We measure certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all

significant inputs are observable or can be derived principally from or 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 asset or liability.

We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and we consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

The following table presents our financial assets measured and recorded at fair value on a recurring basis using the above input categories:



	As of June 30, 2019
	Level 1		Level 2		Level 3		Total
	(in thousands)
Description:
Assets:
Money market funds	$	108,526	$	—	$	—	$	108,526
U.S. government agencies	45,838		—		—		45,838
Commercial paper	—		17,292		—		17,292
Corporate bonds	—		45,606		—		45,606
Agency bonds	—		21,098		—		21,098
Asset-backed securities	—		7,984		—		7,984
Total assets	$	154,364	$	91,980	$	—	$	246,344



	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
	(in thousands)
Description:
Assets:
Money market funds	$	55,646	$	—	$	—	$	55,646
U.S. government agencies	74,481		—		—		74,481
Commercial paper	—		57,554		—		57,554
Corporate bonds	—		48,495		—		48,495
Agency bonds	—		19,087		—		19,087
Asset-backed securities	—		7,483		—		7,483
Total assets	$	130,127	$	132,619	$	—	$	262,746

As of June 30, 2019, the fair value of our 1.25% convertible senior notes due 2023, as further described in Note 7, Convertible Senior Notes and Capped Calls, was $351.0 million based upon quoted market prices. We consider the fair value of the Notes to be a Level 2 measurement due to limited trading activity of the Notes. We had no other liabilities measured and recorded at fair value on a recurring basis as of June 30, 2019 or December 31, 2018.



	As of June 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Description:
U.S. government agencies	$	45,695	$	143	$	—		$	45,838
Commercial paper	17,291		1		—			17,292
Corporate bonds	45,483		124		(1		)	45,606
Agency bonds	21,026		72		—			21,098
Asset-backed securities	7,972		13		(1		)	7,984
Total assets	$	137,467	$	353	$	(2	)	$	137,818



	As of December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Description:
U.S. government agencies	$	71,480	$	20	$	(17	)	$	71,483
Commercial paper	57,554		—		—			57,554
Corporate bonds	48,532		15		(52		)	48,495
Agency bonds	19,077		16		(6		)	19,087
Asset-backed securities	7,490		—		(7		)	7,483
Total assets	$	204,133	$	51	$	(82	)	$	204,102

As of June 30, 2019 and December 31, 2018, our available-for-sale investments had maturities ranging from three months to two years.

Our available-for-sale investments as of December 31, 2018 included $3.0 million of U.S. Government agencies investments, which are classified as cash and cash equivalents as the original maturity was less than three months.