MARKETABLE DEBT SECURITIES

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

The Company's marketable debt securities as of September 30, 2023 and December 31, 2022 were composed of available-for-sale commercial paper and corporate and government debt securities. The primary objective of the Company’s investment portfolio is to preserve capital and liquidity while enhancing overall returns. The Company’s investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.

Marketable debt securities consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Marketable debt securities:
Commercial paper	$	49,243	$	123,647
Corporate debt securities	334,281		224,055
Securities of government sponsored entities	106,875		40,855
Total available-for-sale marketable debt securities	$	490,399	$	388,557

The following is a summary of short-term marketable debt securities classified as available-for-sale as of September 30, 2023 (in thousands):


	Remaining Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses		Aggregate Estimated Fair Value
Marketable debt securities:
Commercial paper	Less than 1	$	49,306	$	—	$	(63)	$	49,243
Corporate debt securities	Less than 1	110,582		10		(867)		109,725
Securities of government-sponsored entities	Less than 1	54,051		—		(391)		53,660
Total maturity less than 1 year		213,939		10		(1,321)		212,628
Corporate debt securities	1 to 2	225,773		68		(1,285)		224,556
Securities of government-sponsored entities	1 to 2	53,641		—		(426)		53,215
Total maturity 1 to 2 years		279,414		68		(1,711)		277,771
Total available-for-sale marketable debt securities		$	493,353	$	78	$	(3,032)	$	490,399

The following is a summary of short-term marketable debt securities classified as available-for-sale as of December 31, 2022 (in thousands):


	Remaining Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses		Aggregate Estimated Fair Value
Marketable debt securities:
Commercial paper	Less than 1	$	124,301	$	2	$	(656)	$	123,647
Corporate debt securities	Less than 1	155,841		—		(1,355)		154,486
Securities of government-sponsored entities	Less than 1	7,473		—		(80)		7,393
Total maturity less than 1 year		287,615		2		(2,091)		285,526
Corporate debt securities	1 to 2	70,195		33		(659)		69,569
Securities of government-sponsored entities	1 to 2	33,702		6		(246)		33,462
Total maturity 1 to 2 years		103,897		39		(905)		103,031
Total available-for-sale securities		$	391,512	$	41	$	(2,996)	$	388,557

During the nine months ended September 30, 2023, investment activity for the Company included $284.6 million in maturities and $381.3 million in purchases, all relating to debt-based marketable securities. During the nine months ended September 30, 2022, investment activity for the Company included $329.6 million in maturities and $301.1 million in purchases, all relating to debt-based marketable securities. As of September 30, 2023 and December 31, 2022, the accrued interest receivable related to the Company's marketable debt securities was $4.1 million and $1.9 million, respectively, and was recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company reviews the available-for-sale marketable debt securities for declines in fair value below the cost basis each quarter. For any security whose fair value is below its amortized cost basis, the Company first evaluates whether it intends to sell the impaired security, or will otherwise be more likely than not required to sell the security before recovery. If either are true, the amortized cost basis of the security is written down to its fair value at the reporting date. If neither circumstance holds true, the Company assesses whether any portion of the unrealized loss is a result of a credit loss. Any amount deemed to be attributable to credit loss is recognized in the income statement, with the amount of the loss limited to the difference between fair value and amortized cost and recorded as an allowance for credit losses. The portion of the unrealized loss related to factors other than credit losses is recognized in other comprehensive income (loss).

The following is a summary of available-for-sale marketable debt securities in an unrealized loss position with no credit losses reported as of September 30, 2023 (in thousands):


	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Commercial paper	$	49,243	$	63	$	—	$	—	$	49,243	$	63
Corporate debt securities	257,153		1,740		36,977		412		294,130		2,152
Securities of government-sponsored entities	92,405		654		12,470		163		104,875		817
Total	$	398,801	$	2,457	$	49,447	$	575	$	448,248	$	3,032

The following is a summary of available-for-sale marketable debt securities in an unrealized loss position with no credit losses reported as of December 31, 2022 (in thousands):


	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Commercial paper	$	117,853	$	656	$	—	$	—	$	117,853	$	656
Corporate debt securities	99,066		1,041		107,964		973		207,030		2,014
Securities of government-sponsored entities	31,402		263		4,456		63		35,858		326
Total	$	248,321	$	1,960	$	112,420	$	1,036	$	360,741	$	2,996

As of September 30, 2023 and December 31, 2022, the amortized cost of the available-for-sale marketable debt securities in an unrealized loss position was $451.3 million and $363.7 million, respectively.

As of September 30, 2023 and December 31, 2022, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis. The increase in unrealized losses for the nine months ended September 30, 2023 was primarily due to fluctuations in short-term interest rates. The Company does not believe the unrealized losses incurred during the period are due to credit-related factors. The credit ratings of the securities held remain of the highest quality. Moreover, the Company continues to receive payments of interest and principal as they become due, and our expectation is that those payments will continue to be received timely. Factors unknown to us at this time may cause actual results to differ and require adjustments to the Company’s estimates and assumptions in the future.