Fair Value Measurements

3 Months Ended

Mar. 31, 2022

The following is a summary of available-for-sale marketable securities held as of March 31, 2022 and December 31, 2021 (in thousands):


			Gross Unrealized						Classification on Balance Sheet
	Amortized Cost		Gains		Losses		Aggregate Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
As of March 31, 2022


Corporate bonds	$	645,755	$	—	$	(17,750)	$	628,005	$	108,981	$	519,024
U.S. government agency obligations	272,133		—		(7,009)		265,124		19,306		245,818
	$	917,888	$	—	$	(24,759)	$	893,129	$	128,287	$	764,842

As of December 31, 2021

Commercial paper	$	25,056	$	—	$	(24)	$	25,032	$	25,032	$	—
Corporate bonds	1,268,991		1,191		(4,275)		1,265,907		459,012		806,895
U.S. government agency obligations	316,728		3		(1,281)		315,450		56,530		258,920
	$	1,610,775	$	1,194	$	(5,580)	$	1,606,389	$	540,574	$	1,065,815

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 condensed 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 condensed consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest income in the condensed consolidated statements of income. As of March 31, 2022, the Company held for investment corporate bonds with a fair value of $43.8 million, which were classified as available-for-sale marketable securities that had been in a continuous unrealized loss position for more than 12 months. The unrealized loss related to these corporate bonds was $1.1 million and is included in accumulated other comprehensive loss as of March 31, 2022. The unrealized loss is 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 as of March 31, 2022 and December 31, 2021 (in thousands):


	Total Fair Value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2
As of March 31, 2022
Cash Equivalents and Marketable Securities:
Money market funds	$	1,428	$	1,428	$	—


Corporate bonds	628,005		—		628,005
U.S. government agency obligations	265,124		—		265,124
Mutual funds	22,641		22,641		—
	$	917,198	$	24,069	$	893,129




As of December 31, 2021
Cash Equivalents and Marketable Securities:
Money market funds	$	109,313	$	109,313	$	—
Commercial paper	39,031		—		39,031
Corporate bonds	1,265,907		—		1,265,907

U.S. government agency obligations	315,450		—		315,450
Mutual funds	23,129		23,129		—
	$	1,752,830	$	132,442	$	1,620,388

As of March 31, 2022 and December 31, 2021, the Company grouped money market and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of March 31, 2022 and December 31, 2021, 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 between Level 1 or Level 2 of the fair value measurement hierarchy during the three months ended March 31, 2022.

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 the assumptions market participants would use to estimate the fair value of a financial instrument.

Contractual maturities of the Company’s available-for-sale marketable securities held as of March 31, 2022 and December 31, 2021 were as follows (in thousands):


	March 31, 2022		December 31, 2021
Due in 1 year or less	$	128,287	$	540,574
Due after 1 year through 5 years	764,842		1,065,815
	$	893,129	$	1,606,389