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Fair Value Measurements
 12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements

The following is a summary of available-for-sale marketable securities held as of December 31, 2018 and 2017 (in thousands):
 
 
 
Gross Unrealized
 
Aggregate
Fair Value
 
Classification on Balance Sheet
 
Amortized Cost
 
 
 
 
 
 
Short-Term
Marketable
Securities
 
Long-Term
Marketable
Securities
As of December 31, 2018
 
Gains
 
Losses
 
 
 
Certificates of deposit
$
40,000

 
$
—

 
$
(7
)
 
$
39,993

 
$
39,993

 
$
—

Commercial paper
282,996

 
—

 
(50
)
 
282,946

 
282,946

 
—

Corporate bonds
685,653

 
1

 
(4,309
)
 
681,345

 
482,088

 
199,257

U.S. government agency obligations
50,876

 
—

 
(404
)
 
50,472

 
50,472

 
—

 
$
1,059,525

 
$
1

 
$
(4,770
)
 
$
1,054,756

 
$
855,499

 
$
199,257

 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
$
6,951

 
$
—

 
$
(9
)
 
$
6,942

 
$
6,942

 
$
—

Corporate bonds
736,902

 
2

 
(3,829
)
 
733,075

 
289,378

 
443,697

U.S. government agency obligations
220,014

 
—

 
(1,764
)
 
218,250

 
102,234

 
116,016

 
$
963,867

 
$
2

 
$
(5,602
)
 
$
958,267

 
$
398,554

 
$
559,713


The Company offers certain eligible employees the ability to participate in a non-qualified deferred compensation plan. The mutual funds held by the Company that are associated with this plan are classified as restricted trading securities. These securities are not included in the available-for-sale securities table above but are included in marketable securities in the consolidated balance sheets.

Unrealized gains and unrealized temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive loss in the consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest income in the consolidated statements of income. As of December 31, 2018, the Company held for investment corporate bonds with a fair value of $462.4 million, which are classified as available-for-sale marketable securities and have been in a continuous unrealized loss position for more than 12 months. The unrealized losses of $3.9 million related to these corporate bonds are included in accumulated other comprehensive income as of December 31, 2018. The unrealized losses are attributable to changes in interest rates. Based on the evaluation of available evidence, the Company does not believe any unrealized losses represent other than temporary impairments.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities as of December 31, 2018 and 2017 (in thousands): 
 
Total Fair Value
 
Fair Value Measurements at Reporting Date Using
 
Level 1
 
Level 2
 
Level 3
As of December 31, 2018
 
 
 
 
 
 
 
Cash Equivalents and Marketable Securities:
 
 
 
 
 
 
 
Money market funds
$
380,260

 
$
380,260

 
$
—

 
$
—

Certificates of deposit
39,993

 
39,993

 
—

 
—

Commercial paper
282,946

 
—

 
282,946

 
—

Corporate bonds
681,345

 
—

 
681,345

 
—

U.S. government agency obligations
50,472

 
—

 
50,472

 
—

Mutual funds
10,016

 
10,016

 
—

 
—

 
$
1,445,032

 
$
430,269

 
$
1,014,763

 
$
—

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Contingent consideration obligation related to completed acquisitions
$
(6,300
)
 
$
—

 
$
—

 
$
(6,300
)
 
 
 
 
 
 
 
 
As of December 31, 2017
 
 
 
 
 
 
 
Cash Equivalents and Marketable Securities:
 
 
 
 
 
 
 
Money market funds
$
22,649

 
$
22,649

 
$
—

 
$
—

Commercial paper
10,928

 
—

 
10,928

 
—

Corporate bonds
733,075

 
—

 
733,075

 
—

U.S. government agency obligations
218,248

 
—

 
218,248

 
—

Mutual funds
7,879

 
7,879

 
—

 
—

 
$
992,779

 
$
30,528

 
$
962,251

 
$
—

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Contingent consideration obligation related to completed acquisitions
$
(8,631
)
 
$
—

 
$
—

 
$
(8,631
)

As of December 31, 2018 and 2017, the Company grouped money market funds, certificates of deposit and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of December 31, 2018 and 2017, the Company grouped commercial paper, U.S. government agency obligations and corporate bonds using a Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. The Company did not have any transfers of assets or liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2018 and 2017.

When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

The valuation technique used to measure the fair value of the Company's Level 3 liabilities, which consist of contingent consideration related to the acquisitions of Soha Systems, Inc. ("Soha") and Cyberfend, Inc. ("Cyberfend") in 2016 (Note 8), was primarily an income-based approach. The significant unobservable input used in the fair value measurement of the contingent consideration is the likelihood of achieving development milestones to integrate the acquired technology into the Company's technology as well as achieving certain post-closing financial results.

Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2018 and 2017 were as follows (in thousands):
 
December 31, 2018
 
December 31, 2017
Due in 1 year or less
$
855,499

 
$
398,554

Due after 1 year through 5 years
199,257

 
559,713

 
$
1,054,756

 
$
958,267



The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs for the years ended December 31, 2018 and 2017 (in thousands):

 
2018
 
2017
Beginning balance
$
(8,631
)
 
$
(7,100
)
Fair value adjustment to contingent consideration included in general and administrative expense
(1,835
)
 
(2,781
)
Cash paid upon achievement of milestone
4,166

 
1,250

Ending balance
$
(6,300
)
 
$
(8,631
)