Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Summary of Liabilities Measured at Fair Value

The following table sets forth our liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy:


	Fair Value at September 30, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:
Earn-out liability	$	—	$	—	$	18,892	$	18,892
Put option liability	—		—		777		777

Summary of Significant Assumptions to Determine Fair Value

The following table

sets forth the range of inputs for the significant assumptions utilized to determine the fair value of the earn-out payment as of September 30, 2023:


	September 30, 2023
Risk-free interest rate	5.60%	to	5.63%
Expected revenue volatility	25.20%
Revenue discount rate	10.88%	to	10.92%
Credit discount rate	10.90%	to	11.00%

The following table sets forth the inputs for the significant assumptions utilized to determine the fair value of the put option liability as of September 30, 2023:


						September 30, 2023
Risk-free interest rate						5.46%
Expected volatility						39.27%
Dividend yield						0.95%

Summary of Changes in Fair Value

The following table presents a summary of the changes in fair value of our liabilities measured using Level 3 inputs:


	Earn-out		Put Option
Opening Balance	$	5,960	$	510
Changes in fair value (1)	12,932		267
Balance at September 30, 2023	$	18,892	$	777

(1)We recognized $12.9 million of remeasurement expense associated with the change in the fair value of the earn-out liability during the nine months ended September 30, 2023. During the three months ended March 31, 2023, a $0.1 million gain was recognized in other income, net in the consolidated statements of operations. After the first quarter of 2023, the change in fair value of the earn-out liability is being presented separately as a component of operating income with $13.1 million of expense recognized during the six months ended September 30, 2023. For the put option liability, we recognized $0.2 million of expense associated with the change in fair value in SG&A in the consolidated statements of income during the nine months ended September 30, 2023.