Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

The fair values of the financial instruments we measure at fair value on a recurring basis are as follows (in thousands):



	March 31, 2019
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Commercial paper	$	—	$	76,897	$	—	$	76,897
Money market funds	546		—		—		546
Marketable securities:
Corporate bonds	—		214,819		—		214,819
Asset-backed securities	—		108,059		—		108,059
Certificates of deposit	—		64,418		—		64,418
Commercial paper	—		100,212		—		100,212
U.S. treasury securities	20,060		—		—		20,060
Prepaid expenses and other current assets:
Certificates of deposit	—		1,057		—		1,057
Restricted cash:
Certificates of deposit	—		25,724		—		25,724
Other liabilities:
Redeemable convertible preferred stock warrants	$	—	$	—	$	5,005	$	5,005



	December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	785	$	—	$	—	$	785
Commercial paper	—		73,486		—		73,486
Marketable securities:
Corporate bonds	—		204,170		—		204,170
U.S. treasury securities	35,921		—		—		35,921
Asset-backed securities	—		106,658		—		106,658
Certificates of deposit	—		68,359		—		68,359
Commercial paper	—		90,196		—		90,196
Prepaid expenses and other current assets:
Certificates of deposit	—		1,057		—		1,057
Restricted cash:
Certificates of deposit	—		11,724		—		11,724
Other liabilities:
Redeemable convertible preferred stock warrants	$	—	$	—	$	4,934	$	4,934

We classify our marketable securities within Level 1 or Level 2 because we determine their fair values using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

We classify our redeemable convertible preferred stock warrants within Level 3 because we determine their fair values using significant unobservable inputs, including the fair value of our redeemable convertible preferred stock, which we determine in the same manner as our common stock. Refer to our significant accounting policies in Note 1 for additional information.

We record changes in the fair value of our redeemable convertible preferred stock warrants in interest expense and other income (expense), net. These amounts were not material for the three months ended March 31, 2019 and 2018.

Gross unrealized gains and losses on our marketable securities were immaterial in the aggregate as of March 31, 2019 and December 31, 2018, and gross unrealized losses for marketable securities that had been in an unrealized loss position for greater than 12 consecutive months were also immaterial as of March 31, 2019 and December 31, 2018. We evaluated all available evidence and concluded that our marketable securities are not other than temporarily impaired as of March 31, 2019 and December 31, 2018.

The fair value of our marketable securities by contractual maturity is as follows (in thousands):



	March 31, 2019
Due in one year or less	$	319,271
Due after one to five years	188,297
Total	$	507,568

Net realized gains and losses from sales of available-for-sale securities were not material for any period presented.

- 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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