v3.26.3
Fair Value Measurement
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement

3. Fair Value Measurement

U.S. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into the following three levels of inputs that may be used to measure fair value:

Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the measurement date.

Level 2—Pricing inputs are other than quoted prices in active market, which are either directly or indirectly observable as of the report date. The nature of these securities includes investments for which quoted prices are available but traded less frequently and investments that are fair valued using other securities, the parameters of which can be directly observed.

Level 3—Securities that have little to no pricing observability as of the report date. These securities are measured using management’s best estimate of fair value, where the inputs into the determination of fair value are not observable and require significant management judgment or estimation.

The following tables summarize the balances of our financial liabilities (in thousands) that were measured at fair value on a recurring basis, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:

 

 

September 30, 2026

 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(1)

 

$

—

 

 

$

403

 

 

$

—

 

 

$

403

 

Total assets

 

$

—

 

 

$

403

 

 

$

—

 

 

$

403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration payable (2)

 

$

—

 

 

$

—

 

 

$

1,991

 

 

$

1,991

 

Total liabilities

 

$

—

 

 

$

—

 

 

$

1,991

 

 

$

1,991

 

 

 

 

December 31, 2025

 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(1)

 

$

—

 

 

$

6

 

 

$

—

 

 

$

6

 

Total assets

 

$

—

 

 

$

6

 

 

$

—

 

 

$

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts(1)

 

$

—

 

 

$

305

 

 

$

—

 

 

$

305

 

Total liabilities

 

$

—

 

 

$

305

 

 

$

—

 

 

$

305

 
(1)
The fair values of the forward contracts were based on similar exchange traded derivatives and the related asset or liability is included within Level 2 of the fair value hierarchy.
(2)
In connection with our acquisition of assets of the sim racing business operated under the Trak Racer brand (refer to Note 5 for further details), we recorded a contingent consideration liability measured at fair value. Under the terms of the arrangement, a contingent consideration of up to $10.0 million is payable following a twelve-month earn-out period based on a scale of attainment of the projected upside to the acquired business’s contribution profit, net of payroll costs, as compared to the prior twelve-month period. The fair value was estimated using a Monte Carlo Simulation, a simulation-based measurement technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement. The preliminary allocation of purchase consideration for the Trak Racer acquisition was performed as of the acquisition date, August 4, 2026, which was close to the end of the reporting period. Management evaluated the key assumptions used to value the contingent consideration as of September 30, 2026, and determined there was no material change in its fair value from the acquisition date.