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Long-Term Debt, Net | 9 Months Ended
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Sep. 30, 2025
Debt Disclosure [Abstract] |
Long-Term Debt, Net | Long-Term Debt, Net 1.00% Convertible Notes due 2028 In August 2022, we completed the sale of $720.0 million in aggregate principal amount of 1.00% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”). The net proceeds in connection with the issuance of the 2028 Convertible Notes, after deducting the initial purchasers’ fee of $18.0 million, was approximately $702.0 million. We also incurred additional debt issuance costs totaling $1.0 million. Debt issuance costs and the initial purchasers’ fee are presented as a debt discount. The 2028 Convertible Notes pay interest semi-annually in arrears on February 15th and August 15th of each year at an annual rate of 1.00%. The 2028 Convertible Notes are general unsecured obligations and rank senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the 2028 Convertible Notes, rank equally in right of payment with all existing and future liabilities that are not so subordinated, are effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries. The 2028 Convertible Notes have a maturity date of August 15, 2028. Holders may convert their 2028 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2022, if the last reported sale price per share of common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the offering memorandum for the 2028 Convertible Notes; (4) if we call such notes for redemption; and (5) at any time from, and including, February 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date. As of September 30, 2025, the conditional conversion feature of the 2028 Convertible Notes was triggered, and as a result, the 2028 Convertible Notes were classified to current portion of long-term debt, net in our condensed consolidated balance sheets. Upon conversion, we will pay cash for the settlement of principal, and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election. The initial conversion rate for the 2028 Convertible Notes is 17.8517 shares of common stock per $1,000 in principal amount of 2028 Convertible Notes, equivalent to a conversion price of approximately $56.02 per share of our common stock. The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued or unpaid interest. As of September 30, 2025, we were in compliance with all covenants. Capped Call Transactions In connection with the offering of the 2028 Convertible Notes, we entered into capped call transactions with certain counterparties (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to holders of our common stock upon conversion of the 2028 Convertible Notes or at our election (subject to certain conditions) offset any cash payments we are required to make in excess of the principal amount of such converted 2028 Convertible Notes. The cap price of the Capped Call Transactions is initially $75.4075 per share of common stock, representing a premium of 75% above the last reported sale price of $43.09 per share of common stock on August 15, 2022, and is subject to certain adjustments under the terms of the Capped Call Transactions. As of September 30, 2025, no capped calls had been exercised. Pursuant to their terms, the capped calls qualify for classification within stockholders’ equity in our condensed consolidated balance sheets, and their fair value is not remeasured and adjusted as long as they continue to qualify for stockholders’ equity classification. We paid approximately $69.1 million for the Capped Calls, including applicable transaction costs, which was recorded as a reduction to additional paid-in capital in our condensed consolidated balance sheets. The Capped Call Transactions are separate transactions entered into by us with the Capped Call Counterparties, are not part of the terms of the 2028 Convertible Notes, and do not affect any holder’s rights under the 2028 Convertible Notes. Holders of the 2028 Convertible Notes do not have any rights with respect to the Capped Call Transactions. 0.25% Convertible Notes due 2027 In March 2021, we completed the sale of $805.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”). The net proceeds in connection with the issuance of the 2027 Convertible Notes, after deducting the initial purchasers’ fee of $20.1 million, was approximately $784.9 million. We also incurred additional debt issuance costs totaling $0.4 million. Debt issuance costs and the initial purchasers’ fee are presented as a debt discount. The 2027 Convertible Notes pay interest semi-annually in arrears on March 1st and September 1st of each year at an annual rate of 0.25%. The 2027 Convertible Notes are general unsecured obligations and rank senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the 2027 Convertible Notes, rank equally in right of payment with all existing and future liabilities that are not so subordinated, are effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries. The 2027 Convertible Notes have a maturity date of March 1, 2027. Holders may convert their 2027 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the offering memorandum for the 2027 Convertible Notes; (4) if we call such notes for redemption; and (5) at any time from, and including, September 1, 2026 until the close of business on the scheduled trading day immediately before the maturity date. As of September 30, 2025, the 2027 Convertible Notes were not convertible. Upon conversion, we will pay cash for the settlement of principal and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election. The initial conversion rate for the 2027 Convertible Notes is 12.9576 shares of common stock per $1,000 in principal amount of 2027 Convertible Notes, equivalent to a conversion price of approximately $77.17 per share of our common stock. The conversion rate is subject to adjustment. As of September 30, 2025, we were in compliance with all covenants. Net Carrying Amounts of our Convertible Notes The carrying amount and fair value of our Convertible Notes were as follows (in thousands).
|  | September 30, 2025 |  | December 31, 2024
Principal amount |  |  |  |
2027 Convertible Notes |  | $ | 805,000 |  |  | $ | 805,000 |
2028 Convertible Notes |  | 720,000 |  |  | 720,000 |
Total principal amount |  | $ | 1,525,000 |  |  | $ | 1,525,000 |
Unamortized debt discount |  |  |  |
2027 Convertible Notes |  | $ | (4,928) |  |  | $ | (7,518) |
2028 Convertible Notes |  | (9,315) |  |  | (11,684) |
Total unamortized debt discount |  | $ | (14,243) |  |  | $ | (19,202) |
Carrying amount |  |  |  |
2027 Convertible Notes |  | $ | 800,072 |  |  | $ | 797,482 |
2028 Convertible Notes |  | 710,685 |  |  | 708,316 |
Total carrying amount |  | $ | 1,510,757 |  |  | $ | 1,505,798 |
Fair value based on trading levels (Level 2) |  |  |  |
2027 Convertible Notes |  | $ | 930,685 |  |  | $ | 769,218 |
2028 Convertible Notes |  | 1,028,858 |  |  | 779,882 |
Total fair value of outstanding notes |  | $ | 1,959,543 |  |  | $ | 1,549,100 |
Remaining amortization per period of debt discount (in years) |  |  |  |
2027 Convertible Notes |  | 1.4 |  | 2.2
2028 Convertible Notes |  | 2.9 |  | 3.6
The following table summarizes the components of interest expense and the effective interest rates for each of our Convertible Notes (in thousands).
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Coupon interest |  |  |  |  |  |  |  |
2027 Convertible Notes |  | $ | 503 |  | $ | 503 |  | $ | 1,509 |  | $ | 1,509
2028 Convertible Notes |  | 1,800 |  | 1,800 |  | 5,400 |  | 5,400
Total coupon interest |  | $ | 2,303 |  | $ | 2,303 |  | $ | 6,909 |  | $ | 6,909
Amortization of debt discount |  |  |  |  |  |  |  |
2027 Convertible Notes |  | $ | 865 |  | $ | 859 |  | $ | 2,590 |  | $ | 2,572
2028 Convertible Notes |  | 792 |  | 781 |  | 2,369 |  | 2,334
Total amortization of debt discount |  | $ | 1,657 |  | $ | 1,640 |  | $ | 4,959 |  | $ | 4,906
Interest expense |  |  |  |  |  |  |  |
2027 Convertible Notes |  | $ | 1,368 |  | $ | 1,362 |  | $ | 4,099 |  | $ | 4,081
2028 Convertible Notes |  | 2,592 |  | 2,581 |  | 7,769 |  | 7,734
Total interest expense |  | $ | 3,960 |  | $ | 3,943 |  | $ | 11,868 |  | $ | 11,815
Effective interest rates |  |  |  |  |  |  |  |
2027 Convertible Notes |  | 0.7 | % |  | 0.7 | % |  | 0.7 | % |  | 0.7 | %
2028 Convertible Notes |  | 1.5 | % |  | 1.5 | % |  | 1.5 | % |  | 1.5 | %
Revolving Credit and Term Loan Facilities In May 2022, we entered into a credit agreement, which was subsequently amended in August 2022 (the “Amendment”), with Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders and L/C Issuers party thereto (the “2022 Credit Agreement”), evidencing a credit facility (the “2022 Facility”) that provides for (i) a $575 million revolving credit facility (the “Revolving Credit Facility”) and (ii) a $250 million term loan facility (the “Term Facility”). Concurrently, with the entry into the Amendment, we repaid the entire outstanding Term Facility and repaid all outstanding loans under the Revolving Credit Facility under the 2022 Credit Agreement. The 2022 Facility will mature on November 30, 2026 unless either the Revolving Credit Facility or the Term Facility is extended prior to such date in accordance with the 2022 Credit Agreement. The Term Facility requires quarterly scheduled repayments of the term loans in each of the first, second, third and fourth years following the closing in annual amounts equal to 2.50%, 5.00%, 7.50% and 10.00% of the initial principal amount of the term loans, respectively. The term loans are also subject to mandatory prepayments from the proceeds of certain asset sales, subject to our right to reinvest the proceeds thereof. Borrowings under the 2022 Facility bear interest, at our option, at a rate equal to an applicable margin plus: (a) the applicable Term Secured Overnight Financing Rate (“SOFR”) (which includes a SOFR adjustment of 0.10%), or (b) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50%, (2) the Bank of America prime rate, (3) the Term SOFR rate for an interest period of one month plus 1.10%, and (4) 1.00%. The margin for the 2022 Facility ranges, based on our consolidated total net leverage ratio, from 0.25% to 1.25% in the case of base rate loans and from 1.25% to 2.25% in the case of Term SOFR rate loans. In addition to paying interest on the outstanding principal under the Facility, we will pay (i) a commitment fee in respect of the unutilized commitments thereunder and (ii) customary letter of credit fees and agency fees. The commitment fees range from 0.15% to 0.35% per annum based on our consolidated net leverage ratio. As of September 30, 2025, the Revolving Credit Facility was undrawn. We incurred a total of $3.6 million in third-party costs related to the 2022 Credit Agreement which are recorded as debt issuance cost within prepaid expenses and other assets in our condensed consolidated balance sheets. As of September 30, 2025, the unamortized debt issuance cost related to the revolving credit facility was $0.9 million.

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