Fair Value MeasurementsThe following tables summarize our financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:
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| December 31, 2025 |
| Level 1 | | Level 2 | | Level 3 | | Aggregate Fair Value |
| Assets: | | | | | | | |
| Money market funds | $ | 66,298 | | | $ | — | | | $ | — | | | $ | 66,298 | |
| Contingent consideration receivable | — | | | — | | | 83 | | | 83 | |
| Total assets | 66,298 | | | — | | | 83 | | | 66,381 | |
| Liabilities: | | | | | | | |
| Profits interests, noncurrent | — | | | — | | | 2,611 | | | 2,611 | |
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| Total liabilities | $ | — | | | $ | — | | | $ | 2,611 | | | $ | 2,611 | |
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| December 31, 2024 |
| Level 1 | | Level 2 | | Level 3 | | Aggregate Fair Value |
| Assets: | | | | | | | |
| Money market funds | $ | 96,069 | | | $ | — | | | $ | — | | | $ | 96,069 | |
| Contingent consideration receivable | — | | | — | | | 146 | | | 146 | |
| Total assets | 96,069 | | | — | | | 146 | | | 96,215 | |
| Liabilities: | | | | | | | |
| Profits interests, noncurrent | — | | | — | | | 2,811 | | | 2,811 | |
| Total liabilities | $ | — | | | $ | — | | | $ | 2,811 | | | $ | 2,811 | |
The level 3 assets relate to contingent consideration receivable from a related party associated with the sale of brands disposed as part of the Reorganization and the Buttonwood Publishing sale, and the level 3 liabilities relate to profits interests. See Note 5 – Acquisitions and Disposals and Note 10 – Stock-Based Compensation.
The following table summarizes the changes in fair value of the recurring Level 3 fair value measurements during the year ended December 31, 2025:
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| | | Level 3 Fair Value Measurements |
| Income Statement Line Item That Includes The Gains And Losses | | Contingent consideration receivable | | Profits interests, noncurrent |
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| Balance at December 31, 2024 | | | $ | 146 | | | $ | 2,811 | |
| Issues | | | 41 | | | — | |
| Total gains (losses) recorded in earnings | Other income (expense), net | | 1,194 | | | — | |
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| Total (gains) losses recorded in earnings | General and administrative expense | | — | | | (200) | |
| Payments received and net settlements | | | (1,298) | | | — | |
| Balance at December 31, 2025 | | | $ | 83 | | | $ | 2,611 | |
The following table provides quantitative information regarding the recurring Level 3 fair value measurements inputs for the contingent consideration receivable, profits interests, and derivative liabilities at their measurement dates: | | | | | |
| As of |
| December 31, 2025 |
| Contingent consideration receivable | |
| Discount rate | 25.00 | % |
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| Profits interests | |
| Discount rate | 25.00 | % |
| Discount for lack of marketability | 30.70 | % |
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During the fourth quarter of 2024, the Company determined that impairment indicators were present due to the Legacy reorganization which began in 2024. As a result, the Company recorded an impairment loss on Legacy’s intangible assets totaling $0.3 million, deferred contract acquisition costs totaling $2.1 million, as well as full impairment of the operating lease right-of-use asset totaling $2.1 million.
During the year ended December 31, 2023, the Company determined that impairment indicators were present due to continuing losses with respect to its Buttonwood Publishing business which it had acquired during 2022. As a result, the Company recorded an impairment loss on Buttonwood Publishing’s intangible assets totaling $584. The Company used a with and without method to determine the fair value of the customer relationships and a relief from royalty method to determine the fair value of the tradenames. The key input for these nonrecurring Level 3 fair value measurements was the 22.8% discount rate. Additional impairments were recorded in December 2023, as further described in Note 5 – Acquisitions and Disposals.
During the year ended December 31, 2023, the embedded derivative instruments were settled at fair value. The following table summarizes the change in fair value of the derivative liabilities during the year ended December 31, 2023:
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Balance – December 31, 2022 | 1,281 | |
| Change in fair value of derivative instruments | 1,779 | |
| Settlement of derivative instruments | (3,060) | |
Balance – December 31, 2023 | $ | — | |
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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.