Strategic Investments

3 Months Ended

Mar. 31, 2023

Strategic Investments

Strategic Investments

Note 6 - Strategic Investments

Strategic investments include investments in a number of non-public technology-driven companies. We account for strategic investments under the ASC 321 measurement alternative for equity securities without readily determinable fair values, as there are no quoted market prices for the investments. The investments are measured at cost less impairment, adjusted for observable price changes and are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

In conjunction with certain of our strategic investments, we have the ability to commit additional capital over time through warrants and call options; for some investments, the exercisability and exercise prices are conditional on the achievement of certain performance metrics.

The following tables provide a roll-forward of the balance of strategic investments (in thousands):

	Three Months Ended March 31, 2023								Three Months Ended March 31, 2022
	Strategic investments		Warrants			Call options	Total		Strategic investments		Warrants			Total
Balance, beginning of period	$	277,676	$	1,654	$	17,233	$	296,563	$	80,775	$	2,745	$	83,520
Investments		—		—		—		—		500		—		500
Observable price changes:
Unrealized gains		—		—		—		—		41,893		28,539		70,432
Unrealized losses		—		—		—		—		—		—		—
Exercises		—		—		—		—		—		—		—
Sales		—		—		—		—		—		—		—
Balance, end of period	$	277,676	$	1,654	$	17,233	$	296,563	$	123,168	$	31,284	$	154,452

	Inception to date
	Strategic investments		Warrants			Call options	Total
Investments	$	109,482	$	3,047	$	17,233	$	129,762
Observable price changes:
Realized gains		12,312		—		—		12,312
Unrealized gains		74,817		29,073		—		103,890
Unrealized losses		(1,108)		(377)		—		(1,485)
Exercises		96,719		(30,089)		—		66,630
Sales		(14,546)		—		—		(14,546)
Balance, end of period	$	277,676	$	1,654	$	17,233	$	296,563

As part of our strategy, we continuously evaluate opportunities for strategic investments that align with our mission. Examples of investment areas include real-time crime center software, drones and related software, biometric sensors, and weapon detection solutions.