v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 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

 

 

 

September 30, 2026

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds(1)

 

$

216,474

 

 

$

—

 

 

$

—

 

 

$

216,474

 

Certificates of deposit

 

 

—

 

 

 

534

 

 

 

 

 

 

534

 

U.S. government and agency

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total cash, cash equivalents and restricted cash

 

$

216,474

 

 

$

534

 

 

$

—

 

 

$

217,008

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

U.S. government and agency

 

 

—

 

 

 

788,458

 

 

 

—

 

 

 

788,458

 

Total short-term investments

 

$

—

 

 

$

788,458

 

 

$

—

 

 

$

788,458

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Strategic investments

 

 

71,598

 

 

 

—

 

 

 

—

 

 

 

71,598

 

Total prepaid expense and other current assets

 

$

71,598

 

 

$

—

 

 

$

—

 

 

$

71,598

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency

 

 

—

 

 

 

664,482

 

 

 

—

 

 

 

664,482

 

Total long-term investments

 

$

—

 

 

$

664,482

 

 

$

—

 

 

$

664,482

 

Other noncurrent assets:

 

 

 

 

 

 

 

 

 

 

 

 

Strategic investments

 

 

—

 

 

 

—

 

 

 

148,134

 

 

 

148,134

 

Total other noncurrent assets

 

$

—

 

 

$

—

 

 

$

148,134

 

 

$

148,134

 

Total assets

 

$

288,072

 

 

$

1,453,474

 

 

$

148,134

 

 

$

1,889,680

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liabilities

 

$

—

 

 

$

—

 

 

$

2,124,224

 

 

$

2,124,224

 

Total liabilities

 

$

—

 

 

$

—

 

 

$

2,124,224

 

 

$

2,124,224

 

 

 

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 nine months ended September 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

 

 

100,500

 

 

 

—

 

 

 

—

 

Issuances

 

 

—

 

 

 

(24,502

)

 

 

—

 

Transfer out of Level 3(4)

 

 

(22,846

)

 

 

—

 

 

 

—

 

Changes in fair value included in net income (loss)

 

 

9,470

 

 

 

24,502

 

 

 

303,185

 

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

 

 

—

 

 

 

—

 

 

 

—

 

Fair value as of September 30, 2026

 

$

148,134

 

 

$

—

 

 

$

(2,124,224

)

 

(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 nine months ended September 30, 2026, the Company transferred one of its strategic investments from Level 3 to Level 1 due to the conversion of certain convertible debt securities into publicly-traded equity securities.

Warrant Liabilities

The Company’s warrant liabilities are comprised of the Series A and Series B private warrants. As of September 30, 2026, there were 79,053,330 of Series A and Series B private warrants outstanding. No Series A and Series B private warrants have been redeemed by the Company as of September 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 90.0% and 95.0% as of September 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 7.6% and 5.8% as of September 30, 2026 and the acquisition date, respectively, and the revenue volatility was 30.0% and 25.0% as of September 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):

 

 

 

September 30,
2026

 

 

December 31,
2025

 

Publicly-traded equity securities

 

$

71,598

 

 

$

—

 

Convertible debt securities

 

 

29,059

 

 

 

36,000

 

Privately-held equity securities

 

 

30,000

 

 

 

30,000

 

SAFE investments

 

 

119,075

 

 

 

25,000

 

Total strategic investments

 

$

249,732

 

 

$

91,000

 

 

The Company recognized net unrealized losses of $65.7 million and $15.5 million for the three and nine months ended September 30, 2026, respectively, on publicly-traded equity securities. The Company has agreed to enter into customary lock-up agreements with respect to its investments in publicly-traded equity securities, which are expected to lapse within 3 to 12 months. The fair values of publicly-traded equity securities are based on observable inputs and are classified as Level 1 in the fair value hierarchy. The fair values of convertible debt securities and SAFEs, for which the Company elected the fair value option, are classified as Level 3 and are measured using the scenario-based method or Monte Carlo simulation model described in Note 2, using unobservable inputs, including the probability and expected timing of each scenario, the estimated equity value of the investee, a risk-adjusted discount rate, and expected equity volatility.

In connection with the Investment Agreements, the majority of Investees also entered into a commercial contract with the Company 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 nine months ended September 30, 2026, the Company recognized $7.0 million and $15.7 million of revenue from the commercial contracts, respectively.