Financial Instruments

Investments

The following tables present information about our financial assets measured at fair value on a recurring basis as of December 31, 2017 and 2016 based on the three-tier fair value hierarchy (in thousands):



	Fair Value Measurement at December 31, 2017
	Level 1		Level 2		Total
Description
Corporate bonds	$	—	149,069		$	149,069
Money market funds	32,832		—		32,832
U.S. Treasury securities	—		28,382		28,382
Asset-backed securities	—		27,738		27,738
Commercial paper	—		19,622		19,622
Agency securities	—		14,911		14,911
Total	$	32,832	$	239,722	$	272,554
Included in cash and cash equivalents					$	37,531
Included in marketable securities					$	235,023



	Fair Value Measurement at December 31, 2016
	Level 1		Level 2		Total
Description
Corporate bonds	$	—	$	124,930	$	124,930
Asset-backed securities	—		32,567		32,567
U.S. Treasury securities	—		30,585		30,585
Commercial paper	—		9,787		9,787
Agency securities	$	—	$	8,489	$	8,489
Money market funds	$	3,545	$	—	$	3,545
Total	$	3,545	$	206,358	$	209,903
Included in cash and cash equivalents					$	3,545
Included in marketable securities					$	206,358

There were no transfers between fair value measurement levels during the years ended December 31, 2017 or 2016.

Gross unrealized gains or losses for cash equivalents and marketable securities as of December 31, 2017 and 2016 were not material. As of December 31, 2017 and 2016, there were no securities that were in an unrealized loss position for more than twelve months.

The following table classifies our marketable securities by contractual maturity as of December 31, 2017 and 2016 (in thousands):



	December 31, 2017		December 31, 2016
Due in one year or less	$	137,576	$	131,190
Due after one year	97,447		75,168
Total	$	235,023	$	206,358

Derivative Instruments and Hedging

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. As of December 31, 2017, the balance of accumulated other comprehensive loss included an unrecognized net gain of $0.9 million related to the effective portion of changes in the fair value of foreign currency forward contracts designated as cash flow hedges. As of December 31, 2017, we have no cash collateral related to our cash flow hedges. We expect to reclassify a net gain of $1.0 million into earnings over the next 12 months associated with our cash flow hedges.

The following table presents information about our derivative instruments on the consolidated balance sheet as of December 31, 2017 and 2016 (in thousands):



	December 31, 2017
	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	$	2,359	Accrued liabilities	$	1,220
Total		$	2,359		$	1,220



	December 31, 2016
	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	$	868	Accrued liabilities	$	4,280
Total		$	868		$	4,280

Our foreign currency forward contracts had a total notional value of $139.7 million and $79.6 million as of December 31, 2017 and 2016, respectively.

The following table presents information about our derivative instruments on the statement of operations for the years ended December 31, 2017 and 2016 (in thousands):



		Year Ended December 31, 2017					Year Ended December 31, 2016
Derivative Instrument	Location of Loss Reclassified into Earnings	Gain Recognized in AOCI		Loss Reclassified from AOCI into Earnings			Loss Recognized in AOCI			Loss Reclassified from AOCI into Earnings
Foreign currency forward contracts	Revenue, cost of revenue, operating expenses	$	3,663	$	(225	)	$	(3,174	)	$	(903	)
Total		$	3,663	$	(225	)	$	(3,174	)	$	(903	)

All derivatives have been designated as hedging instruments. Amounts recognized in earnings related to excluded time value and hedge ineffectiveness were not material for the years ended December 31, 2017 and 2016.