Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Financial Assets

The following tables provide the financial assets and liabilities measured at fair value on a recurring basis:


	Amortized Cost or Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value Hierarchy as of June 30, 2021						Aggregate Fair Value
							Level 1	Level 2		Level 3
Financial Assets:	(In thousands)
Cash and cash equivalents:
Money market funds	$	1,191,640	$	—	$	—		$	1,191,640	$	—	$	—	$	1,191,640

Commercial paper	177,609		—		—			—		177,609		—		177,609
Total included in cash and cash equivalents	1,369,249		—		—			1,191,640		177,609		—		1,369,249
Marketable securities:
U.S. Treasury securities	415,676		125		(434)			415,367		—		—		415,367
Non-U.S. Government securities	237,875		2		(264)			237,613		—		—		237,613
Corporate debt securities and commercial paper	3,468,815		5,206		(1,418)			47,000		3,425,603		—		3,472,603
Total marketable securities	4,122,366		5,333		(2,116)			699,980		3,425,603		—		4,125,583

Total financial assets	$	5,491,615	$	5,333	$	(2,116)		$	1,891,620	$	3,603,212	$	—	$	5,494,832
Financial Liabilities:
Accrued expenses and other current liabilities:
Foreign currency derivative liabilities	$	—	$	—	$	(2,908)		$	—	$	(2,908)	$	—	$	(2,908)
Total financial liabilities	$	—	$	—	$	(2,908)		$	—	$	(2,908)	$	—	$	(2,908)


	Amortized Cost or Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value Hierarchy as of December 31, 2020						Aggregate Fair Value
							Level 1	Level 2		Level 3
Financial Assets:	(In thousands)
Cash and cash equivalents:
Money market funds	$	656,749	$	—	$	—		$	656,749	$	—	$	—	$	656,749

Commercial paper	2,000		—		—			—		2,000		—		2,000
Total included in cash and cash equivalents	658,749		—		—			656,749		2,000		—		658,749
Marketable securities:
U.S. Treasury securities	223,247		389		(1)			223,635		—		—		223,635
Corporate debt securities and commercial paper	1,874,257		8,149		(135)			50,000		1,832,271		—		1,882,271
Total marketable securities	2,097,504		8,538		(136)			273,635		1,832,271		—		2,105,906

Total financial assets	$	2,756,253	$	8,538	$	(136)		$	930,384	$	1,834,271	$	—	$	2,764,655

The Company’s primary objective when investing excess cash is preservation of capital, hence the Company’s marketable securities primarily consist of U.S. Treasury Securities, high credit quality corporate debt securities and commercial paper. As the Company views its marketable securities as available to support current operations, it has classified all available for sale securities as short-term. As of June 30, 2021 and December 31, 2020, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of June 30, 2021 and December 31, 2020, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities before maturity.

The Company regularly reviews changes to the rating of its debt securities by rating agencies as well as reasonably monitors the surrounding economic conditions to assess the risk of expected credit losses. As of June 30, 2021, the risk of expected credit losses was not significant.

Interest earned on marketable securities was $5.6 million and $9.4 million in the three and six months ended June 30, 2021, respectively, and $7.8 million and $16.6 million in the three and six months ended June 30, 2020, respectively. The interest is recorded as other (expenses) income, net, in the accompanying condensed consolidated statements of operations.

The following table summarizes the contractual maturities of marketable securities:


	As of June 30, 2021				As of December 31, 2020
	Amortized Cost		Aggregate Fair Value		Amortized Cost		Aggregate Fair Value
Financial Assets:	(In thousands)
Less than one year	$	1,375,453	$	1,377,906	$	1,126,091	$	1,128,927
One to three years	2,746,913		2,747,677		971,413		976,979
Total	$	4,122,366	$	4,125,583	$	2,097,504	$	2,105,906

Strategic Investments

As of June 30, 2021 and December 31, 2020, the Company held strategic investments with a fair value of $12.3 million and $9.3 million, respectively, in equity securities of privately held companies in which the Company does not have a controlling interest or significant influence. These securities are recorded as other long-term assets in the accompanying condensed consolidated balance sheets. There were no impairments in the three and six months ended June 30, 2021 or 2020.

Financial Liabilities

The Company’s financial liabilities that are not measured at fair value on a recurring basis consist of its senior notes due 2029 and 2031 (“2029 Notes” and “2031 Notes,” respectively). The Company’s convertible senior notes due 2023 (“Convertible Notes”) were fully redeemed during the quarter and were no longer outstanding as of June 30, 2021. Refer to Note 10 for further details on these financial liabilities.

As of June 30, 2021, the fair values of the 2029 Notes and 2031 Notes were $518.2 million and $521.7 million, respectively. The 2029 Notes and 2031 Notes are classified as Level 2 financial instruments within the fair value hierarchy.

- 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.

+ References + Details