Teads Holding Co.TEAD
Teads Holding Co. Fair Value Disclosure
7. Fair Value Measurements
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company’s financial instruments include restricted time deposits, severance pay fund deposits and foreign currency forward contracts. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the Company uses the fair value hierarchy described below to distinguish between observable and unobservable inputs:
Level I — Valuations based on quoted prices in active markets for identical assets and liabilities at the measurement date;
Level II — Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be principally corroborated by observable market data for substantially the full term of the related assets or liabilities; and
Level III — Valuations based on unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.
The following table sets forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy:
| December 31, 2025 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Cash equivalents and investments (1) | $ | 18,602 | $ | 26,901 | $ | — | $ | 45,503 | |||||||||||||||
Restricted time deposits (2) | — | 1,477 | — | 1,477 | |||||||||||||||||||
Severance pay fund deposits (2) | — | 5,158 | — | 5,158 | |||||||||||||||||||
Foreign currency forward contract (3) | — | 383 | — | 383 | |||||||||||||||||||
| Total financial assets | $ | 18,602 | $ | 33,919 | $ | — | $ | 52,521 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Foreign currency forward contract (4) | — | 15 | — | 15 | |||||||||||||||||||
Total financial liabilities | $ | — | $ | 15 | $ | — | $ | 15 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Cash equivalents and investments (1) | $ | 30,754 | $ | 95,161 | $ | — | $ | 125,915 | |||||||||||||||
Restricted time deposits (2) | — | 631 | — | 631 | |||||||||||||||||||
Severance pay fund deposits (2) | — | 5,255 | — | 5,255 | |||||||||||||||||||
Foreign currency forward contract (3) | — | 493 | — | 493 | |||||||||||||||||||
| Total financial assets | $ | 30,754 | $ | 101,540 | $ | — | $ | 132,294 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Foreign currency forward contract (4) | — | 193 | — | 193 | |||||||||||||||||||
Total financial liabilities | $ | — | $ | 193 | $ | — | $ | 193 | |||||||||||||||
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(1)Money market securities are valued using Level I of the fair value hierarchy, while the fair values of U.S. Treasuries, government bonds, commercial paper, corporate bonds and municipal bonds are considered Level II and are obtained from independent pricing services,
which may use various methods, including quoted prices for identical or similar securities in active and inactive markets. See Note 4 for additional detail of the Company’s fixed income securities by balance sheet location.
(2)Recorded within other assets.
(3)Recorded within prepaid expenses and other current assets.
(4)Recorded within
The Company enters into foreign currency forward exchange contracts to manage the effects of fluctuations in foreign currency exchange rates on its net cash flows from non-U.S. dollar denominated operations. Pursuant to the new master netting agreement entered into in February 2025, the Company may set off the amounts payable in the same currency. However, the Company records the fair values of the assets and liabilities relating to its undesignated foreign currency forward contracts on a gross basis in its consolidated balance sheets and no amounts have been offset. The Company was not required to post cash collateral as of December 31, 2025.
By entering into foreign currency forward contracts, the Company is exposed to a potential credit risk that the counterparty to its contracts will fail to meet its contractual obligations. If a counterparty fails to perform, the Company’s maximum credit risk exposure would be the positive fair value of the foreign currency forward contracts, or any asset balance, which represents the amount the counterparty owes to the Company. In order to mitigate the counterparty risk, the Company performs an evaluation of its counterparty credit worthiness, and its forward contracts have a term of no more than 18 months. For the years ended December 31, 2025, 2024 and 2023, the Company recorded net unrealized gains of $0.1 million, net unrealized losses of $0.8 million, and net unrealized gains of $1.6 million, respectively, within interest income and other income, net in its consolidated statements of operations, related to mark-to-market adjustments on its undesignated foreign currency forward contacts.
Due to their short term nature, the fair value of the Company’s borrowings outstanding under its Overdraft Facility (as defined below in Note 9), generally approximates their carrying value. The Notes (as defined below in Note 9) are recorded within long-term debt on the Company’s consolidated balance sheets at their carrying value, which may differ from their fair value. The fair value of the Notes is estimated using external pricing data, including any available market prices and based on other debt instruments with similar characteristics. The following table summarizes the carrying value and the estimated fair value of the Notes, based on Level II measurements of the fair value hierarchy:
| December 31, 2025 | |||||||||||
| Carrying Value | Estimated Fair Value | ||||||||||
| (In thousands) | |||||||||||
10% Senior Secured Notes | $ | 605,113 | $ | 252,861 | |||||||
See Note 9 for additional information relating to the Notes.
Non-Financial Assets
The Company’s non-financial assets, which primarily consist of goodwill, definite-lived intangibles assets, operating lease right-of-use assets and property and equipment, are not required to be carried at fair value on a recurring basis and are reported at their carrying value. The Company’s goodwill is assessed for impairment at least annually, while other long-lived assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated and are adjusted to fair value only when an impairment is recognized, or in the event an asset is held for sale. In 2025, the Company recorded impairment changes for goodwill as disclosed in Note 5. The Company determines the fair values of these assets using Level III measurements, based on the Company’s best estimates of the amount and timing of future discounted cash flows, historical experience, market conditions, business plans and performance expectations.
In connection with the post-merger integration following the Acquisition, the Company made a decision to deprecate the video product offering associated with its prior acquisition of vi. Accordingly, during the twelve months ended December 31, 2025, the Company recorded impairment charges totaling $15.5 million to fully impair the carrying values of the related definite-lived long lived assets of $15.1 million and capitalized software of $0.4 million, as there are no material remaining future cash flows associated with this technology (see Notes 5 and 6 for additional information). In addition, during the twelve months ended December 31, 2025, the Company exited one of its office locations, resulting in a non-cash charge of $0.1 million to fully impair the associated right-of-use asset.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 18, 2022 | |
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.