Fair Value Measurements

3 Months Ended

Mar. 31, 2024

5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

•Level 1: Quoted market prices in active markets for identical assets or liabilities

•Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data

•Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. There were no transfers between levels during the periods presented.

The following table sets forth our financial assets that are measured at fair value on a recurring basis:


		March 31, 2024
	Fair value hierarchy level	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
		(in thousands)
Cash equivalents:
Money market funds	Level 1	$	876,482	$	—	$	—	$	876,482

Commercial paper	Level 2	18,114		—		(11)		18,103
Marketable securities:
U.S. treasury securities	Level 1	392,660		136		(436)		392,360
U.S. agency bonds	Level 2	45,111		17		(77)		45,051
Non-U.S. government securities	Level 2	4,880		—		(1)		4,879
Corporate bonds	Level 2	92,194		113		(159)		92,148

Commercial paper	Level 2	167,437		28		(68)		167,397
Total		$	1,596,878	$	294	$	(752)	$	1,596,420


		December 31, 2023
	Fair value hierarchy level	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
		(in thousands)
Cash equivalents:
Money market funds	Level 1	$	345,555	$	—	$	—	$	345,555
Commercial paper	Level 2	9,994		—		(9)		9,985
Marketable securities:
U.S. treasury securities	Level 1	426,734		697		(188)		427,243
U.S. agency bonds	Level 2	77,535		13		(34)		77,514
Non-U.S. government securities	Level 2	21,723		10		(27)		21,706
Corporate bonds	Level 2	94,725		310		(81)		94,954
Certificates of deposit	Level 2	2,810		—		(1)		2,809
Commercial paper	Level 2	187,596		148		(24)		187,720
Total		$	1,166,672	$	1,178	$	(364)	$	1,167,486

Gross unrealized gains (losses) within accumulated other comprehensive income (loss) were immaterial as of March 31, 2024 and December 31, 2023. There were no impairment charges due to credit losses during the three months ended March 31, 2024 and 2023.

As of March 31, 2024, the amortized cost of marketable securities with maturities less than one year was $550.3 million. The amortized cost of marketable securities with maturities between one and five years was $152.0 million.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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