Fair Value Measurements

9 Months Ended

Sep. 30, 2021

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, marketable 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 cash equivalents and marketable securities as of September 30, 2021 and December 31, 2020.

	September 30, 2021
	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	$	422,165	$	421,570	$	595	$	—
Total cash equivalents		422,165		421,570		595		—
Marketable securities:
U.S. government securities		302,022		—		302,022		—
U.S. corporate bonds		560,945		—		560,945		—
International corporate bonds		238,316		—		238,316		—
U.S. commercial paper		120,129		—		120,129		—
International commercial paper		198,592		—		198,592		—
U.S. municipal securities		1,000		—		1,000		—
Total marketable securities		1,421,004		—		1,421,004		—
	$	1,843,169	$	421,570	$	1,421,599	$	—

	December 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	$	1,661,082	$	1,637,609	$	23,473	$	—
Total cash equivalents		1,661,082		1,637,609		23,473		—
Marketable securities:
U.S. government securities		160,588		—		160,588		—
U.S. corporate bonds		123,107		—		123,107		—
International corporate bonds		57,676		—		57,676		—
U.S. commercial paper		45,963		—		45,963		—
International commercial paper		51,133		—		51,133		—
Total marketable securities		438,467		—		438,467		—
	$	2,099,549	$	1,637,609	$	461,940	$	—

During the nine months ended September 30, 2021 and 2020, 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 September 30, 2021 and December 31, 2020:

	September 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Credit Losses		Fair Value
	(in thousands)
Assets:
U.S. government securities	$	302,080	$	8	$	(66	)	$	—	$	302,022
U.S. corporate bonds		561,120		69		(244	)		—		560,945
International corporate bonds		238,376		42		(102	)		—		238,316
U.S. commercial paper		120,133		2		(6	)		—		120,129
International commercial paper		198,601		2		(11	)		—		198,592
U.S. municipal securities		1,000		—		—			—		1,000
	$	1,421,310	$	123	$	(429	)	$	—	$	1,421,004

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Credit Losses		Fair Value
	(in thousands)
Assets:
U.S. government securities	$	160,589	$	11	$	(12	)	$	—	$	160,588
U.S. corporate bonds		122,882		240		(15	)		—		123,107
International corporate bonds		57,485		200		(9	)		—		57,676
U.S. commercial paper		45,963		—		—			—		45,963
International commercial paper		51,133		—		—			—		51,133
	$	438,052	$	451	$	(36	)	$	—	$	438,467

As of September 30, 2021, cash equivalents were comprised of money market funds and U.S. corporate bonds. As of December 31, 2020, cash equivalents were comprised of commercial paper, money market funds and U.S. treasury securities.

As of September 30, 2021, all marketable securities held by the Company had remaining contractual maturities of one year or less, except for U.S. government securities, U.S. corporate bonds, international corporate bonds and a municipal security with a fair value of $486.1 million that had maturities of one to two years.

As of December 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 $5.1 million that had maturities of one to two years.

All marketable securities, including those with remaining contractual maturities of more than one year, are classified as current assets on the balance sheet because they are considered to be “available for sale” and the Company can convert them into cash to fund current operations.

As of September 30, 2021, the marketable securities in a loss position had a maturity of less than one year, except for U.S. government securities, U.S. corporate bonds, and international corporate bonds with a fair value of $383.0 million, that had maturities of one to two years. As of December 31, 2020, 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 nine months ended September 30, 2021 and the year ended December 31, 2020.