Fair Value Measurements

9 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

16. Fair Value Measurement

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize assets and liabilities measured and recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets as of June 30, 2023 and September 30, 2022 (in thousands):

	As of June 30, 2023
Description	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	589,326	$	589,326	$	—	$	—
Available-for-sale securities		559,914		127,592		432,322		—
Net investment hedge		984		—		984		—
Total assets	$	1,150,224	$	716,918	$	433,306	$	—
Liabilities:
Foreign exchange contracts		428		—		428		—
Total liabilities	$	428	$	—	$	428	$	—

	As of September 30, 2022
Description	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	374,804	$	374,055	$	749	$	—
Available-for-sale securities		1,263,782		651,800		611,982		—
Foreign exchange contracts		634		—		634		—
Net investment hedge		124,789		—		124,789		—
Total assets	$	1,764,009	$	1,025,855	$	738,154	$	—
Liabilities:
Foreign exchange contracts		230	$	—		230		—
Total liabilities	$	230	$	—	$	230	$	—

Cash Equivalents

Cash equivalents consist of money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values.

Available-For-Sale Securities

Available-for-sale securities primarily consist of municipal securities and U.S. government-backed securities, and as such are classified as Level 1. Investments classified as Level 2 consist of debt securities that are valued using matrix pricing and benchmarking because they are not actively traded and bank certificates of deposit. Matrix pricing is a

mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

Foreign Exchange Contracts

Foreign exchange contract assets and liabilities are measured and reported at fair value based on observable market inputs and classified within Level 2 of the fair value hierarchy due to a lack of an active market for these contracts.

Net Investment Hedge

Net investment hedge assets are measured and reported at fair value based on observable market inputs and classified within Level 2 of the fair value hierarchy due to a lack of an active market for these contracts.

Contingent Consideration Liability

The contingent consideration liability related to acquisitions is measured and reported at fair value using the real options method based on the unobservable inputs that are significant to the fair value and classified with Level 3 of the fair value hierarchy. The amount is contingent based on the acquired business’ performance through September 30, 2023. Please refer to Note 4, Business Combinations for further details. Changes in the fair value of contingent consideration resulting from a change in the underlying inputs are recognized in results of operations until the arrangement is settled. This liability was revalued from $18.5 million as of December 31, 2022 to $1.4 million as of March 31, 2023 and to zero as of June 30, 2023, with the offset to the changes in fair value recorded in the Condensed Consolidated Statements of Operations.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During the three and nine months ended June 30, 2023 and 2022, the Company did not record any material fair value measurements for assets or liabilities on a nonrecurring basis.