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.

Our investments in marketable debt securities, including U.S. treasury securities and corporate bonds are classified and accounted for as available-for-sale. The marketable debt securities are classified either short-term or long-term based on each instrument’s underlying contractual maturity date. As of September 30, 2022 and December 31, 2021, we reported $40.6 million and $7.3 million of investments in debt securities as Investments - noncurrent on our Condensed Consolidated Balance Sheets, respectively, as management intends to hold these investment for more than 12 months from the reporting date. We may sell certain marketable debt securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit risk, duration and asset allocation. The marketable debt securities are measured at fair value with realized gains

and losses reported as Interest and other income (loss), net on our Condensed Consolidated Statements of Income and Comprehensive Income. Unrealized gains and losses on marketable debt securities are reported as Accumulative Other Comprehensive Income (loss) on our Statements of Stockholders' Equity.

Our investments in marketable equity securities are classified based on the nature of the securities and their availability for use in current operations. The marketable equity securities are measured at fair value with gains and losses recognized in Interest and other income (loss), net on our Condensed Consolidated Statements of Income and Comprehensive Income.

We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, we will record an impairment charge and establish a new cost basis in the investment.


	September 30, 2022
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Mutual funds	$	30,400	$	—	$	(3,265)	$	27,135
U.S. treasury securities	25,640		19		(24)		25,635
Corporate bonds	15,095		277		(457)		14,915
Equity securities	54,813		1,002		(13,468)		42,347
	$	125,948	$	1,298	$	(17,214)	$	110,032


	December 31, 2021
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Mutual funds	$	50,000	$	—	$	(338)	$	49,662
Corporate bonds	6,996		290		—		7,286
Equity securities	38,100		—		(1,331)		36,769
	$	95,096	$	290	$	(1,669)	$	93,717


	September 30, 2022
	Marketable Equity Securities		Marketable Debt Securities		Total
Mutual funds	$	27,135	$	—	$	27,135
U.S. treasury securities	—		25,635		25,635
Equity securities	42,347		—		42,347
Corporate bonds	—		14,915		14,915
	$	69,482	$	40,550	$	110,032


	December 31, 2021
	Marketable Equity Securities		Marketable Debt Securities		Total
Mutual funds	$	49,662	$	—	$	49,662
Equity securities	36,769		—		36,769
Corporate bonds	—		7,286		7,286
	$	86,431	$	7,286	$	93,717

We invest in derivatives that are not designated as hedging instruments and which consist of call and put options. When we sell call and put options, the premium received is reported as Other current liabilities on our Condensed Consolidated Balance Sheets. When we purchase put or call options, the premium paid is reported as Other current liabilities on our Condensed Consolidated Balance Sheets. The carrying value of these options are adjusted to the fair value at the end of each reporting period until the options expire. Gains and losses recognized from the periodic adjustments to fair value are recognized as Interest and other income, on our Condensed Consolidated Statements of Income and Comprehensive Income.

Our derivative instruments consisted of call and put options sold 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 September 30, 2022 and December 31, 2021 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net unrealized gains (losses) recognized on marketable equity securities	$	(9,278)	$	490	$	(14,062)	$	490
Net realized gains (losses) recognized on marketable equity securities	(555)		—		218		—
Net unrealized gains ( losses) recognized on derivative instruments	3,907		(2)		(696)		(2)
Net realized gains recognized on derivative instruments	2,214		9		4,089		9
Net realized gains recognized on marketable debt securities	188		—		556		—
Total net gains (losses) recognized in interest and other income (loss), net	$	(3,524)	$	497	$	(9,895)	$	497

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 September 30, 2022 and December 31, 2021.

Financial instruments measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 are classified based on the valuation technique in the table below (in thousands):


	September 30, 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	$	—	$	21,061	$	—	$	21,061
U.S. treasury securities	—		25,635		—		25,635
Mutual funds	27,135		—		—		27,135
Equity securities	42,347		—		—		42,347
Corporate bonds	—		14,915		—		14,915
Total assets at fair value	$	69,482	$	61,611	$	—	$	131,093

Liabilities
Derivative instruments	$	—	$	3,199	$	—	$	3,199
Total liabilities at fair value	$	—	$	3,199	$	—	$	3,199


	December 31, 2021
	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:
Mutual funds	$	49,662	$	—	$	—	49,662
Equity securities	36,769		—		—		36,769
Corporate bonds	—		7,286		—		7,286
Total assets at fair value	$	86,431	$	7,286	$	—	$	93,717

Liabilities
Derivative instruments	$	—	$	6,267	$	—	$	6,267
Total liabilities at fair value	$	—	$	6,267	$	—	$	6,267