Fair Value Measurements

9 Months Ended

Oct. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 7. Fair Value Measurements

The carrying amounts of accounts receivable and other current assets, accounts payable and accrued liabilities approximate fair value due to their short-term nature.

Financial assets and financial liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial assets and financial liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The following table presents the fair value hierarchy for financial assets measured at fair value on a recurring basis as of October 31, 2016 (in thousands):  

	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	20,607	$	—	$	—	$	20,607
Commercial paper		—		—		—		—
Corporate notes and bonds		—		1,100		—		1,100
U.S. agency obligations		—		—		—		—
Short-term investments
Asset-backed securities		—		22,848		—		22,848
Commercial paper		—		22,885		—		22,885
Corporate notes and bonds		—		87,307		—		87,307
U.S. agency obligations		—		88,931		—		88,931
U.S. treasury securities		—		82,760		—		82,760
Total	$	20,607	$	305,831	$	—	$	326,438

The following table presents the fair value hierarchy for financial assets measured at fair value on a recurring basis as of January 31, 2016 (in thousands):

	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	28,087	$	—	$	—	$	28,087
Corporate notes and bonds		—		11,396		—		11,396
U.S. agency obligations		—		3,002		—		3,002
Short-term investments
Asset-backed securities		—		5,454		—		5,454
Commercial paper		—		5,970		—		5,970
Corporate notes and bonds		—		38,327		—		38,327
U.S. agency obligations		—		124,586		—		124,586
U.S. treasury securities		—		39,687		—		39,687
Total	$	28,087	$	228,422	$	—	$	256,509

We determine the fair value of our security holdings based on pricing from our service provider and market prices from industry-standard independent data providers. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). We perform procedures to ensure that appropriate fair values are recorded such as comparing prices obtained from other sources.