Fair Value Measurements

12 Months Ended

Dec. 31, 2019

The following tables provide the financial assets measured at fair value on a recurring basis:



	Amortized Cost or Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Months			Gross Unrealized Losses More Than 12 Months		Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Amortized Cost or Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Months			Gross Unrealized Losses More Than 12 Months		Level 1		Level 2		Level 3		Aggregate Fair Value
Financial Assets:	(In thousands)
Cash and cash equivalents:
Money market funds	$	153,252	$	—	$	—		$	—	$	153,252	$	—	$	—	$	153,252
Reverse repurchase agreements	35,800		—		—			—		—		35,800		—		35,800
Total included in cash and cash equivalents	189,052		—		—			—		153,252		35,800		—		189,052
Marketable securities:
U.S. Treasury securities	215,847		241		(3		)	—		216,085		—		—		216,085
Corporate debt securities and commercial paper	1,378,487		4,516		(55		)	—		5,000		1,377,948		—		1,382,948
Total marketable securities	1,594,334		4,757		(58		)	—		221,085		1,377,948		—		1,599,033
Strategic investments	5,500		—		—			—		—		—		5,500		5,500
Total financial assets	$	1,788,886	$	4,757	$	(58	)	$	—	$	374,337	$	1,413,748	$	5,500	$	1,793,585



	Amortized Cost or Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Months				Gross Unrealized Losses More Than 12 Months			Fair Value Hierarchy as of December 31, 2018						Aggregate Fair Value
	Amortized Cost or Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Months				Gross Unrealized Losses More Than 12 Months			Level 1		Level 2		Level 3		Aggregate Fair Value
Financial Assets:	(In thousands)
Cash and cash equivalents:
Money market funds	$	420,234	$	—	$	—			$	—		$	420,234	$	—	$	—	$	420,234
Reverse repurchase agreements	35,000		—		—				—			—		35,000		—		35,000
Commercial paper	9,983		—		—				—			—		9,983		—		9,983
Total included in cash and cash equivalents	465,217		—		—			—	—			420,234		44,983		—		465,217
Marketable securities:
U.S. Treasury securities	59,785		—		(7		)		(9		)	59,769		—		—		59,769
Corporate debt securities and commercial paper	201,683		23		(123		)		(224		)	—		201,359		—		201,359
Total marketable securities	261,468		23		(130		)		(233		)	59,769		201,359		—		261,128
Total financial assets	$	726,685	$	23	$	(130	)		$	(233	)	$	480,003	$	246,342	$	—	$	726,345

As the Company views its marketable securities as available to support current operations, it has classified all available for sale securities as short-term. As of December 31, 2019, the Company had no securities that were in unrealized loss position for over 12 months. As of December 31, 2018, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of December 31, 2019 and 2018, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities and determined that no other-than-temporary impairments were required to be recognized during the years ended December 31, 2019, 2018 and 2017.

Interest earned on marketable securities was $20.8 million, $3.0 million and $2.6 million in the years ended December 31, 2019, 2018 and 2017, respectively. The interest is recorded as other income (expense), net, in the accompanying consolidated statements of operations.

The following table summarizes the contractual maturities of marketable securities:



	As of December 31, 2019				As of December 31, 2018
	Amortized Cost		Aggregate Fair Value		Amortized Cost		Aggregate Fair Value
Financial Assets:	(In thousands)
Less than one year	$	859,996	$	861,181	$	261,468	$	261,128
One to three years	734,338		737,852		—		—
Total	$	1,594,334	$	1,599,033	$	261,468	$	261,128

The Company enters into reverse securities repurchase agreements, primarily for short-term investments with maturities of 90 days or less. As of December 31, 2019 and 2018, the Company was party to reverse repurchase agreements totaling $35.8 million and $35.0 million, respectively, which were reported in cash and equivalents in the accompanying consolidated balance sheets. Under these reverse securities repurchase agreements, the Company typically lends available cash at a specified rate of interest and holds U.S. government securities as collateral during the term of the agreement. Collateral value is in excess of the amounts loaned under these agreements.

In May and August 2019, the Company made strategic investments totaling $5.5 million into privately held debt securities in which the Company does not have a controlling interest or significant influence. These securities are recorded at fair value in other long-term assets in the consolidated balance sheet. The Company classifies its strategic investments as Level 3 within the fair value hierarchy based on the nature of the fair value inputs and judgment involved in the valuation process. There were no material changes to fair value of these securities during the year ended December 31, 2019.

As of December 31, 2019 and 2018, the fair value of the 0.25% convertible senior notes due 2023 (the “Notes”), as further described in Note 9 below, was approximately $841.3 million and $743.4 million, respectively. The fair value of the Notes is determined based on the closing price on the last trading day of the reporting period and is classified as a Level 2 security within the fair value hierarchy.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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