On December 27, 2024, the Company purchased a financial instrument to manage its exposure to financial risk and to mitigate potential tax liability. The Company determined that the financial instrument met the definition of a derivative under ASC Topic 815, Derivatives and Hedging.

The derivative is measured at fair value using the discounted cash flow method and includes unobservable inputs derived from management’s estimates and assumptions. Management’s estimates and assumptions are based in part on external data and internal data and involve a significant degree of judgment. The primary unobservable inputs, classified as Level 3 under the fair value hierarchy, include the remote possibility of a future payout of taxes. The discount rate utilized in the fair value model was 5.5%, as of December 27, 2024.

The following table summarizes the fair value of the derivative and location within the consolidated balance sheets:

As of December 31, 2024, the unrealized gain (loss) recognized related to the derivative’s change in fair value was immaterial.

December 31, 2024

(In thousands)

Non-current assets:

Other assets