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Fair Value Measurement
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement

9. Fair Value Measurement

The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, certain prepaid expenses, other current assets, accrued liabilities, and other current liabilities approximate fair value because of their short-term maturities.

The Company issued warrants to purchase Series J Preferred Stock (the “Series J Warrants”) in connection with the Company’s entrance into the Term Loans and issued warrants to purchase common stock (the “Common Warrants,” together with the “Series J Warrants,” the “Warrants”) and two tranche obligations: (1) the RPM Call Option and (2) the Majority Sponsor Top-Up (both as defined in Note 13. Stockholders’ Equity and Redeemable Convertible Preferred Stock) in connection with the Company’s issuance of the Series D-1 Preferred Stock. The Company determined that the Warrants and tranche obligations should be classified as either liabilities or assets on the unaudited condensed consolidated balance sheets depending on valuation and are recorded at fair value both initially and subsequently, with changes in fair value recorded through earnings.

In March 2025, the Majority Sponsor Top-Up expired unexercised when the total amount of Series D-1 Preferred Stock purchased by investors exceeded $250.0 million. On March 24, 2025, the RPM Call Option was terminated via amendment of the Series D stock purchase agreement. As a result, the $0.2 million Majority Sponsor Top-Up and $4.2 million RPM Call Option were derecognized from the unaudited condensed consolidated balance sheet and recognized in other income, net in the unaudited condensed consolidated statement of net loss and comprehensive loss for the three months ended March 31, 2025.

In connection with the IPO, the Common Warrants were net exercised into 1.0 million shares of common stock. The Series J Warrants remained outstanding as of March 31, 2026.

Prior to the Company’s IPO on August 8, 2025, the Company used a Monte Carlo simulation model and probability weighted valuations based on different scenarios including change of control, IPO and default scenarios to value the Warrants. The value per Warrant under the change of control scenario was the average value per unit under 50,000 Monte Carlo simulations, the value per Warrant under the

IPO scenario was based on the number of common stock equivalent shares (including the Warrants) and total estimated equity value of the Company, and the value per Warrant under the default scenario was assumed to be zero.

The Company used a Black-Scholes option-pricing valuation model to value the Series J Warrants as of March 31, 2026. The following table presents the key inputs applied in the valuation of the Series J Warrants:

March 31, 2026

 

Common stock price

$

 

28.47

 

Exercise price for the Series J Warrants

$

 

21.17

 

Risk-free rate

 

4.09%-4.14%

 

Volatility

 

94.0%-99.0%

 

Term (years)

 

7.30-8.14

 

Black-Scholes value (per share)

$

24.70-24.80

 

Number of warrants

 

 

646

 

Value of Series J Warrants

$

 

15,978

 

The following tables present the key inputs applied in the valuation of the Series J Warrants as of December 31, 2025:

December 31, 2025

 

Common stock price

$

 

22.37

 

Exercise price for the Series J Warrants

$

 

21.17

 

Risk-free rate

 

3.94%-4.01%

 

Volatility

 

92.5%-97.5%

 

Term (years)

 

7.55-8.39

 

Black-Scholes value (per share)

$

19.00-19.06

 

Number of warrants

 

 

646

 

Value of Series J Warrants

$

 

12,294

 

During each of the three months ended March 31, 2026, and March 31, 2025 no warrants were issued. The fair value remeasurement of the Series J Warrants resulted in an increase in fair value of $3.7 million and $0.9 million for the three months ended March 31, 2026 and March 31, 2025, respectively. No warrants were exercised during the three months ended March 31, 2026 and March 31, 2025.

The fair value of the Series J Warrants on March 31, 2026 was $16.0 million.

 

 

March 31, 2026

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

275,880

 

 

$

—

 

 

$

—

 

 

$

275,880

 

Money market funds

 

 

50,299

 

 

 

—

 

 

 

—

 

 

 

50,299

 

Time deposits

 

 

225,447

 

 

 

—

 

 

 

—

 

 

 

225,447

 

Total financial assets

 

$

551,626

 

 

$

—

 

 

$

—

 

 

$

551,626

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Series J Warrants

 

$

—

 

 

$

15,978

 

 

$

—

 

 

$

15,978

 

Total financial liabilities

 

$

—

 

 

$

15,978

 

 

$

—

 

 

$

15,978

 

 

The fair value of the Series J Warrants on December 31, 2025 was $12.3 million.

 

 

December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

787,747

 

 

$

—

 

 

$

—

 

 

$

787,747

 

Money market funds

 

 

—

 

 

 

5,219

 

 

 

—

 

 

 

5,219

 

Time deposits

 

 

100,008

 

 

 

—

 

 

 

—

 

 

 

100,008

 

Total financial assets

 

$

887,755

 

 

$

5,219

 

 

$

—

 

 

$

892,974

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Series J Warrants

 

$

—

 

 

$

12,294

 

 

$

—

 

 

$

12,294

 

Total financial liabilities

 

$

—

 

 

$

12,294

 

 

$

—

 

 

$

12,294

 

There were no transfers between levels within the fair value hierarchy during the three months ended March 31, 2026 and 2025.