Advantage Solutions Inc. Fair Value Disclosure
10. Fair Value of Financial Instruments
The Company measures fair value based on the prices 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. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value.
As of December 31, 2025, and 2024, the Company’s interest rate derivatives and forward contracts are Level 2 assets and liabilities with the related fair values based on third-party pricing service models. These models use discounted cash flows that utilize market-based forward swap curves commensurate with the terms of the underlying instruments.
The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy. The carrying amounts of “Cash and cash equivalents”, “Accounts receivable”, and “Accounts payable” approximate fair value due to the short-term maturities of these financial instruments in the Consolidated Balance Sheets.
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December 31, 2025 |
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(in thousands) |
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Fair Value |
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Level 1 |
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Level 2 |
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Level 3 |
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Liabilities measured at fair value |
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Derivative financial instruments |
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$ |
476 |
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$ |
— |
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$ |
476 |
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$ |
— |
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Total liabilities measured at fair value |
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$ |
476 |
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$ |
— |
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$ |
476 |
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$ |
— |
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December 31, 2024 |
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(in thousands) |
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Fair Value |
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Level 1 |
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Level 2 |
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Level 3 |
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Assets measured at fair value |
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Derivative financial instruments |
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$ |
796 |
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$ |
— |
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$ |
796 |
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$ |
— |
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Total assets measured at fair value |
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$ |
796 |
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$ |
— |
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$ |
796 |
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$ |
— |
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Interest Rate Collar and Cap Agreements
The Company had interest rate collar and cap contracts with an aggregate notional value of principals of $700.0 million as of December 31, 2025 and 2024, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities. In July 2024, the Company entered into two interest rate collar contracts with a notional value of principal of $200.0 million each to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR. The interest rate collar contracts were effective December 16, 2024 and will mature on April 5, 2027 and 2028. In April
2023, the Company entered into two interest rate collar contracts in an aggregate notional amount of $300.0 million with a maturity date of April 5, 2026 to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR.
As of December 31, 2025, the fair value of the Company's outstanding interest rate collars and caps of $0.5 million was included in “Other long-term liabilities” in the Consolidated Balance Sheets. As of December 31, 2024, the fair value of the Company’s outstanding interest rate caps and collars of $0.8 million were included in “Prepaid expenses and other current assets” in the Consolidated Balance Sheets. Changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss.
During the year ended December 31, 2025, the Company recognized of $1.3 million related to changes in the fair value of its derivative instruments. During the years ended December 31, 2024, and 2023, the Company recognized of $5.3 million and $7.7 million, respectively, related to changes in the fair value of its derivative instruments.
Long-term Debt
The following table sets forth the carrying values and fair values of the Company’s financial liabilities measured on a non-recurring basis, categorized by input level within the fair value hierarchy:
(in thousands) |
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Carrying Value |
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Fair Value |
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Balance at December 31, 2025 |
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Term Loan Facility |
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$ |
1,092,745 |
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$ |
928,880 |
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6.5% Senior Secured Notes |
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595,087 |
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483,776 |
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Total long-term debt |
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$ |
1,687,832 |
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$ |
1,412,656 |
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(in thousands) |
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Carrying Value |
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Fair Value |
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Balance at December 31, 2024 |
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Term Loan Facility |
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$ |
1,105,995 |
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$ |
1,153,346 |
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6.5% Senior Secured Notes |
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615,087 |
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612,533 |
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Total long-term debt |
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$ |
1,721,082 |
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$ |
1,765,879 |
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The fair value of debt reported in the table above is based on adjusted price quotations on the debt instruments in an active market. The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the Revolving Credit Facility, approximate fair market value based on maturities for debt of similar terms.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 3, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 1, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 30, 2020 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.