Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories:
Level 1: Measured using unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2: Measured using quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).
Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below considers the market for the financial assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
The following tables present the Company's fair value hierarchy for those assets and liabilities measured at fair value as of December 31, 2025 and December 31, 2024 (in thousands):
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| | Total as of December 31, 2025 | | Level 1 | | Level 2 | | Level 3 |
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| Assets | | | | | | | | |
| Cash and cash equivalents: | | | | | | | | |
| Cash and money market funds | | $ | 111,042 | | | $ | 111,042 | | | $ | — | | | $ | — | |
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| Other assets: | | | | | | | | |
| Restricted cash | | $ | 4,021 | | | $ | 4,021 | | | $ | — | | | $ | — | |
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| | Total as of December 31, 2024 | | Level 1 | | Level 2 | | Level 3 |
| Assets | | | | | | | | |
| Cash and cash equivalents: | | | | | | | | |
| Cash and money market funds | | $ | 71,621 | | | $ | 71,621 | | | $ | — | | | $ | — | |
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| Other assets: | | | | | | | | |
| Restricted cash | | $ | 4,123 | | | $ | 4,123 | | | $ | — | | | $ | — | |
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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.