The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of these items.

Certain assets, including long-lived assets, goodwill and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. For the years ended December 31, 2020, 2019 and 2018, no impairments were identified of those assets requiring measurement at fair value on a non-recurring basis.

The Company classifies and discloses fair value measurements in one of the following three categories of fair value hierarchy:

Level 1Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities.

Level 2Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.

Level 3Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table summarizes the Company's financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

	As of December 31, 2020
	Quoted		Significant
	Prices in		Other		Significant
	Active		Observable		Unobservable
	Markets		Inputs		Inputs		Total Fair
	(Level 1)		(Level 2)		(Level 3)		Value
Assets:
Cash equivalents:
Money market funds	$	432,560	$	—	$	—	$	432,560
Total financial assets	$	432,560	$	—	$	—	$	432,560
Liabilities:
Contingent consideration	$	—	$	—	$	10,619	$	10,619
Derivative instruments - acquisition-related deferred common stock consideration		—		1,011		—		1,011
Total financial liabilities	$	—	$	1,011	$	10,619	$	11,630

	As of December 31, 2019
	Quoted		Significant
	Prices in		Other		Significant
	Active		Observable		Unobservable
	Markets		Inputs		Inputs		Total Fair
	(Level 1)		(Level 2)		(Level 3)		Value
Assets:
Cash equivalents:
Money market funds	$	511,436	$	—	$	—	$	511,436
Total financial assets	$	511,436	$	—	$	—	$	511,436

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. The fair value of the Company’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets.

For the years ended December 31, 2020, 2019 and 2018, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented.

On May 27, 2020, the Company entered into a Stock Purchase Agreement with Techwan SA (“Techwan”) pursuant to which the Company purchased all of the issued and outstanding shares of stock of Techwan (see Note 8). In accordance with the Stock Purchase Agreement, 6,779 shares of the Company’s common stock were reserved and are expected to be issued to the sellers in November 2021 subject to the provisions in the Stock Purchase Agreement. Management analyzed the liability for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the liability qualifies for derivative accounting. The derivative liability is not designated as a hedging instrument. In accordance with ASC 815, the Company recorded the acquisition-related deferred common stock consideration derivative liability, which is carried at fair value, in other long-term liabilities on the condensed consolidated balance sheet. The derivative liability will be marked-to-market each measurement period and changes in fair value during the year ended December 31, 2020 of $0.1 million was recorded as a component of other expense, net on the consolidated statement of operations. The fair value is derived from the Company’s stock price. The acquisition-related deferred common stock consideration derivative liability will remain in effect until such time as the associated shares are issued and the resulting derivative liability will be transitioned from a liability to equity as of such date.

The following table summarizes the changes in Level 3 financial instruments (in thousands):

Fair value at December 31, 2018	$	—
Contingent consideration from MissionMode acquisition		550
Change in fair value of contingent consideration obligation from MissionMode acquisition		(550	)
Fair value at December 31, 2019		—
Contingent consideration from one2many acquisition		2,190
Contingent consideration from Techwan acquisition		2,030
Contingent consideration from SnapComms acquisition		2,047
Change in fair value of contingent consideration obligation from one2many acquisition		8,114
Change in fair value of contingent consideration obligation from Techwan acquisition		(2,030	)
Change in fair value of contingent consideration obligation from SnapComms acquisition		(2,047	)
Foreign currency translation		315
Fair value at December 31, 2020	$	10,619

The valuation of the contingent consideration was derived using estimates of the probability of achievement within specified time periods based on projections of future revenue metrics per the terms of the applicable agreements. These include estimates of the Company’s assessment of the probability of meeting such results, with the probability-weighted earn-out using a Monte Carlo Simulation Model then discounted to estimate fair value. Fair value is estimated using the probability weighted cash flow estimate closer to the measurement date. The various operating performance measures included in these contingent consideration agreements primarily relate to product revenue. As these are unobservable inputs, the contingent consideration liabilities are included in Level 3 inputs. During the year ended December 31, 2020, as a result of assessing the probabilities of One2Many Group B.V. (“one2many”) meeting revenue metrics during the period of March 1, 2020 through February 28, 2021, the Company recognized an increase in the fair value of one2many’s contingent consideration obligation in the amount

of $8.1 million. During the year ended December 31, 2020, as a result of assessing the probabilities of Techwan meeting revenue metrics during the period of April 1, 2020 through March 31, 2021, the Company recognized a decrease in the fair value of Techwan’s contingent consideration obligation in the amount of $2.0 million. During the year ended December 31, 2020, as a result of assessing the probabilities of SnapComms Limited (“SnapComms”) meeting revenue metrics during the period of April 1, 2020 through March 31, 2021, the Company recognized a decrease in the fair value of SnapComms’ contingent consideration obligation in the amount of $2.0 million.

The Company estimates the fair value of the convertible senior notes based on their last actively traded prices (Level 1) or market-observable inputs (Level 2). As of December 31, 2020 and 2019, the fair value of the 0.125% convertible senior notes due 2024 (the “2024 Notes”) was determined to be $663.6 million and $450.4 million, respectively, and the carrying value of the 2024 Notes was $369.0 million and $351.1 million, respectively. As of December 31, 2020 and 2019, the fair value of the 1.50% convertible senior notes due 2022 (the “2022 Notes”) was determined to be $265.5 million and $215.8 million, respectively, and the carrying value of the 2022 Notes was $72.5 million and $79.2 million, respectively. See Note 9.