Derivatives

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

We use foreign currency forward contracts to mitigate foreign currency risk of certain monetary assets and liabilities denominated in foreign currencies. We do not enter into such contracts for trading or speculative purposes. These derivative instruments are not designated as hedging instruments.

In April 2024, we started to hedge certain net investment positions in foreign subsidiaries by entering into foreign currency forward contracts, generally settled monthly, that are designated as hedges of net investments. The difference between the forward rate and the spot rate of the net investment hedge forward contracts is excluded from the assessment of hedge effectiveness and subsequently reported in other (income) expense, net on a straight-line basis over the life of the forward contracts. Changes in the fair value of the forward contracts are recognized in other comprehensive income (loss) within foreign currency translation.

As of September 30, 2024 and December 31, 2023, our foreign exchange forward contracts consisted of the following:


	September 30, 2024					December 31, 2023
	Notional Value		Fair Value (Level 2)		Balance Sheet Location	Notional Value		Fair Value (Level 2)		Balance Sheet Location
	(In thousands)
Forward contracts not designated as hedging instruments
Japanese yen	$	190,653	$	1,392	Other current assets	$	279,027	$	2,745	Other current assets
Korean won	99,727		(678)		Accrued expenses	59,036		(97)		Accrued expenses
Philippine peso	7,488		(15)		Accrued expenses	6,553		(20)		Accrued expenses
Singapore dollar	3,497		7		Other current assets	11,506		20		Other current assets
Taiwan dollar	22,792		(61)		Accrued expenses	37,914		89		Other current assets
Total forward contracts not designated as hedging instruments	$	324,157	$	645		$	394,036	$	2,737


	September 30, 2024					December 31, 2023
	Notional Value		Fair Value (Level 2)		Balance Sheet Location	Notional Value		Fair Value (Level 2)		Balance Sheet Location
	(In thousands)
Forward contracts designated as net investment hedging instruments
Japanese yen	$	133,904	$	(1,000)	Accrued expenses	$	—	$	—	N/A
Total forward contracts designated as net investment hedging instruments	$	133,904	$	(1,000)		$	—	$	—

For the three and nine months ended September 30, 2024, we incurred a net loss of $4.1 million and $10.8 million, respectively, due to the impact of derivatives not designated as hedging instruments, which includes the forward costs, and the related hedged items. For the three and nine months ended September 30, 2023, the derivatives not designated as hedging instruments resulted in a net loss of $13.8 million and $52.2 million, respectively, which were partially offset by the foreign currency gains associated with the underlying net liabilities.

For the three and nine months ended September 30, 2024, a gain of $1.7 million and $2.9 million, respectively, was recognized in other (income) expense, net for the difference between the forward rate and the spot rate of the net investment hedge. For the three and nine months ended September 30, 2024, a loss of $11.3 million and $8.1 million, respectively, was recognized in other comprehensive income (loss) for the changes in fair value of the net investment hedges.