Commitments and Contingencies
Purchase Obligations
The Company enters into various supply agreements that contains purchase commitments. Most of the commitments are based on a binding forecast for an agreed-upon period, which is 12 months or less. Future minimum purchase commitments under such agreements amount to $7.6 million, of which all are due in 2026. The total amount of supplies purchased for the years ended December 31, 2025 and 2024 under such agreements was $30.0 million and $32.3 million, respectively.
Additionally, the Company has non-cancellable purchase commitments with its cloud computing services provider and for software subscriptions to support operations in the ordinary course of business. For the years ended December 31, 2025 and 2024, the Company purchased cloud computing services and software subscriptions of $21.3
million and $9.9 million, respectively, related to non-cancelable agreements. As of December 31, 2025, future non-cancellable commitments with remaining terms in excess of one year under these agreements were as follows:
| | | | | |
| Amount |
| |
| (amounts in thousands) |
| Years Ended December 31, | |
| 2026 | $ | 16,121 | |
| 2027 | 17,047 | |
| 2028 | 517 | |
| Total purchase commitments | $ | 33,685 | |
Litigation
During the ordinary course of business, the Company has become and may in the future become subject to pending and threatened legal and regulatory actions and proceedings. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings are likely to have a material adverse effect on its financial position as of December 31, 2025 and 2024, nor its results of operations or cash flows for the years ended December 31, 2025, 2024, and 2023.
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.