Following the Mergers on June 1, 2020, the Company assumed certain investments in non-marketable equity securities. As of December 31, 2022 and December 31, 2021, other long-term assets included equity securities accounted for under the equity method with a carrying amount of $4.4 million and $4.8 million, respectively. No impairments to the carrying amount of the Company’s non-marketable equity securities were recognized in the years ended December 31, 2022, 2021 and 2020, respectively.

In the fourth quarter of 2022, the Company began to use derivative financial instruments to manage foreign currency exchange rate risk. The Company’s derivative financial instruments consist of foreign currency forward contracts, which are used primarily to hedge portions of its anticipated foreign currency exposure. The maturities of these instruments are generally less than twelve months. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements. All the significant inputs to the third-party valuation models are observable in active markets. Inputs include current market-based parameters

such as forward rates, yield curves and credit default swap pricing. For additional information related to the three-level hierarchy of fair value measurements, see “Note 7 – Fair Value.”

The notional and fair values of all derivative instruments were as follows (in thousands):


Derivative instruments in cash flow hedges (foreign exchange contracts)	December 31, 2022		December 31, 2021
Liabilities
Accrued liabilities	$	94	$	—
Total fair value	$	94	$	—
Total notional value	$	52,197	$	—
Undesignated derivative instruments (foreign exchange contracts)
Liabilities
Accrued liabilities	$	41	$	—
Total fair value	$	41	$	—
Total notional value	$	7,402	$	—

The Company designates certain foreign currency forward contracts as hedging instruments pursuant to ASC 815, Derivatives and Hedging (“ASC 815”). For information on the effective portion of the gain or loss on the derivative, which is reported as a component of accumulated other comprehensive income (loss), refer to “Note 5 -- Composition of Certain Financial Statement Captions.” For the year ended December 31, 2022, no amounts were reclassified into statement of operations line items as no underlying hedged item is recognized in earnings. The Company did not enter into derivative contracts in 2021 or 2020.

For derivatives that are not designated as hedge instruments, they are measured and reported at fair value. Changes in the fair value of these undesignated derivatives are reported in other income (expense), net, on the Consolidated Statements of Operations. Realized losses and changes in the estimated fair value of the derivatives were not significant in the year ended December 31, 2022. The Company did not enter into derivative contracts in 2021 or 2020.