Fair Value Measurements

3 Months Ended

Apr. 30, 2021

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis at April 30, 2021 (in thousands):


	Level 1		Level 2		Level 3		Total
Cash equivalents:(1)
Money market funds	$	146,111	$	—	$	—	$	146,111
Marketable securities:
U.S. treasury securities	—		227,066		—		227,066
Corporate notes and bonds	—		10,490		—		10,490


Certificate of deposit	—		280		—		280
Total assets	$	146,111	$	237,836	$	—	$	383,947

(1)Included in cash and cash equivalents.

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis at January 31, 2021 (in thousands):


	Level 1		Level 2		Level 3		Total
Cash equivalents:(1)
Money market funds	$	90,437	$	—	$	—	$	90,437

Marketable securities:
U.S. treasury securities	—		268,169		—		268,169
Corporate notes and bonds	—		14,587		—		14,587


Certificates of deposit	—		280		—		280
Total assets	$	90,437	$	283,036	$	—	$	373,473
Derivative liabilities:(2)
Foreign currency forward contracts not designated as hedges	$	—	$	47	$	—	$	47
Total liabilities	$	—	$	47	$	—	$	47

(1)Included in cash and cash equivalents.

(2)The derivative liabilities were related to foreign currency forward contracts at a notional amount of $2.9 million. The derivative liabilities were included in the accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets at January 31, 2021. The foreign currency forward contracts were accounted for as an economic hedge and as a result the changes in the fair value of the derivative assets and liabilities were recognized in the Company’s condensed consolidated statements of operations. The changes in the fair value during the year ended January 31, 2021 were not material.

The Company has $1,380.0 million in aggregate principal amount of 0.375% convertible senior notes due in 2026 (the “2026 Notes”), $805.0 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (the “2025 Notes”) and $5.9 million in aggregate principal amount of 0.375% convertible senior notes due in 2023 (the “2023 Notes” and together with the 2025 Notes and 2026 Notes, the “Convertible Notes”), outstanding as of April 30, 2021. Refer to Note 8, “Convertible Senior Notes” for further details on the Convertible Notes.

The Company carries the Convertible Notes at par value less the portion allocated to equity and the related unamortized discount and issuance costs on its condensed consolidated balance sheets and presents the fair value for disclosure purposes only. The estimated fair value of the 2026 Notes, 2025 Notes and 2023 Notes, based on a market approach as of April 30, 2021 was approximately $1,618.5 million, $1,426.0 million and $35.6 million, respectively, which represents a Level 2 valuation estimate. The estimated fair value of the 2026 Notes, 2025 Notes and 2023 Notes, based on a market approach as of January 31, 2021 was approximately $1,775.0 million, $1,617.5 million and $61.2 million, respectively, which represents a Level 2 valuation estimate. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last trade completed prior to the end of the period.