The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.


	As of
	September 30, 2024		December 31, 2023
	(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges	$	17,786,210	$	8,783,273
Fair value hedges	3,834,258		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	1,033,077		—
Total	$	22,653,545	$	8,783,273

As of September 30, 2024, approximately $1.1 billion of the Company’s euro–denominated Senior Notes was designated as a hedge of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries. See Note 6 Debt for further information on the Company’s debt obligations.


	As of September 30, 2024
	Derivative Assets				Derivative Liabilities
	Other current assets		Other non-current assets		Accrued expenses and other liabilities		Other non-current liabilities
	(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	136,211	$	5,080	$	196,622	$	120,764
Derivatives not designated as hedging instruments:
Foreign exchange contracts	14,713		—		18,765		—
Total	$	150,924	$	5,080	$	215,387	$	120,764


	As of December 31, 2023
	Derivative Assets				Derivative Liabilities
	Other current assets		Other non-current assets		Accrued expenses and other liabilities		Other non-current liabilities
	(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	26,416	$	4,518	$	140,089	$	46,575
Derivatives not designated as hedging instruments:
Foreign exchange contracts	—		—		—		—
Total	$	26,416	$	4,518	$	140,089	$	46,575

The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.

As of September 30, 2024, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $135 million.

In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.

The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. No cash collateral was received or posted by the Company as of September 30, 2024 and December 31, 2023.

The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:


	As of September 30, 2024
							Gross Amount Not Offset in the Consolidated Balance Sheets
	Gross Amount Recognized in the Consolidated Balance Sheets		Gross Amount Offset in the Consolidated Balance Sheets		Net Amount Presented in the Consolidated Balance Sheets		Financial Instruments		Collateral Received and Posted		Net Amount
	(in thousands)
Derivative assets	$	156,004	$	—	$	156,004	$	(155,428)	$	—	$	576
Derivative liabilities	336,151		—		336,151		(155,428)		—		180,723


	As of December 31, 2023
							Gross Amount Not Offset in the Consolidated Balance Sheets
	Gross Amount Recognized in the Consolidated Balance Sheets		Gross Amount Offset in the Consolidated Balance Sheets		Net Amount Presented in the Consolidated Balance Sheets		Financial Instruments		Collateral Received and Posted		Net Amount
	(in thousands)
Derivative assets	$	30,934	$	—	$	30,934	$	(27,246)	$	—	$	3,688
Derivative liabilities	186,664		—		186,664		(27,246)		—		159,418


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	(369,805)	$	101,169	$	19,883	$	101,169
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	(10,175)		—		(10,175)		—
Net investment hedges:
Foreign currency-denominated debt	(42,000)		—		(45,400)		—
Total	$	(421,980)	$	101,169	$	(35,692)	$	101,169


	Three Months Ended
	September 30, 2024
	Revenues		Cost of Revenues		Interest and other income (expense)
	(in thousands)
Total amounts presented in the Consolidated Statements of Operations	$	9,824,703	$	5,119,884	$	(21,693)

Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI	48,184		297		—
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items	—		—		(71,673)
Derivatives designated as hedging instruments	—		—		70,332
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach	—		—		(9,069)
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts	—		—		(1,296)


	Nine Months Ended
	September 30, 2024
	Revenues		Cost of Revenues		Interest and other income (expense)
	(in thousands)
Total amounts presented in the Consolidated Statements of Operations	$	28,754,453	$	15,271,100	$	212,671

Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI	70,244		564		—
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items	—		—		(71,673)
Derivatives designated as hedging instruments	—		—		70,332
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach	—		—		(9,069)
Gains on derivatives not designated as hedging instruments
Foreign exchange contracts	—		—		12,767

No gains or losses on derivative instruments were recognized in the Consolidated Statements of Operations in the three and nine months ended September 30, 2023.