Fair value measurements

12 Months Ended

Dec. 31, 2023

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022 (in thousands):


	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
December 31, 2023
Assets:
Cash and cash equivalents	$	221,755	$	221,755	$	—	$	—
Marketable securities:
U.S. government agency securities and treasuries	—		—		—		—



Receivables and other current assets:
Beneficiary interest in factored invoices	560		—		—		560
Total assets	$	222,315	$	221,755	$	—	$	560
December 31, 2022
Assets:
Cash and cash equivalents	$	113,006	$	113,006	$	—	$	—
Marketable securities:
U.S. government agency securities and treasuries	66,237		—		66,237		—
Corporate bonds	2,498		—		2,498		—


Total assets	$	181,741	$	113,006	$	68,735	$	—

Cash and cash equivalents

As of December 31, 2023, cash and cash equivalents comprise funds in cash, money market accounts, and commercial paper.

Marketable securities

Marketable securities classified as Level 2 within the valuation hierarchy generally consist of U.S. government agency securities and treasuries, corporate bonds, and commercial paper. The Company estimates the fair value of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. The Company validates the prices provided by its third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts. At December 31, 2022, the balance in the Company’s accumulated other comprehensive loss was composed primarily of activity related to the Company’s available-for-sale debt securities. There were $0.1 million, and no material realized losses recognized on the sale or maturity of available-for-sale securities during the years ended December 31, 2023 and 2022, respectively.

Accrued interest receivable on the Company's available-for-sale debt securities totaled $0.3 million and $0.1 million as of December 31, 2023 and 2022, respectively. No accrued interest receivable was written off during the twelve months ended December 31, 2023 or 2022.

The following table summarizes available-for-sale debt securities in a continuous unrealized loss position for less than and greater than twelve months, and for which an allowance for credit losses has not been recorded at December 31, 2023 and 2022 (in thousands):


	Less than 12 months				12 months or greater				Total
Description	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
December 31, 2023
U.S. government agency securities and treasuries	$	—	$	—	$	—	$	—	$	—	$	—

Total	$	—	$	—	$	—	$	—	$	—	$	—
December 31, 2022
U.S. government agency securities and treasuries	$	—	$	—	$	66,237	$	(1,733)	$	66,237	$	(1,733)
Corporate bonds	—		—		2,498		(26)		2,498		(26)
Total	$	—	$	—	$	68,735	$	(1,759)	$	68,735	$	(1,759)

The Company determined that there was no material change in the credit risk of the above investments during the twelve months ended December 31, 2023. As such, an allowance for credit losses was not recognized.

Factoring agreement

Due from factor classified as Level 3 within the valuation hierarchy consists of beneficiary interest in transferred invoices. The Company estimates the fair value of the beneficiary interest based on the estimated cash flows after applying counterparty and credit risk adjustments associated with the factoring agent and distributors, respectively. As of December 31, 2023, no adjustment to the beneficiary interest in invoices sold was deemed an unobservable input and was determined based from ongoing credit evaluations and historical experience with aging of such invoices, among other factors. A significant change to this input could result in a significantly lower or higher fair value measurement.

The following table shows a reconciliation of the beginning and ending balances for Level 3 financial liabilities measured at fair value on a recurring basis for the three months ended December 31, 2023:


	For the year ended December 31,
	2023
Level 3 financial assets, beginning of period	$	—
Beneficiary interest obtained in transferred invoices	560
Proceeds from previously transferred invoices	—
Level 3 financial assets, end of period	$	560

- 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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