v3.25.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Employee Benefit Plans

15. Employee Benefit Plans

Defined Contribution Plans

The Company has defined contribution employee retirement savings plans in the U.S., the U.K. and Japan. The Company matches the contributions of participating employees on the basis of percentages specified in each plan. The Company’s matching contributions to the plans were $7.0 million, $6.8 million and $6.8 million for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively.

Defined Benefit Plan

The Company maintains a frozen defined benefit pension plan in the U.K. (the “U.K. Plan”). The U.K. Plan was closed to new membership in 1997 and stopped accruing additional pension benefits for existing members in 2003. Benefits under the U.K. Plan were based on the participants’ years of service and compensation as of the date the plan was frozen in 2003, adjusted for inflation. The Company continues to fund the plan in accordance with the pension regulations in the U.K.

The net periodic pension cost is included in other income (expense) in the consolidated statements of operations and consisted of the following components (in thousands):

 

Year Ended December 31,

 

 

2025

 

 

2024

 

 

2023

 

Components of the net periodic pension cost:

 

 

 

 

 

 

 

 

Interest cost

$

1,255

 

 

$

1,158

 

 

$

1,185

 

Expected return on plan assets

 

(1,500

)

 

 

(1,466

)

 

 

(1,440

)

Amortization of actuarial losses

 

778

 

 

 

851

 

 

 

990

 

Amortization of prior service cost

 

30

 

 

 

30

 

 

 

30

 

Net periodic pension cost

$

563

 

 

$

573

 

 

$

765

 

The actuarial assumptions used to compute the net periodic pension cost for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively, were as follows:

 

Year Ended December 31,

 

2025

 

2024

 

2023

Weighted-average discount rate

5.5%

 

4.5%

 

4.8%

Weighted-average long-term rate of return on plan assets

5.5%

 

5.1%

 

5.3%

 

The actuarial assumptions used to compute the benefit obligations as of December 31, 2025 and December 31, 2024, respectively, were as follows:

 

December 31,

 

2025

 

2024

Weighted-average discount rate

5.6%

 

5.5%

Rate of inflation

2.7%

 

3.1%

The discount rates used are derived from (AA) corporate bonds that have maturities approximating the terms of the pension obligations under the U.K. Plan. In estimating the expected return on plan assets, the Company considered the historical performance of the major asset classes held by the U.K. Plan and current forecasts of future rates of return for these asset classes.

The following table provides a reconciliation of benefit obligations and plan assets of the U.K. Plan (in thousands):

 

December 31,

 

 

2025

 

 

2024

 

Change in benefit obligation:

 

 

 

 

 

Projected benefit obligation at beginning of year

$

22,400

 

 

$

26,259

 

Interest cost

 

1,255

 

 

 

1,158

 

Actuarial (gains) losses (1)

 

(104

)

 

 

(3,393

)

Benefits paid

 

(1,396

)

 

 

(1,374

)

Prior service cost

 

—

 

 

 

—

 

Foreign currency exchange rate changes

 

1,570

 

 

 

(250

)

Projected benefit obligation at end of year

$

23,725

 

 

$

22,400

 

Accumulated benefit obligation at end of year

$

23,725

 

 

$

22,400

 

Change in plan assets:

 

 

 

 

 

Fair value of plan assets at beginning of year

$

26,645

 

 

$

29,351

 

Actual return on plan assets

 

845

 

 

 

(1,311

)

Employer contributions

 

—

 

 

 

287

 

Benefits paid

 

(1,396

)

 

 

(1,374

)

Foreign currency exchange rate changes

 

1,862

 

 

 

(308

)

Fair value of plan assets at end of year

$

27,956

 

 

$

26,645

 

Funded status at end of year

$

4,231

 

 

$

4,245

 

Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost:

 

 

 

 

 

Net actuarial losses at beginning of year

$

(6,197

)

 

$

(7,772

)

Net actuarial gains (losses) during the year

 

(551

)

 

 

627

 

Prior service cost arising during the year

 

—

 

 

 

—

 

Amounts reclassified from accumulated other comprehensive loss to income before income taxes

 

808

 

 

 

881

 

Foreign currency exchange rate changes

 

(430

)

 

 

67

 

Net actuarial losses

$

(6,370

)

 

$

(6,197

)
(1)
Actuarial (gains)/losses in the U.K. Plan for the years ended December 31, 2025 and December 31, 2024, respectively, primarily resulted from changes in the discount rate assumptions.

The funded status of the U.K. Plan was included in other long term assets on the accompanying consolidated balance sheet as of December 31, 2025 and December 31, 2024, respectively.

The following table reflects the total expected benefit payments to plan participants for each of the next five years and the following five years in aggregate and have been estimated based on the same assumptions used to measure the Company’s benefit obligations as of December 31, 2025 (in thousands):

 

Amount

 

2026

$

1,680

 

2027

 

1,772

 

2028

 

1,741

 

2029

 

1,739

 

2030

 

2,232

 

2031-2035

 

10,214

 

Total

$

19,378

 

In the U.K., defined benefit pension plan funding valuations are conducted every three years to determine the future level of contributions. Based on the results of the most recent valuation in 2024, the Company will not be required to contribute any additional funds for the next two years. Future annual funding contributions, if any, will be determined in the next statutory funding valuation in 2027.

Fair Value of Plan Assets

The trustee of the U.K. Plan has the fiduciary responsibilities to manage the plan assets in consultation with the Company. The overall objective is to invest plan assets in a portfolio of diversified assets, primarily through the use of institutional collective funds. During the year ended December 31, 2023, the investment strategy was gradually shifted from a balanced growth strategy that combines investments in growth assets (such as equities and credit) with investments in debt instruments that match a portion of the expected future benefit payments to a strategy that is progressively more focused on matching the benefit payments based on a series of de-risking triggers that are based on the funding level. As these triggers are hit, the assets are shifted from growth assets into fixed income investments leading to an increasingly low risk approach.

The following table summarizes the fair values of Plan assets by asset category as of December 31, 2025 (in thousands):

Asset Category

 

Fair Value

 

 

Quoted Prices in Active Markets
for Identical
Assets
 (Level 1)

 

 

Significant Other Observable
Inputs
 (Level 2)

 

 

Significant Other Unobservable
Inputs
 (Level 3)

 

 

Not
Subject to
Leveling

 

Mutual Funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income (1)

 

$

27,569

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

27,569

 

Cash

 

 

387

 

 

 

387

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

27,956

 

 

$

387

 

 

$

—

 

 

$

—

 

 

$

27,569

 

 

(1)
This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: cash and cash equivalents (70%), bonds (26%) and other assets (4%).

The following table summarizes the fair values of Plan assets by asset category as of December 31, 2024 (in thousands):

Asset Category

 

Fair Value

 

 

Quoted Prices in Active Markets
for Identical
Assets
 (Level 1)

 

 

Significant Other Observable
Inputs
 (Level 2)

 

 

Significant Other Unobservable
Inputs
 (Level 3)

 

 

Not
Subject to
Leveling

 

Mutual Funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced (1)

 

$

5,118

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

5,118

 

Fixed income (2)

 

 

21,136

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21,136

 

Cash

 

 

391

 

 

 

391

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

26,645

 

 

$

391

 

 

$

—

 

 

$

—

 

 

$

26,254

 
(1)
This class comprises a diversified portfolio of global investments which seeks growth from equities and credit assets. It is allocated on a weighted average basis as follows: equities (5%), bonds (90%) and other assets (5%).
(2)
This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (79%) and other assets (21%).