Financial Instruments

9 Months Ended

Sep. 30, 2019

Financial Instruments Disclosure [Abstract]

4.	Financial Instruments

Our financial assets are measured at fair value on a recurring basis using the following hierarchy to prioritize valuation inputs, in accordance with applicable U.S. GAAP:

Level 1:

Quoted prices in active markets for identical assets or liabilities that we have the ability to access

Level 2:

Observable market-based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves

Level 3:

Inputs that are unobservable data points that are not corroborated by market data

We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs. There have been no transfers between Level 1, Level 2 and Level 3 in any periods presented.

Financial assets and liabilities are considered Level 2 when their fair values are determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis. U.S. Treasury, government agency and corporate debt obligations, commercial paper and asset-backed securities are valued primarily using market prices of comparable securities, bid/ask quotes, interest rate yields and prepayment spreads and are included in Level 2.

Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. We have no Level 3 financial assets or liabilities.

The following tables summarize the estimated fair value and related valuation input hierarchy of our available-for-sale securities as of each period end:

		Total			Total			Total			Total
		Amortized			Unrealized			Unrealized			Estimated
As of September 30, 2019:	Input Level	Cost			Gain			Loss			Fair Value
		(in thousands)
Money market funds	Level 1	$	43,210		$	—		$	—		$	43,210
U.S. Treasury obligations	Level 2		117,946			38			—			117,984
Government agency obligations	Level 2		4,524			2			(1	)		4,525
Corporate debt obligations	Level 2		70,385			190			(1	)		70,574
Commercial paper	Level 2		36,522			—			—			36,522
Asset-backed securities	Level 2		7,341			5			—			7,346
Certificate of deposit	Level 2		500			—			—			500
Total available-for-sale securities			280,428			235			(2	)		280,661
Less: amounts classified as cash equivalents			(92,167	)		(3	)		—			(92,170	)
Amounts classified as short-term investments		$	188,261		$	232		$	(2	)	$	188,491

		Total			Total			Total			Total
		Amortized			Unrealized			Unrealized			Estimated
As of December 31, 2018:	Input Level	Cost			Gain			Loss			Fair Value
		(in thousands)
Money market funds	Level 1	$	38,708		$	—		$	—		$	38,708
U.S. Treasury obligations	Level 2		111,164			4			(80	)		111,088
Government agency obligations	Level 2		15,206			1			(32	)		15,175
Corporate debt obligations	Level 2		121,017			15			(217	)		120,815
Commercial paper	Level 2		12,935			—			—			12,935
Asset-backed securities	Level 2		11,894			—			(31	)		11,863
Total available-for-sale securities			310,924			20			(360	)		310,584
Less: amounts classified as cash equivalents			(61,651	)		—			—			(61,651	)
Amounts classified as short-term investments		$	249,273		$	20		$	(360	)	$	248,933

The amortized cost and fair value of our available-for-sale securities by contractual maturity were as follows:

	As of September 30, 2019				As of December 31, 2018
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
	(in thousands)				(in thousands)
Maturing within one year	$	246,860	$	246,976	$	287,755	$	287,469
Maturing in one to five years		33,568		33,685		23,169		23,115
Total available-for-sale securities	$	280,428	$	280,661	$	310,924	$	310,584

As of September 30, 2019, certain available-for-sale securities had been in a continuous unrealized loss position, each for less than twelve months. As of this date, no significant facts or circumstances were present to indicate a deterioration in the creditworthiness of the respective issuers, and the Company has no requirement or intention to sell these securities before maturity or recovery of their amortized cost basis. During the three and nine months ended September 30, 2019 and 2018, we did not recognize any other-than-temporary impairment losses.

In addition, restricted cash collateralized by money market funds is a financial asset measured at fair value and is a Level 1 financial instrument under the fair value hierarchy. As of September 30, 2019 and December 31, 2018, restricted cash was $1.4 million.

The following table provides a reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets that sum to the total of the same such amounts in the condensed consolidated statement of cash flows:

	September 30,		December 31,
	2019		2018
	(in thousands)
Cash and cash equivalents	$	94,431	$	60,698
Restricted cash - short term		194		194
Restricted cash - long term		1,200		1,200
Total cash, cash equivalents and restricted cash	$	95,825	$	62,092