Fair Value Measurements and Investments

9 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements and Investments

Note 6—Fair Value Measurements and Investments

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Fair Value Measurements Using Inputs Considered as
	Level 1				Level 2
	June 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023
	(in millions)
Assets
Cash equivalents and restricted cash equivalents:
Money market funds	$	9,703	$	13,504	$	—	$	—
U.S. Treasury securities	7		301		—		—
Investment securities:
Marketable equity securities	286		339		—		—
U.S. government-sponsored debt securities	—		—		789		1,108
U.S. Treasury securities	5,659		4,316		—		—
Other current and non-current assets:
Money market funds	29		23		—		—
Derivative instruments	—		—		278		293
Total	$	15,684	$	18,483	$	1,067	$	1,401
Liabilities
Accrued compensation and benefits:
Deferred compensation liability	$	229	$	175	$	—	$	—
Accrued and other liabilities:
Derivative instruments	—		—		263		396
Total	$	229	$	175	$	263	$	396

Level 1 assets and liabilities. Money market funds, U.S. Treasury securities and marketable equity securities are classified as Level 1 within the fair value hierarchy, as fair value is based on unadjusted quoted prices in active markets for identical assets. The Company’s deferred compensation liability is measured at fair value based on marketable equity securities held under the deferred compensation plan.

Level 2 assets and liabilities. The fair value of U.S. government-sponsored debt securities, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. Derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

U.S. Government-sponsored Debt Securities and U.S. Treasury Securities

The amortized cost, unrealized gains and losses and fair value of debt securities were as follows:

	June 30, 2024
	Amortized Cost		Gross Unrealized				Fair Value
			Gains		Losses
	(in millions)
U.S. government-sponsored debt securities	$	791	$	—	$	(2)	$	789
U.S. Treasury securities	5,688		4		(26)		5,666
Total	$	6,479	$	4	$	(28)	$	6,455

	September 30, 2023
	Amortized Cost		Gross Unrealized				Fair Value
			Gains		Losses
	(in millions)
U.S. government-sponsored debt securities	$	1,109	$	1	$	(2)	$	1,108
U.S. Treasury securities	4,697		—		(80)		4,617
Total	$	5,806	$	1	$	(82)	$	5,725

Debt securities with unrealized losses for less than 12 months and 12 months or greater were as follows:

	June 30, 2024
	Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
U.S. government-sponsored debt securities	$	526	$	(1)	$	164	$	(1)
U.S. Treasury securities	2,496		(7)		1,704		(19)
Total	$	3,022	$	(8)	$	1,868	$	(20)

	September 30, 2023
	Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
U.S. government-sponsored debt securities	$	412	$	(2)	$	50	$	—
U.S. Treasury securities	1,360		(12)		2,128		(68)
Total	$	1,772	$	(14)	$	2,178	$	(68)

The unrealized losses were primarily attributable to changes in interest rates.

The stated maturities of debt securities were as follows:

	June 30, 2024
	(in millions)
Due within one year	$	3,418
Due after one year through five years	3,037
Total	$	6,455

Equity Securities

For the three months ended June 30, 2024 and 2023, the Company recognized net unrealized losses of $16 million and net unrealized gains of $96 million, respectively, on marketable and non-marketable equity securities held as of period end. For the nine months ended June 30, 2024 and 2023, the Company recognized net unrealized losses of $3 million and $85 million, respectively, on marketable and non-marketable equity securities held as of period end.

Fair value measurement alternative. The Company’s investments in privately held companies do not have readily determinable fair values. These investments are measured at fair value on a non-recurring basis and are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity and the fact that significant inputs used to measure fair value are unobservable and require management’s judgment.

The following table summarizes the Company’s non-marketable equity securities held as of period end that were accounted for using the fair value measurement alternative:

	June 30, 2024
	(in millions)
Initial cost basis	$	710
Adjustments:
Upward adjustments	909
Downward adjustments, including impairment	(458)
Carrying amount	$	1,161

Unrealized gains and losses of the Company’s non-marketable equity securities held as of period end that were accounted for using the fair value measurement alternative were as follows:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Upward adjustments	$	—	$	75	$	9	$	94
Downward adjustments, including impairment	$	(13)	$	—	$	(28)	$	(86)

Other Fair Value Disclosures

Debt. Debt instruments are measured at amortized cost on the Company’s consolidated balance sheets. The fair value of the debt instruments, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. If measured at fair value in the financial statements, these instruments would be classified as Level 2 in the fair value hierarchy. As of June 30, 2024, the carrying value and estimated fair value of debt was $20.6 billion and $18.3 billion, respectively. As of September 30, 2023, the carrying value and estimated fair value of debt was $20.5 billion and $17.7 billion, respectively.

Other financial instruments not measured at fair value. As of June 30, 2024, the carrying values of settlement receivable and payable and customer collateral are an approximate fair value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.

Non-financial assets. Certain non-financial assets such as goodwill, intangible assets and property, equipment and technology are subject to non-recurring fair value measurements if they are deemed to be impaired. The Company performed an annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2024, and concluded there was no impairment as of that date. No recent events or changes in circumstances indicated that impairment existed as of June 30, 2024