Derivative Financial Instruments

12 Months Ended

Dec. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

As part of our currency exchange rate risk management strategy, we enter into certain derivative foreign currency forward contracts that do not meet the U.S. GAAP criteria for hedge accounting but have the impact of partially offsetting certain foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in currency exchange losses, net, in the Consolidated Statements of Income. At December 31, 2025, the notional amount of open foreign currency exchange forward contracts not designated as hedging instruments was $113.4 million and there were no unrealized gains/losses on these contracts. All open foreign currency exchange forward contracts not designated as hedging instruments will mature during the first quarter of 2026.

We also use derivative foreign currency forward contracts to manage exposure to foreign exchange currency risks arising from forecasted transactions. These instruments meet the U.S. GAAP criteria for hedge accounting and are accounted for under ASC 815, Derivatives and Hedging. For hedges of forecasted transactions, significant characteristics and expected terms of a forecasted transaction are specifically identified, and it is probable that each forecasted transaction will occur. If it is deemed probable the forecasted transaction will not occur, then the gain or loss would be recognized immediately into net income. At December 31, 2025, the notional amount of open foreign currency exchange forward contracts designated as cash flow hedges was $31.6 million. See Note 7—Reclassifications Out of Accumulated Other Comprehensive Loss for information on unrealized loss deferred in Accumulated other comprehensive loss until the transactions related to these cash flow hedges affect earnings. Fair values of these contracts are derived using quoted forward foreign exchange prices to interpolate values of outstanding trades at the reporting date based on their maturities. All open foreign currency exchange forward contracts designated as cash flow hedges outstanding at will mature by December 2026.

The following table presents the Consolidated Balance Sheets location and fair value of assets and liabilities associated with derivative financial instruments:

	December 31,
(In thousands)	2025		2024
Derivatives not designated as hedging instruments:
Foreign exchange contracts: prepaid expenses and other current assets	$	—	$	175
Foreign exchange contracts: other current liabilities	$	392	$	1,111
Derivatives designated as cash flow hedges:
Foreign exchange contracts: prepaid expenses and other current assets	$	105	$	—
Foreign exchange contracts: other current liabilities	$	320	$	—

The following table presents the amount and classification of the (gains) losses associated with derivative financial instruments within the Consolidated Statements of Income and Consolidated Statements of Cash Flows:

	Year ended December 31,
	2025		2024
Derivatives not designated as hedging instruments:
Foreign exchange contracts: currency exchange losses, net	$	(4,370)	$	9,139

As of December 31, 2025, we expect approximately $0.2 million of net losses currently in Accumulated other comprehensive loss to be reclassified into net income within the next 12 months as forecasted transactions occur.