Fair Value Measurements

6 Months Ended

Jun. 30, 2022

The Company determines the fair value of financial assets and liabilities using three levels of inputs as follows:

Level 1—Inputs which include quoted prices in active markets for identical assets and liabilities.

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Recurring Fair Value Measurements

The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows as of June 30, 2022 and December 31, 2021 (in thousands):



	June 30, 2022
Description	Level 1		Level 2		Level 3		Total
Money market fund	$	41,722	$	—	$	—	$	41,722
U.S. treasury securities		—		96,800		—		96,800
Non-U.S. government securities		—		24,368		—		24,368
Commercial paper		—		77,750		—		77,750
Asset-backed securities		—		19,304		—		19,304
Corporate debt securities		—		83,548		—		83,548
Total available-for-sale securities	$	41,722	$	301,770	$	—	$	343,492


	December 31, 2021
Description	Level 1		Level 2		Level 3		Total
Money market fund	$	41,960	$	—	$	—	$	41,960
U.S. treasury securities		—		40,237		—		40,237
Government-sponsored agencies		—		16,765		—		16,765
Commercial paper		—		111,868		—		111,868
Asset-backed securities		—		39,926		—		39,926
Corporate debt securities		—		103,574		—		103,574
Total available-for-sale securities	$	41,960	$	312,370	$	—	$	354,330

During the three and six months ended June 30, 2022, there were no transfers between Level 1 and Level 2 financial assets. When the Company uses observable market prices for identical securities that are traded in less active markets, the Company classifies its marketable debt instruments as Level 2. When observable market prices for identical securities are not available, the Company prices its marketable debt instruments using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Non-binding market consensus prices are based on the proprietary valuation models of pricing providers or brokers. These valuation models incorporate a number of inputs, including non-binding and binding broker quotes; observable market prices for identical or similar securities; and the internal assumptions of pricing providers or brokers that use observable market inputs and, to a lesser degree, unobservable market inputs. The Company corroborates non-binding market consensus prices with observable market data using statistical models when observable market data exists. The discounted cash flow model uses observable market inputs, such as LIBOR-based yield curves, currency spot and forward rates, and credit ratings.

Other Fair Value Measurements

The carrying amount and estimated fair value of financial instruments not recorded at fair value at June 30, 2022 and December 31, 2021 were as follows (in thousands):


	June 30,				December 31,
	2022				2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt, net (1)	$	23,725	$	25,271	$	23,635	$	25,046

(1)

Carrying amounts of long-term debt were net of unamortized debt discounts of $226 and $316 as of June 30, 2022 and December 31, 2021, respectively.

The fair value of the Company's long-term debt is estimated using the net present value of future debt payments, discounted at an interest rate that is consistent with market interest rates, which is a Level 2 input.

- 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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