Fair Value Measurements

12 Months Ended

Jan. 31, 2025

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 January 31, 2025 (in thousands):

	Level 1		Level 2		Total
Assets:
Cash equivalents:
Money market funds	$	1,741,089	$	—	$	1,741,089
U.S. government securities	—		388,670		388,670
Time deposits	—		113,851		113,851
Corporate notes and bonds	—		4,466		4,466
Commercial paper	—		3,064		3,064
Short-term investments:
Corporate notes and bonds	—		1,059,181		1,059,181
U.S. government and agency securities	—		456,673		456,673
Commercial paper	—		307,856		307,856
Certificates of deposit	—		185,163		185,163
Long-term investments:
Corporate notes and bonds	—		501,369		501,369
U.S. government and agency securities	—		153,065		153,065
Certificates of deposit	—		2,042		2,042
Derivative assets:
Foreign currency forward contracts	—		1,579		1,579
Total assets	$	1,741,089	$	3,176,979	$	4,918,068
Liabilities:
Derivative liabilities:
Foreign currency forward contracts	$	—	$	(1,639)	$	(1,639)
Total liabilities	$	—	$	(1,639)	$	(1,639)

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 funds	533,211		—		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.

See Note 10, “Convertible Senior Notes for the fair value measurement of the Company’s convertible senior notes, which is not included in the tables above.

Strategic Investments

The tables above do not include the Company’s strategic investments, which consist primarily of non-marketable equity securities accounted for using the Measurement Alternative and 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):

	January 31, 2025		January 31, 2024
Equity securities:
Non-marketable equity securities under Measurement Alternative	$	281,158	$	190,238
Non-marketable equity securities under equity method	5,491		5,307
Marketable equity securities	13,833		37,320
Debt securities:
Non-marketable debt securities	750		1,500
Total strategic investments—included in other assets	$	301,232	$	234,365

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

	Fiscal Year Ended January 31,
	2025		2024		2023
Unrealized gains (losses) on non-marketable equity securities under Measurement Alternative:
Impairments	$	(11,578)	$	(3,101)	$	(38,036)
Upward adjustments	—		—		4,125
Net unrealized gains (losses) on marketable equity securities	(2,428)		15,197		(12,524)
Net unrealized gains (losses) on strategic investments in equity securities	(14,006)		12,096		(46,435)
Net realized gains (losses) on strategic investments in equity securities(1)	(17,414)		34,713		—
Total—included in other income (expense), net	$	(31,420)	$	46,809	$	(46,435)

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(1)The net realized gains on strategic investments in equity securities for the fiscal year ended January 31, 2024 include primarily a remeasurement gain of $34.0 million recognized on a previously held equity interest as a result of a business combination completed during fiscal 2024. See Note 7, “Business Combinations,” for further details. For strategic investments in equity securities sold, the realized gains or losses represent 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 January 31, 2025 were $18.3 million and $33.9 million, respectively.