Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Available-for-sale marketable securities held as of September 30, 2023 and December 31, 2022 were as follows (in thousands):


							Classification on Balance Sheet
	Amortized Cost		Gross Unrealized Losses		Aggregate Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
As of September 30, 2023

Commercial paper	$	986	$	(2)	$	984	$	984	$	—
Corporate bonds	1,198,624		(11,527)		1,187,097		307,876		879,221
U.S. government agency obligations	479,186		(3,412)		475,774		166,463		309,311
	$	1,678,796	$	(14,941)	$	1,663,855	$	475,323	$	1,188,532

As of December 31, 2022
Time deposits	$	19,530	$	—	$	19,530	$	19,530	$	—

Corporate bonds	624,082		(21,029)		603,053		362,458		240,595
U.S. government agency obligations	252,573		(10,391)		242,182		180,320		61,862
	$	896,185	$	(31,420)	$	864,765	$	562,308	$	302,457

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. Additionally, the Company holds certain money market funds that are classified as marketable securities. These securities are not included in the available-for-sale securities table above but are included in marketable securities in the interim 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 interim condensed consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest and marketable securities income (loss), net in the interim condensed consolidated statements of income. As of September 30, 2023, the Company held for investment corporate bonds and U.S. government agency obligations with a fair value of $486.1 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 related to these securities were $10.4 million and are included in accumulated other comprehensive loss as of September 30, 2023. 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 credit losses.

The fair value measurements within the fair value hierarchy of the Company’s financial assets as of September 30, 2023 and December 31, 2022 were as follows (in thousands):


	Total Fair Value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2
As of September 30, 2023
Cash Equivalents and Marketable Securities:
Money market funds	$	43,700	$	43,700	$	—
Certificates of deposit	25,246		—		25,246

Commercial paper	984		—		984
Corporate bonds	1,187,097		—		1,187,097
U.S. government agency obligations	475,774		—		475,774
Mutual funds	20,951		20,951		—
	$	1,753,752	$	64,651	$	1,689,101




As of December 31, 2022
Cash Equivalents and Marketable Securities:
Money market funds	$	999	$	999	$	—
Time deposits	285,830		—		285,830

Corporate bonds	603,053		—		603,053

U.S. government agency obligations	242,182		—		242,182
Mutual funds	18,745		18,745		—
	$	1,150,809	$	19,744	$	1,131,065

As of September 30, 2023 and December 31, 2022, the Company grouped money market funds and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of September 30, 2023 and December 31, 2022, the Company grouped time deposits, commercial paper, corporate bonds, certificates of deposit and U.S. government agency obligations 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 or Level 2 of the fair value measurement hierarchy during the nine months ended September 30, 2023.

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 September 30, 2023 and December 31, 2022 were as follows (in thousands):


	September 30, 2023		December 31, 2022
Due in 1 year or less	$	475,323	$	562,308
Due after 1 year through 5 years	1,188,532		302,457
	$	1,663,855	$	864,765

- 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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