Financial Instruments and Fair Value

9 Months Ended

Oct. 31, 2023

Investments, All Other Investments [Abstract]

2. Financial Instruments and Fair Value

The Company invests a portion of its cash in money market funds and debt securities that are denominated in United States dollars. The debt security investment portfolio consists of commercial paper, corporate bonds, asset-backed securities and U.S. government securities. All of the investments are classified as available-for-sale securities and reported at fair value in the condensed consolidated balance sheets as follows:


	As of October 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Money market funds	$	1,649	$	—	$	—		$	1,649
Commercial paper		22,963		—		—			22,963
Corporate bonds		40,667		7		(642	)		40,032
Asset-backed securities		17,269		—		(256	)		17,013
U.S. government securities		22,491		—		(328	)		22,163
Total cash equivalents and marketable debt securities	$	105,039	$	7	$	(1,226	)	$	103,820

	As of January 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Money market funds	$	7,872	$	—	$	—		$	7,872
Commercial paper		18,333		—		—			18,333
Corporate bonds		23,472		50		(224	)		23,298
Asset-backed securities		18,753		44		(149	)		18,648
U.S. government securities		33,256		22		(235	)		33,043
Total cash equivalents and marketable debt securities	$	101,686	$	116	$	(608	)	$	101,194

The following table provides the breakdown of unrealized losses as of October 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position:


	As of October 31, 2023
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
Corporate bonds	$	29,661	$	(406	)	$	9,098	$	(236	)	$	38,759	$	(642	)
Asset-backed securities		9,550		(87	)		7,463		(169	)		17,013		(256	)
U.S. government securities		14,761		(185	)		7,402		(143	)		22,163		(328	)
Total marketable debt securities at loss position	$	53,972	$	(678	)	$	23,963	$	(548	)	$	77,935	$	(1,226	)

As of January 31, 2023, there were no debt securities with unrealized losses for more than twelve months.


	As of
	October 31, 2023		January 31, 2023
	(in thousands)
Included in cash equivalents	$	25,271	$	7,872
Included in marketable debt securities		78,549		93,322
Total cash equivalents and marketable debt securities	$	103,820	$	101,194

The contractual maturities of the investments at October 31, 2023 and January 31, 2023 were as follows:


	As of
	October 31, 2023		January 31, 2023
	(in thousands)
Due within one year	$	39,736	$	48,016
Due in 1 - 5 years		64,084		52,414
Due in 5 - 7 years		—		764
Total cash equivalents and marketable debt securities	$	103,820	$	101,194

The unrealized gains and losses on the available-for-sale securities were primarily caused by fluctuations in market value and interest rates as a result of the economic environment. In accordance with ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company estimates the expected losses at an individual security level whenever a security’s fair value is below its amortized cost basis using the discounted cash flow method. The credit-related portion of the loss is recognized in other income, net, in the condensed consolidated statements of operations but is limited to the difference between the fair value and the amortized cost basis of the security, adjusted for accrued interest. The non-credit-related portion of the loss is recognized in accumulated other comprehensive loss in the condensed consolidated balance sheets. The credit-related losses were not material for the three and nine months ended October 31, 2023 and 2022, respectively.

Interest income, including amortization of premiums and accretion of discounts related to the investments, as well as realized gains and losses from sales of the investments are recorded in other income, net, in the condensed consolidated statements of operations. For the three months ended October 31, 2023 and 2022, interest income and realized gains and losses, net, were approximately $1.3 million and $0.7 million, respectively. For the nine months ended October 31, 2023 and 2022, interest income and realized gains and losses, net, were approximately $3.5 million and $0.8 million, respectively.

The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3—Unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The Company measures the fair value of money market funds using quoted prices in active markets for identical assets and classifies them within Level 1. The fair value of the Company’s investments in other debt securities are obtained based on quoted prices for similar assets in active markets and are classified within Level 2.

The following tables present the fair value of the financial instruments measured on a recurring basis as of October 31, 2023 and January 31, 2023, respectively:


	As of October 31, 2023
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	1,649	$	1,649	$	—	$	—
Commercial paper		22,963		—		22,963		—
Corporate bonds		40,032		—		40,032		—
Asset-backed securities		17,013		—		17,013		—
U.S. government securities		22,163		—		22,163		—
Total cash equivalents and marketable debt securities	$	103,820	$	1,649	$	102,171	$	—

	As of January 31, 2023
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	7,872	$	7,872	$	—	$	—
Commercial paper		18,333		—		18,333		—
Corporate bonds		23,298		—		23,298		—
Asset-backed securities		18,648		—		18,648		—
U.S. government securities		33,043		—		33,043		—
Total cash equivalents and marketable debt securities	$	101,194	$	7,872	$	93,322	$	—