Fair Value Measurements

3 Months Ended

Mar. 31, 2024

We account for certain assets and liabilities at fair value and classify these assets and liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3). Our other current assets and other current liabilities have fair values that approximate their carrying values.

Assets and liabilities subject to fair value measurements are as follows (in millions):


	As of March 31, 2024
	Level 1		Level 2		Level 3		Balance
Assets
Money market funds(1)	$	99.7	$	—	$	—	$	99.7
Time deposits(1)	336.8		—		—		336.8
U.S. government and agency securities(2)	—		2,398.6		—		2,398.6
Corporate debt securities(2)	—		570.7		—		570.7
Equity securities(3)	20.5		—		—		20.5


Total assets	$	457.0	$	2,969.3	$	—	$	3,426.3
Liabilities

Contingent consideration(4)	—		—		22.6		22.6
Total liabilities	$	—	$	—	$	22.6	$	22.6


	As of December 31, 2023
	Level 1		Level 2		Level 3		Balance
Assets
Money market funds(1)	$	408.5	$	—	$	—	$	408.5
Time deposits(1)	126.4		—		—		126.4
U.S. government and agency securities(2)	—		3,032.6		—		3,032.6
Corporate debt securities(2)	—		724.6		—		724.6
Equity securities(3)	14.9		—		—		14.9


Total assets	$	549.8	$	3,757.2	$	—	$	4,307.0
Liabilities

Contingent consideration(4)	—		—		21.1		21.1
Total liabilities	$	—	$	—	$	21.1	$	21.1

(1)Included in cash and cash equivalents in our consolidated balance sheets.

(2)Included in cash and cash equivalents and current and non-current marketable investments in our consolidated balance sheets. See Note 3—Investments—Marketable Investments—Available-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded.

(3)Included in current marketable investments in our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the three months ended March 31, 2024, and March 31, 2023 we recognized $5.6 million of net unrealized gains and $8.8 million of net unrealized losses, respectively, on these securities. We recorded these gains and losses in our consolidated statements of operations within other income (expense), net. See Note 3—Investments—Marketable Investments—Investments in Equity Securities with Readily Determinable Fair Values.

(4)Included in other current liabilities and other non-current liabilities in our consolidated balance sheets. The fair value of our contingent consideration obligations has been estimated using probability-weighted discounted cash flow models (DCFs). The DCFs incorporate Level 3 inputs, including estimated discount rates, that we believe market participants would consider relevant in pricing, and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The fair value of our contingent consideration liabilities increased by $1.5 million during the three months ended March 31, 2024, of which $1.4 million was a measurement period adjustment related to the Miromatrix acquisition with the remaining change recorded within research and development in our consolidated statements of operations.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate fair value because of their short maturities. The fair values of our marketable investments and contingent consideration are reported above within the fair value hierarchy. See Note 3—Investments. The carrying value of our debt is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt.

- 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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