2025. As of June 30, 2026, the Company had one customer that accounted for $0.8 million, or 42% of gross unbilled receivables and a customer that accounted for $0.2 million, or 12%, respectively, of gross unbilled receivables. As of December 31, 2025, one customer accounted for $0.7 million, or 36%, of gross unbilled receivables. |
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