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FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
PROVISION FOR INCOME TAXES
The Company determined the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising during the quarter. The Company’s effective tax rates for the three and nine months ended September 30, 2026 were 0.06% and (0.04)%, respectively. The Company’s effective tax rates for the three and nine months ended September 30, 2025 were 0.10% and (0.13)%, respectively. In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative adjustment is recorded in that quarter. The Company's quarterly income tax provision and quarterly estimate of the annual effective tax rate are subject to volatility due to several factors, including the Company’s ability to accurately predict the proportion of the Company’s loss before provision for income taxes in multiple jurisdictions, the tax effects of the Company’s stock-based compensation, and the effects of its foreign entities.
The Company had no unrecognized tax benefits, and no related interest or penalties were recognized, during the three and nine months ended September 30, 2026 and 2025.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The short-term nature of the Company’s cash and cash equivalents, accounts receivable and current liabilities causes each of their carrying values to approximate fair value for all periods presented.
The following table presents the Company’s fair value hierarchy for financial instruments (in thousands):
September 30, 2026
December 31, 2025
Level 1
Level 2Level 3TotalLevel 1Level 2Level 3Total
Recurring:
Assets:
Money market funds$492,550 $— $— $492,550 $185,050 $— $— $185,050 
Marketable equity securities$— $5,497 $— $5,497 $— $— $— $— 
Total$492,550 $5,497 $— $498,047 $185,050 $— $— $185,050 
Liabilities:
Earnout liability
$— $— $— $— $— $— $22,632 $22,632 
Total
$— $— $— $— $— $— $22,632 $22,632 
Nonrecurring:
Preferred equity investment$— $— $534 $534 $— $— $— $— 
Total$— $— $534 $534 $— $— $— $— 
Marketable equity securities are measured at fair value using the quoted market price of Magnachip’s common stock. Because the shares were not yet registered for resale at September 30, 2026, they are classified within Level 2. The preferred equity investment was measured at fair value on a nonrecurring basis in connection with the impairment assessment and classified within Level 3.
During the third quarter of 2026, the Company identified impairment indicators related to a preferred equity investment, including the investee’s limited liquidity, continuing operating losses and cash outflows, dependence on additional financing and the failure of an anticipated financing transaction to close. The Company estimated the fair value of the investment using a probability-weighted scenario model under the income approach. Significant unobservable inputs included the probabilities assigned to potential liquidity and exit outcomes, estimated exit values, the timing of those outcomes, additional financing expected to rank senior to the Company’s investment, potential dilution and a discount rate. Based on this valuation, the Company estimated the fair value of the investment at $0.5 million and recognized a noncash impairment loss of $7.2 million in other income (expense), net during the three and nine months ended September 30, 2026.
See Note 15, “Related Party Transactions and Equity Investments,” for additional information.