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Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 were as follows (in thousands):
March 31, 2025
Level 1Level 2Level 3Total
(unaudited)
Money market funds$338,163 $— $— $338,163 
Contingent consideration liabilities— — (7,313)(7,313)
Total
$338,163 $— $(7,313)$330,850 
Assets measured at fair value on a recurring basis as of December 31, 2024 were as follows (in thousands):
December 31, 2024
Level 1Level 2Level 3Total
Money market funds$186,872 $— $— $186,872 
U.S. Treasury notes177,199 — — 177,199 
Commercial paper— 13,941 — 13,941 
Corporate bonds— 9,601 — 9,601 
Total
$364,071 $23,542 $— $387,613 
There were no transfers between Level 1 and Level 2 of the fair value measurement hierarchy during the three months ended March 31, 2025 and 2024.
Convertible senior notes
As of March 31, 2025 and December 31, 2024, the estimated fair value of our convertible senior notes, with aggregate principal totaling $230.0 million, was $230.7 million and $227.5 million, respectively. We estimate the fair value based on quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). These convertible senior notes are recorded at face value less unamortized debt discount and transaction costs on our condensed consolidated balance sheets. Refer to Note 10—Debt for further information.
Nonrecurring fair value measurements
We recorded no impairment charges related to the impairment of ROU assets and leasehold improvements associated with office space designated for subleasing during the three months ended March 31, 2025 and $2.2 million for the three months ended March 31, 2024. These impairment charges were derived from the difference between the carrying value and the fair value of the relevant asset groups. The fair value of these asset groups was estimated using a discounted cash flow analysis of the office space designated for subleasing and included certain unobservable (Level 3) inputs, including the anticipated future sublease terms and rates.
Level 3 fair value measurements
The Upfront acquisition consideration included an initial estimate for contingent consideration based on certain revenue-based earn-out performance targets for Upfront during an earn-out period that ends on December 31, 2026. The Upfront contingent consideration is capped at $33.4 million and will be paid 63% in equity and 37% in cash to the extent achieved. We value Upfront’s expected contingent consideration and the corresponding liability using the Monte Carlo simulation valuation model using a distribution of potential outcomes of potential pay-out scenarios.
The Lumeon acquisition consideration included an initial estimate for contingent consideration based on certain revenue-based earn-out performance targets for Lumeon during an earn-out period that ends on June 30, 2025. The Lumeon contingent consideration is capped at $25.0 million and will be paid in cash to the extent achieved. We value Lumeon’s expected contingent consideration and the corresponding liability using the Black-Scholes valuation method based on estimates of potential pay-out scenarios.
The Carevive acquisition consideration included an initial estimate for contingent consideration based on certain revenue-based earn-out performance targets for Carevive during an earn-out period that ends on June 30, 2025. The Carevive contingent consideration is capped at $10.0 million and will be paid in cash to the extent achieved. We value Carevive’s expected contingent consideration and the corresponding liability using the Black-Scholes valuation method based on estimates of potential pay-out scenarios.
The outstanding contingent consideration liabilities are categorized as Level 3 fair value measurements and are remeasured as of each reporting period. The aggregate intrinsic value of the revenue-based earn-out contingent consideration liabilities is $5.3 million based on a point estimate of our internal forecasting of the ultimate earn-out that will be earned and our closing stock price as of March 31, 2025. The recurring Level 3 fair value measurements of the contingent consideration liabilities include the other following significant inputs used during the three months ended March 31, 2025:
Valuation MethodMarket Price of Revenue RiskRevenue VolatilityExpected Term (years)Risk-free interest rate
(unaudited)
Revenue-based earn-out liabilities
Monte Carlo
13.0%40%1.94.3%

The following table sets forth a summary of the changes in the estimated fair value of the contingent consideration liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(unaudited)
Balance as of December 31, 2024
$— 
Acquisition-date contingent consideration liability from Upfront acquisition (see Note 2)
7,313 
Balance as of March 31, 2025
$7,313