Available-for-sale Securities and Fair Value on Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Available-for-sale Securities and Fair Value on Financial Instruments

Note 2. Available-for-sale Securities and Fair Value on Financial Instruments

Available-for-sale Securities

The following is a summary of available-for-sale securities at June 30, 2024 (in thousands):

	June 30, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Allowance for Credit Loss		Fair Value
Money market funds	$	1,641	$	—	$	—		$	—	$	1,641
United States government agency securities		23,668		12		(210	)		—		23,470
Corporate debt securities		32,668		—		(232	)		—		32,436
Mortgage-backed securities		3,227		—		(341	)		—		2,886
Total available-for-sale securities	$	61,204	$	12	$	(783	)	$	—	$	60,433

The following is a summary of available-for-sale securities at December 31, 2023 (in thousands):

	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Allowance for Credit Loss		Fair Value
Money market funds	$	5,062	$	—	$	—		$	—	$	5,062
United States government agency securities		19,652		16		(314	)		—		19,354
Corporate debt securities		32,395		3		(638	)		—		31,760
Mortgage-backed securities		3,347		7		(263	)		—		3,091
Total available-for-sale securities	$	60,456	$	26	$	(1,215	)	$	—	$	59,267

Available-for-sale securities at June 30, 2024 and December 31, 2023, consisted of the following by contractual maturity (in thousands):

	June 30, 2024				December 31, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	40,309	$	39,954	$	42,598	$	41,789
Greater than one year and less than five years		20,895		20,479		17,858		17,478
Total available-for-sale securities	$	61,204	$	60,433	$	60,456	$	59,267

The following tables show all available-for-sale marketable securities in an unrealized loss position for which an allowance for credit losses has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2024
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate debt securities	$	6,180	$	(8	)	$	23,967	$	(224	)	$	30,147	$	(232	)
United States government agency securities		3,492		(17	)		14,407		(193	)		17,899		(210	)
Mortgage-backed securities		—		—			2,691		(341	)		2,691		(341	)
Total	$	9,672	$	(25	)	$	41,065	$	(758	)	$	50,737	$	(783	)

	December 31, 2023
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate debt securities	$	1,466	$	(12	)	$	29,647	$	(626	)	$	31,113	$	(638	)
United States government agency securities		4,855		(25	)		10,991		(289	)		15,846		(314	)
Mortgage-backed securities		242		(1	)		2,647		(262	)		2,889		(263	)
Total	$	6,563	$	(38	)	$	43,285	$	(1,177	)	$	49,848	$	(1,215	)

The Company typically invests in highly-rated securities, and its investment policy limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for expected credit losses, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. The Company also regularly reviews its investments in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. During the three and six months ended June 30, 2024 and 2023, the Company did not recognize any expected credit losses. The Company has no current requirement or intent to sell the securities in an unrealized loss position. The Company expects to recover up to (or beyond) the initial cost of investment for securities held. The gross realized gains or losses from the sale or maturity of available-for-sale investments were de minimis for all periods presented.

Fair Value Disclosures

The Company uses certain assumptions that market participants would use to determine the fair value of an asset or liability in pricing the asset or liability in an orderly transaction between market participants at the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows:

•Level 1: Quoted prices in active markets for identical instruments

•Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments)

•Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments)

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

To estimate the fair value of Level 2 debt securities the Company’s primary pricing service relies on inputs from multiple industry-recognized pricing sources to determine the price for each investment. Corporate debt and U.S. government agency securities are systematically priced by this service as of the close of business each business day. If the primary pricing service does not price a specific asset a secondary pricing service is utilized.

The Company classifies instruments in Level 3 if one or more significant inputs or significant value drivers are unobservable. The Company did not have any Level 3 investments as of June 30, 2024 or December 31, 2023.

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at June 30, 2024 (in thousands):

	Balance sheet			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	classification	Total		(Level 1)		(Level 2)		(Level 3)
Money market funds	Cash and cash equivalents	$	1,641	$	1,641	$	—	$	—
United States government agency securities	Short-term investments		23,470		—		23,470		—
Corporate debt securities	Short-term investments		32,436		—		32,436		—
Mortgage-backed securities	Short-term investments		2,886		—		2,886		—
Total short-term investments		$	60,433	$	1,641	$	58,792	$	—

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2023 (in thousands):

	Balance sheet			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	classification	Total		(Level 1)		(Level 2)		(Level 3)
Money market funds	Cash and cash equivalents	$	5,062	$	5,062	$	—	$	—
United States government agency securities	Short-term investments		19,354		—		19,354		—
Corporate debt securities	Short-term investments		31,760		—		31,760		—
Mortgage-backed securities	Short-term investments		3,091		—		3,091		—
Total short-term investments		$	59,267	$	5,062	$	54,205	$	—

The Company did not have any transfers among fair value measurement levels during the three and six months ended June 30, 2024 and 2023.