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Convertible Senior Notes | 12 Months Ended
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Dec. 31, 2024
Debt Disclosure [Abstract] |
Convertible Senior Notes | Convertible Senior Notes In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). In March/April 2019, we issued $800 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes, together with the 2026 notes, the notes). The 2026 notes bear no interest and will mature on September 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to such date. The 2025 notes bear interest of 0.125% per year which is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. The 2025 notes will mature on March 15, 2025, unless repurchased, redeemed or converted in accordance with their terms prior to such date. As of December 31, 2024, 9,297,800 and 6,961,352 shares remained underlying the 2026 notes and 2025 notes, respectively. Each $1,000 principal amount of the 2026 notes will initially be convertible into 9.2978 shares of our common stock. This is equivalent to an initial conversion price of approximately $107.55 per share, which is subject to adjustment in certain circumstances. Each $1,000 principal amount of the 2025 notes will initially be convertible into 19.3956 shares of our common stock. This is equivalent to an initial conversion price of approximately $51.56 per share, which is subject to adjustment in certain circumstances. Prior to the close of business on the business day immediately preceding June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 notes, the notes are convertible at the option of holders only upon satisfaction of certain circumstances. On or after June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 notes until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, the notes may be settled in shares of our common stock, cash or a combination of cash and shares of our common stock, at our election. As of December 31, 2024, the 2026 notes are not convertible and have been classified as a long-term liability. As of December 31, 2024, the 2025 notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding their maturity date and have been classified as a current liability. We expect to settle any 2025 Notes conversion requests in shares of our common stock. In November 2024, in connection with our securities repurchase program, we extinguished $116.6 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $96.2 million, which was paid to the holders in cash. We also incurred approximately $0.3 million in fees resulting in a total reacquisition price of $96.5 million. The carrying amount of the extinguished notes was $116.0 million resulting in a $19.5 million gain on early extinguishment of debt. We elected to reacquire and not cancel the extinguished 2026 notes and left the associated capped call transactions outstanding. The following table presents the net carrying amount of the notes (in thousands):
| December 31, 2024 |  | December 31, 2023
| 2026 Notes |  | 2025 Notes |  |  |  | 2026 Notes |  | 2025 Notes |  |
Principal amount | $ | 127,906 |  |  | $ | 358,914 |  |  |  |  | $ | 244,479 |  |  | $ | 358,914 |  |  |
Unamortized issuance costs | (562) |  |  | (309) |  |  |  |  | (1,721) |  |  | (1,835) |  |  |
Net carrying amount | $ | 127,344 |  |  | $ | 358,605 |  |  |  |  | $ | 242,758 |  |  | $ | 357,079 |  |  |
The following table presents the total interest expense recognized related to the notes (in thousands):
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
2026 notes: |  |  |  |  |
Contractual interest expense | $ | — |  |  | $ | — |  |  | $ | — |
Amortization of issuance costs | 620 |  |  | 1,035 |  |  | 2,196 |
Total 2026 notes interest expense | $ | 620 |  |  | $ | 1,035 |  |  | $ | 2,196 |
2025 notes: |  |  |  |  |
Contractual interest expense | $ | 443 |  |  | $ | 621 |  |  | $ | 874 |
Amortization of issuance costs | 1,527 |  |  | 2,121 |  |  | 2,970 |
Total 2025 notes interest expense | $ | 1,970 |  |  | $ | 2,742 |  |  | $ | 3,844 |
Capped Call Transactions Concurrently with the offering of the 2026 notes and 2025 notes, we used $103.4 million and $97.2 million, respectively, of the net proceeds to enter into privately negotiated capped call transactions which are expected to reduce or offset potential dilution to holders of our common stock upon conversion of the notes or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes. The capped call transactions automatically exercise upon conversion of the notes and as of December 31, 2024, cover 9,297,800 and 6,961,352 shares of our common stock for the 2026 notes and 2025 notes, respectively. These are intended to effectively increase the overall conversion price from $107.55 to $156.44 per share for the 2026 notes and $51.56 to $79.32 per share for the 2025 notes. The effective increase in conversion price as a result of the capped call transactions serves to reduce potential dilution to holders of our common stock and/or offset the cash payments we are required to make in excess of the principal amount of any converted notes. As these transactions meet certain accounting criteria, they are recorded in stockholders’ equity as a reduction of additional paid-in capital on our consolidated balance sheets and are not accounted for as derivatives. The fair value of the capped call instrument is not remeasured each reporting period. The cost of the capped call is not expected to be deductible for tax purposes.

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