v3.26.3
Debt
 9 Months Ended
Sep. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
Convertible Senior Notes

Issuance and Key Terms
On August 24, 2026, the Company issued $201.3 million aggregate principal amount of 0.00% convertible senior notes due in 2031 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, which included the full exercise by the initial purchasers of their option to purchase an additional $26.3 million aggregate principal amount of Notes. The Notes were issued pursuant to an indenture dated as of August 24, 2026 (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee.

The Notes are senior unsecured obligations and will mature on August 15, 2031, unless earlier converted, redeemed, or repurchased. The Indenture contains customary events of default, upon the occurrence and continuation of which the Notes may become immediately due and payable.

The Company received net proceeds of $194.3 million from the offering, after deducting debt issuance costs. The Company used $17.5 million of the net proceeds to pay the cost of the Capped Calls (as defined below) and intends to use the remainder for general corporate purposes, including capital expenditures.

Conversion
The following table presents the initial conversion terms of the Notes:
Initial Conversion Rate per $1,000 principalInitial Conversion PriceInitial Number of Shares
(in thousands)
45.5705$21.94 9,171 

The conversion rate for the Notes is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. If the Company declares a cash dividend or distribution per share equal to or greater than the applicable market price of its common stock, holders of the Notes would be entitled to receive a cash distribution based on the shares underlying the Notes without converting their Notes.

Prior to May 15, 2031, holders may convert their Notes only under specified circumstances: (1) beginning in 2027, if the price of the Company's Class A common stock is at least 130% of the conversion price for at least 20 trading days within a period of 30 consecutive trading days in the preceding calendar quarter; (2) during a specified period following 10 consecutive trading days in which the trading price of the Notes is less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the then-effective conversion rate; (3) if the Company calls the
applicable Notes for redemption; or (4) upon the occurrence of specified corporate events. Beginning May 15, 2031, holders may convert their Notes at any time through the second scheduled trading day immediately preceding the maturity date.
Upon conversion, the Company may settle its conversion obligation in cash, shares of Class A common stock, or a combination of cash and shares, at its election. In connection with a make-whole fundamental change, as defined in the Indenture, or a notice of redemption, the conversion rate will increase in certain circumstances for holders who convert their Notes in connection with the applicable event. The conversion rate may not exceed 59.2417 shares of Class A common stock per $1,000 principal amount of Notes, subject to adjustment under the Indenture.
Redemption and Repurchase Terms
•Optional Redemption: The Company may redeem the Notes for cash on or after August 20, 2029 (up to 31 trading days prior to maturity) at 100% of principal plus accrued special interest, provided the stock price reaches at least 130% of the conversion price for 20 out of 30 consecutive trading days. At least $100.0 million principal must remain outstanding after any partial redemption. No sinking fund applies.
•Fundamental Change: Holders may require the Company to repurchase their Notes for cash at 100% of principal plus accrued special interest upon a specified fundamental change.
•Event of Default: Upon the occurrence and continuation of certain events of default specified in the Indenture, the principal amount of the Notes, together with accrued and unpaid special interest, may become immediately due and payable in accordance with the acceleration provisions of the Indenture.
Carrying Amount and Interest Expense
The net carrying value of the Notes as of September 30, 2026 was as follows (in thousands):
September 30,
2026
Principal amount$201,250 
Less: unamortized debt issuance costs(6,765)
Net carrying value$194,485 
The Notes were issued at par, do not bear regular interest, and the principal amount of the Notes will not accrete; however, special interest may become payable under certain circumstances in accordance with the terms of the Indenture. Interest expense related to the Notes, consisting entirely of amortization of debt issuance costs, was $0.1 million for each of the three and nine months ended September 30, 2026. The effective interest rate on the Notes was 0.70% for the three and nine months ended September 30, 2026.

Capped Calls
In conjunction with the issuance of the Notes, the Company entered into separately negotiated capped call transactions (the "Capped Calls") with certain financial institutions at a total cost of $17.5 million. The Capped Calls initially cover approximately 9.2 million shares of the Company’s Class A common stock, subject to customary anti-dilution adjustment similar to those applicable to the Notes. The Capped Calls are generally expected to reduce potential dilution of the Company's Class A common stock upon conversion of the Notes and/or offset cash payments the Company may be required to make in excess of the principal amount of converted Notes, in each case subject to a cap. The cost of the Capped Calls is recorded in stockholders' equity as a reduction of additional paid-in capital on the condensed consolidated balance sheets. The Capped Calls are not subsequently remeasured at fair value as long as they continue to qualify for equity classification.

The Capped Calls have an initial strike price of $21.94 per share, which corresponds to the initial conversion price of the Notes, and an initial cap price of $33.76 per share, both subject to certain adjustments. Upon settlement, the Company may receive cash, shares of Class A common stock, or a combination thereof. The Capped Calls are indexed to the Company’s own stock and meet the criteria for equity classification and, therefore, qualify for the derivative scope exception.
As of September 30, 2026, the Capped Calls were out of the money and the Company would not receive shares, cash, or a combination thereof if the Capped Calls were settled as of such date. The settlement value of the Capped Calls would increase with increases in the Company’s stock price, subject to the cap price discussed above, and the settlement method is generally expected to mirror that of the Notes.
Revolving Credit Facility
The Company has a credit agreement, as amended (the “Credit Agreement”), with Citizens Bank, N.A. (the “Lender”), which includes a senior secured revolving credit facility with a total borrowing capacity of up to $50.0 million (the “Revolving Credit Facility”) for general corporate purposes and working capital needs. The Revolving Credit Facility includes a sub-limit of up to $3.0 million for the issuance of letters of credit and matures on April 30, 2030. As of September 30, 2026, the Company had no outstanding borrowings and no letters of credit under the Revolving Credit Facility and $50.0 million remained available for borrowing.
The Credit Agreement contains customary restrictive financial and operating covenants, including limitations on the Company’s ability to incur additional indebtedness, pay dividends, make certain investments, sell assets, repurchase shares up to $15.0 million in any fiscal year, and engage in other specified transactions. The Credit Agreement also requires the Company to comply with financial covenants on a quarterly basis, including (i) minimum liquidity of $30.0 million held on deposit with the Lender, over which the Company retains control and considers as cash and cash equivalents, (ii) a maximum total leverage ratio of 6.75 to 1.00 for the quarter ended September 30, 2026 and decreases over time to 3.75 to 1.00 for the quarter ending December 31, 2027 and thereafter, and (iii) a minimum fixed charge coverage ratio of 1.50 to 1.00 through the quarter ending March 31, 2027 and 1.65 to 1.00 for the quarter ending June 30, 2027 and thereafter.
The financial covenants use trailing twelve-month consolidated EBITDA, as defined under the Credit Agreement, which includes specified adjustments and exclusions. As a result, consolidated EBITDA as defined under the Credit Agreement may differ materially from Adjusted EBITDA as presented elsewhere in this report. As of September 30, 2026, the Company was in compliance with the covenants under the Credit Agreement.

The above-described terms of the Credit Agreement reflect a series of amendments, beginning April 30, 2026 through August 24, 2026.

On April 30, 2026, the Company entered into an amendment to the Credit Agreement. The amendment, among other things, (i) extended the maturity date from June 4, 2027 to June 4, 2028, (ii) reset the option that allows the Company to extend the maturity date by one year, subject to certain conditions, and (iii) modified certain negative covenants, including increasing the limit on share repurchases from up to $10.0 million to up to $15.0 million per fiscal year and increasing the limit on permitted acquisitions to up to $20.0 million of cash consideration.

On June 30, 2026, the Company entered into an amendment to the Credit Agreement that modified a negative covenant to increase the permitted indebtedness for capital leases to $150.0 million outstanding.

On August 18, 2026, the Company entered into an amendment to the Credit Agreement that permitted the Company to issue the Notes and enter into the related Capped Calls.
On August 24, 2026, in connection with the closing of the offering of the Notes, the Company entered into an amendment to the Credit Agreement, which resulted in the terms described above, as follows: (i) increased the total borrowing capacity of the senior secured revolving credit facility from $20.0 million to $50.0 million, (ii) extended the maturity date of the Credit Agreement from June 4, 2028 to April 30, 2030 and eliminated the one-year extension option, and (iii) modified certain financial covenants under the Credit Agreement, including by adding a new fixed charge coverage ratio test, removing the minimum consolidated EBITDA threshold, increasing the minimum liquidity requirement and revising the maximum total leverage ratio thresholds.