Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair value measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

	Fair Value Measurements at December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	321,047	$	—	$	—	$	321,047
U.S. treasury bills		4,173		—		—		4,173
Short-term investments:
U.S. treasury bills		—		77,165		—		77,165
U.S. government agency bonds		—		67,394		—		67,394
	$	325,220	$	144,559	$	—	$	469,779

	Fair Value Measurements at December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	23,314	$	—	$	—	$	23,314
Short-term investments:
U.S. treasury bills		—		45,864		—		45,864
U.S. government agency bonds		—		38,113		—		38,113
	$	23,314	$	83,977	$	—	$	107,291
Liabilities:
Preferred stock tranche right liability (Series B)	$	—	$	—	$	2,874	$	2,874

There were no transfers between Level 1, Level 2 and Level 3 during the years ended December 31, 2024 and 2023.

The Company classifies its U.S. treasury bills and U.S. government agency bonds as short-term based on each instrument’s availability for use in current operations. The fair value of the Company’s U.S. treasury bills and U.S. government agency bonds are classified as Level 2 because they are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency.

Short-term investments consisted of the following (in thousands):

	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. treasury bills	$	77,142	$	37	$	(14	)	$	77,165
U.S. government agency bonds		67,442		34		(82	)		67,394
Total short-term investments:	$	144,584	$	71	$	(96	)	$	144,559

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. treasury bills	$	45,863	$	9	$	(8	)	$	45,864
U.S. government agency bonds		38,093		23		(3	)		38,113
Total short-term investments:	$	83,956	$	32	$	(11	)	$	83,977

The contractual maturities of the Company’s short-term investments in available-for-sale securities held were as follows (in thousands):

	December 31, 2024		December 31, 2023
Due within one year	$	109,943	$	83,977
Due after one year through two years		34,616		—
Total available-for-sale securities	$	144,559	$	83,977

Valuation of preferred stock tranche right liabilities

As of December 31, 2023, the preferred stock tranche right liability in the table above is composed of the fair value of the obligation to issue Series B Preferred Stock (Note 8). The fair value of the preferred stock tranche right liabilities was based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy.

Series A preferred stock tranche right liability

In February 2023, upon satisfaction of certain conditions, the second closing of the Series A Preferred Stock was completed. The Company issued and sold 8,000,000 shares of Series A Preferred Stock at a price of $10.00 per share, which resulted in the settlement of the associated Series A preferred stock tranche right liability. The fair value of Series A Preferred Stock was $10.04 per share upon the second closing.

Series B preferred stock tranche right liability

The fair value of the Series B preferred stock tranche right liability was determined using an option pricing model as it represents an option for the Series B Option Shares (as defined in Note 8). The valuation considered as inputs the estimated fair value of the Series B Preferred Stock as of each valuation date, the risk-free interest rate, volatility, expected dividends, and estimated time to the tranche closing.

The most significant assumption in the valuation model impacting the fair value of the preferred stock tranche right liability is the fair value of the Company’s Series B Preferred Stock as of each measurement date. The Company determined the fair value per share of the underlying Series B Preferred Stock by taking into consideration the most recent sales of its Series B Preferred Stock, results obtained from third-party valuations and additional factors the Company deemed relevant. In June 2023, the initial tranche of the Series B Preferred Stock closed with a fair value of $13.00 per share. As of December 31, 2023, the fair value of Series B Preferred Stock was $15.86 per share. In April 2024, upon satisfaction of certain conditions, the Company issued and sold 8,823,523 shares of Series B Preferred Stock at a price of $17.00 per share, which resulted in the settlement of the associated Series B preferred stock tranche right liability. The fair value of Series B Preferred Stock was $17.002 per share upon the closing. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining estimated time to the tranche closing. The volatility is based on the historical volatility of publicly traded peer companies adjusted for the seniority of the Series B Preferred Stock. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Changes in these inputs can have a significant impact on the fair value of the preferred stock tranche right liability.

The following table presents the assumptions used in the option-pricing model to determine the fair value of the Series B preferred stock tranche right liability during the periods presented:

	2023
	June (Issuance Date)			December 31,
Expected volatility		51.0	%		21.2	%
Expected dividends		0.0	%		0.0	%
Expected term (in years)		0.80			0.25
Risk-free rate		5.3	%		5.4	%

The following table presents a roll-forward of the aggregate fair value of the Series A and Series B preferred stock tranche right liabilities, for which fair value was determined using Level 3 inputs (in thousands):

	Preferred Stock Tranche Right Liability
	Series A			Series B
Fair value at December 31, 2022	$	6,947		$	—
Fair value of Series B preferred stock tranche right liability at issuance		—			11,774
Change in fair value of preferred stock tranche right liabilities		(6,627	)		(8,900	)
Final settlement of Series A preferred stock tranche right liability		(320	)		—
Fair value at December 31, 2023		—			2,874
Change in fair value of Series B preferred stock tranche right liability		—			(2,859	)
Final settlement of Series B preferred stock tranche right liability		—			(15	)
Fair value at December 31, 2024	$	—		$	—