Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Table Text Blocks

Schedule of assets and liabilities measured at fair value on a recurring basis

The following tables present the assets and liabilities the Company has measured at fair value on a recurring basis (in thousands):

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	September 30, 2022		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents:
Money market funds	$	130,674	$	130,674	$	—	$	—
Repurchase agreements		268,000		—		268,000		—
Commercial paper		156,213		—		156,213		—
Corporate bonds		3,287		—		3,287		—
Restricted cash:
Money market funds		1,735		1,735		—		—
Total assets measured at fair value	$	559,909	$	132,409	$	427,500	$	—
Liabilities:
Note hedge warrants	$	1	$	—	$	—	$	1
Total liabilities measured at fair value	$	1	$	—	$	—	$	1

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	December 31, 2021		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents:
Money market funds	$	595,233	$	595,233	$	—	$	—
Restricted cash:
Money market funds		1,735		1,735		—		—
Convertible note hedges		1,115		—		—		1,115
Total assets measured at fair value	$	598,083	$	596,968	$	—	$	1,115
Liabilities:
Note hedge warrants	$	1,316	$	—	$	—	$	1,316
Total liabilities measured at fair value	$	1,316	$	—	$	—	$	1,316

Schedule of assumptions used in fair market valuations

The following inputs were used in the fair market valuation of the Convertible Note Hedges as of December 31, 2021 and Note Hedge Warrants as of September 30, 2022 and December 31, 2021:

	September 30, 2022			December 31, 2021
	Note Hedge			Convertible			Note Hedge
	Warrants			Note Hedges			Warrants
Risk-free interest rate (1)		3.4	%		0.2	%		0.4	%
Expected term		0.3			0.5			1.0
Stock price (2)	$	10.36		$	11.66		$	11.66
Strike price (3)	$	18.82		$	14.51		$	18.82
Common stock volatility (4)		32.1	%		27.0	%		32.2	%
Dividend yield (5)		—	%		—	%		—	%

(1) Based on U.S. Treasury yield curve, with terms commensurate with the expected terms of the Convertible Note Hedges and the Note Hedge Warrants.

(2) The closing price of the Company’s Class A Common Stock on the last trading days of the quarters ended September 30, 2022 and December 31, 2021, respectively.

(3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants.

(4) Expected volatility based on historical volatility of the Company’s Class A Common Stock.

(5) The Company has not paid and does not anticipate paying cash dividends on its shares of common stock in the foreseeable future; therefore, the expected dividend yield is assumed to be zero.

Schedule of the change in Level 3 assets

	Convertible		Note Hedge
	Note Hedges		Warrants
Balance at December 31, 2021	$	1,115	$	(1,316)
Change in fair value, recorded as a component of gain on derivatives		(1,115)		1,315
Balance at September 30, 2022	$	—	$	(1)

Schedule of the change in Level 3 liabilities

	Convertible		Note Hedge
	Note Hedges		Warrants
Balance at December 31, 2021	$	1,115	$	(1,316)
Change in fair value, recorded as a component of gain on derivatives		(1,115)		1,315
Balance at September 30, 2022	$	—	$	(1)