Annual report [Section 13 and 15(d), not S-K Item 405]

Fair Value Measurements

v3.25.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Assets and liabilities carried at fair value on a recurring basis consisted of the following (in thousands):
December 31, 2024 December 31, 2023
Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3
Assets:
Assets held in rabbi trust $ 12,191  $ —  $ 12,191  $ —  $ 10,838  $ —  $ 10,838  $ — 
Convertible notes $ 6,347  $ —  $ —  $ 6,347  $ 5,081  $ —  $ —  $ 5,081 
Cash equivalents (1):
             
Commercial paper $ —  $ —  $ —  $ —  $ 27,998  $ —  $ 27,998  $ — 
Money market funds 90,737  90,737  —  —  68,364  68,364  —  — 
$ 90,737  $ 90,737  $ —  $ —  $ 96,362  $ 68,364  $ 27,998  $ — 
Marketable debt securities, available-for-sale:                
Short-term investments:                
U.S. treasuries $ 29,517  $ 29,517  $ —  $ —  $ 91,840  $ 91,840  $ —  $ — 
Corporate debt 160,150  —  160,150  —  77,041  —  77,041  — 
ABS and other —  —  —  —  —  —  —  — 
$ 189,667  $ 29,517  $ 160,150  $ —  $ 168,881  $ 91,840  $ 77,041  $ — 
Long-term investments:                
U.S. treasuries $ 773  $ 773  $ —  $ —  $ 9,852  $ 9,852  $ —  $ — 
U.S. government sponsored entities 929  —  929  —  1,040  —  1,040  — 
Corporate debt 30,934  —  30,934  —  44,565  —  44,565  — 
ABS and other 18,511  —  18,511  —  12,002  —  12,002  — 
$ 51,147  $ 773  $ 50,374  $ —  $ 67,459  $ 9,852  $ 57,607  $ — 
Liabilities:                
Contingent consideration $ 4,731  $ —  $ —  $ 4,731  $ 5,482  $ —  $ —  $ 5,482 
Deferred consideration $ 411  $ —  $ 411  $ —  $ 1,571  $ —  $ 1,571  $ — 
Deferred compensation liability $ 8,304  $ 8,304  $ —  $ —  $ 8,356  $ 8,356  $ —  $ — 
(1)Included in cash, cash equivalents, and restricted cash on the accompanying consolidated balance sheets.
There were no transfers in or out of Level 3 during the years ended December 31, 2024 and 2023.
Contingent and Deferred Consideration
During the year ended December 31, 2024, the Company considered current interest rates and the probability of achieving EBITDA and other performance targets in its determination of fair value for the contingent consideration. The Company is uncertain as to the extent of the volatility in the unobservable inputs in the foreseeable future. Deferred consideration in connection with acquisitions is carried at fair value and calculated using a discounted cash flow estimate with the only remaining condition on such payments being the passage of time.
As of December 31, 2024 and December 31, 2023, contingent and deferred consideration had a maximum undiscounted payment to be settled in cash or stock of $12.0 million and $14.7 million, respectively. Assuming the achievement of the applicable performance criteria and/or service and time requirements, the Company anticipates these payments will be made over the next one to two-year period. Changes in fair value are included in selling, general and administrative expense in the consolidated statements of operations.
A reconciliation of contingent consideration measured at fair value on a recurring basis consisted of the following (in thousands):
Twelve Months Ended
December 31,
2024 2023
Beginning balance $ 5,482  $ 7,067 
Change in fair value of contingent consideration(1)
43  (16)
Payments of contingent consideration (794) (1,569)
Ending balance $ 4,731  $ 5,482 
(1)Includes immaterial impact of foreign currency translation.
Quantitative information about the valuation technique and significant unobservable inputs used in the valuation of the Company’s Level 3 financial liabilities measured at fair value on a recurring basis consisted of the following (dollars in thousands):
Fair Value at
December 31, 2024		 Valuation Technique Unobservable inputs
Range (Weighted Average)(1)
Contingent
consideration
 $ 4,731  Discounted cash flow Expected life of cash flows
0.3-2.8 years
 (0.4 years)
Discount rate
4.8%-6.1%
(5.9%)
Probability of achievement
0.0%-100.0%
(98.2%)
Fair Value at
December 31, 2023		 Valuation Technique Unobservable inputs
Range (Weighted Average)(1)
Contingent
consideration
 $ 5,482  Discounted cash flow Expected life of cash flows
0.8-3.8 years
 (1.4 years)
Discount rate
5.3%-6.4%
(6.1%)
Probability of achievement
11.1%-100.0%
(96.5%)
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
Convertible Notes
The fair value of the convertible notes considered (i) the contractual maturity which may be extended at the option of the holders, (ii) a weighted average premium at settlement of 120% upon a subsequent financing, equity financing or a change in control, and (iii) a weighted average discount rate of 14.4%. During the year ended December 31, 2024, the fair value of the convertible notes increased by approximately $1.3 million primarily due to the reduction in the estimated time to the settlement from a weighed average of 1.7 years to 0.8 years.