Fair Value Measurements

12 Months Ended

Dec. 31, 2025

12)

Fair Value Measurements

The Company’s debt instruments are recorded at their carrying values in its consolidated balance sheets, which may differ from their respective fair values. The estimated fair value of the Company’s 2027 Notes and 2029 Notes are both based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt (see Note 9 — Debt for additional information). The fair values of the Company’s short- term loans generally approximated their carrying values.

At December 31, 2025 and 2024, the Company held currency forward contracts with an aggregated notional amount of $10,046 and $28,160, respectively, to sell United States dollars and to buy various foreign currencies such as Canadian dollars and Euro, among others, at a forward rate. Any changes in the fair value of these contracts are recorded in Other income (expense), net in the consolidated statement of operations. During the years ended December 31, 2025, 2024 and 2023, the Company recorded a net gain (loss) of $821, ($1,649) and ($848), respectively.

The following table presents the Company’s fair value hierarchy for financial assets and liabilities:


	Fair Value Measurements as of December 31, 2025
	Level 1		Level 2		Level 3		Total
Liabilities:
emotion3D GmbH Contingent Consideration - First Tranche	$	—	$	—	$	611	$	611
emotion3D GmbH Contingent Consideration - Second Tranche	$	—	$	—	$	4,179	$	4,179
emotion3D GmbH Contingent Consideration -Third Tranche	$	—	$	—	$	696	$	696
emotion3D Subsidies Holdback	$	720	$	—	$	—	$	720
emotion3D Indemnity Holdback	$	2,000	$	—	$	—	$	2,000


	Fair Value Measurements as of December 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities:
Kinetic Contingent Consideration — First Tranche	$	—	$	—	$	2,455	$	2,455
Kinetic Contingent Consideration — Second Tranche	$	—	$	—	$	1,908	$	1,908
indie Switzerland Contingent Consideration — Second Tranche	$	—	$	—	$	634	$	634
GEO Indemnity Holdback	$	6,344	$	—	$	—	$	6,344
City Semi Contingent Consideration — Second Tranche	$	—	$	—	$	500	$	500

As of December 31, 2025 and 2024, the Company’s cash and cash equivalents, including restricted cash, were all held in cash or Level 1 instruments where the fair values approximate the carrying values.

Level 3 Disclosures

Contingent Considerations

Contingent considerations were valued based on the consideration expected to be transferred. The Company estimated the fair value based on a Monte Carlo Simulations analysis to simulate the probability of achievement of various milestones identified within each contingent consideration arrangement, using certain assumptions that require significant judgment and discount rates. The discount rates were based on the estimated cost of debt plus a premium, which included consideration of expected term of the earn-out payment, yield on treasury instruments and an estimated credit rating for the Company.

Because the acquisition related to emotion3D occurred within the last twelve months, the significant information to be obtained and analyzed and the fact that emotion3D resides in a foreign jurisdiction, the Company’s fair value estimates for the associated contingent consideration were valued based on a probability method as of December 31, 2025.

See Note 11 — Contingent and Earn-Out Liabilities for additional information of our Level 3 disclosures.

The following table presents the significant unobservable inputs assumed for each of the fair value measurements:


	December 31, 2025			December 31, 2024
	Input			Input
Liabilities:
emotion3D GmbH Contingent Consideration - Second Tranche
Market yield rate		10.53	%	N/A
Scenario probability		80.00	%	N/A
emotion3D GmbH Contingent Consideration - Third Tranche
Market yield rate		10.53	%	N/A
Scenario probability		64.00	%	N/A
Kinetic Contingent Consideration - First Tranche
Market yield rate	N/A				7.34	%
Scenario probability	N/A				100.00	%
Kinetic Contingent Consideration - Second Tranche
Market yield rate	N/A				7.68	%
Scenario probability	N/A				70.00	%
indie Switzerland Contingent Consideration — Second Tranche
Discount rate	N/A				10.20	%
Volatility	N/A				60.00	%
City Semi Contingent Consideration — Second Tranche
Discount rate	N/A				12.65	%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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+ Details

indie Semiconductor, Inc. 10-K