Financial Instruments

Fair Value Measurements

We measure our cash equivalents, marketable securities and restricted cash at fair value on a recurring basis. We define fair value as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:


▪	Level I—Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;


▪	Level II—Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; and


▪	Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on our own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

We classify our cash equivalents, marketable securities and restricted cash within Level 1 or Level 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. Our fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of our marketable securities were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques.

Cash Equivalents, Marketable Securities and Restricted Cash

The following tables summarize our cash equivalents, marketable securities and restricted cash by significant investment categories as of January 31, 2016 and October 31, 2016 (in thousands):



	As of January 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Restricted Cash
Level 1
Money market funds	$	45,614	$	—	$	—	$	45,614	$	45,614	$	—
Level 2
Certificate of deposits	7,132		—		—		7,132		—		7,132
Total	$	52,746	$	—	$	—	$	52,746	$	45,614	$	7,132



	As of October 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1
Money market accounts	$	—	$	—	$	—		$	—	$	—	$	—	$	12,734
Level 2
U.S. government treasury notes	143,532		67		(27		)	143,572		14,949		128,623		—
U.S. government agencies	41,161		13		(55		)	41,119		—		41,119		—
Corporate debt securities	192,944		581		(110		)	193,415		—		193,415		—
Foreign government bonds	2,625		3		—			2,628		—		2,628		—
Total	$	380,262	$	664	$	(192	)	$	380,734	$	14,949	$	365,785	$	12,734

The amortized cost and estimated fair value of our marketable securities are shown below by contractual maturity (in thousands):



	As of October 31, 2016
	Amortized Cost		Fair Value
Due within one year	$	95,602	$	95,673
Due in one to five years	269,711		270,112
Total	$	365,313	$	365,785

As of October 31, 2016, there were no securities that were in an unrealized loss position for more than 12 months. Based on our evaluation of available evidence, we concluded that the gross unrealized losses on our marketable securities as of October 31, 2016 were temporary in nature. The following table presents gross unrealized losses and fair values for those investments that were in a continuous unrealized loss position for less than 12 months as of October 31, 2016, aggregated by investment category (in thousands):



	Less than 12 months
	Fair Value		Unrealized Loss
U.S. government treasury notes	$	35,647	$	(27	)
U.S. government agencies	28,274		(55		)
Corporate debt securities	47,483		(110		)
Total	$	111,404	$	(192	)

Gross realized gains on sale of marketable securities for the three and nine months ended October 31, 2016 were $65,000 and $175,000, respectively.