INVESTMENTS AND FAIR VALUE MEASUREMENTS

4 Months Ended

Apr. 30, 2024

INVESTMENTS AND FAIR VALUE MEASUREMENTS

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.

Investments - current were as follows (in thousands):

		April 30, 2024		December 31, 2023
Marketable equity securities	$	50,496	$	62,978
U.S. treasury securities		42,352		41,313
Investments - current	$	92,848	$	104,291

Investments- noncurrent were as follows (in thousands):

		April 30, 2024		December 31, 2023
U.S. treasury securities	$	19,747	$	13,653
Corporate bonds		26,798		19,697
Investments - noncurrent	$	46,545	$	33,350

Marketable securities as of April 30, 2024 and December 31, 2023 consisted of the following (in thousands):

		April 30, 2024
		Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Marketable equity securities
Equity securities	$	50,645	$	5,656	$	(5,805	)	$	50,496
Marketable debt securities
U.S. treasury securities		61,306		825		(32	)		62,099
Corporate bonds		25,695		1,151		(48	)		26,798
Total marketable debt securities		87,001		1,976		(80	)		88,897
	$	137,646	$	7,632	$	(5,885	)	$	139,393

		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

The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of April 30, 2024 (in thousands) are as follows: 

		April 30, 2024
		Amortized Cost		Fair Value
Less than 1 year	$	41,522	$	42,352
1 to 5 years		45,479		46,545
Total	$	87,001	$	88,897

       As of April 30, 2024, the fair value of corporate bonds with unrealized loss position was $5.6 million, with an aggregated loss of less than $0.1 million. As of April 30, 2024, the fair value of treasury securities with unrealized loss position was $25.2 million, with an aggregated loss of less than $0.1 million. 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. 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 April 30, 2024 and December 31, 2023.

Derivative Financial Instruments

Our derivative instruments consisted of call and put options valued at their fair value as of the balance sheet date. These derivative instruments are reported as Other current liabilities on our Condensed Consolidated Balance Sheets as of April 30, 2024 and December 31, 2023 (in thousands):

		April 30, 2024
		Cost		Unrealized Losses			Fair Value
Derivative instruments	$	7,935	$	(2,495	)	$	5,440
	$	7,935	$	(2,495	)	$	5,440

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

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

		Four Months Ended April 30, 2024			Three Months Ended March 31, 2023
Net unrealized gains (losses) recognized on marketable equity securities	$	(3,899	)	$	2,014
Net realized gains recognized on marketable equity securities		6,778			1,669
Net unrealized gains (losses) recognized on derivative instruments		468			(102	)
Net realized gains recognized on derivative instruments		1,627			717
Net realized gains recognized on marketable debt securities		338			—
Total net gains recognized in interest and other income, net	$	5,312		$	4,298

Fair Value Measurements

Our financial instruments include cash and cash equivalents, receivables, accounts payable and accrued liabilities. The fair value of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1.

Our financial instruments measured at fair value on a recurring basis consisted of equity securities, corporate bonds, U.S. treasury securities and derivatives.  U.S. treasury securities and 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 bonds and derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources that are observable or can be corroborated by observable market data 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 April 30, 2024, and December 31, 2023.

Financial instruments measured at fair value on a recurring basis as of April 30, 2024 and December 31, 2023 are classified based on the valuation technique in the table below (in thousands):

		April 30, 2024
		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	$	—	$	62,099	$	—	$	62,099
Equity securities		50,496		—		—		50,496
Corporate bonds		8,220		18,578		—		26,798
Total assets at fair value	$	58,716	$	80,677	$	—	$	139,393
Liabilities
Derivative instruments	$	—	$	5,440	$	—	$	5,440
Total liabilities at fair value	$	—	$	5,440	$	—	$	5,440

		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