Long-term debt |
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | Long-term debt The Company’s long-term debt consisted of the following:
Convertible Notes
On February 2, 2026, the Company issued $690.0 million aggregate principal amount of 0.75% convertible senior notes due 2032 (the “2032 Notes”), including the full exercise of the initial purchasers’ option to purchase an additional $90 million principal amount. The Company received net proceeds of $669.8 million from the issuance of the 2032 Notes, after deducting underwriting discounts and commissions and issuance costs. These debt issuance costs are presented as a direct
deduction from the carrying amount of the 2032 Notes and are amortized to interest expense using the effective interest method. The unamortized debt issuance costs as of March 31, 2026 amounted to $19.7 million.
The 2032 Notes are senior, unsecured obligations and bear interest at 0.75% per year, payable semiannually in arrears on February 15 and August 15 (beginning August 15, 2026). The 2032 Notes mature on February 15, 2032, unless earlier repurchased, redeemed or converted. Holders may convert their 2032 Notes at their option under the following conditions: (i) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2026 and only during such fiscal quarter, if the last reported sale price of the Company’s 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 fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day, (ii) during the five business-day period after any ten consecutive trading-day period in which the trading price per $1,000 principal amount of notes for each trading day of such five consecutive trading-day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) if the Company issues a notice of redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called (or deemed called) for redemption, or (iv) only upon the occurrence of certain events prior to November 17, 2031, and at any time thereafter preceding maturity. Upon conversion, the Company may settle the conversion obligation in cash, shares of common stock, or a combination of cash and shares, at the Company’s election. The Company may not redeem the 2032 Notes prior to February 20, 2029. The Company may redeem all or any portion of the 2032 Notes on or after February 20, 2029, subject to the conditions and limitations described in the indenture. No sinking fund is provided for the 2032 Notes. The initial conversion rate is 70.4846 shares of common stock per $1,000 principal amount of 2032 Notes (equivalent to an initial conversion price of $14.19 per share). The conversion rate is subject to customary anti-dilution adjustments and may be increased in certain circumstances upon a make-whole fundamental change or following a notice of redemption. The 2032 Notes include customary covenants and certain events of default after which they may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which they become automatically due and payable.
As of March 31, 2026, none of the conditions permitting early conversion had been met. Accordingly, the 2032 Notes were classified as long-term as of March 31, 2026. The fair value of the 2032 Notes was $588.6 million as of March 31, 2026. The estimated fair value of the 2032 Notes was based on observable quoted prices in markets that are not active and are categorized within Level 2 of the fair value hierarchy under ASC 820 Fair Value Measurement. For the three months period ended March 31, 2026, the effective interest rate on the 2032 Notes was 1.3% per annum, and interest expense recognized totaled $1.3 million, consisting of $0.8 million of contractual interest and $0.5 million of amortization of debt issuance costs.
Mortgage Loan
On March 6, 2026, the Company entered into a mortgage loan in connection with the acquisition of an industrial property (Note 4) which is held through a special purpose entity. The loan has a principal balance of $30.75 million and is secured by a first priority mortgage on the underlying real property, together with an assignment of leases and rents and a pledge of the equity interests in the special purpose entity. The carrying value of the assets pledged as collateral primarily consists of land, building and related lease intangible assets associated with the property. The loan bears interest at a fixed rate of 6.784% per annum and requires interest-only monthly payments, with the outstanding principal balance due at maturity in March 2036. As of March 31, 2026, the carrying value of the real estate assets pledged as collateral, including land and building was $62.1 million.
The loan agreement includes customary covenants, including debt yield requirements, cash management provisions, and restrictions on additional indebtedness, transfers of the property or ownership interests, and certain leasing and operating activities. The loan also includes customary prepayment provisions, including yield maintenance requirements, which may result in prepayment premiums if the loan is repaid before maturity.
As of March 31, 2026, the Company was in compliance with all applicable covenants under the 2032 Notes and the Mortgage Loan agreements.
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