Fair Value Measurement

3 Months Ended

Mar. 31, 2023

Note 3. Fair Value Measurement

The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The following tables set forth the fair value of the Company’s financial assets, which consist of cash equivalents and marketable securities measured and recognized at fair value (in thousands):


		March 31, 2023
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash equivalents:
Money market funds	Level 1	$	44,535	$	—	$	—		$	44,535
U.S. treasury securities	Level 1		14,931		5		—			14,936
Commercial paper	Level 2		54,866		—		(8	)		54,858
U.S. government agency securities	Level 2		22,185		8		—			22,193
Marketable securities:
U.S. treasury securities	Level 1		111,569		39		(179	)		111,429
Corporate bonds	Level 2		27,613		—		(33	)		27,580
Commercial paper	Level 2		57,553		—		(62	)		57,491
U.S. government agency securities	Level 2		36,849		4		(121	)		36,732
Total		$	370,101	$	56	$	(403	)	$	369,754


		December 31, 2022
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash equivalents:
Money market funds	Level 1	$	26,718	$	—	$	—		$	26,718
Commercial paper	Level 2		66,732		—		(16	)		66,716
U.S. government agency securities	Level 2		20,477		7		—			20,484
Marketable securities:
U.S. treasury securities	Level 1		127,234		6		(318	)		126,922
Corporate bonds	Level 2		12,531		2		(3	)		12,530
Commercial paper	Level 2		142,726		—		(195	)		142,531
U.S. government agency securities	Level 2		24,132		—		(184	)		23,948
Total		$	420,550	$	15	$	(716	)	$	419,849

The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Levels 1, 2 and 3 during the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, there were no financial instruments classified as Level 3.

The following table summarizes the available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of March 31, 2023 and December 31, 2022, aggregated by major security type and length of time in a continuous unrealized loss position:


	March 31, 2023
	Less than 12 months					Greater than 12 months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. treasury securities	$	65,954	$	(179	)	$	—	$	—	$	65,954	$	(179	)
Corporate bonds		27,580		(33	)		—		—		27,580		(33	)
Commercial paper		75,935		(70	)		—		—		75,935		(70	)
U.S. government agency securities		26,885		(121	)		—		—		26,885		(121	)
Total	$	196,354	$	(403	)	$	—	$	—	$	196,354	$	(403	)


	December 31, 2022
	Less than 12 months					Greater than 12 months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. treasury securities	$	99,870	$	(318	)	$	—	$	—	$	99,870	$	(318	)
Corporate bonds		2,848		(3	)		—		—		2,848		(3	)
Commercial paper		127,163		(211	)		—		—		127,163		(211	)
U.S. government agency securities		23,948		(184	)		—		—		23,948		(184	)
Total	$	253,829	$	(716	)	$	—	$	—	$	253,829	$	(716	)

As of March 31, 2023 and December 31, 2022, the Company held 54 and 69 debt securities, respectively, with an unrealized loss position. The Company evaluated its securities for credit losses and considered the decline in market value to be primarily attributable to current economic and market conditions and not to a credit loss or other factors. Additionally, the Company does not intend to sell the securities in an unrealized loss position and does not expect they will be required to sell the securities before recovery of the unamortized cost basis. As of March 31, 2023 and December 31, 2022, an allowance for credit losses has not been recognized. Given our intent and ability to hold such securities until recovery, and the lack of significant change in credit risk of these investments, we do not consider these marketable securities impaired as of March 31, 2023 and December 31, 2022.

There were no realized gains or losses on marketable securities for the three months ended March 31, 2023 and 2022. Interest on marketable securities is included in interest income. As of March 31, 2023 and December 31, 2022, the Company had accrued interest receivable of $0.6 million and $0.5 million, respectively, which was included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

The following table summarizes the contractual maturities of the Company’s cash equivalents and marketable securities as of March 31, 2023 and December 31, 2022 at estimated fair value (in thousands):


	March 31,		December 31,
	2023		2022
Due in less than one year	$	363,404	$	419,849
Due in more than one year		6,350		—
Total	$	369,754	$	419,849

- 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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