Investments and Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Investments and Fair Value Measurements

Investments and Fair Value Measurements

5. Investments and Fair Value Measurements

Available-for-Sale Securities

The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair market value of marketable securities classified within Level 1 is based on quoted prices for identical instruments in active markets. The fair value of marketable securities classified within Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in

markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Available-for-sale securities are summarized below:

		March 31, 2020
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	79,855	$	490	$	—	$	80,345
US government agency securities	Level 2		34,935		17		—		34,952
Corporate notes	Level 2		2,617		—		(2)		2,615
Commercial paper	Level 2		114,603		48		(39)		114,612
Marketable securities			232,010		555		(41)		232,524
Money market funds	Level 1		200,579		—		—		200,579
Total		$	432,589	$	555	$	(41)	$	433,103

		December 31, 2019
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	100,746	$	108	$	—	$	100,854
Corporate notes	Level 2		25,466		9		(1)		25,474
Commercial paper	Level 2		112,066		31		(2)		112,095
Marketable securities			238,278		148		(3)		238,423
Money market funds	Level 1		35,736		—		—		35,736
Total		$	274,014	$	148	$	(3)	$	274,159

As of March 31, 2020, all of the available-for-sale securities had contractual maturities within 13 months and the weighted-average maturity of marketable securities was approximately 2 months. There have been no material changes to the Company’s valuation techniques during the three months ended March 31, 2020.

Available-for-sale debt securities with unrealized losses are summarized below:

	March 31, 2020
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Corporate notes	$	2,615	$	(2)	$	—		—	$	2,615	$	(2)
Commercial paper		44,606		(39)		—		—		44,606		(39)
Total	$	47,221	$	(41)	$	—	$	—	$	47,221	$	(41)

	December 31, 2019
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Corporate notes	$	5,507	$	(1)	$	—	$	—	$	5,507	$	(1)
Commercial paper		28,137		(2)		—		—		28,137		(2)
Total	$	33,644	$	(3)	$	—	$	—	$	33,644	$	(3)

The Company invests primarily in high credit quality and short-term maturity debt securities with the intent to hold such securities until maturity at par value. The Company does not intend to sell the investments that are currently in an unrealized loss position, and it is unlikely that it will be required to sell the investments before recovery of their amortized

cost basis, which may be maturity. The Company reviewed its available-for-sale debt securities and determined that there were no credit-related losses to be recognized as of March 31, 2020.

As of March 31, 2020, the Company’s accumulated other comprehensive income (loss) on its condensed consolidated balance sheets consisted of net unrealized gains or losses on available-for-sale investments. During the three months ended March 31, 2020, the Company sold marketable securities for total proceeds of $14.9 million and recognized a minimal net realized gain from the sales based on the specific identification method. The Company did not sell any of its marketable securities for the three months ended March 31, 2019.