Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations:



	As of September 30, 2016
	Level 1		Level 2		Level 3
Assets:
Short-term investments (1)	$	31,957	$	—	$	—
Total	$	31,957	$	—	$	—
Liabilities:
Contingent consideration (2)	$	—	$	—	$	2,322
Total	$	—	$	—	$	2,322
	As of December 31, 2015
	Level 1		Level 2		Level 3
Assets:
Short-term investments (1)	$	42,994	$	—	$	—
Total	$	42,994	$	—	$	—
Liabilities:
Contingent consideration (2)	$	—	$	—	$	2,695
Total	$	—	$	—	$	2,695


(1)	Short-term investments in the accompanying consolidated balance sheets are six-month U.S. Treasury Bills. The fair values of these assets are based on Level 1 inputs in the fair value hierarchy.

(2)

Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired. The undiscounted maximum payment under the arrangements was $7.9 million, based on future revenues, gross profits and certain milestones. We estimated the fair value of the contingent consideration using a Monte Carlo Simulation, which is based on significant inputs, primarily forecasted future results of the acquired businesses not observable in the market, and thus represents a Level 3 measure. For the three and nine months ended September 30, 2016, we paid $0.3 million and $0.4 million, respectively, as part of these arrangements. The remaining change in the fair value of the contingent consideration from December 31, 2015 to September 30, 2016 is related to changes in foreign currency.