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Derivative Financial Instruments and Hedging Activities
9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments and Hedging Activities
The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.

Notional Amount of Derivative Contracts
The net notional amounts of the Company’s outstanding derivative instruments were as follows:
As of 
September 30,
2024
December 31,
2023
(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges
$17,786,210 $8,783,273 
Fair value hedges
3,834,258 — 
Derivatives not designated as hedging instruments:
Foreign exchange contracts1,033,077 — 
Total
$22,653,545 $8,783,273 
As of September 30, 2024, approximately $1.1 billion of the Company’s euro–denominated Senior Notes was designated as a hedge of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries. See Note 6 Debt for further information on the Company’s debt obligations.

Fair Value of Derivative Contracts
The fair value of the Company’s outstanding derivative instruments was as follows:

 As of September 30, 2024
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$136,211 $5,080 $196,622 $120,764 
Derivatives not designated as hedging instruments:
Foreign exchange contracts14,713 — 18,765 — 
Total$150,924 $5,080 $215,387 $120,764 
 As of December 31, 2023
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$26,416 $4,518 $140,089 $46,575 
Derivatives not designated as hedging instruments:
Foreign exchange contracts— — — — 
Total$26,416 $4,518 $140,089 $46,575 
The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.
As of September 30, 2024, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $135 million.
Master Netting Agreements
In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.
The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. No cash collateral was received or posted by the Company as of September 30, 2024 and December 31, 2023.
The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:

 As of September 30, 2024
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$156,004 $— $156,004 $(155,428)$— $576 
Derivative liabilities336,151 — 336,151 (155,428)— 180,723 

 As of December 31, 2023
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$30,934 $— $30,934 $(27,246)$— $3,688 
Derivative liabilities186,664 — 186,664 (27,246)— 159,418 
Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements
The pre-tax gains (losses) on the Company’s cash flow hedges, fair value hedges, and net investment hedges recognized in AOCI were as follows:
Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness$(369,805)$101,169 $19,883 $101,169 
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness(10,175)— (10,175)— 
Net investment hedges:
Foreign currency-denominated debt(42,000)— (45,400)— 
Total$(421,980)$101,169 $(35,692)$101,169 


The gains (losses) on hedged items and derivative instruments recognized in the Consolidated Statement of Operations were as follows:
Three Months Ended
September 30, 2024
RevenuesCost of RevenuesInterest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$9,824,703 $5,119,884 $(21,693)
Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI48,184 297 — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — (71,673)
Derivatives designated as hedging instruments— — 70,332 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — (9,069)
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts— — (1,296)
Nine Months Ended
September 30, 2024
RevenuesCost of RevenuesInterest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$28,754,453 $15,271,100 $212,671 
Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI70,244 564 — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — (71,673)
Derivatives designated as hedging instruments— — 70,332 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — (9,069)
Gains on derivatives not designated as hedging instruments
Foreign exchange contracts— — 12,767 
No gains or losses on derivative instruments were recognized in the Consolidated Statements of Operations in the three and nine months ended September 30, 2023.