Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

Fair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the interim condensed consolidated financial statements on a recurring basis (at least annually). Our financial instruments consist of cash and cash equivalents, marketable securities, accounts receivables, accounts payable, accrued liabilities, convertible debt and long-term debt. Long-term debt and convertible debt are reported at amortized cost on our interim condensed consolidated balance sheets. Cash and cash equivalents, marketable securities and restricted cash are reported at their respective fair values on our interim condensed consolidated balance sheets. The remaining financial instruments are reported on our interim condensed consolidated balance sheets at cost that approximate current fair values due to their relatively short maturities.

Assets and liabilities recorded at fair value on a recurring basis in the interim condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

In accordance with ASC 820-10, Fair Value Measurements and Disclosures, we determine the fair value of financial and non-financial assets liabilities using the three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The following table summarizes our financial assets measured at fair value on a recurring basis (in thousands):

	June 30, 2022
	Total		Level 1		Level 2		Level 3
Financial Assets:
Money market funds	$	224,325	$	224,325	$	—	$	—
Corporate debt securities		63,362		—		63,362		—
U.S. government agency securities		49,124		—		49,124		—
Certificates of deposits		1,942		—		1,942		—
U.S. government securities		192,485		—		192,485		—
U.S. treasury bills		100,956		5,000		95,956		—
Total financial assets	$	632,194	$	229,325	$	402,869	$	—
	December 31, 2021
	Total		Level 1		Level 2		Level 3
Financial Assets:
Money market funds	$	671,845	$	671,845	$	—	$	—
Corporate debt securities		10,006		—		10,006		—
U.S. government agency securities		4,843		—		4,843		—
Certificates of deposits		244		—		244		—
U.S. government securities		34,964		—		34,964		—
Total financial assets	$	721,902	$	671,845	$	50,057	$	—

We estimate the fair values of our investments in corporate debt securities, government and government related securities and certificates of deposits by taking into consideration valuations obtained from third-party pricing services. The fair value of our marketable securities classified within Level 2 is based upon observable inputs that 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. At June 30, 2022, and December 31, 2021, the weighted average remaining contractual maturities of our Level 2 investments were 15 months and 18 months, respectively, and all of these investments are rated A-1/P-1 or A/A2, or higher, by Moody’s and Standard & Poor’s. There were no transfers between Level 1 and Level 2 during the periods presented.

There were no sales of available-for-sale securities except for money market funds in the periods presented. No credit loss allowance was recorded as of June 30, 2022, as we do not believe the unrealized loss is a result of a credit loss due to the nature of our investments. We also considered the current and expected future economic and market conditions and determined that the estimate of credit losses was not significantly impacted.