v3.24.3
Fair Value Measurements and Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Fair Value of Financial Instruments Fair Value Measurements and Fair Value of Financial Instruments
Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets, as well as assets and liabilities measured at fair value on a non-recurring basis or disclosed at fair value, are categorized based upon the level of judgment associated with inputs used to measure their fair values. The accounting guidance for fair value provides a framework for measuring fair value and requires certain disclosures about how fair value is determined. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance also establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:
Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and
Level 3—Unobservable inputs based on our own data or other assumptions that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the
fair value hierarchy. We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs.
Level 1 securities consist of highly liquid money market funds for which the carrying amounts approximate their fair values due to their short maturities. U.S. Treasury securities are valued using Level 1 inputs based on unadjusted, quoted prices in active markets that are observable at the measurement date for identical assets or liabilities. Level 2 securities, consisting of corporate debt, commercial paper, U.S. government agency securities and asset-backed securities, are measured based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, we rely on non-binding quotes from our investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments or historical pricing trends of securities relative to our peers. To validate the fair value determinations provided by our investment managers, we review the pricing movement in the context of overall market trends and trading information from our investment managers. In addition, we assess the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. We had no Level 3 securities as of September 30, 2024 or December 31, 2023.
There were no transfers within the hierarchies during the three and nine months ended September 30, 2024 or the year ended December 31, 2023.
The following tables set forth our financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy at September 30, 2024 and December 31, 2023:
September 30, 2024
Fair Value
Hierarchy Level
Amortized
Cost
Gross
Unrealized Gains
Gross
Unrealized Losses
Fair
Value
Assets(in thousands)
Cash and cash equivalents:
CashLevel 1$25,939 $— $— $25,939 
Money market fundsLevel 1463,700 — — 463,700 
U.S. Treasury securitiesLevel 175,578 7 (3)75,582 
 Commercial paperLevel 2466,099 8 (49)466,058 
U.S. government agency securities
Level 2
18,909 2 (1)18,910 
Total cash and cash equivalents 1,050,225 17 (53)1,050,189 
Investments:  
U.S. Treasury securitiesLevel 11,124,838 3,341 (452)1,127,727 
Commercial paperLevel 2128,620 141 — 128,761 
Corporate debtLevel 2603,485 2,427 (133)605,779 
Asset-backed securitiesLevel 2160,491 444 (15)160,920 
U.S. government agency securitiesLevel 2198,955 769 (61)199,663 
Total investments2,216,389 7,122 (661)2,222,850 
Total assets measured at fair value $3,266,614 $7,139 $(714)$3,273,039 
December 31, 2023
Fair Value
Hierarchy Level
Amortized
Cost
Gross
Unrealized Gains
Gross
Unrealized Losses
Fair
Value
Assets(in thousands)
Cash and cash equivalents:
CashLevel 1$50,003 $— $— $50,003 
Money market fundsLevel 147,357 — — 47,357 
Commercial paperLevel 2300,256 — (165)300,091 
Total cash and cash equivalents397,616 — (165)397,451 
Investments:
U.S. Treasury securitiesLevel 1481,704 422 (44)482,082 
Commercial paperLevel 2102,435 7 (35)102,407 
Corporate debtLevel 2133,523 168 (42)133,649 
Asset-backed securitiesLevel 223,963 18 — 23,981 
U.S. government agency securitiesLevel 2103,484 — (152)103,332 
Total investments845,109 615 (273)845,451 
Total assets measured at fair value$1,242,725 $615 $(438)$1,242,902 
The following table presents the contractual maturities of our investments as of September 30, 2024 (in thousands):
September 30, 2024
Fair Value
Due in less than one year$1,130,276 
Due in one to five years1,092,574 
Total$2,222,850