Fair Value Measurements

3 Months Ended

Mar. 31, 2020

3.	Fair Value Measurements

The Company’s cash equivalents are classified within Level 1 and Level 2 of the fair value hierarchy. The Company’s investments in marketable securities are classified within Level 2 of the fair value hierarchy.

The fair values of the Company’s marketable securities are based on prices obtained from independent pricing sources. Consistent with the fair value hierarchy described in Note 2, Summary of Significant Accounting Policies, securities with validated quotes from pricing services are reflected within Level 2, as they are primarily based on observable pricing for similar assets or other market observable inputs. Typical inputs used by these pricing services include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers or estimates of cash flow, prepayment spreads and default rates.

The following tables summarize the Company’s money market funds and marketable securities as of March 31, 2020 and December 31, 2019.

	March 31, 2020
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents:
Cash equivalents	$	199,444	$	169,249	$	30,195	$	—
Total cash equivalents		199,444		169,249		30,195		—
Marketable securities:
U.S. government securities		145,913		—		145,913		—
U.S. corporate bonds		362,161		—		362,161		—
International corporate bonds		116,396		—		116,396		—
U.S. commercial paper		27,904		—		27,904		—
International commercial paper		20,939		—		20,939		—
Total marketable securities		673,313		—		673,313		—
	$	872,757	$	169,249	$	703,508	$	—

	December 31, 2019
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents:
Cash equivalents	$	126,705	$	65,414	$	61,291	$	—
Total cash equivalents		126,705		65,414		61,291		—
Marketable securities:
U.S. government securities		205,328		—		205,328		—
U.S. corporate bonds		429,845		—		429,845		—
International corporate bonds		142,998		—		142,998		—
U.S. commercial paper		52,261		—		52,261		—
International commercial paper		51,256		—		51,256		—
Total marketable securities		881,688		—		881,688		—
	$	1,008,393	$	65,414	$	942,979	$	—

During the three months ended March 31, 2020 and 2019, there were no transfers among the Level 1, Level 2 and Level 3 categories.

The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of March 31, 2020 and December 31, 2019:

	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Credit Losses		Fair Value
	(in thousands)
Assets:
U.S. government securities	$	145,202	$	711	$	—		$	—	$	145,913
U.S. corporate bonds		363,156		415		(1,410	)		—		362,161
International corporate bonds		116,878		180		(662	)		—		116,396
U.S. commercial paper		27,930		—		(26	)		—		27,904
International commercial paper		20,939		—		—			—		20,939
	$	674,105	$	1,306	$	(2,098	)	$	—	$	673,313

	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Assets:
U.S. government securities	$	205,172	$	176	$	(20	)	$	205,328
U.S. corporate bonds		429,148		797		(100	)		429,845
International corporate bonds		142,568		457		(27	)		142,998
U.S. commercial paper		52,252		14		(5	)		52,261
International commercial paper		51,253		5		(2	)		51,256
	$	880,393	$	1,449	$	(154	)	$	881,688

As of March 31, 2020, all marketable securities held by the Company had remaining contractual maturities of one year or less, except for corporate bonds with a fair value of $82.9 million, that had maturities of one to two years. As of December 31, 2019, all marketable securities held by the Company had remaining contractual maturities of one year or less, except for corporate bonds with a fair value of $137.1 million, that had maturities of one to two years.

As of March 31, 2020, the marketable securities in a loss position had a maturity of less than one year, except for corporate bonds with a fair value of $51.3 million, that had maturities of one to two years. As of December 31, 2019, the marketable securities in a loss position had a maturity of less than one year.

There have been no impairments of the Company’s assets measured and carried at fair value during the three months ended March 31, 2020 and the year ended December 31, 2019.