Strategic Investments

3 Months Ended

Mar. 31, 2024

Strategic Investments

Strategic Investments

Note 7 - 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 fair value may be less than its carrying value.

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, 2024								Three Months Ended March 31, 2023
	Strategic investments		Warrants			Call options	Total		Strategic investments		Warrants			Call options		Total
Balance, beginning of period	$	212,996	$	1,501	$	17,233	$	231,730	$	277,676	$	1,654	$	17,233	$	296,563
Investments		9,128		—		—		9,128		—		—		—		—
Fair value adjustments:
Realized gains		45,162		—		—		45,162		—		—		—		—
Realized losses		—		—		(2,870)		(2,870)		—		—		—		—
Unrealized gains		74,784		855		—		75,639		—		—		—		—
Exercises		(61,962)		—		(1,330)		(63,292)		—		—		—		—
Balance, end of period	$	280,108	$	2,356	$	13,033	$	295,497	$	277,676	$	1,654	$	17,233	$	296,563

In January 2024, the Company acquired the remaining outstanding stock of a strategic investment. The Company’s existing interest had a fair value at acquisition date of $63.3 million which resulted in a non-taxable gain of $42.3 million. For additional information on the business combination, refer to Note 16.  

Additionally, as a result of an observable price change for a separate strategic investee, we recognized an unrealized gain of $75.6 million for the strategic investment and related warrants in other income, net on our condensed consolidated statement of operations during the three months ended March 31, 2024.

	Inception to date
	Strategic investments		Warrants			Call options	Total
Investments	$	133,626		4,222		17,233	$	155,081
Fair value adjustments:
Realized gains		57,474		—		—		57,474
Realized losses		—		—		(2,870)		(2,870)
Unrealized gains		149,601		29,928		—		179,529
Unrealized losses and impairments		(82,304)		(1,705)		—		(84,009)
Exercises		36,257		(30,089)		(1,330)		4,838
Sales		(14,546)		—		—		(14,546)
Balance, end of period	$	280,108	$	2,356	$	13,033	$	295,497