Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

Note 7. Debt

The following tables summarize outstanding debt as of September 30, 2024, and December 31, 2023.

	Principal		Unamortized Debt Issuance Costs & Discount		Carrying Value
Convertible senior notes, due 2026	$	173,771	$	(1,850)	$	171,921
Convertible senior notes, due 2028	333,334		(106,370)		226,964
Other notes	150		(3)		147
Balance as of September 30, 2024	$	507,255	$	(108,223)	$	399,032

	Principal		Unamortized Debt Issuance Costs & Discount		Carrying Value
Convertible senior notes, due 2026	$	225,000	$	(3,311)	$	221,689
Convertible senior notes, due 2028	333,334		(119,665)		213,669
Advance funding arrangement	94		—		94
Other notes	300		(13)		287
Balance as of December 31, 2023	$	558,728	$	(122,989)	$	435,739

Convertible Senior Notes

Interest expense for our convertible senior notes includes both contractual interest expense and amortization of debt issuance costs and discount. The following table details interest expense recognized for the 0.75% convertible senior notes due in September 2026 (the “2026 Notes”) and 6.75% convertible senior notes due in October 2028 (the “2028 Notes”):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024				2023		2024		2023
Contractual interest expense for 2026 Notes	$	399			$	422	$	1,220	$	1,720
Contractual interest expense for 2028 Notes	5,625				5,625		16,875		10,063
Amortization of debt issuance costs and discount for 2026 Notes	295				299		882		1,215
Amortization of debt issuance costs and discount for 2028 Notes	4,711				3,914		13,295		6,713
	$	11,030	$	11,030	$	10,260	$	32,272	$	19,711

The effective interest rates for the 2026 Notes and 2028 Notes are 1.3% and 17.9%, respectively.

For the three and nine months ended September 30, 2024, we capitalized $0.1 million and $0.4 million, respectively, of interest expense on the 2028 Notes related to ongoing internally developed software projects.

In February 2024, we repurchased $8.0 million aggregate principal amount of our 2026 Notes. We paid $3.0 million, or 37.5% of par value, plus accrued interest. We recognized a $4.9 million gain on extinguishment of debt, calculated as the difference between the reacquisition price and the net carrying amount of the portion of the 2026 Notes that was extinguished.

In September 2024, we repurchased $43.2 million aggregate principal amount of our 2026 Notes. We paid $20.2 million, or an average of 46.8% of par value, plus accrued interest. We recognized a $22.5 million gain on extinguishment of debt, calculated as the difference between the reacquisition price and the net carrying amount of the portion of the 2026 Notes that was extinguished.

Advance Funding Arrangement

For certain home warranty contracts, we participated in financing arrangements with third-party financers that provided us with the contract premium upfront, less a financing fee. Third-party financers collected installment payments from the warranty contract customer which satisfied our repayment obligation over a portion of the contract term. We remained obligated to repay the third-party financer if a customer cancels its warranty contract prior to full repayment of the advance funding amount we received. As part of the arrangement, we paid financing fees, which were collected by the third-party financers upfront and were initially recognized as a debt discount. Financing fees were amortized as interest expense under the effective interest method. The implied interest rate varied per contract and was generally approximately 14% of total funding received. As of September 30, 2024, our obligation was completely satisfied with the third-party financers, and we had no outstanding balance.