Fair Value Measurements and Financial Instruments |
9 Months Ended |
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Sep. 30, 2026 | |
| Fair Value Disclosures [Abstract] | |
| Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The Company’s financial assets and liabilities, as well as certain nonrecurring fair value measurements such as goodwill impairment and long-lived assets impairment, are measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows: •Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; •Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs corroborated by observable market data for substantially the full term of the assets or liabilities; and •Level 3—Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing assets or liabilities based on the best information available. Recurring Fair Value Measurements As of September 30, 2026, the Company held money market funds of $100.7 million, of which $8.2 million is included in cash and cash equivalents and $92.5 million is included in restricted cash (non-current) in the condensed consolidated balance sheets. Money market funds are valued using quoted prices in active markets and are classified as Level 1 within the fair value hierarchy. The Company had no other financial assets or liabilities measured at fair value on a recurring basis as of September 30, 2026, and no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2025. Nonrecurring Fair Value Measurements The Company’s nonrecurring fair value measurements primarily relate to assets acquired and liabilities assumed in connection with business combinations. In 2025 and the third quarter of 2026, the Company completed business combinations in which the acquired assets and assumed liabilities were recorded at their estimated fair values as of the acquisition date. The Omega Acquisition completed on September 1, 2026 and GESA Acquisition completed on July 1, 2026 were each accounted for as business combinations under ASC 805, and accordingly the acquired assets and assumed liabilities were recognized at their acquisition-date fair values, with the excess of consideration transferred over the fair value of identifiable net assets acquired recognized as goodwill. The customer relationship intangible assets recognized in connection with the Omega and GESA acquisitions were recorded at acquisition-date fair values of $90.6 million and $93.1 million, respectively, determined using the income approach (specifically, the multi-period excess earnings method). The trademark intangible assets recognized in connection with the Omega and GESA acquisitions were recorded at acquisition-date fair values of $13.2 million and $14.9 million, respectively, determined using the income approach (specifically, the relief-from-royalty method). See Note 4. “Acquisitions - Business Combinations” and Note 8. “Intangible Assets” for additional information. The Genco Acquisition completed on March 16, 2026 was accounted for as an asset acquisition under ASC 805-50, and accordingly the acquired assets and assumed liabilities were recorded at allocated acquisition cost. The customer relationship intangible asset recognized in connection with the Genco Acquisition was recorded at its standalone fair value of $15.7 million, determined using the income approach. See Note 4. “Acquisitions - Asset Acquisitions” and Note 8. “Intangible Assets” for additional information. The fair value measurements for the acquisitions were determined using valuation techniques appropriate for the nature of the assets and liabilities and involved significant unobservable inputs. Accordingly, these measurements are classified within Level 3 of the fair value hierarchy. Financial Instruments Not Measured at Fair Value on a Recurring Basis The carrying amounts of certain financial instruments not measured at fair value approximate their fair values due to their short-term nature or other characteristics, as follows: •Cash, accounts receivable, contract assets, accounts payable, accrued liabilities, contract liabilities and other current liabilities (including insurance premium financing) - The carrying amounts approximate fair value primarily because of their short maturities. •Restricted cash (non-current asset) - The carrying amount approximates fair value as it consists of cash held in a deposit account. •Finance and operating lease obligations and equipment financing - The carrying amounts approximate fair value as the incremental borrowing rates used to measure the liabilities approximate current market rates for similar obligations. The Stateline Term Loan, 2031 Senior Notes, and the Convertible Notes are carried at amortized cost. The carrying amount of the Stateline Term Loan approximates fair value because the effective interest rate resets periodically to reflect current market rates. See Note 11. “Debt” and Note 12. “Convertible Notes” for the carrying amounts and fair values of these instruments, including the related fair value hierarchy classifications. Credit Risk The financial instruments that are subject to concentrations of credit risk mainly include cash and cash equivalents and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash with high-quality financial institutions. These balances often exceed the FDIC-insured limits. The Company monitors the creditworthiness of institutions with which it deposits funds. The majority of our accounts receivable have payment terms of 60 days or less. As of September 30, 2026, one customer accounted for 67% of our total accounts receivable. A significant portion of our revenue and accounts receivable is derived from customers in the artificial intelligence computing sector, and we also serve customers in the energy industry. The concentration of customers in these sectors may increase our overall exposure to credit risk, as these customers may be similarly affected by shifts in technology demand, access to capital, economic, regulatory or other external factors. If a customer defaults, our gross profit and cash flows may be adversely affected. To manage this credit risk, we conduct credit evaluations, monitor customer payment behavior, and, when necessary, pursue legal remedies, such as filing of liens.
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