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Long-Term Debt | 6 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
Long-Term Debt | Note 6. Long-Term Debt The following table sets forth the net carrying amount of the Company’s long-term debt (in thousands):
Debt Instrument |  | Maturity Date |  | June 30, 2024 |  | December 31, 2023
2025 Convertible Notes |  | March 1, 2025 |  | $ | 161,326 |  |  | $ | 161,326 |
2026 Convertible Notes |  | March 15, 2026 |  | 609,065 |  |  | 609,065 |
Term Loan under Credit Agreement (1) |  | February 14, 2028 |  | 380,000 |  |  | 390,000 |
Revolving Credit Facility under Credit Agreement (2) |  | February 14, 2028 |  | — |  |  | — |
2030 Senior Notes |  | August 15, 2030 |  | 400,000 |  |  | 400,000 |
Total principal amount |  |  |  | 1,550,391 |  |  | 1,560,391 |
Less: unamortized debt discount and issuance costs on long-term debt |  |  |  | (13,104) |  |  | (14,909) |
Less: current portion of long-term debt, net (3) |  |  |  | (181,033) |  |  | (20,000) |
Net carrying amount of long-term debt |  |  |  | $ | 1,356,254 |  |  | $ | 1,525,482 |
(1)The Company has $75.0 million available for drawdown under the Term Loan as of June 30, 2024. (2)The Company has $225.0 million available for borrowing under the Revolving Credit Facility as of June 30, 2024. (3)The current portion of long-term debt, net as of June 30, 2024 relates to $161.0 million net carrying amount from the 2025 Convertible Notes, and $20.0 million of expected principal payments due on the Term Loan. The Term Loan requires quarterly principal payments equal to 1.25% of the original $400.0 million aggregate principal amount with balance due at maturity. The following table sets forth the future minimum principal payments for long-term debt as of June 30, 2024 (in thousands):
| 2025 Convertible Notes |  | 2026 Convertible Notes |  | Term Loan |  | 2030 Senior Notes |  | Total
2024 remaining | $ | — |  |  | $ | — |  |  | $ | 10,000 |  |  | $ | — |  |  | $ | 10,000 |
2025 | 161,326 |  |  | — |  |  | 20,000 |  |  | — |  |  | 181,326 |
2026 | — |  |  | 609,065 |  |  | 20,000 |  |  | — |  |  | 629,065 |
2027 | — |  |  | — |  |  | 20,000 |  |  | — |  |  | 20,000 |
2028 onwards | — |  |  | — |  |  | 310,000 |  |  | 400,000 |  |  | 710,000 |
Total principal amount | $ | 161,326 |  |  | $ | 609,065 |  |  | $ | 380,000 |  |  | $ | 400,000 |  |  | $ | 1,550,391 |
2030 Senior Notes I n August 2023, the Company issued $400.0 million aggregate principal amount of 8.5% senior unsecured notes due 2030 (the "2030 Senior Notes") in a private offering. The net proceeds were approximately $391.9 million. The 2030 Senior Notes are guaranteed by the Company's domestic subsidiaries and are subject to certain covenants and redemption provisions outlined in the indenture. As of June 30, 2024, the carrying value of the 2030 Senior Notes, net of unamortized debt discount and issuance costs, was $392.7 million, and the Company was in compliance with all covenants under the indenture. The effective interest rate on the 2030 Senior Notes was 8.9% as of June 30, 2024. Credit Agreement In February 2023, the Company entered into a credit agreement with certain lenders, providing for a $200.0 million revolving credit facility (the “Revolving Credit Facility”) and a $400.0 million term loan (the “Term Loan”). The credit facilities were subsequently amended to increase the Revolving Credit Facility to $225.0 million and the Term Loan to $475.0 million (collectively, as amended, the “Credit Agreement”). The proceeds from the Revolving Credit Facility can be used for working capital and general corporate purposes, while the remaining $75.0 million tranche of the Term Loan can be used to repurchase a portion of the Company’s convertible notes and for working capital and general corporate purposes. The credit facilities mature on February 14, 2028, and are guaranteed by certain material domestic subsidiaries of the Company, and secured by substantially all of the personal property of the Company and such subsidiary guarantors. In the second quarter of 2023, the Company drew down the initial $400.0 million Term Loan to repurchase a portion of the 2025 Convertible Notes. As of June 30, 2024, $75.0 million of the Term Loan remained available for draw until August 2, 2024. On August 2, 2024, the Company entered into the Third Amendment to its Credit Agreement to extend the draw down of this $75.0 million tranche from August 2, 2024 to May 2, 2025. Borrowings under the Credit Agreement will bear interest, at the Company’s option, at either: (a) the fluctuating rate per annum equal to the greatest of (i) the prime rate then in effect, (ii) the federal funds rate then in effect, plus 0.5% per annum, and (iii) an adjusted term SOFR rate determined on the basis of a one-month interest period, plus 1.0%, in each case, plus a margin of between 1.0% and 2.0%; and (b) an adjusted term SOFR rate (based on one, three or six month interest periods), plus a margin of between 2.0% and 3.0%. The applicable margin in each case is determined based on the Company’s total net leverage ratio. Interest is payable quarterly in arrears with respect to borrowings bearing interest at the alternate base rate or on the last day of an interest period, but at least every three months, with respect to borrowings bearing interest at the term SOFR rate. As of June 30, 2024, the carrying value of the 2028 Term Loan, net of unamortized debt discount and issuance costs, was $377.4 million, and the Company was in compliance with all covenants under the Credit Agreement. The effective interest rate on the 2030 Senior Notes was 8.1% as of June 30, 2024. Convertible Notes In March 2020, the Company issued $1.0 billion of 0% convertible notes due 2025 (the “2025 Convertible Notes”), and in September 2020, it issued $650.0 million of 0% convertible notes due 2026 (the “2026 Convertible Notes” and together with the 2025 Convertible Notes, the “Convertible Notes”). The Convertible Notes are senior, unsecured obligations that do not bear regular interest and the principal amount of the Convertible Notes does not accrete. As of June 30, 2024, the carrying values of the 2025 and 2026 Convertible Notes, net of unamortized debt issuance costs, were $161.0 million and $606.2 million, respectively, and the Company was in compliance with all covenants under each of the Convertible Notes indentures. Other Terms of the Convertible Notes
|  | 2025 Convertible Notes |  | 2026 Convertible Notes
$1,000 principal amount initially convertible into number of the Company’s Class A Common Stock, par value $0.0001 |  | 2.7745 shares |  | 2.3583 shares
Equivalent initial approximate conversion price per share |  | $ | 360.43 |  |  | $ | 424.03 |
During the three and six months ended June 30, 2024, the conditions allowing holders of the 2025 Convertible Notes and 2026 Convertible Notes to convert were not met. The Convertible Notes of either series may be convertible thereafter if one or more of the conversion conditions specified in the applicable indentures governing our Convertible Notes (the “Convertible Notes Indentures”) is satisfied during future measurement periods. Partial Repurchase of 2025 and 2026 Convertible Notes In May 2023, the Company used the entire proceeds from the drawdown of the $400.0 million Term Loan and $27.3 million of other available cash to repurchase $460.7 million principal amount of the 2025 Convertible Notes, resulting in a gain on early debt extinguishment of $31.1 million, net of related unamortized debt issuance costs. In August 2023, the Company used a portion of the net proceeds from the offering of the 2030 Senior Notes to repurchase $125.3 million and $40.9 million aggregate principal of the 2025 Convertible Notes and 2026 Convertible Notes, respectively, by paying an aggregate amount of $153.6 million in cash, resulting in a gain on early debt extinguishment of $11.8 million, net of related unamortized debt issuance costs. In December 2023, the Company used a portion of the remaining net proceeds from the offering of the 2030 Senior Notes to repurchase $252.7 million aggregate principal of the 2025 Convertible Notes by paying $241.3 million in cash, resulting in a gain of early debt extinguishment in the amount of $10.5 million net of related unamortized debt issuance costs. Capped Calls In connection with the offering of the 2026 Convertible Notes, the Company entered into privately-negotiated capped call transactions with certain counterparties (the “Capped Calls”). The initial strike price of the 2026 Convertible Notes corresponds to the initial conversion price of the 2026 Convertible Notes. The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A Common Stock upon any conversion of the 2026 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The following table below sets forth key terms and costs incurred for the outstanding Capped Calls:
|  |  |  | 2026 Convertible Notes
Initial approximate strike price per share, subject to certain adjustments |  |  |  | $ | 424.03 |
Initial cap price per share, subject to certain adjustments |  |  |  | $ | 556.10 |
Net cost incurred (in millions) |  |  |  | $ | 41.8 |
Class A Common Stock covered, subject to anti-dilution adjustments (in millions) |  |  |  | 1.5
Settlement commencement date |  |  |  | 2/13/2025
Settlement expiration date |  |  |  | 3/13/2025
The following table sets forth the interest expense recognized related to long-term debt (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Contractual interest expense | $ | 14,718 |  |  | $ | 3,286 |  |  | $ | 29,676 |  |  | $ | 3,286 |
Amortization of debt discount and issuance costs | 1,011 |  |  | 1,279 |  |  | 2,014 |  |  | 2,398 |
Total interest expense related to long-term debt | $ | 15,729 |  |  | $ | 4,565 |  |  | $ | 31,690 |  |  | $ | 5,684 |

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