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Fair Value Measurements
 6 Months Ended
Jul. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
The following table presents the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis as of July 31, 2024 (in thousands):

Level 1
Level 2
Total
Assets:
Cash equivalents:
Money market funds$636,041 $— $636,041 
U.S. government securities— 276,145 276,145 
Time deposits— 65,287 65,287 
Commercial paper— 2,348 2,348 
Short-term investments:
Corporate notes and bonds— 770,287 770,287 
U.S. government and agency securities— 488,432 488,432 
Commercial paper— 443,159 443,159 
Certificates of deposit— 246,584 246,584 
Long-term investments:
Corporate notes and bonds— 503,793 503,793 
U.S. government and agency securities— 181,914 181,914 
Certificates of deposit— 11,699 11,699 
Derivative assets:
Foreign currency forward contracts— 1,075 1,075 
Total assets$636,041 $2,990,723 $3,626,764 
Liabilities:
Derivative liabilities:
Foreign currency forward contracts$— $(565)$(565)
Total liabilities
$— $(565)$(565)
The following table presents the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis as of January 31, 2024 (in thousands):

Level 1
Level 2
Total
Assets:
Cash equivalents:
U.S. government securities$— $742,234 $742,234 
Money market funds533,211 — 533,211 
Time deposits— 56,263 56,263 
Short-term investments:
Corporate notes and bonds— 939,727 939,727 
U.S. government and agency securities— 573,780 573,780 
Commercial paper— 353,548 353,548 
Certificates of deposit— 216,444 216,444 
Long-term investments:
Corporate notes and bonds— 607,989 607,989 
U.S. government and agency securities— 299,637 299,637 
Certificates of deposit— 8,681 8,681 
Derivative assets:
Foreign currency forward contracts— 60 60 
Total assets$533,211 $3,798,363 $4,331,574 
Liabilities:
Derivative liabilities:
Foreign currency forward contracts$— $(745)$(745)
Total liabilities
$— $(745)$(745)

The Company determines the fair value of its security holdings based on pricing from the Company’s service providers and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures.

Strategic Investments

The tables above do not include the Company’s strategic investments, which consist primarily of (i) non-marketable equity securities recorded at cost minus impairment, if any, and adjusted for observable transactions for the same or similar investments of the same issuer (referred to as the Measurement Alternative), and (ii) marketable equity securities.

The Company’s non-marketable equity securities accounted for using the Measurement Alternative are recorded at fair value on a non-recurring basis and classified within Level 3 of the fair value hierarchy because significant unobservable inputs or data in an inactive market are used in estimating their fair value. The estimation of fair value for these assets requires the use of an observable transaction price or other unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. The Company’s marketable equity securities are recorded at fair value on a recurring basis and classified within Level 1 of the fair value hierarchy because they are valued using the quoted market price.
The following table presents the Company’s strategic investments by type (in thousands):

July 31, 2024January 31, 2024
Equity securities:
Non-marketable equity securities under Measurement Alternative$295,506 $190,238 
Non-marketable equity securities under equity method5,436 5,307 
Marketable equity securities13,255 37,320 
Debt securities:
Non-marketable debt securities1,750 1,500 
Total strategic investments—included in other assets$315,947 $234,365 

The following table summarizes the gains and losses associated with the Company’s strategic investments in equity securities (in thousands):

Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
Unrealized losses on non-marketable equity securities under Measurement Alternative:
Impairments$(7,158)$(2,101)$(25,911)$(2,101)
Net unrealized gains (losses) on marketable equity securities
650 7,410 (3,005)4,996 
Net unrealized gains (losses) on strategic investments in equity securities
(6,508)5,309 (28,916)2,895 
Net realized gains on marketable equity securities sold(1)
— — 1,713 — 
Total—included in other income (expense), net
$(6,508)$5,309 $(27,203)$2,895 
________________
(1)Represents the difference between the sale proceeds and the carrying value of the securities at the beginning of the period or the purchase date, if later.

The cumulative upward adjustments and the cumulative impairments to the carrying value of the non-marketable equity securities accounted for using the Measurement Alternative held by the Company as of July 31, 2024 were $37.1 million and $67.0 million, respectively.