XML 30 R19.htm IDEA: XBRL DOCUMENT v3.25.2
Fair Value Measurements (Notes)
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
ASC Topic 820, Fair Value Measurement (“Topic 820”) established a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy under Topic 820 are described below:
Level 1:    Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2:    Inputs to the valuation methodology are quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3:    Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The fair value measurement level for assets and liabilities within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis within each level of the fair value hierarchy:
Fair Value Hierarchy
Level 1Level 2Level 3
(in thousands)June 30, 2025December 31, 2024June 30, 2025December 31, 2024June 30, 2025December 31, 2024
Assets:
Interest rate caps$— $— $— $18 $— $— 
Total assets measured at fair value$— $— $— $18 $— $— 
Liabilities:
Contingent earnout liabilities$— $— $— $— $16,731 $145,559 
Total liabilities measured at fair value$— $— $— $— $16,731 $145,559 
Interest Rate Caps
The fair value of interest rate caps is determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.
Contingent Earnout Liabilities
Methodologies used for liabilities measured at fair value on a recurring basis within Level 3 of the fair value hierarchy are based on limited unobservable inputs. These methods may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The fair value of contingent earnout liabilities is based on sales projections for the acquired entities, which are reassessed each reporting period. Based on the Company’s ongoing assessment of the fair value of its contingent earnout liabilities, the Company recorded a net increase (decrease) in the estimated fair value of such liabilities of $(2.0) million and $6.1 million for the three and six months ended June 30, 2025, respectively. The Company has assessed the maximum estimated exposure to the contingent earnout liabilities to be $63.2 million at June 30, 2025.
The Company measures contingent earnout liabilities at fair value each reporting period using significant unobservable inputs classified within Level 3 of the fair value hierarchy. The Company uses a probability weighted value analysis as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are sales projections over the earnout period, and the probability outcome percentages assigned to each scenario. Significant increases or decreases to either of these inputs would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earnout liabilities. Ultimately, the liability will be equivalent to the amount settled, and the difference between the fair value estimate and amount settled will be recorded in earnings for business combinations, or as a change in the carrying value of the assets acquired for asset acquisitions.
The fair value of the contingent earnout liabilities is based on Monte Carlo simulations that measure the present value of the expected future payments to be made to partners in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, the Company estimates the partner’s future performance using financial projections developed by management for the partner and market participant assumptions that were derived for revenue growth or EBITDA growth. Revenue growth rates for earnouts with ongoing measurement periods generally ranged from 20% to 25% at June 30, 2025 and from 20% to 25% at December 31, 2024. The Company estimates future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. These payments are generally discounted to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the partner to achieve the targets. However, no significant discount rates have been applied to the remaining material contingent earnout liabilities at June 30, 2025 or December 31, 2024 due, in part, to the short-term nature of a substantial portion of the liabilities wherein their fair values approximate their carrying values. Changes in financial projections, market participant assumptions for revenue growth, or the risk-adjusted discount rate, would result in a change in the fair value of contingent consideration.
The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation:
For the Three Months
Ended June 30,		For the Six Months
 Ended June 30,
(in thousands)2025202420252024
Balance at beginning of period$48,234 $235,865 $145,559 $276,467 
Change in fair value of contingent consideration(1)
(1,957)5,552 6,104 18,228 
Fair value of contingent consideration issuances8,766 — 8,766 
Settlement of contingent consideration(2)
(38,312)(31,174)(143,698)(84,452)
Balance at end of period$16,731 $210,243 $16,731 $210,243 
__________
(1)    The Company reclassified $1.5 million and $(1.6) million of its contingent earnout liabilities through the issuance/(reduction) of colleague earnout incentives during the three and six months ended June 30, 2025, respectively, and $2.8 million and $6.4 million during the three and six months ended June 30, 2024, respectively, which results in a reclassification between the change in fair value of contingent consideration and colleague compensation and benefits expense in the condensed consolidated statements of comprehensive income (loss).
(2)    The Company settled $5.6 million of its contingent earnout liabilities through the issuance of related party notes payable during the six months ended June 30, 2024. The condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 include $5.6 million and $1.5 million, respectively, of payments of contingent earnout consideration related to similar non-cash settlements in prior periods.
Fair Value of Other Financial Instruments
The fair value of long-term debt is based on an estimate using a discounted cash flow analysis and current borrowing rates for similar types of borrowing arrangements. The carrying amount and estimated fair value of long-term debt were as follows:
Fair Value HierarchyJune 30, 2025December 31, 2024
(in thousands)Carrying AmountEstimated
Fair Value		Carrying AmountEstimated
Fair Value
Long-term debt(1)
Level 2$1,531,121 $1,553,957 $1,435,800 $1,450,479 
Revolving line of creditLevel 2112,000 113,190 — — 
__________
(1)    The carrying amount of long-term debt reflects outstanding borrowings, which are presented net of unamortized debt issuance costs of $27.1 million and $29.3 million at June 30, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets