Fair Value Measurements

3 Months Ended

Mar. 31, 2022

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 Company performs validation procedures to ensure the reasonableness of this data. The Company performs its own review of prices received from the independent pricing services by comparing these prices to other sources. After completing the validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of March 31, 2022 and December 31, 2021.

The following tables summarize the Company’s cash equivalents and marketable securities as of March 31, 2022 and December 31, 2021.

	March 31, 2022
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents:
Money market funds	$	170,827	$	170,827	$	—	$	—
International commercial paper		4,000		—		4,000		—
U.S. corporate bonds		2,721		—		2,721		—
Total cash equivalents		177,548		170,827		6,721		—
Marketable securities:
U.S. government securities		436,464		—		436,464		—
U.S. corporate bonds		568,109		—		568,109		—
International corporate bonds		200,209		—		200,209		—
U.S. commercial paper		75,228		—		75,228		—
International commercial paper		129,587		—		129,587		—
U.S. municipal securities		36,970		—		36,970		—
Total marketable securities		1,446,567		—		1,446,567		—
	$	1,624,115	$	170,827	$	1,453,288	$	—

	December 31, 2021
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents:
Money market funds	$	289,440	$	289,440	$	—	$	—
U.S. commercial paper		2,000		—		2,000		—
International commercial paper		1,999		—		1,999		—
Total cash equivalents		293,439		289,440		3,999		—
Marketable securities:
U.S. government securities		324,532		—		324,532		—
U.S. corporate bonds		627,780		—		627,780		—
International corporate bonds		236,812		—		236,812		—
U.S. commercial paper		80,176		—		80,176		—
International commercial paper		142,335		—		142,335		—
U.S. municipal securities		36,428		—		36,428		—
Total marketable securities		1,448,063		—		1,448,063		—
	$	1,741,502	$	289,440	$	1,452,062	$	—

During the three months ended March 31, 2022 and 2021, 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, 2022 and December 31, 2021:

	March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Credit Losses		Fair Value
	(in thousands)
Assets:
U.S. government securities	$	441,082	$	3	$	(4,621	)	$	—	$	436,464
U.S. corporate bonds		572,189		10		(4,090	)		—		568,109
International corporate bonds		202,003		—		(1,794	)		—		200,209
U.S. commercial paper		75,309		—		(81	)		—		75,228
International commercial paper		129,703		—		(116	)		—		129,587
U.S. municipal securities		37,482		—		(512	)		—		36,970
	$	1,457,768	$	13	$	(11,214	)	$	—	$	1,446,567

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Credit Losses		Fair Value
	(in thousands)
Assets:
U.S. government securities	$	325,514	$	—	$	(982	)	$	—	$	324,532
U.S. corporate bonds		628,836		27		(1,083	)		—		627,780
International corporate bonds		237,303		—		(491	)		—		236,812
U.S. commercial paper		80,194		—		(18	)		—		80,176
International commercial paper		142,358		—		(23	)		—		142,335
U.S. municipal securities		36,518		—		(90	)		—		36,428
	$	1,450,723	$	27	$	(2,687	)	$	—	$	1,448,063

As of March 31, 2022, cash equivalents were comprised of money market funds, U.S. corporate bonds and international commercial paper. As of December 31, 2021, cash equivalents were comprised of money market funds, U.S. commercial paper and international commercial paper.

As of March 31, 2022, 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 municipal securities with a fair value of $282.7 million that had maturities of one to two years.

As of December 31, 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 municipal securities with a fair value of $436.1 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 March 31, 2022, 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, international corporate bonds and municipal securities with a fair value of $282.7 million, that had maturities of one to two years. As of December 31, 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, international corporate bonds and municipal securities, with a fair value of $431.5 million, that had maturities of one to two years.

There have been no impairments of the Company’s assets measured and carried at fair value during the three months ended March 31, 2022 and the year ended December 31, 2021.