Fair Value Measurements

12 Months Ended

Jan. 31, 2022

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, 2022 (in thousands):


	Level 1		Level 2		Level 3		Total
Cash equivalents: (1)
Money market funds	$	233,705	$	—	$	—	$	233,705
Marketable securities:
U.S. treasury securities	—		223,032		—		223,032




Other investments:
Non-marketable debt investments	—		—		6,434		6,434
Total assets	$	233,705	$	223,032	$	6,434	$	463,171

(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 accrued expenses and other current liabilities on the Company’s consolidated balance sheets at January 31, 2021. The foreign currency forward contracts matured during the three months ended April 30, 2021 and were not renewed.

Other Investments

The non-marketable debt investments are recorded at fair value on a recurring basis. The estimation of fair value for non-marketable debt investments is based on valuation methods using an observable transaction price, if available and other unobservable inputs including the volatility, rights, and obligations of the securities the Company holds; as a result, the Company classifies these assets as Level 3 within the fair value hierarchy.

As of January 31, 2022, the balance of non-marketable debt investments was $6.4 million, which includes an unrealized gain of $1.3 million. There have been no impairments to the amortized cost of the non-marketable debt investments during the year ended January 31, 2022.

The table above does not include the Company's non-marketable equity investments. The non-marketable equity investments are measured under the measurement alternative on a non-recurring basis. As of January 31, 2022, the carrying value of non-marketable equity investments was $5.0 million. There have been no impairments or adjustments to the carrying amount of the equity investments during the year ended January 31, 2022.

Convertible Senior Notes

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 $1.8 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 January 31, 2022. Refer to Note 10, “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 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 January 31, 2022 was approximately $1,227.1 million, $895.0 million and $5.3 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.