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FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
•Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment.
•Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The following table presents assets and liabilities measured at fair value on a recurring basis using the above input categories:
March 31, 2025December 31, 2024
(In thousands)
Level 1Level 2Level 3Level 1Level 2Level 3
Assets:
Cash equivalents, restricted cash and marketable securities:
Money market funds$175,480 $— $— $191,410 $— $— 
Certificates of deposit65,000 — — 95,000 — — 
Commercial paper— — — — — — 
Corporate notes and bonds— — — — — 
Marketable securities:
Certificates of deposit— 28,232 — — 30,092 — 
Commercial paper— 21,443 — — 30,713 — 
Corporate notes and bonds— 399,275 — — 449,570 — 
U.S. Treasuries— 88,525 — — 111,612 — 
U.S. Government agency securities— 579,305 — — 631,493 — 
Other assets:
Investments in debt securities— — 65,157 — — 64,834 
Investment in tax equity fund— — 5,190 — — — 
Total assets measured at fair value$240,480 $1,116,780 $70,347 $286,410 $1,253,480 $64,834 
Liabilities:
Warranty obligations:
Current$— $— $26,200 $— $— $27,173 
Non-current— — 153,853 — — 143,743 
Total warranty obligations measured at fair value— — 180,053 — — 170,916 
Total liabilities measured at fair value$— $— $180,053 $— $— $170,916 
Notes due 2028, Notes due 2026 and Notes due 2025
The Company carries the Notes due 2028 (as defined in Note 9, “Debt”) and Notes due 2026 (as defined in Note 9, “Debt”) at face value less unamortized debt issuance costs on its condensed consolidated balance sheets. As of March 31, 2025, the fair value of the Notes due 2028 and Notes due 2026 was $487.4 million and $601.3 million, respectively. The fair value as of March 31, 2025 was determined based on the closing trading price per $100 principal amount as of the last day of trading for the period. The Company considers the fair value of the Notes due 2028 and Notes due 2026 to be a Level 2 measurement as they are not actively traded.
Investments in debt securities
Investments in debt securities is recorded in “Other assets” on the accompanying condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024. The changes in the balance in investments in debt securities during the period were as follows:
Three Months Ended
March 31,
20252024
(In thousands)
Balance at beginning of period$64,834 $79,855 
Fair value adjustments included in other income, net323 942 
Balance at end of period$65,157 $80,797 
Investment in tax equity fund
In January 2025, the Company made an investment in a tax equity fund contributing $6.9 million. The Company has elected to report its investment at fair value, which is equal to the present value of the remaining future cash flows expected to be received from the investment. The investment is included in “Other assets” on the accompanying condensed consolidated balance sheet as of March 31, 2025.
As of March 31, 2025, the fair value of the investment was $5.2 million, representing the Company’s share of net assets in the tax equity fund. During the three months ended March 31, 2025, the Company recognized a deferred tax asset of $1.8 million related to the difference between the initial investment amount and the fair value. Additionally, the Company recognized a gain of $0.1 million in “Other income (expense), net” in the condensed consolidated statements of operations for the same period.
Fair Value Option for Warranty Obligations Related to Products Sold Since January 1, 2014
The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of return rates and replacement costs, the Company used certain Level 3 inputs, which are unobservable and significant to the overall fair value measurement. Such additional assumptions are based on the Company’s credit-adjusted risk-free rate (“discount rate”) and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation.
The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs designated as Level 3 for the periods indicated:
Three Months Ended
March 31,
20252024
(In thousands)
Balance at beginning of period$170,916 $161,793 
Accruals for warranties issued during period7,299 6,082 
Changes in estimates4,626 (12,018)
Settlements(4,898)(6,540)
Increase due to accretion expense3,060 2,905 
Other(950)(1,672)
Balance at end of period$180,053 $150,550 
Quantitative and Qualitative Information about Level 3 Fair Value Measurements
As of March 31, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 were as follows:
Percent Used
(Weighted Average)
Item Measured at Fair ValueValuation TechniqueDescription of Significant Unobservable InputMarch 31,
2025		December 31,
2024
Warranty obligations for products sold since January 1, 2014Discounted cash flowsProfit element and risk premium17.5%16.8%
Credit-adjusted risk-free rate7.2%7.2%
Sensitivity of Level 3 Inputs - Warranty Obligations
Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on the requirements of a third-party participant willing to assume the Company’s warranty obligations. The discount rate is determined by reference to the Company’s own credit standing at the fair value measurement date. Under the expected present value technique, increasing the profit element and risk premium input by 100 basis points would result in a $1.3 million increase to the liability. Decreasing the profit element and risk premium by 100 basis points would result in a $1.3 million reduction to the liability. Increasing the discount rate by 100 basis points would result in a $12.2 million decrease to the liability. Decreasing the discount rate by 100 basis points would result in a $13.7 million increase to the liability.