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Debt | 12 Months Ended
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Dec. 31, 2023
Debt Disclosure [Abstract] |
Debt | (11) Debt Convertible Senior Notes In May 2020, we issued $230.0 million aggregate principal amount of convertible senior notes due May 1, 2025 (the “2025 Notes”) and in March 2021, we issued $600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the “2027 Notes”) and in September 2023, we issued $300.0 million aggregate principal amount of convertible senior notes due March 15, 2029 (the “2029 Notes”) (collectively, the “Notes”). Further details of the Notes are as follows:
Issuance |  | Maturity Date |  | Interest Rate |  | First Interest Payment Date |  | Effective Interest Rate |  | Semi-Annual Interest Payment Dates |  | Initial Conversion Rate per $1,000 Principal |  | Initial Conversion Price |  | Number of Shares (in millions)
2025 Notes |  | May 1, 2025 |  | 2.25% |  | November 1, 2020 |  | 2.88% |  | May 1 and November 1 |  | 16.3875 |  | $ | 61.02 |  |  | 0.8
2027 Notes |  | March 15, 2027 |  | 0.25% |  | September 15, 2021 |  | 0.67% |  | March 15 and September 15 |  | 9.6734 |  | $ | 103.38 |  |  | 5.8
2029 Notes |  | March 15, 2029 |  | 1.25% |  | March 15, 2024 |  | 1.69% |  | March 15 and September 15 |  | 15.4213 |  | $ | 64.85 |  |  | 4.6
The 2025 Notes, the 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S. Trust Company, Bank National Association, as trustee (the “Indentures”). The total net proceeds from the 2025 Notes, the 2027 Notes and the 2029 Notes offerings, after deducting initial purchase discounts and debt issuance costs, were $222.8 million, $585.0 million and $292.0 million, respectively. Terms of the Notes The holders of the Notes may convert their respective Notes at their option at any time prior to the close of business on the business day immediately preceding their respective convertible dates only under the following circumstances: •during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 for the 2025 Notes, March 20, 2024 for the 2027 Notes and September 21, 2026 for the 2029 Notes (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the respective Notes on each applicable trading day; •during the five business day period after any five consecutive trading day period for the 2025 Notes and any ten consecutive trading day period for the 2027 Notes and the 2029 Notes (the “measurement periods”) in which the trading price (as defined in the Indentures) per $1,000 principal amount of the applicable series of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate of the respective Notes on each such trading day; •if we call any or all of the respective Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the respective redemption date; or •upon the occurrence of specified corporate events (as set forth in the Indentures). As of December 31, 2023, the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders. The holders may convert the 2025 Notes, the 2027 Notes and the 2029 Notes at any time on or after November 1, 2024, December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures. If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances. The 2025 Notes, the 2027 Notes and the 2029 Notes are redeemable after May 6, 2023, March 20, 2024 and September 21, 2026 (the “Redemption Dates”), respectively. On or after the respective Redemption Dates, we may redeem for cash all or any portion of the 2025 Notes, the 2027 Notes or the 2029 Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding, the date on which we provide the redemption notice at a redemption price equal to 100% principal amount of the 2025 Notes, the 2027 Notes or the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Partial Repurchase and Conversion of the 2023 Notes On March 16, 2021, we used a portion of the proceeds from the issuance of the 2027 Notes, together with 2.2 million shares of our common stock, to repurchase and retire $182.6 million aggregate principal amount of the 2023 Notes, and paid accrued and unpaid interest thereon (the 2023 Notes Repurchase Transaction). The 2023 Notes Repurchase Transaction was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20). The total fair value of the additional common stock issued to induce the conversion of $2.7 million was recognized as an inducement expense and classified as a component of interest expense in our consolidated statement of operations. The remaining cash and common stock consideration issued under the original terms of the 2023 Notes was accounted for under the general conversion accounting guidance where the difference between the carrying amount of the 2023 Notes retired, including unamortized debt issuance cost of $2.7 million, and the cash consideration paid and the par amount of the common stock issued, was recorded in additional paid-in capital. During the first quarter of 2021, holders of the 2023 Notes elected to convert Notes with a principal amount of $2.0 million. Cash was paid for the principal and the excess conversion spread was paid in 23,123 shares of our common stock. Redemption of the 2023 Notes On September 16, 2021, we issued a redemption notice for the remaining $45.4 million aggregate principal amount outstanding of the 2023 Notes. Pursuant to the redemption notice, on November 30, 2021 we paid $43.4 million in cash and issued 697,262 shares of our common stock to the holders of the 2023 Notes who submitted conversion notices, and the remaining $2.0 million of 2023 Notes were redeemed in cash, plus accrued and unpaid interest. Partial Repurchase and Conversion of the 2025 Notes In September 2023, we used $201.0 million of the proceeds from the issuance of the 2029 Notes to repurchase and retire $184.0 million aggregate principal amount of the 2025 Notes and paid accrued and unpaid interest thereon. As a result of the induced conversion, we recorded $53.9 million in non-cash induced conversion expense which is included in interest expense in our consolidated statement of operations. The induced conversion expense represents the fair value of the consideration issued upon conversion in excess of the fair value of the securities issuable under the original terms of the 2025 Notes. Accounting for the Notes In accounting for the issuance of the Notes, the principal less debt issuance costs are recorded as debt on our consolidated balance sheet. The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes. The net carrying amount of the Notes as of December 31, 2023 and December 31, 2022 was as follows (in thousands):
|  | 2025 Notes |  | 2027 Notes |  | 2029 Notes
|  | Principal |  | Unamortized debt issuance costs |  | Total |  | Principal |  | Unamortized debt issuance costs |  | Total |  | Principal |  | Unamortized debt issuance costs |  | Total
Balance at December 31, 2022 |  | $ | 229,992 |  |  | $ | (3,480) |  |  | $ | 226,512 |  |  | $ | 600,000 |  |  | $ | (10,564) |  |  | $ | 589,436 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Issuance |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 300,000 |  |  | (7,909) |  |  | 292,091 |
Partial repurchase |  | (184,000) |  |  | 2,010 |  |  | (181,990) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of debt issuance costs |  | — |  |  | 1,066 |  |  | 1,066 |  |  | — |  |  | 2,487 |  |  | 2,487 |  |  | — |  |  | 394 |  |  | 394 |
Balance at December 31, 2023 |  | $ | 45,992 |  |  | $ | (404) |  |  | $ | 45,588 |  |  | $ | 600,000 |  |  | $ | (8,077) |  |  | $ | 591,923 |  |  | $ | 300,000 |  |  | $ | (7,515) |  |  | $ | 292,485 |
Interest expense related to the Notes was as follows (in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| 2025 Notes |  | 2027 Notes |  | 2029 Notes |  | Total |  | 2025 Notes |  | 2027 Notes |  | Total |  | 2023 Notes |  | 2025 Notes |  | 2027 Notes |  | Total
Contractual interest expense | $ | 3,795 |  |  | $ | 1,500 |  |  | $ | 1,167 |  |  | $ | 6,462 |  |  | $ | 5,174 |  |  | $ | 1,502 |  |  | $ | 6,676 |  |  | $ | 950 |  |  | $ | 5,175 |  |  | $ | 1,164 |  |  | $ | 7,289 |
Amortization of debt issuance costs | 1,066 |  |  | 2,487 |  |  | 394 |  |  | 3,947 |  |  | 1,425 |  |  | 2,468 |  |  | 3,893 |  |  | $ | 498 |  |  | $ | 1,384 |  |  | $ | 1,948 |  |  | $ | 3,830 |
Induced conversion expense | 53,889 |  |  | — |  |  | — |  |  | 53,889 |  |  | — |  |  | — |  |  | — |  |  | 2,740 |  |  | — |  |  | — |  |  | 2,740 |
Total interest expense | $ | 58,750 |  |  | $ | 3,987 |  |  | $ | 1,561 |  |  | $ | 64,298 |  |  | $ | 6,599 |  |  | $ | 3,970 |  |  | $ | 10,569 |  |  | $ | 4,188 |  |  | $ | 6,559 |  |  | $ | 3,112 |  |  | $ | 13,859 |
Capped Calls In connection with the offering of the 1.25% convertible senior notes due 2023 (the “2023 Notes”), the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “2023 Capped Calls, “2025 Capped Calls”, “2027 Capped Calls” and “2029 Capped Calls”) (collectively, the “Capped Calls”). The Capped Calls are expected to reduce potential dilution to our common stock upon conversion of a given series of notes and/or offset any cash payments that we are required to make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls are subject to adjustment upon the occurrence of certain specified extraordinary events affecting us, including merger events, tender offers and announcement events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes:
|  | Capped Calls Entered into in Connection with the Issuance of the 2023 Notes |  | Capped Calls Entered into in Connection with the Issuance of the 2025 Notes |  | Capped Calls Entered into in Connection with the Issuance of the 2027 Notes |  | Capped Calls Entered into in Connection with the Issuance of the 2029 Notes
Initial strike price, subject to certain adjustments |  | $ | 41.59 |  |  | $ | 61.02 |  |  | $ | 103.38 |  |  | $ | 64.85 |
Cap price, subject to certain adjustments |  | $ | 63.98 |  |  | $ | 93.88 |  |  | $ | 159.04 |  |  | $ | 97.88 |
Total premium paid (in thousands) |  | $ | 26,910 |  |  | $ | 27,255 |  |  | $ | 76,020 |  |  | $ | 36,570 |
Expiration dates |  | June 2, 2023 - August 1, 2023 |  | March 4, 2025 - April 29, 2025 |  | January 1, 2027 - March 11, 2027 |  | February 13, 2029 - March 13, 2029
For accounting purposes, the 2023 Capped Calls, the 2025 Capped Calls, the 2027 Capped Calls and the 2029 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes, the 2025 Notes, the 2027 Notes and the 2029 Notes. The 2023 Notes, 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The 2025 Capped Calls were not redeemed with the partial repurchase of the 2025 Notes and remain outstanding. The 2023 Capped Calls were not redeemed with the repayment of the 2023 Notes in 2021. In accordance with the terms of the Capped Calls agreements, we elected to cash-settle the 2023 Capped Calls via written notice provided to the counterparties on May 31, 2023 (the “Notice Date”). The 2023 Capped Calls were settled over a 40-day trading period from June 2, 2023 to August 1, 2023, with a settlement date of August 3, 2023. Since cash settlement was elected, pursuant to ASC 815, the 2023 Capped Calls were deemed to meet the definition of a derivative instrument, requiring reclassification from stockholder's equity to a derivative asset at the fair value on the Notice Date, with subsequent changes in fair value to be recorded to earnings through the settlement date. The fair value on the Notice Date of $33.0 million was reclassified from stockholders' equity (additional paid-in capital) to derivative assets. The change in fair value of the derivative asset from the Notice Date to September 30, 2023 was $15.5 million and recorded to other income (expense) on our consolidated statement of operations. On August 3, 2023, we received $17.5 million in cash from the settlement of the 2023 Capped Calls. Credit Agreement In April 2020, we entered into a Credit and Security Agreement (the Credit Agreement), with KeyBank National Association that provided for a $30.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million and an accordion feature under which we could increase the credit facility to up to $70.0 million. In May 2020, we utilized the accordion feature to increase the credit facility to $50.0 million. In December 2021, we entered into an Amendment Agreement (the Amendment) in respect of our Credit and Security Agreement (as amended, the Credit Agreement), with KeyBank National Association, to, among other things, increase the credit facility from $50.0 million to $100.0 million and extend the maturity date to December 22, 2024. The Credit Agreement provides for a $100.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million, and an accordion feature under which we can increase the credit facility to up to $150.0 million. We incurred fees of $0.4 million in connection with entering into the Credit Agreement. The fees are recorded in other current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement. The commitment fee of 0.2% per annum on the unused portion of the credit facility is expensed as incurred and included within interest expense on the consolidated statement of operations. The Credit Agreement contains certain financial covenants including a requirement that we maintain specified minimum recurring revenue and liquidity amounts. The borrowings under the Credit Agreement bear interest, at our option, at a rate equal to either (i) term SOFR plus a credit spread adjustment of 0.10% per annum plus a margin of 2.50% per annum or (ii) the alternate base rate (subject to a floor), plus an applicable margin equal to 0% per annum. As of December 31, 2023, we did not have any outstanding borrowings and we were in compliance with all covenants under the Credit Agreement. As of December 31, 2023, we had a total of $8.8 million in letters of credit outstanding as collateral for certain office space leases and corporate credit card programs which reduce the amount of borrowing available under our Credit Agreement.

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