Financial Instruments and Fair Value

3 Months Ended

Apr. 30, 2020

Investments All Other Investments [Abstract]

2. Financial Instruments and Fair Value

The Company invests a portion of its cash in debt securities that are denominated in United States dollars. The investment portfolio consists of money market funds, asset-backed securities, commercial paper, U.S. government securities, and debt securities of corporations. All of the investments are classified as available-for-sale securities and reported at fair value in the condensed consolidated balance sheets as follows:

	As of April 30, 2020
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Money market funds	$	2,011	$	—	$	—		$	2,011
Commercial paper		61,902		—		—			61,902
Corporate bonds		103,681		726		(599	)		103,808
Asset-backed securities		23,742		152		(18	)		23,876
U.S. government securities		20,059		144		—			20,203
Total cash equivalents and marketable debt securities	$	211,395	$	1,022	$	(617	)	$	211,800

	As of January 31, 2020
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Money market funds	$	8,284	$	—	$	—		$	8,284
Commercial paper		63,390		—		—			63,390
Corporate bonds		95,053		653		—			95,706
Asset-backed securities		23,062		69		(2	)		23,129
U.S. government securities		20,524		48		—			20,572
Total cash equivalents and marketable debt securities	$	210,313	$	770	$	(2	)	$	211,081

As of April 30, 2020, there were no debt securities with unrealized losses for more than twelve months.

	As of
	April 30, 2020		January 31, 2020
	(in thousands)
Included in cash equivalents	$	37,058	$	37,736
Included in marketable debt securities		174,742		173,345
Total cash equivalents and marketable debt securities	$	211,800	$	211,081

The contractual maturities of the investments at April 30, 2020 and January 31, 2020 were as follows:

	As of
	April 30, 2020		January 31, 2020
	(in thousands)
Due within one year	$	144,722	$	146,267
Due within one to three years		67,078		64,814
Total cash equivalents and marketable debt securities	$	211,800	$	211,081

The unrealized losses on the available-for-sale securities were primarily caused by fluctuations in market value and interest rates as a result of the economic environment. Upon adoption of ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company estimates the expected losses at an individual security level whenever a security’s fair value is below its amortized cost basis using the discounted cash flow method. The credit-related portion of the loss is recognized in other income, net in the condensed consolidated statements of operations but is limited to the difference between the fair value and the amortized cost basis of the security, adjusted for accrued interest. The non-credit-related portion of the loss is recognized in accumulated other comprehensive income in the condensed consolidated balance sheets. The credit-related losses of the Company’s financial instruments were not material as of April 30, 2020.

The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3—Unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The Company measures the fair value of money market funds using quoted prices in active markets for identical assets and classifies them within Level 1. The fair value of the Company’s investments in other debt securities are obtained based on quoted prices for similar assets in active markets and are classified within Level 2.

The following tables present the fair value of the financial instruments measured on a recurring basis as of April 30, 2020 and January 31, 2020, respectively:

	As of April 30, 2020
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	2,011	$	2,011	$	—	$	—
Commercial paper		61,902		—		61,902		—
Corporate bonds		103,808		—		103,808		—
Asset-backed securities		23,876		—		23,876		—
U.S. government securities		20,203		—		20,203		—
Total cash equivalents and marketable debt securities	$	211,800	$	2,011	$	209,789	$	—

	As of January 31, 2020
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	8,284	$	8,284	$	—	$	—
Commercial paper		63,390		—		63,390		—
Corporate bonds		95,706		—		95,706		—
Asset-backed securities		23,129		—		23,129		—
U.S. government securities		20,572		—		20,572		—
Total cash equivalents and marketable debt securities	$	211,081	$	8,284	$	202,797	$	—