FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments as of December 31, 2025 and 2024 consist of cash equivalents and debt. Assets and liabilities measured at fair value on a recurring basis (cash equivalents and interest rate swaps) and a nonrecurring basis (debts) are categorized in the tables below based on the levels discussed in “Note 2 — Summary of Significant Accounting Policies”.
The following tables summarize the Company’s financial instruments by level in the fair value hierarchy as of December 31, 2025:
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| (In thousands) | As of December 31, 2025 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| Assets: | | | | | | | |
| Money market funds (cash equivalents) | $ | 665,506 | | | $ | — | | | $ | — | | | $ | 665,506 | |
| Liabilities: | | | | | | | |
| Term Loans | $ | — | | | $ | 512,282 | | | $ | — | | | $ | 512,282 | |
| Senior Secured Notes | $ | — | | | $ | 1,139,512 | | | $ | — | | | $ | 1,139,512 | |
| Senior Unsecured Notes | $ | — | | | $ | 283,400 | | | $ | — | | | $ | 283,400 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | As of December 31, 2024 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| Assets: | | | | | | | |
| Money market funds (cash equivalents) | $ | 75,431 | | | $ | — | | | $ | — | | | $ | 75,431 | |
| | | | | | | |
| Derivative Liabilities: | | | | | | | |
| Term Loans | $ | — | | | $ | 1,013,231 | | | $ | — | | | $ | 1,013,231 | |
| Senior Unsecured Notes | $ | — | | | $ | 298,965 | | | $ | — | | | $ | 298,965 | |
The fair value of the Company’s money market funds is based on quoted active market prices and is determined using the market approach. The fair value of the Company’s Term Loans, Senior Secured Notes and Senior Unsecured Notes are based on market quotes provided by a third-party pricing source. See “Note 10 — Debt” for additional disclosures.
The Company’s non-financial assets and liabilities, which include goodwill and long-lived assets held and used, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur or if an annual impairment test is required, the Company would evaluate the non-financial assets and liabilities for impairment. If an impairment was to occur, the asset or liability would be recorded at its estimated fair value.
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.