Fair Value Measurements

9 Months Ended

Oct. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following tables present information about the Company’s financial assets that have been measured at fair value on a recurring basis as of October 31, 2024 and January 31, 2024 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

	Fair Value Measurement as of October 31, 2024
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	150,934	$	—	$	—	$	150,934
Short-term investments:
U.S. government treasury securities	1,629,038		—		—		1,629,038
Total financial assets	$	1,779,972	$	—	$	—	$	1,779,972

	Fair Value Measurement as of January 31, 2024
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	512,456	$	—	$	—	$	512,456
Short-term investments:
U.S. government treasury securities	1,212,448		—		—		1,212,448
Total financial assets	$	1,724,904	$	—	$	—	$	1,724,904

The Company utilized the market approach and Level 1 valuation inputs to value its money market mutual funds and U.S. government treasury securities because published net asset values were readily available.

The following table summarizes the amortized cost and fair value of the Company’s short-term investments by remaining contractual maturity as of October 31, 2024 and January 31, 2024 (in thousands):

	October 31, 2024						January 31, 2024
	Amortized Cost		Net Unrealized Gains (Losses)		Fair Value		Amortized Cost		Net Unrealized Gains (Losses)		Fair Value
Due within one year	$	909,218	$	825	$	910,043	$	520,006	$	(543)	$	519,463
Due after one year and within three years	718,407		588		718,995		690,211		2,774		692,985
Total short-term investments	$	1,627,625	$	1,413	$	1,629,038	$	1,210,217	$	2,231	$	1,212,448

As of October 31, 2024 and January 31, 2024, unrealized net gains on the Company’s U.S. government treasury securities were approximately $1.4 million and $2.2 million, respectively. These unrealized net gains were caused by fluctuations in interest rates, which results in changes to the market value of these securities. Since the fluctuation in fair value is due to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity, the Company concluded that an allowance for credit losses was unnecessary for short-term investments as of October 31, 2024. Gross realized gains and losses were not material for each of the three and nine months ended October 31, 2024 and 2023. There were no material short-term investments in a continuous loss position for greater than twelve months.

Convertible Senior Notes and Capped Calls

The Company measures the fair value of its outstanding convertible senior notes on a quarterly basis for disclosure purposes. The Company considers the fair value of its convertible senior notes as of October 31, 2024 to be a Level 2 measurement due to limited trading activity of the convertible senior notes.

The fair value measurements for the derivative asset related to the Capped Calls associated with the 2024 Notes (as defined herein) are determined using the Black-Scholes option-pricing model with Level 1 and Level 2 inputs. The derivative asset recognized during the three months ended April 30, 2024 was cash settled in June 2024.

Refer to Note 5, Convertible Senior Notes, for further details on the convertible senior notes and Capped Calls.

Non-marketable Securities

As of October 31, 2024 and January 31, 2024, the total amount of non-marketable equity and debt securities included in other assets on the Company’s condensed consolidated balance sheets was $18.9 million and $12.9 million, respectively. The Company invested an additional $5.8 million and $2.1 million of its cash in non-marketable equity securities during the nine months ended October 31, 2024 and 2023, respectively. The Company recognized immaterial net unrealized gains on certain of these non-marketable securities during the three and nine months ended October 31, 2024. No unrealized gain or loss was recognized during the three months ended October 31, 2023. The Company recognized net unrealized gains on certain of these non-marketable securities of $1.3 million during the nine months ended October 31, 2023. Refer to Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of the Company’s 2024 Form 10-K for further information. The Company considers these assets as Level 3 within the fair value hierarchy when an impairment or observable price changes in orderly transactions are recognized on these non-marketable securities during the period. The estimation of fair value for these investments is inherently complex due to the lack of readily available market data and inherent lack of liquidity and requires the Company’s judgment and the use of significant unobservable inputs in an inactive market. In addition, the determination of whether an orderly transaction is for the identical or a similar investment requires significant management judgment, including understanding the differences in the rights and obligations of the investments, the extent to which those differences would affect the fair values of those investments and the stage of operational development of the entities.