Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 2. Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

We applied the following methods and assumptions in estimating our fair value measurements:

Cash Equivalents — Cash equivalents consist of highly liquid investments, including money market funds with original maturities of less than three months at the acquisition date. We record the fair value measurement of these assets based on quoted market prices in active markets.

Investments — Our investments consist of fixed income securities, which typically include U.S. government agency securities, treasury bills, commercial paper, money market funds and corporate notes and bonds. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Long-term Debt — See Note 6 for the carrying amount and estimated fair value of our convertible senior notes due 2026.

The following table presents the balances of assets measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands):

	March 31, 2021						December 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	38,352	$	—	$	38,352	$	12,425	$	—	$	12,425
Total cash equivalents		38,352		—		38,352		12,425		—		12,425
Short-term investments:
U.S. government agency securities		—		20,185		20,185		—		20,293		20,293
Corporate notes and bonds		—		19,379		19,379		—		13,185		13,185
Commercial paper		—		14,988		14,988		—		23,983		23,983
Treasury bill		—		14,999		14,999		—		24,992		24,992
Total short-term investments		—		69,551		69,551		—		82,453		82,453
Total	$	38,352	$	69,551	$	107,903	$	12,425	$	82,453	$	94,878

We did not have any Level 3 assets or did not measure any liabilities at fair value as of March 31, 2021 or December 31, 2020. The gross unrealized gains or losses on cash equivalents and short-term investments as of March 31, 2021 or December 31, 2020 were not material.