Financial Instruments and Fair Value

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value

Financial Instruments and Fair Value

Cash, Cash Equivalents and Marketable Securities

The Company's investments in marketable debt securities, which consist of U.S. Treasury bills, are classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets until realized.

The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows:

	Amortized Cost		Unrealized Gains		Fair Value		Cash and Cash Equivalents		Marketable Securities
Balance at September 30, 2024
Cash							$	192,641	$	—
Level 1(1):
Money market funds							27,921		—
U.S. Treasury securities	$	188,828	$	38	$	188,866	142,860		46,005
Total Level 1	188,828		38		188,866		170,781		46,005
Total	$	188,828	$	38	$	188,866	$	363,422	$	46,005

	Amortized Cost		Unrealized Gains		Fair Value		Cash and Cash Equivalents		Marketable Securities
Balance at December 31, 2023
Cash							$	221,980	$	—
Level 1(1):
Money market funds							13,906		—
U.S. Treasury securities	$	242,228	$	42	$	242,270	176,732		65,538
Total Level 1	242,228		42		242,270		190,638		65,538
Total	$	242,228	$	42	$	242,270	$	412,618	$	65,538

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

Investments, Assets Designated for Retirement and Pension Plans and Associated Liabilities

The Company has a U.S. non-qualified deferred compensation plan that consists primarily of U.S. marketable securities and mutual funds. The aggregate cost basis for these investments was $43.2 million and $37.2 million as of September 30, 2024, and December 31, 2023, respectively.

The Company also maintains a pension plan for certain current and former employees in Germany. The pensions are individually fixed Euro amounts that vary depending on the function and the eligible years of service of the employee. The Company’s investment strategy is to support its pension obligations through reinsurance contracts. The BaFin—German Federal Financial Supervisory Authority—supervises the insurance companies and the reinsurance contracts. The BaFin requires each reinsurance contract to guarantee a fixed minimum return. The Company’s pension benefits are fully reinsured by group insurance contracts with ERGO Lebensversicherung AG, and the group insurance contracts are measured in accordance with BaFin guidelines (including mortality tables and discount rates) which are considered Level 2 inputs.

The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value:

			Balance Sheet Classification
			Current Assets		Non-Current Assets				Current Liabilities		Non-current Liabilities
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at September 30, 2024
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	59,089	$	—	$	—	$	59,089	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,503		1,300		11,203		—		—		—
Pension benefit obligation	(14,543)		—		—		—		(1,300)		(13,243)
Total Level 2	(2,040)		1,300		11,203		—		(1,300)		(13,243)
Total	$	57,049	$	1,300	$	11,203	$	59,089	$	(1,300)	$	(13,243)

			Balance Sheet Classification
			Current Assets		Non-Current Assets				Current Liabilities		Non-current Liabilities
	Fair Value		Other Current Assets		Assets Designated for Retirement and Pension Plans		Investments		Other Current Liabilities		Retirement and Pension Plans
Balance at December 31, 2023
Measured on a recurring basis:
Level 1(1):
U.S. non-qualified deferred compensation plan	$	47,287	$	—	$	—	$	47,287	$	—	$	—
Level 2(2):
Retirement and pension plan assets	12,394		1,289		11,105		—		—		—
Pension benefit obligation	(14,416)		—		—		—		(1,289)		(13,127)
Total Level 2	(2,022)		1,289		11,105		—		(1,289)		(13,127)
Total	$	45,265	$	1,289	$	11,105	$	47,287	$	(1,289)	$	(13,127)

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.

(2)Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Contingent Consideration and Compensation

The former owners of certain of the Company's acquired businesses are eligible to receive additional cash consideration based on the attainment of certain operating metrics in the periods subsequent to acquisition. Contingent consideration and compensation are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of contingent consideration and compensation using a variation of the income approach, known as the real options method. The significant unobservable inputs utilized in the real options method include (1) revenue forecasts; (2) operating expense forecasts; (3) the discount rate; and (4) volatility.

The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the nine months ended September 30, 2024:

	Earnout		Contingent Compensation
Balance at December 31, 2023	$	(38,601)	$	(18,878)
Earnout accretion	(1,413)		—
Compensation expense	—		(8,220)
Fair value adjustment	(1,211)		—
Payments	—		4,821
Foreign currency translation	(607)		166
Balance at September 30, 2024	$	(41,832)	$	(22,111)

Earnout accruals of $41.8 million and $38.6 million were recorded within Non-current liabilities - Other non-current liabilities as of September 30, 2024, and December 31, 2023, respectively. Contingent compensation accruals of $4.3 million and $6.0 million are recorded within Current liabilities - Accrued salaries and benefits as of September 30, 2024, and December 31, 2023, respectively, and contingent compensation accruals of $17.8 million and $12.9 million are recorded within Non-current liabilities - Accrued salaries and benefits as of September 30, 2024, and December 31, 2023, respectively.

Goodwill

Goodwill represents the difference between the purchase price of acquired businesses and the related fair value of the net assets acquired, which is accounted for by the acquisition method of accounting. The Company performs assessments of the carrying value of goodwill at least annually and whenever events occur or circumstances indicate that a carrying amount of goodwill may not be recoverable. During the three months ended June 30, 2024, an interim goodwill impairment evaluation was conducted to determine the fair value of the Company's reporting units. As a result of this evaluation, the Company recorded impairment charges in the On-Demand Talent and Europe reporting units of $14.8 million and $1.5 million, respectively. The fair value of the reporting units is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of its reporting units using discounted cash flow models.

Other Investments

The Company holds an equity investment that does not have a readily determinable fair value for which the Company uses the measurement alternative prescribed in FASB Accounting Standards Codification Topic 321, Investments-Equity Securities. As of September 30, 2024, the Company held the equity investment under the measurement alternative of $11.0 million which are presented in Other non-current assets in the Condensed Consolidated Balance Sheets. There were no impairments or changes resulting from observable transactions for these investments in the three and nine months ended September 30, 2024 and no adjustments have been made to the carrying values as of September 30, 2024. There were no equity investments as of December 31, 2023.