Fair value measurements

3 Months Ended

Mar. 31, 2024

The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (in thousands):


Description	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
March 31, 2024
Assets:
Cash and cash equivalents	$	212,047	$	212,047	$	—	$	—
Marketable securities:
U.S. government agency securities and treasuries	—		—		—		—
Due from factor:
Beneficiary interest in factored invoices	1,120		—		—		1,120
Total	$	213,167	$	212,047	$	—	$	1,120
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	$	222,315	$	221,755	$	—	$	560

Cash and cash equivalents

The Company considers all highly liquid securities with original final maturities of 90 days or less from the date of purchase to be cash equivalents. As of March 31, 2024 and December 31, 2023, cash and cash equivalents comprise funds in cash and money market accounts held at multiple banking and asset management institutions.

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 values 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 March 31, 2024 and December 31, 2023, 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 no and $0.1 million of realized losses recognized on the sale or maturity of available-for-sale debt securities during the three months ended March 31, 2024 and 2023, respectively.

Accrued interest receivable on the Company's available-for-sale debt securities totaled $0.3 million and $0.3 million as of March 31, 2024 and December 31, 2023, respectively. No accrued interest receivable was written off during the three months ended March 31, 2024 or 2023.

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 March 31, 2024, 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 March 31, 2024:


	For the three months ended March 31,
	2024
Level 3 financial assets, beginning of period	$	560
Beneficiary interest obtained in transferred invoices	1,680
Proceeds from previously transferred invoices	(1,120)
Level 3 financial assets, end of period	$	1,120

- 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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