INVESTMENTS AND FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2023

INVESTMENTS AND FAIR VALUE MEASUREMENTS

3. INVESTMENTS AND FAIR VALUE MEASUREMENTS

Marketable Securities

We invest surplus funds in excess of operational requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns, maintaining a high degree of liquidity, and seeking to avoid the permanent impairment of principal. We periodically evaluate the need for an allowance for credit losses on investment securities available-for-sale on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.

Marketable securities as of December 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	December 31, 2023
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	59,228	$	7,896	$	(4,146	)	$	62,978
Marketable debt securities
U.S. treasury securities	53,662		1,307		(3		)	54,966
Corporate bonds	19,422		472		(197		)	19,697
Total marketable debt securities		73,084		1,779		(200	)		74,663
	$	132,312	$	9,675	$	(4,346	)	$	137,641

	December 31, 2022
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Mutual funds	$	26,352	$	—	$	(3,143	)	$	23,209
Equity securities	53,273		2,776		(5,836		)	50,213
Total marketable equity securities	79,625		2,776		(8,979		)	73,422
Marketable debt securities
U.S. treasury securities	25,640		182		(24		)	25,798
Corporate bonds	13,496		48		(106		)	13,438
Total marketable debt securities		39,136		230		(130	)		39,236
	$	118,761	$	3,006	$	(9,109	)	$	112,658

The amortized costs and fair value of marketable debt securities, by contractual maturity, as of December 31, 2023 and December 31, 2022 (in thousands) are as follows:

	December 31, 2023
	Amortized Cost		Fair Value
Less than 1 year	$	40,129	$	41,313
1 to 5 years	32,955		33,350
Total	$	73,084	$	74,663

	December 31, 2022
	Amortized Cost		Fair Value
Less than 1 year	$	22,014	$	22,196
1 to 5 years	12,086		11,973
More than 5 years	5,036		5,067
Total	$	39,136	$	39,236

As of December 31, 2023, the fair value of available-for-sale debt securities in unrealized loss position for corporate bonds and U.S. treasury securities were $7.1 million and $2.7 million, respectively, with an aggregated loss of $0.2 million. As of December 31, 2022, the fair value of available-for-sale debt securities in unrealized loss position for corporate bonds and U.S. treasury securities were $13.3 million and $2.7 million, respectively, with an aggregated loss of $0.3 million. For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. We had no credit-related impairment loss as of December 31, 2023 and 2022.

Derivative Financial Instruments

Our derivative instruments consisted of written put options sold at their fair value as of the balance sheet dates. These derivative instruments are reported as Other current liabilities on our Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022 (in thousands):

	December 31, 2023
	Cost		Unrealized Gains			Fair Value
Derivative instruments	$	8,797	$	(867	)	$	7,930
	$	8,797	$	(867	)	$	7,930

	December 31, 2022
	Cost		Unrealized Losses		Fair Value
Derivative instruments	$	2,987	$	662	$	3,649
	$	2,987	$	662	$	3,649

A summary of realized and unrealized gains and losses from our equity securities and derivative instruments are as follows (in thousands):

						Years Ended December 31,
							2023		2022
Net unrealized gains (losses) recognized on marketable equity securities	$	9,952	$	(4,533	)
Net realized gains (losses) recognized on marketable equity securities							1,901		(4,085		)
Net realized gains recognized on derivative instruments							3,219		5,493
Net unrealized gains (losses) recognized on derivative instruments							1,426		(662		)
Net realized gains recognized on marketable debt securities							300		734
Total net gains (losses) recognized in interest and other income (loss), net							$	16,798	$	(3,053	)

Fair Value Measurements

Our financial instruments measured at fair value on a recurring basis consisted of money-market funds, mutual funds, equity securities, corporate debt securities and derivatives. Equity securities are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. Corporate debt securities and derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy.

Financial instruments valued based on unobservable inputs which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument are generally classified within Level 3 of the fair value hierarchy. We did not hold Level 3 financial instruments as of December 31, 2023 and December 31, 2022

Financial instruments measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022 are classified based on the valuation technique in the table below (in thousands):

	December 31, 2023
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. treasury securities	$	54,966	$	—	$	—	$	54,966
Equity securities	62,977		—		—		62,977
Corporate bonds	—		19,697		—		19,697
Total assets at fair value	$	117,943	$	19,697	$	—	$	137,640

Liabilities
Derivative instruments	$	—	$	7,930	$	—	$	7,930
Total liabilities at fair value	$	—	$	7,930	$	—	$	7,930

	December 31, 2022
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Certificates of deposit	$	—	$	5,300	$	—	$	5,300
U.S. treasury securities		25,798		—		—	25,798
Mutual funds		23,209		—		—	23,209
Equity securities	50,213		—		—		50,213
Corporate bonds	—		13,438		—		13,438
Total assets at fair value	$	99,220	$	18,738	$	—	$	117,958

Liabilities
Derivative instruments	$	—	$	3,649	$	—	$	3,649
Total liabilities at fair value	$	—	$	3,649	$	—	$	3,649

If quoted prices for identical instruments are available in an active market, debt securities are classified within Level 1 of the fair value hierarchy. If quoted prices for identical instruments in active markets are not available, fair values are estimated using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. To date, all of our debt securities can be valued using one of these two methodologies.

Our derivative financial instruments are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets.