Financial Instruments

9 Months Ended

Oct. 31, 2019

Investments, Debt and Equity Securities [Abstract]

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 1 - Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2 - 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 3 - 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 or quoted market prices for similar instruments.

In addition to our cash equivalents, marketable securities and restricted cash, we measure the fair value of our convertible senior notes (the Notes) on a quarterly basis for disclosure purposes. We consider the fair value of the Notes at October 31, 2019 to be a Level 2 measurement due to its limited trading activity. Refer to Note 6 for the carrying amount and estimated fair value of our Notes as of October 31, 2019.

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, 2019 and October 31, 2019 (in thousands):


	As of January 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1
Money market accounts	$	—	$	—	$	—	$	43,038	$	27,215	$	—	$	15,823
Level 2

U.S. government treasury notes	315,329		208		(315)		315,222		34,129		281,093		—
U.S. government agencies	69,114		17		(154)		68,977		9,983		58,994		—
Corporate debt securities	363,860		534		(757)		363,637		—		363,637		—
Foreign government bonds	7,965		36		—		8,001		—		8,001		—
Asset-backed securities	37,664		105		(12)		37,757		—		37,757		—
Total	$	793,932	$	900	$	(1,238)	$	836,632	$	71,327	$	749,482	$	15,823


	As of October 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1
Money market accounts	$	—	$	—	$	—	$	20,372	$	5,085	$	—	$	15,287
Level 2
U.S. government treasury notes	350,325		2,165		(30)		352,460		—		352,460		—
U.S. government agencies	42,120		331		(1)		42,450		—		42,450		—
Corporate debt securities	436,842		3,800		(10)		440,632		2,361		438,271		—
Foreign government bonds	14,988		131		(5)		15,114		—		15,114		—
Asset-backed securities	88,222		466		(14)		88,674		—		88,674		—
Total	$	932,497	$	6,893	$	(60)	$	959,702	$	7,446	$	936,969	$	15,287

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


	As of October 31, 2019
	Amortized Cost		Fair Value
Due within one year	$	427,200	$	429,154
Due in one to five years	502,936		507,815
Total	$	930,136	$	936,969

Based on our evaluation of available evidence, we concluded that the gross unrealized losses on our investments as of October 31, 2019 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 as of October 31, 2019, aggregated by investment category (in thousands):


	Less than 12 months						Greater than 12 months						Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government treasury notes	$	23,968	$	(27)	$	3,623	$	(3)	$	27,591	$	(30)
U.S. government agencies	—		—		1,938		(1)		1,938		(1)
Corporate debt securities	11,532		(7)		10,366		(3)		21,898		(10)
Foreign government bonds	2,964		(5)		—		—		2,964		(5)
Asset-backed securities	16,130		(14)		—		—		16,130		(14)
Total	$	54,594	$	(53)	$	15,927	$	(7)	$	70,521	$	(60)

Realized gains or losses on sale of marketable securities were not significant for all periods presented.