Fair Value Measurement

3 Months Ended

Mar. 31, 2024

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 inputs: Based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 inputs: Based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 inputs: Based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The following tables present the costs, net unrealized losses, and fair value by major security type for our investments as of March 31, 2024 and December 31, 2023 (in thousands):


	As of March 31, 2024
	Cost		Net Unrealized Losses		Fair Value		Cash and Cash equivalents		Short-term Investments		Long-term Investments
Cash	$	119,562	$	—	$	119,562	$	119,562	$	—	$	—
Level 1:
Money market funds	139,523		—		139,523		139,523		—		—
Commercial paper	14,876		(2)		14,874		—		14,874		—
Subtotal	154,399		(2)		154,397		139,523		14,874		—
Level 2:
Certificates of deposit	20,957		14		20,971		—		20,971		—
U.S. Government and agency securities	51,406		(168)		51,238		—		38,933		12,305
Corporate bonds	31,203		12		31,215		—		18,343		12,872
Subtotal	103,566		(142)		103,424		—		78,247		25,177
Level 3:	—		—		—		—		—		—
Total	$	377,527	$	(144)	$	377,383	$	259,085	$	93,121	$	25,177


	As of December 31, 2023
	Cost		Net Unrealized Losses		Fair Value		Cash and Cash equivalents		Short-term Investments		Long-term Investments
Cash	$	130,566	$	—	$	130,566	$	130,566	$	—	$	—
Level 1:
Money market funds	147,652		—		147,652		147,652		—		—
Commercial paper	16,408		11		16,419		—		16,419		—
Subtotal	164,060		11		164,071		147,652		16,419		—
Level 2:
Certificates of deposit	15,366		21		15,387		—		15,387		—
U.S. Government and agency securities	49,393		(73)		49,320		—		33,198		16,122
Corporate bonds	28,927		26		28,953		—		19,327		9,626
Subtotal	93,686		(26)		93,660		—		67,912		25,748
Level 3:	—		—		—		—		—		—
Total	$	388,312	$	(15)	$	388,297	$	278,218	$	84,331	$	25,748

Our assets measured at fair value on a nonrecurring basis include long-lived assets and finite-lived intangibles, which are considered to be Level 3 inputs. No material impairment charges were recorded during the three months ended March 31, 2024.

Accounts receivable, accounts payable, and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.

- 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.

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