indie Semiconductor, Inc. Fair Value Disclosure
The Company’s debt instruments are recorded at their carrying values in its consolidated balance sheets, which may differ from their respective fair values. The estimated fair value of the Company’s 2027 Notes and 2029 Notes are both based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt (see Note 9 — Debt for additional information). The fair values of the Company’s short- term loans generally approximated their carrying values.
At December 31, 2025 and 2024, the Company held currency forward contracts with an aggregated notional amount of $10,046 and $28,160, respectively, to sell United States dollars and to buy various foreign currencies such as Canadian dollars and Euro, among others, at a forward rate. Any changes in the fair value of these contracts are recorded in in the consolidated statement of operations. During the years ended December 31, 2025, 2024 and 2023, the Company recorded a net gain (loss) of $821, ($1,649) and ($848), respectively.
The following table presents the Company’s fair value hierarchy for financial assets and liabilities:
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Fair Value Measurements as of December 31, 2025 |
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Level 1 |
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Level 2 |
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|
Level 3 |
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Total |
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Liabilities: |
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|
|
|
|
|
|
|
|
|
|
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emotion3D GmbH Contingent Consideration - First Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
611 |
|
|
$ |
611 |
|
emotion3D GmbH Contingent Consideration - Second Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,179 |
|
|
$ |
4,179 |
|
emotion3D GmbH Contingent Consideration -Third Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
696 |
|
|
$ |
696 |
|
emotion3D Subsidies Holdback |
|
$ |
720 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
720 |
|
emotion3D Indemnity Holdback |
|
$ |
2,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,000 |
|
|
|
Fair Value Measurements as of December 31, 2024 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Liabilities: |
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|
|
|
|
|
|
|
|
|
|
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Kinetic Contingent Consideration — First Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,455 |
|
|
$ |
2,455 |
|
Kinetic Contingent Consideration — Second Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,908 |
|
|
$ |
1,908 |
|
indie Switzerland Contingent Consideration — Second Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
634 |
|
|
$ |
634 |
|
GEO Indemnity Holdback |
|
$ |
6,344 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
6,344 |
|
City Semi Contingent Consideration — Second Tranche |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
500 |
|
|
$ |
500 |
|
As of December 31, 2025 and 2024, the Company’s cash and cash equivalents, including restricted cash, were all held in cash or Level 1 instruments where the fair values approximate the carrying values.
Level 3 Disclosures
Contingent Considerations
Contingent considerations were valued based on the consideration expected to be transferred. The Company estimated the fair value based on a Monte Carlo Simulations analysis to simulate the probability of achievement of various milestones identified within each contingent consideration arrangement, using certain assumptions that require significant judgment and discount rates. The discount rates were based on the estimated cost of debt plus a premium, which included consideration of expected term of the earn-out payment, yield on treasury instruments and an estimated credit rating for the Company.
Because the acquisition related to emotion3D occurred within the last twelve months, the significant information to be obtained and analyzed and the fact that emotion3D resides in a foreign jurisdiction, the Company’s fair value estimates for the associated contingent consideration were valued based on a probability method as of December 31, 2025.
See Note 11 — Contingent and Earn-Out Liabilities for additional information of our Level 3 disclosures.
The following table presents the significant unobservable inputs assumed for each of the fair value measurements:
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December 31, |
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December 31, |
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Input |
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Input |
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Liabilities: |
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|
|
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|
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emotion3D GmbH Contingent Consideration - Second Tranche |
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|
|
|
|
||
Market yield rate |
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10.53 |
% |
|
N/A |
|
|
Scenario probability |
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|
80.00 |
% |
|
N/A |
|
|
emotion3D GmbH Contingent Consideration - Third Tranche |
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|
|
|
|
|
||
Market yield rate |
|
|
10.53 |
% |
|
N/A |
|
|
Scenario probability |
|
|
64.00 |
% |
|
N/A |
|
|
Kinetic Contingent Consideration - First Tranche |
|
|
|
|
|
|
||
Market yield rate |
|
N/A |
|
|
|
7.34 |
% |
|
Scenario probability |
|
N/A |
|
|
|
100.00 |
% |
|
Kinetic Contingent Consideration - Second Tranche |
|
|
|
|
|
|
||
Market yield rate |
|
N/A |
|
|
|
7.68 |
% |
|
Scenario probability |
|
N/A |
|
|
|
70.00 |
% |
|
indie Switzerland Contingent Consideration — Second Tranche |
|
|
|
|
|
|
||
Discount rate |
|
N/A |
|
|
|
10.20 |
% |
|
Volatility |
|
N/A |
|
|
|
60.00 |
% |
|
City Semi Contingent Consideration — Second Tranche |
|
|
|
|
|
|
||
Discount rate |
|
N/A |
|
|
|
12.65 |
% |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
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.