Borrowings

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Borrowings

(13) Borrowings

Convertible Notes

The Company previously issued 0% Convertible Senior Notes due November 15, 2026 (the "Notes"), pursuant to an Indenture dated November 16, 2021 (the “Indenture”) between the Company and The Bank of New York Mellon, N.A., as trustee (the "Trustee"). The related principal, unamortized deferred issuance costs and carrying values as of December 31, 2024 and 2023 were as follows:

(in thousands)	December 31, 2024		December 31, 2023
Principal(1)	$	214,378	$	324,870
Unamortized deferred issuance costs	(2,383)		(5,514)
Carrying value	$	211,995	$	319,356

(1) The Notes have an initial conversion rate of 27.8364 shares of Common Stock per $1 principal amount of Notes (which is subject to adjustment in certain circumstances). This is equivalent to an initial conversion price of approximately $35.92 per share. The conversion rate is subject to customary adjustments under certain circumstances in accordance with the terms of the Indenture.

The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment to any of the Company’s future unsecured indebtedness that is not so subordinated; are effectively subordinated in right of payment to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness; and are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of current or future subsidiaries of the Company. The annual effective interest rate of the Notes is 0.594% when including purchasers' discounts and commissions and offering expenses incurred by the Company. The Notes do not bear regular interest, and the principal amount of the Notes will not accrete. The Notes will mature on November 15, 2026, unless earlier redeemed, repurchased or converted in accordance with their terms.

The Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 15, 2026, only under the following circumstances: (1) during any future calendar quarter (and only during such quarter), if the last reported sale price of the Company's common stock, par value $0.001 per share (the “Common Stock”), is equal to or greater than 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Common Stock and the conversion rate on each such trading day; (3) if the Company calls such Notes for redemption at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and (4) upon the occurrence of specified corporate events, including a Fundamental Change (as defined in the Indenture), or distributions of the Common Stock. On or after August 15, 2026, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at any time, at the option of the holder, regardless of the foregoing circumstances. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of Common Stock, or a combination of cash and shares of Common Stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Notes being converted. Holders of the Notes have the right to require the Company to repurchase for cash all or a portion of their Notes at 100% of their principal amount, plus any accrued and unpaid special interest, upon the occurrence of a Fundamental Change. The Company is also required to increase the conversion rate for holders who convert their Notes in connection with a Fundamental Change or convert their Notes that are called for redemption, as the case may be, prior to the maturity date. As of December 31, 2024, none of the circumstances that would permit the holders of the Notes to exercise their conversion option had occurred.

The Notes are redeemable, in whole or in part, for cash at the Company’s option at any time, and from time to time, since November 20, 2024 and before the 41st scheduled trading day immediately preceding the maturity date, but only if the last reported sale price per share of the Common Stock has been at least 130% of the conversion price then in effect for a specified period of time.

The Company incurred $1.4 million, $2.6 million, and $2.7 million of interest expense attributable to debt issuance cost accretion for the years ended December 31, 2024, 2023, and 2022, respectively. In addition, in connection with the repurchases of a portion of the Notes in March 2024 and December 2023 (as further discussed below), the Company wrote off $1.8 million and $2.3 million of the debt issuance costs during the years ended December 31, 2024 and 2023, respectively. Debt issuance cost accretion of $1.3 million and $1.1 million is expected to be incurred in 2025 and 2026, respectively.

Convertible Notes Compliance

The Indenture contains covenants, events of default and other provisions that are customary for offerings of convertible notes. During the three months ended June 30, 2024, the Company became non-compliant with certain terms of the Indenture. The Company’s failure to file its 2023 Form 10-K and provide it to the Trustee by April 1, 2024 represented a default under the terms of the Indenture. In addition, the Company's failure to file its Form 10-Q for the three months ended March 31, 2024 and provide it to the Trustee by May 30, 2024 represented an incremental default under the terms of the Indenture. These defaults did not become an event of default under the terms of the Indenture given that the Company filed its 2023 Form 10-K on August 13, 2024, curing the first default referenced above, and filed its Form 10-Q for the three months ended March 31, 2024 on August 20, 2024, curing the incremental default referenced above. Both defaults were cured prior to the end of the cure period provided for by the Indenture, which cure period was not initiated by the Trustee or holders of the Notes. The Company did not incur any special interest as a result of the defaults, nor did the Notes become subject to any other actions by the Trustee or the holders. As of December 31, 2024, the Company was in compliance with all of the covenants included in the Indenture.

Debt Extinguishment

In March 2024, the Company repurchased $110.5 million of the Notes for $87.2 million, including transaction expenses. The repurchased Notes were retired upon receipt, and the retirement of the debt obligations was accounted for as an extinguishment of debt. The repurchase of the Notes at a discount resulted in the recognition of a gain of $21.5 million, after transaction expenses and the write-off of related debt issuance costs, which is reported in other income (loss), net on the Company’s consolidated statement of operations for the year ended December 31, 2024.

In December 2023, the Company repurchased $135.1 million of the Notes for $100.6 million including transaction expenses. The repurchased notes were retired upon receipt, and the retirement of the debt obligations was accounted for as an extinguishment of debt. The repurchase of the notes at a discount resulted in the recognition of a gain of $32.2 million, after transaction expenses and the write-off of related debt issuance costs, which is reported in other income (loss), net on the Company’s consolidated statement of operations for the year ended December 31, 2023.

At December 31, 2024 and 2023, the estimated fair value of the Notes was $189.4 million and $247.3 million, respectively. This is based on the quoted market price of the Notes where the volume of activity is limited and not active and, thus, this is deemed a Level 2 fair value measurement.