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v3.25.1

Debt | 3 Months Ended
--- | ---
Mar. 31, 2025
Debt Disclosure [Abstract] |
Debt | Debt 2027 Notes In November 2020, the Company issued $1.15 billion principal amount of its 0% Convertible Senior Notes due 2027, or the 2027 Notes. The 2027 Notes do not bear interest, and the principal amount of the 2027 Notes will not accrete. However, special interest and additional interest may accrue on the 2027 Notes at a rate per annum not exceeding 0.50% (subject to certain exceptions) upon the occurrence of certain events such as the failure to file certain reports to the Securities and Exchange Commission, or to remove certain restrictive legends from the 2027 Notes. The 2027 Notes will mature on November 15, 2027, unless repurchased, redeemed or converted earlier. Before August 15, 2027, holders of the 2027 Notes will have the right to convert their 2027 Notes only under the following circumstances: •during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on March 31, 2021, if the last reported sale price of the Company's common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, or the sale price condition; •during the five consecutive business days immediately after any ten consecutive trading day period, or the measurement period, if the trading price per $1,000 principal amount of the 2027 Notes for each trading day of the measurement period is less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on such trading day; or •upon the occurrence of specified corporate events From and after August 15, 2027, holders of the 2027 Notes may convert their 2027 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 7.1523 shares of common stock per $1,000 principal amount of the 2027 Notes, which represents an initial conversion price of approximately $139.82 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Company may not redeem the 2027 Notes at its option at any time before November 20, 2024. The 2027 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after November 20, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any 2027 Notes for redemption will constitute a Make-Whole Fundamental Change with respect to the 2027 Notes, in which case the conversion rate applicable to the conversion of the 2027 Notes will be increased in certain circumstances if it is converted after it is called for redemption. If certain corporate events that constitute a “Fundamental Change” occur, then, subject to a limited exception for certain cash mergers, holders of the 2027 Notes may require the Company to repurchase their 2027 Notes at a cash repurchase price equal to the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. In February 2025, the Company entered into privately negotiated exchange agreements with certain holders of its 2027 Notes, pursuant to which the Company issued $600.0 million aggregate principal amount of 1.25% Convertible Senior Notes due 2031, or the 2031 Notes, in exchange for the retirement of $659.3 million aggregate principal amount of the 2027 Notes, or the Note Exchange Transaction. Following the closing of the Note Exchange Transaction, $490.7 million in aggregate principal amount of the 2027 Notes remain outstanding with terms unchanged. In addition, as a result of the Note Exchange Transaction, the Company recognized a gain on extinguishment of convertible notes of $13.7 million for the three months ended March 31, 2025, included in other income (expense), net on the Company's condensed consolidated statements of operations. 2031 Notes The 2031 Notes bear interest at a rate of 1.25% per annum, payable semi-annually in arrears on each February 15 and August 15, commencing on August 15, 2025. Special interest may accrue on the 2031 Notes at a rate per annum not exceeding 0.50% (subject to certain exceptions). The 2031 Notes will mature on February 15, 2031, unless repurchased, redeemed or converted earlier. Before November 15, 2030, holders of the 2031 Notes will have the right to convert the 2031 Notes only under the following circumstances: •during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on March 31, 2025, if the last reported sale price of the Company's common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter; •during the five consecutive business days immediately after any ten consecutive trading day period, or the measurement period, if the trading price per $1,000 principal amount of 2031 Notes for each trading day of the measurement period is less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on such trading day; or •upon the occurrence of specified corporate events. From and after November 15, 2030, holders of 2031 Notes may convert their 2031 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 16.0716 shares of common stock per $1,000 principal amount of 2031 Notes, which represents an initial conversion price of approximately $62.22 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Company may not redeem the 2031 Notes at its option at any time before February 21, 2028. The 2031 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after February 21, 2028 and on or before the 25th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any 2031 Note for redemption will constitute a Make-Whole Fundamental Change with respect to the 2031 Note, in which case the conversion rate applicable to the conversion of the 2031 Note will be increased in certain circumstances if it is converted after it is called for redemption. If certain corporate events that constitute a “Fundamental Change” occur, then, subject to a limited exception for certain cash mergers, holders of the 2031 Notes may require the Company to repurchase their 2031 Notes at a cash repurchase price equal to the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. Since the 2027 Notes and the 2031 Notes were not convertible as of March 31, 2025 and December 31, 2024, the net carrying amounts of the 2027 Notes and the 2031 Notes were classified as long-term liabilities. The following table sets forth the net carrying amounts of the 2027 Notes and the 2031 Notes as of March 31, 2025, and December 31, 2024:
|  | March 31, 2025 |  | December 31, 2024
|  | (unaudited) |  |
|  | (in thousands)
2027 Notes |  |  |  |
Outstanding principal amount |  | $ | 490,660 |  |  | $ | 1,150,000 |
Less: unamortized debt issuance costs |  | (2,904) |  |  | (7,453) |
Net carrying amount |  | $ | 487,756 |  |  | $ | 1,142,547 |
2031 Notes |  |  |  |
Outstanding principal amount |  | $ | 600,000 |  |  | $ | — |
Add: unamortized debt premium |  | 40,752 |  |  | — |
Less: unamortized debt issuance costs |  | (12,169) |  |  | — |
Net carrying amount |  | $ | 628,583 |  |  | $ | — |
Total net carrying amount |  | $ | 1,116,339 |  |  | $ | 1,142,547 |
The total estimated fair value of the 2027 Notes was $434.2 million and $964.9 million as of March 31, 2025 and December 31, 2024, respectively, and the total estimated fair value of the 2031 Notes was $621.4 million as of March 31, 2025. The fair values were determined based on the closing trading price per $100 of the 2027 Notes and the 2031 Notes as of the last day of trading for the period. The following table sets forth interest expenses recognized and effective interest rates represented related to the 2027 Notes and the 2031 Notes:
|  |  |  |  |  | Three Months Ended March 31, |  |
|  |  |  |  |  | 2025 |  | 2024 |  |  |  |
|  |  |  |  |  | (unaudited)
|  |  |  |  |  | (in thousands)
Coupon interest expense |  |  |  |  |  | $ | 917 |  |  | $ | — |  |  |  |  |
Amortization of debt premium |  |  |  |  |  | (828) |  |  | — |  |  |  |  |
Amortization of debt issuance costs |  |  |  |  |  | 702 |  |  | 645 |  |  |  |  |
Total interest expense recognized |  |  |  |  |  | $ | 791 |  |  | $ | 645 |  |  |  |  |
Effective interest rate: |  |  |  |  |  |  |  |  |  |  |  |
2027 Notes |  |  |  |  |  | 0.2% |  | 0.2% |  |  |  |
2031 Notes |  |  |  |  |  | 0.4% |  | * |  |  |  |
*Not applicable Note Hedges To minimize the impact of potential economic dilution upon conversion of the 2027 Notes, the Company entered into convertible note hedge transactions, or the 2027 Note Hedges, with respect to its common stock concurrent with the issuance of the 2027 Notes. The 2027 Note Hedges cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2027 Notes. The strike price of the 2027 Note Hedges will initially be approximately $182.60 per share, which represents a premium of 75% over the last reported sale price of the Company’s common stock of $104.34 per share on November 16, 2020, and is subject to certain adjustments under the terms of the 2027 Note Hedges. The 2027 Note Hedges will expire upon maturity of the 2027 Notes. The 2027 Note Hedges are separate transactions and are not part of the terms of the 2027 Notes. Holders of the 2027 Notes will not have any rights with respect to the 2027 Note Hedges. The shares receivable related to the 2027 Note Hedges are excluded from the calculation of diluted earnings per share as they are anti-dilutive. As these transactions meet certain accounting criteria, the 2027 Note Hedges are recorded in stockholders’ equity and are not accounted for as derivatives. The Company paid an aggregate amount of $90.0 million for the 2027 Note Hedges, which has been recorded as a reduction to additional paid-in capital and will not be remeasured. In March 2025, in connection with the Note Exchange Transaction, the Company entered into unwind agreements with certain financial institutions with respect to the 2027 Note Hedges, under which the parties terminated a portion of the 2027 Note Hedges up to the notional amounts corresponding to the amount of the 2027 Notes retired in the Note Exchange Transaction. As a result, the Company recorded an increase of $5.5 million to its additional paid-in capital. The terms of the remaining 2027 Note Hedges remain unchanged. The Company did not enter into any convertible note hedge transactions in connection with the 2031 Notes.

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