Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

16.Fair Value of Financial Instruments

The authoritative guidance on fair value measurement defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an “exit price”). At March 31, 2024 and December 31, 2023, the Company’s financial instruments include cash, cash equivalents, accounts receivable, accounts payable, and other liabilities. The fair values of these financial instruments approximate their carrying values due to their short-term maturities.

Investments measured at fair value are based on one or more of the following three valuation techniques:

•Market approach—Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;

•Cost approach—Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and

•Income approach—Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing models and lattice models).

In addition, the guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities;

Level 2 Pricing inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurements and unobservable.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate

and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Financial assets and liabilities measured at fair value on a quarterly basis are as follows:

Fair value as of March 31, 2024 (in thousands):

	Level 1		Level 2		Level 3		Total
Contingent consideration
Earnout liability	$	-	$	-	$	4,142	$	4,142
Total liabilities at fair value	$	-	$	-	$	4,142	$	4,142

Fair value as of December 31, 2023 (in thousands):

	Level 1		Level 2		Level 3		Total
Contingent consideration
Earnout liability	$	-	$	-	$	2,300	$	2,300
Total liabilities at fair value	$	-	$	-	$	2,300	$	2,300

Refer to Notes to Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2023 for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value.

The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in our consolidated balance sheets, on the basis of Level 2 inputs, were as follows (in thousands):

	March 31, 2024				December 31, 2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Convertible senior notes due 2025	$	115,443	$	211,261	$	400,000	$	568,000
Convertible senior notes due 2029		800,000		872,080		-		-
Delayed draw term loan		350,000		350,000		350,000		350,000
Total	$	1,265,443	$	1,433,341	$	750,000	$	918,000