Financial Instruments and Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

The following table presents assets and liabilities measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023:

	June 30, 2024								December 31, 2023
(In thousands)	Level 2		Level 3		Measured at NAV		Total		Level 2		Level 3		Total
Financial assets:
Debt securities AFS	$	1,725	$	—	$	—	$	1,725	$	2,095	$	—	$	2,095
Equity securities	—		—		4,960		4,960		6,447		2,966		9,413
Interest rate swaps	7,241		—		—		7,241		4,385		—		4,385
Financial liabilities:
Interest rate swaps	—		—		—		—		900		—		900

Debt Securities Available for Sale ("AFS")

Costa Rica Government Obligations are held by a trust in the Costa Rica National Bank as a collateral requirement for settlement activities. The Company may substitute securities as needed but must maintain certain levels of collateral based on transaction volumes. No debt securities were purchased or sold during the six-month periods ended June 30, 2024 or June 30, 2023. Debt securities amounting to $0.4 million matured during the six-month period ended June 30, 2024, none in 2023. A provision for credit losses was not required for either June 30, 2024 or 2023.

The fair value of debt securities is estimated based on observable inputs through corroboration with market data at the measurement date, therefore classified as a Level 2 asset within the fair value hierarchy.

Interest rate swaps

The fair value of the Company's interest rate swaps are estimated using Level 2 inputs under the fair value hierarchy. Refer to Note 5 for additional information related to the derivative instruments.

Equity Securities

The fair value of the equity securities was calculated based on enterprise value to revenue multiples ranging from 0.4x to 8.3x, therefore classified as a Level 3 asset within the fair value hierarchy. During the six-month period ended June 30, 2024, the Company sold equity securities with a carrying value of $5.5 million classified as Level 3 assets within the fair value hierarchy. In connection with this sale, the Company realized a gain of $2.5 million, recognized through other income, net. At June 30, 2024, the Company no longer holds equity securities classified as Level 3. The fair value of the equity securities was $3.0 million at December 31, 2023. At December 31, 2023, mutual funds classified as equity securities, were registered with the securities and exchange commission in Brazil and were broker traded and therefore classified as Level 2.

The following table presents the changes in equity securities classified as Level 3 assets:

(In thousands)	Equity Securities
Balance at December 31, 2023	$	2,966
Disposition of equity securities	(5,487)
Change in fair value of equity securities, recognized through Other income, net	2,521
Balance at June 30, 2024	$	—

There were no transfers in or out of Level 3 during the six-month periods ended June 30, 2024 or June 30, 2023.

Equity Securities Measured at Net Asset Value (NAV)

At June 30, 2024, the Company holds mutual funds classified as equity securities on the Company's unaudited condensed consolidated balance sheet that are measured at fair value using the NAV per share, or its equivalent, as a practical expedient. Mutual funds consist of investments in venture capital strategies and start-ups with a focus on privately held technology companies. The NAV is based on the fair value of the underlying net assets owned by the mutual funds and the relative interest of each participating investor in the fair value of the underlying assets.

Financial assets and liabilities not measured at fair value

The following table presents the carrying value and estimated fair value for financial instruments at June 30, 2024 and December 31, 2023:

	June 30, 2024		December 31, 2023
(In thousands)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial liabilities:
2027 Term A Loan Facility	438,021	443,745	449,450	452,337
2030 Term B Loan Facility	521,847	542,700	521,240	539,325

The fair value of the term loans at June 30, 2024 and December 31, 2023 was obtained using prices provided by third party service providers. Their pricing is based on various inputs such as market quotes, recent trading activity in a non-active market or imputed prices. These inputs are considered Level 3 inputs under the fair value hierarchy. Also, the pricing may include the use of an algorithm that could take into account movements in the general high yield market, among other variants. The secured term loans are not accounted for at fair value in the balance sheet.