The following tables present information about our financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):


	Fair Value Measurement at September 30, 2022
	Level 1		Level 2		Total
Description
U.S. Treasury securities	$	—	$	421,965	$	421,965
Corporate bonds	—		385,774		385,774
Money market funds	387,159		—		387,159
Asset-backed securities	—		69,035		69,035
Agency securities	—		70,299		70,299
Commercial paper	—		39,443		39,443
Certificates of deposit and time deposits	—		9,169		9,169
Total	$	387,159	$	995,685	$	1,382,844
Included in cash and cash equivalents					$	429,135
Included in marketable securities					$	953,709


	Fair Value Measurement at December 31, 2021
	Level 1		Level 2		Total
Description
U.S. Treasury securities	$	—	$	480,726	$	480,726
Corporate bonds	—		430,018		430,018
Money market funds	234,123		—		234,123
Asset-backed securities	—		93,620		93,620
Agency securities	—		50,057		50,057
Commercial paper	—		48,950		48,950
Certificates of deposit and time deposits	—		1,488		1,488
Total	$	234,123	$	1,104,859	$	1,338,982
Included in cash and cash equivalents					$	239,550
Included in marketable securities					$	1,099,432

As of September 30, 2022 and December 31, 2021, there were no securities within Level 3 of the fair value hierarchy. There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2022 or 2021.

As of September 30, 2022, gross unrealized gains and gross unrealized losses for marketable securities were not material and $22 million, respectively. The aggregate amortized cost basis for cash equivalents and marketable securities was $1,405 million and excludes accrued interest of $3 million. The aggregate fair value of securities with unrealized losses was $901 million.

As of December 31, 2021, gross unrealized gains and gross unrealized losses for marketable securities were $1 million and $3 million, respectively. The aggregate amortized cost basis for cash equivalents and marketable securities was $1,341

Unrealized losses for securities that have been in an unrealized loss position for more than 12 months as of September 30, 2022 and December 31, 2021 were $7 million and not material, respectively. We have not recorded an allowance for credit losses, as we believe any such losses would be immaterial based on the high-grade credit rating for each of our marketable securities as of the end of each period. We intend to hold our marketable securities to maturity and it is unlikely that they would be sold before their cost bases are recovered.

As of September 30, 2022 and December 31, 2021, the balance of strategic investments without readily determinable fair values was $17 million and $16 million, respectively. There have been no adjustments to the carrying values of strategic investments resulting from impairments or observable price changes.

For our other financial instruments, including accounts receivable, accounts payable, and other current liabilities, the carrying amounts approximate their fair values due to the relatively short maturity of these balances.

Our foreign currency exposures typically arise from expenditures associated with foreign operations and sales in foreign currencies of our products. To mitigate the effect of foreign currency fluctuations on our future cash flows and earnings, we enter into foreign currency forward contracts with certain financial institutions and designate those contracts as cash flow hedges. Our foreign currency forward contracts generally have maturities of 15 months or less.

We include time value related to our cash flow hedges for effectiveness testing purposes and the entire change in the unrecognized value of our hedge contracts is recorded in accumulated other comprehensive income (loss), or AOCI. As of September 30, 2022, the balance of AOCI included an unrecognized net gain of $1 million related to the changes in the fair value of foreign currency forward contracts designated as cash flow hedges. We expect to reclassify a net loss of $2 million into earnings over the next 12 months associated with our cash flow hedges.


	September 30, 2022
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value (Level 2)		Balance Sheet Location	Fair Value (Level 2)
Foreign currency forward contracts	Other current assets	$	18,917	Accrued liabilities	$	23,715

Total		$	18,917		$	23,715


	December 31, 2021
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value (Level 2)		Balance Sheet Location	Fair Value (Level 2)
Foreign currency forward contracts	Other current assets	$	6,439	Accrued liabilities	$	9,422
Total		$	6,439		$	9,422

Our foreign currency forward contracts had a total notional value of $543 million and $488 million as of September 30, 2022 and December 31, 2021, respectively. We have a master netting arrangement with each of our counterparties, which

permit net settlement of multiple, separate derivative contracts with a single payment. We do not have collateral requirements with any of our counterparties. GAAP permits companies to present the fair value of derivative instruments on a net basis according to master netting arrangements. We have elected to present our derivative instruments on a gross basis in our consolidated financial statements. We do not enter into any derivative contracts for trading or speculative purposes. All derivatives have been designated as hedging instruments.

The following table presents information about our foreign currency forward contracts on our consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Gain (Loss) Reclassified from AOCI into Earnings
	Three Months Ended September 30,				Nine Months Ended September 30,
Classification	2022		2021		2022		2021
Revenue	$	4,166	$	(1,126)	$	7,352	$	(3,207)
Cost of revenue	(1,268)		(76)		(2,674)		814
Research and development	(1,641)		(92)		(3,587)		911
Sales and marketing	(3,133)		(180)		(6,753)		1,893
General and administrative	(1,417)		(53)		(2,552)		654
Total	$	(3,293)	$	(1,527)	$	(8,214)	$	1,065

The loss recognized in AOCI related to foreign currency forward contracts was $3 million and $4 million for the three months ended September 30, 2022 and September 30, 2021, respectively. The loss recognized in AOCI related to foreign currency forward contracts was $4 million and $7 million for the nine months ended September 30, 2022 and 2021, respectively.

The cash flow effects related to foreign currency forward contracts are included within operating activities on our consolidated statements of cash flows.

As of September 30, 2022, the fair values of our 0.25% convertible senior notes due 2023 and our 0.625% convertible senior notes due 2025 were $181 million and $935 million, respectively. We estimate the fair value of our convertible senior notes based on their last traded prices or market observable inputs, resulting in a Level 2 classification in the fair value hierarchy. Based on the closing price of our common stock of $76.10 on the last trading day of the quarter, the if-converted value of the 2025 convertible senior notes did not exceed the principal amount of $1,150 million, and the if-converted value of the 2023 convertible senior notes exceeded the remaining principal amount by $31 million as of September 30, 2022.