Derivatives

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Note 11—Derivatives

We are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes.

We enter into foreign currency contracts to manage our foreign exchange exposure related to certain balance sheet items that do not meet the requirements for hedge accounting. These derivative instruments are adjusted to fair value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability.

We pay interest on our Credit Agreement which fluctuates based on changes in our benchmark interest rates. In order to mitigate the risk of increases in benchmark rates on our term loans, we entered into an interest rate swap agreement whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount. The interest rate swap was designated as a cash flow hedge. Cash flows related to the interest rate swap agreement are included in interest expense, net.

We determine the fair value of our foreign currency derivatives and interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data. We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure. All derivatives are carried at fair value in our consolidated balance sheets. We consider the risk of counterparty default to be minimal. We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2024:

	Notional			Derivative Assets			Derivative Liabilities
	Amount		Maturity Date	Classification	Fair Value		Classification	Fair Value
Cash flow hedges
Interest rate swaps	$	300,000	March 2027	Other assets, net	$	6,113	Other liabilities	$	—
Economic (non-designated) hedges
Foreign currency contracts	$	43,238	January 2025	Other current assets	$	8	Other current liabilities	$	255

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2023:

	Notional			Derivative Assets			Derivative Liabilities
	Amount		Maturity Date	Classification	Fair Value		Classification	Fair Value
Cash flow hedges
Interest rate swaps	$	350,000	March 2027	Other assets, net	$	8,447	Other liabilities	$	—
Economic (non-designated) hedges
Foreign currency contracts	$	78,436	January 2024	Other current assets	$	1,043	Other current liabilities	$	—

The notional amount of the interest rate swap represents the amount in effect at the end of the period. Based on contractual terms, the notional amount will decrease in increments of $50 million on the last business day of March of each year until the maturity date.

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2024:

	Amount of Gain		Location of Gain	Total Amount of Expense		Amount of Gain/
	Recognized in		Reclassified from	Line Items Presented in the		(Loss) Reclassified
	Other		Accumulated Other	Consolidated Statement of		from Accumulated
	Comprehensive		Comprehensive Loss	Operations in Which the		Other Comprehensive
	(Loss) Income		into Income	Effects are Recorded		Loss into Income
Interest rate swaps	$	5,492	Interest expense, net	$	143,804	$	7,826

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2023:

						Amount of
	Amount of Gain		Location of Gain	Total Amount of Expense		Gain/(Loss)
	Recognized in		Reclassified from	Line Items Presented in the		Reclassified from
	Other		Accumulated Other	Consolidated Statement of		Accumulated Other
	Comprehensive		Comprehensive Loss	Operations in Which the		Comprehensive Loss
	(Loss) Income		into Income	Effects are Recorded		into Income
Interest rate swaps	$	2,707	Interest expense, net	$	157,915	$	9,720

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2022:

						Amount of
	Amount of Gain		Location of Gain	Total Amount of Expense		Gain/(Loss)
	Recognized in		Reclassified from	Line Items Presented in the		Reclassified from
	Other		Accumulated Other	Consolidated Statement of		Accumulated Other
	Comprehensive		Comprehensive Loss	Operations in Which the		Comprehensive Loss
	Income		into Income	Effects are Recorded		into Income
Interest rate swaps	$	14,814	Interest expense, net	$	128,891	$	(647)

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

For the years ended December 31, 2024, 2023 and 2022 we recognized losses of $3.5 million, $0.3 million and $0.9 million, associated with our economic (non-designated) foreign currency contracts.

We recorded the change in fair value of derivative instruments and the remeasurement adjustment of the foreign currency denominated asset or liability in other operating expense (income), net for our foreign exchange contracts.