v3.24.3
DEBT
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
DEBT DEBT
The net carrying value of the Company’s outstanding debt as of September 30, 2024 and December 31, 2023, consisted of the following:

(in thousands)September 30, 2024December 31, 2023
2026 Notes$330,707 $330,707 
2031 Notes300,000 — 
Less: unamortized debt discount(12,024)(5,053)
Total convertible notes, net of discount$618,683 $325,654 

The Company issued the following convertible notes (collectively, the “Notes”) in private offerings:

•$300.0 million aggregate principal amount of 2.125% Convertible Senior Notes due 2031 (the “2031 Notes”)

•$330.7 million aggregate principal amount of 1.0% Convertible Senior Notes due 2026 (the “2026 Notes”)

The following table summarizes the key terms of each of the Notes:

2026 Notes2031 Notes
Issuance DateNovember 2021August 2024
Maturity DateDecember 1, 2026September 1, 2031
Remaining Principal (in thousands)
$330,707 $300,000 
Stated Interest Rate1.0 %2.125 %
Interest Payment DatesJune 1 & December 1March 1 & September 1
Net Proceeds (1) (in thousands)
$728,082 $291,595 
Initial Conversion Rate13.1277 52.9451 
Initial Conversion Price$76.17 $18.89 
Share Principal Price$1,000 $1,000 

(1) Net proceeds are net of customary offering expenses associated with the issuance of each of the Notes (the “issuance costs”). The Company accounts for these issuance costs as a reduction to the principal amount and amortizes the issuance costs to interest expense from the respective debt issuance date through the Maturity Date, on the Condensed Consolidated Statements of Operations.

Issuance of 2031 Notes

On August 14, 2024, the Company issued $250.0 million principal of 2.125% Convertible Senior Notes due 2031. In addition, on August 14, 2024, the initial purchasers of the 2031 Notes purchased an additional $50.0 million principal of 2031 Notes for an aggregate principal amount of $300.0 million. The 2031 Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”) with respect to the 2031 Notes between the Company and the U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

The 2031 Notes are senior unsecured obligations of the Company and bear interest at a rate of 2.125% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025. The 2031 Notes will mature on September 1, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms. The 2031 Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 52.9451 shares per one thousand dollar principal amount of 2031 Notes, which represents an initial conversion price of approximately $18.89 per share of common stock. The conversion rate is subject to customary anti-dilution adjustments. In addition, following certain events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its 2031 Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided by the Indenture.

Prior to March 1, 2031, the 2031 Notes are convertible only upon the occurrence of certain events. On or after March 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity
date of the 2031 Notes, holders may convert the 2031 Notes at any time. Upon conversion of the 2031 Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election.

Prior to September 6, 2028, the Company may not redeem the 2031 Notes. The Company may redeem for cash all or any portion of the 2031 Notes, at its option, on or after September 6, 2028, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, whether or not consecutive, including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Holders have the right to require the Company to repurchase for cash all or any portion of their 2031 Notes on March 1, 2029 at a repurchase price equal to 100% of the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest to, but excluding the repurchase date. In addition, if the Company undergoes a “fundamental change,” as defined in the Indenture, prior to the maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2031 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in principal amount of the outstanding 2031 Notes may declare 100% of the principal of, and accrued and unpaid special interest, if any, on, all the 2031 Notes to be due and payable.

2026 Notes Partial Extinguishment of Debt

In September 2023, the Company entered into privately negotiated exchange agreements with certain holders of its 2026 Notes. In total, the Company exchanged $416.8 million principal amount of 2026 Notes for an aggregate 31,722,417 shares of Company common stock. Due to the addition of a substantive conversion feature, the Company determined that the exchange was an extinguishment of debt. The Company measured an $82.6 million gain on extinguishment of debt based on the carrying value of the 2026 Notes, the fair value of the Company’s common stock issued in the exchange and related transaction costs on the Condensed Consolidated Statements of Operations.

The Company is permitted and may seek to repurchase additional notes prior to the maturity date, whether through privately negotiated purchases, open market purchases, or otherwise.