Fair Value Measurements

3 Months Ended

Mar. 31, 2023

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds(1)	$	81,405	$	—	$	—	$	81,405
Commercial paper	—		104,864		—		104,864
Corporate debt securities	—		9,902		—		9,902
U.S. Treasury securities	136,234		—		—		136,234
Total assets	$	217,639	$	114,766	$	—	$	332,405

______________

(1)This balance includes cash requirements settled on a nightly basis.


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds(1)	$	53,641	$	—	$	—	$	53,641
Commercial paper	—		177,099		—		177,099
Corporate debt securities	—		13,821		—		13,821
U.S. Treasury securities	165,028		—		—		165,028
Total assets	$	218,669	$	190,920	$	—	$	409,589

______________

(1)This balance includes cash requirements settled on a nightly basis.

Money market funds and U.S. Treasury securities are valued based on quoted market prices in active markets, with no valuation adjustment.

Commercial paper and corporate debt securities are valued taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.

The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands):


	March 31, 2023
	Amortized cost		Unrealized gains		Unrealized losses		Estimated fair value
Cash and cash equivalents:

Money market funds(1)	$	81,405	$	—	$	—	$	81,405

Total cash and cash equivalents	$	81,405	$	—	$	—	$	81,405
Marketable securities:
Commercial paper	$	104,864	$	—	$	—	$	104,864
Corporate debt securities	9,926		—		(23)		9,903
U.S. Treasury securities	136,572		58		(397)		136,233
Total marketable securities	$	251,362	$	58	$	(420)	$	251,000

______________

(1)This balance includes cash requirements settled on a nightly basis.


	December 31, 2022
	Amortized cost		Unrealized gains		Unrealized losses		Estimated fair value
Cash and cash equivalents:

Money market funds(1)	$	53,641	$	—	$	—	$	53,641
Corporate debt securities	—		—		—		—
Total cash and cash equivalents	$	53,641	$	—	$	—	$	53,641
Marketable securities:
Commercial paper	$	177,099	$	—	$	—	$	177,099
Corporate debt securities	13,890		—		(69)		13,821
U.S. Treasury securities	166,045		7		(1,024)		165,028
Total marketable securities	$	357,034	$	7	$	(1,093)	$	355,948

______________

(1)This balance includes cash requirements settled on a nightly basis.

Realized gains or losses on investments for the three months ended March 31, 2023 and 2022 were not material. As of March 31, 2023, it was determined that no credit losses exist, because the change in market value of those securities resulted from fluctuations in market interest rates since the time of purchase, rather than a deterioration of the credit worthiness of the issuers. As of March 31, 2023 and December 31, 2022, all securities have a maturity of 18 months or less and all securities with gross unrealized losses have been in a continuous loss position for less than one year. The Company generally holds its marketable securities until maturity and does not intend to sell, and is not required to sell, the investments that are in an unrealized loss position before the recovery of their amortized cost basis.

- 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.

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