Financial Instruments and Hedging Activities

3 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments and Hedging Activities

Derivatives Not Designated as Hedges

Forward Currency Contracts

We have operations in a number of international locations where currency exchange rates can be volatile. We utilize foreign currency forward contracts to mitigate the risks associated with changes in foreign currency exchange rates so that our exposure to foreign currencies will be mitigated or offset by the gains or losses on the foreign currency forward contracts. Generally, we enter into such contracts for less than 90 days and have no cash requirements until maturity. As of December 31, 2021 and September 30, 2021, we had outstanding contracts with a total notional value of $75.1 million and $52.5 million, respectively.

We did not designate any forward contracts as hedging instruments for the three months ended December 31, 2021 or 2020. Therefore, changes in fair value of foreign currency forward contracts were recognized within Other income, net in our consolidated statements of operations. The cash flows related to the settlement of forward contracts not designated as hedging instruments are included in cash flows from investing activities within our consolidated statement of cash flows.

A summary of the derivative instruments is as follows (dollars in thousands):


Derivatives Not Designated as Hedges	Balance Sheet Classification	Fair Value
		December 31, 2021		September 30, 2021
Foreign currency forward contracts	Prepaid expenses and other current assets	$	129	$	112
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	(105)	$	(49)

A summary of other income (expense), net related to foreign currency forward contracts for the three months ended December 31, 2021 and 2020 is as follows (dollars in thousands):


	Income Statement Classification	Three Months Ended December 31,
Derivatives Not Designated as Hedges	(Income) Loss Recognized	2021		2020
Foreign currency forward contracts	Other income (expense), net	$	175	$	(548)