Fair Value Measurements

12 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

16.    Fair Value Measurements

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 accompanying Consolidated Balance Sheets as of September 30, 2023 and 2022 (in thousands):

	As of September 30, 2023
Description	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	525,952	$	525,952	$	—	$	—
Available-for-sale securities		450,211		85,949		364,262		—
Foreign exchange contracts		44		—		44		—
Net investment hedge		13,036		—		13,036		—
Total assets	$	989,243	$	611,901	$	377,342	$	—
Liabilities:
Foreign exchange contracts		421		—		421		—
Total liabilities	$	421	$	—	$	421	$	—

	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 highly rated corporate debt securities and U.S. government backed securities which 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 & Net Investment Hedge

Our foreign exchange contract assets and liabilities, and our net investment hedge assets are measured and reported at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. 

Contingent Consideration Liability

The contingent consideration liability related to the acquisition of B Medical 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 contingency was 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 zero as of June 30, 2023, with the offset to the changes in fair value recorded in the Consolidated Statements of Operations. There were no changes to the measurement of the contingent consideration liability in the fourth quarter.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During fiscal year 2023 and 2022, the Company did not record any material fair value measurements for assets or liabilities on a nonrecurring basis.