XML 24 R18.htm IDEA: XBRL DOCUMENT
v3.24.3

Convertible Senior Notes | 9 Months Ended
--- | ---
Sep. 30, 2024
Debt Disclosure [Abstract] |
Convertible Senior Notes | 9. Convertible Senior Notes The carrying value of the Company's Convertible Senior Notes is as follows:
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | (Amounts in thousands) |
1.00% Convertible Senior Notes due 2028: |  |  |  |  |  |
Principal amount |  | $ | 600,000 |  |  | $ | 600,000 |
Unamortized debt discount |  |  | (71,261 | ) |  |  | (81,457 | )
Unamortized debt issuance costs |  |  | (7,132 | ) |  |  | (8,400 | )
Carrying amount - Convertible Senior Notes due 2028, net |  | $ | 521,607 |  |  | $ | 510,143 |
0.375% Convertible Senior Notes due 2024: |  |  |  |  |  |
Principal amount |  | $ | — |  |  | $ | 69,700 |
Unamortized debt issuance costs |  |  | — |  |  |  | (248 | )
Carrying amount - Convertible Senior Notes due 2024, net |  | $ | — |  |  | $ | 69,452 |
1.00% Convertible Senior Notes due 2028 On December 14, 2023, the Company issued $600.0 million aggregate principal amount of its 2023 Notes in the Exchange and Subscription Agreements with a limited number of holders of its outstanding 2019 Notes and certain other qualified institutional buyers pursuant to Rule 144A under the Securities Act. Pursuant to the Exchange and Subscription Agreements and to the Exchange Transaction, the Company issued $290.1 million aggregate principal amount of the 2023 Notes in a private placement to accredited institutional buyers (the “Subscription Transactions”) for $290.1 million in cash. The Company evaluated the Exchange Transaction and determined approximately $29.6 million of the $217.7 million principal of the exchanged 2019 Notes should be accounted for as extinguishments of debt and approximately $188.1 million should be accounted for as modification of debt. As a result, the Company recognized a $12.7 million loss on extinguishments of debt in its consolidated statements of comprehensive income (loss) for the year ended December 31, 2023, inclusive of $0.1 million of unamortized debt issuance costs. Under debt modification accounting, the carrying amount of the modified 2019 Notes was reduced by $2.8 million, with a corresponding increase to additional paid-in capital, to account for the increase in the fair value of the embedded conversion option, representing a debt discount of the modified 2019 Notes. The aggregate debt discount of $71.3 million as of September 30, 2024, comprised of $68.9 million increase in principal of the modified 2019 Notes and a $2.4 million increase in the fair value of the embedded conversion option. The aggregate debt discount of $81.5 million as of December 31, 2023, comprised of $78.7 million increase in principal of the modified 2019 Notes and a $2.8 million increase in the fair value of the embedded conversion option. These amounts are presented as a direct reduction from the carrying value of the convertible debt in their respective periods presented in our condensed consolidated balance sheets. This amount is being accreted into interest expense in the condensed consolidated statements of comprehensive income (loss) using the effective interest method over the term of the 2023 Notes. Proceeds from the Subscription Transactions were $276.1 million, net of debt issuance costs of $13.9 million. The Exchange Transaction resulted in $6.2 million of the debt issuance costs related to the modified 2019 Notes, which were expensed as incurred in accordance with debt modification accounting, and $7.7 million of deferred debt issuance costs related to the 2023 Notes, which were recorded as a direct deduction to the carrying value of the 2023 Notes on the Company’s condensed consolidated balance sheets. The Company is amortizing the $7.7 million of debt issuance costs of the 2023 Notes into amortization of debt issuance costs in the Company’s condensed consolidated statements of comprehensive income (loss) over the remaining term of the 2023 Notes. The carrying value of the 2023 Notes of $521.6 million and $510.1 million is included in long-term debt on the Company's condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively. The Company used $14.4 million of the proceeds from the Subscription Transactions to repurchase shares of its common stock from certain purchasers of the 2023 Notes. For more information regarding this repurchase, see Note 13, “Stockholders’ Equity - Share Repurchases” included in Part II, Item 8, “Financial Statements and Supplementary Data,” to the Company's Form 10-K/A. The Company also used a portion of the proceeds to finance in part, the settlement upon redemption of the remaining 2019 Notes at maturity. The remainder of the proceeds will be used for working capital. The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of 1.00% per year. Interest is payable semi-annually in arrears on each of June 15 and December 15, which commenced on June 15, 2024. The 2023 Notes will mature on December 15, 2028, unless earlier redeemed, repurchased or converted. During the third quarter of 2024, the closing price of the Company’s common stock did not exceed 130% of the conversion price of the 2023 Notes for more than 20 trading days of the last 30 consecutive trading of the quarter. As a result, the 2023 Notes are not convertible at the option of the holders of the 2023 Notes during the fourth quarter of 2024, the quarter immediately following the quarter when the conditions are met, as stated in the indenture governing the 2023 Notes. Because the 2023 Notes were not convertible as of September 30, 2024, the Company continues to classify the carrying value of the 2023 Notes of $521.6 million as noncurrent liabilities on the Company’s condensed consolidated balance sheet at September 30, 2024. The initial conversion rate for the 2023 Notes is 4.9247 shares of the Company’s common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of $203.06 per share and represents a 30% premium over the last reported sale price of $156.20 per share on December 6, 2023, the date on which the 2023 Notes were priced. Prior to the close of business on the business day immediately preceding September 15, 2028, the 2023 Notes will be convertible at the option of the holders of 2023 Notes only upon the satisfaction of the specified conditions mentioned above and during certain quarters commencing after the calendar quarter ending on March 31, 2024, into cash up to their principal amount, and into cash, shares of the Company’s common stock or a combination thereof, at the Company’s election, for the conversion value above the principal amount, if any. Thereafter until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2023 Notes will be convertible at the option of the holders of 2023 Notes at any time regardless of these conditions. The Company may redeem for cash, all or a portion of the 2023 Notes, at its option, on or after December 18, 2026 and prior to the 21 st scheduled trading day immediately preceding the maturity date at a redemption price of 100% of the principal amount of the 2023 Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date, if certain conditions are met in accordance to the 2023 Notes Indenture. For more information on the 2023 Notes, see Note 15, “Convertible Senior Notes,” included in Part II, Item 8, “Financial Statements and Supplementary Data,” to the Company’s Form 10-K/A. The following table sets forth total interest expense recognized related to the 2023 Notes for the three and nine months ended September 30, 2024 for which there were no comparable amounts for the same periods of 2023:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2024 |  |  | 2024 |
|  | (Amounts in thousands, except percentage data) |
Contractual interest expense – 2023 Notes |  | $ | 1,500 |  |  | $ | 4,500 |
Amortization of debt discount – 2023 Notes |  |  | 3,473 |  |  |  | 10,197 |
Amortization of debt issuance costs – 2023 Notes |  |  | 410 |  |  |  | 1,190 |
Total |  | $ | 5,383 |  |  | $ | 15,887 |
Effective interest rate of the liability component |  |  | 4.39 | % |  |  | 4.39 | %
At September 30, 2024 and December 31, 2023, the carrying value of the 2023 Notes was $521.6 million and $510.1 million, respectively, net of unamortized discount, and the fair value of the 2023 Notes was $553.3 million and $596.0 million, respectively. The fair value of the 2023 Notes was determined based on the most recent trade activity of the 2023 Notes at September 30, 2024 and December 31, 2023. 0.375% Convertible Senior Notes due 2024 The Company issued $287.5 million aggregate principal amount of the 2019 Notes on July 19, 2019 in a transaction which included the underwriters’ exercise in full of an option to purchase an additional $37.5 million aggregate principal amount of the 2019 Notes (the “Notes Offering”). The net proceeds of the Notes Offering, after deducting underwriting discounts and commissions and other related offering expenses payable by the Company, were approximately $278.5 million. Immediately following the closing of the Exchange Transaction mentioned above, $69.7 million in aggregate principal amount of the 2019 Notes remained outstanding as of December 31, 2023. During 2024, $0.2 million aggregate principal amount of the 2019 Notes converted, bringing the remaining outstanding 2019 Notes to $69.5 million in aggregate principal amount. The remaining 2019 Notes matured and were paid off in full on July 15, 2024. As mentioned above, the Company used net proceeds from the Exchange Transaction to fund the repayment of the 2019 Notes at maturity and to pay accrued and unpaid interest with respect to such notes. The Company irrevocably elected to settle the conversion of the 2019 Notes using a combination of cash and the Company’s common stock, settling the par value of the 2019 Notes in cash and any excess conversion premium in shares. In connection with the conversion, the Company paid $69.6 million in cash, which included principal and accrued interest, and issued 100,942 shares of the Company’s common stock representing the conversion premium. For more information on the 2023 Notes, see Note 15, “Convertible Senior Notes,” included in Part II, Item 8, “Financial Statements and Supplementary Data,” to the Company’s Form 10-K/A. The following table sets forth total interest expense recognized related to the 2019 Notes:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (Amounts in thousands, except percentage data) |
Contractual interest expense – 2019 Notes |  | $ | 11 |  |  | $ | 269 |  |  | $ | 141 |  |  | $ | 808 |
Amortization of debt issuance costs – 2019 Notes |  |  | 19 |  |  |  | 459 |  |  |  | 243 |  |  |  | 1,373 |
Total |  | $ | 30 |  |  | $ | 728 |  |  | $ | 384 |  |  | $ | 2,181 |
Effective interest rate of the liability component |  |  | 1.00 | % |  |  | 1.00 | % |  |  | 1.00 | % |  |  | 1.00 | %
At December 31, 2023, the carrying value of the 2019 Notes was $69.5 million, net of unamortized discount, and the fair value of the 2019 Notes was $109.8 million. The fair value of the 2019 Notes was determined based on the most recent trade activity of the 2019 Notes at December 31, 2023.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/470/tableOfContent + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration