Fair Value Measurements

12 Months Ended

Jan. 31, 2020

The following table summarizes our financial assets that are measured at fair value on a recurring basis:


	January 31, 2020
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Level 1:
Cash equivalents⁽¹⁾
Money market funds	$	165,424	$	—	$	—	$	165,424
Level 2:
Available-for-sale securities
Commercial paper	14,919		7		(1)		14,925
Corporate notes and bonds	372,844		891		(31)		373,704
U.S. Treasury securities	90,697		153		(1)		90,849
U.S. government agency securities	175,086		153		(49)		175,190
Level 2 total	653,546		1,204		(82)		654,668
Total	$	818,970	$	1,204	$	(82)	$	820,092

	January 31, 2019
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Level 1:
Cash equivalents⁽¹⁾
Money market funds	$	350,063	$	—	$	—	$	350,063
Level 2:
Cash equivalents⁽¹⁾
Commercial paper	76,828		—		(11)		76,817
Corporate notes and bonds	2,998		—		—		2,998
U.S. government agency securities	6,491		—		—		6,491
Available-for-sale securities
Commercial paper	86,655		4		(21)		86,638
Corporate notes and bonds	287,496		389		(105)		287,780
U.S. Treasury securities	4,982		—		(1)		4,981
U.S. government agency securities	36,021		7		(4)		36,024
Level 2 total	501,471		400		(142)		501,729
Total	$	851,534	$	400	$	(142)	$	851,792

(1)Included in "cash and cash equivalents" in our consolidated balance sheets as of January 31, 2020 and 2019, in addition to cash of $75.8 million and $81.4 million

We use quoted prices in active markets for identical assets to determine the fair value of our Level 1 investments. The fair value of our Level 2 investments is determined using pricing based on quoted market prices or alternative market observable inputs.

The fair value of our available-for-sale securities as of January 31, 2020, by remaining contractual maturities, were as follows (in thousands):


Due in one year or less	$	414,939
Due in one to two years	239,729
	$	654,668

As of January 31, 2020 and 2019, we had a total of 178 and 119 available-for-sale securities, none of which were considered to be other-than-temporarily impaired for the periods presented.

We had no liabilities measured at fair value on recurring basis as of January 31, 2020 and 2019.

Convertible Senior Notes

As of January 31, 2020 and 2019, the estimated fair value of our 0.5% Convertible Senior Notes with aggregate principal amount of $575.0 million was $743.5 million and $575.0 million. We estimated the fair value based on the quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). The Notes are recorded at face value less unamortized debt discount and transaction costs as “Convertible senior notes, net” on our consolidated balance sheets. Refer to Note 10 for further information.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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