Derivative Financial Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Foreign Currency Exchange Rate Exposure

The Company uses forward foreign currency exchange contracts to hedge certain operational exposures resulting from potential changes in foreign currency exchange rates. Such exposures result from portions of the Company's forecasted cash flows being denominated in currencies other than the U.S. dollar, primarily the Euro and British Pound. The derivative instruments the Company uses to hedge this exposure are not designated as cash flow hedges, and as a result, changes in their fair value are recorded in interest and other income, net, on the Company's Consolidated Statements of Operations and Comprehensive Loss.

The fair values of forward foreign currency exchange contracts are estimated using current exchange rates and interest rates and take into consideration the current creditworthiness of the counterparties. Information regarding the specific instruments used by the Company to hedge its exposure to foreign currency exchange rate fluctuations is provided below. The Company did not have foreign currency exchange contracts prior to June 2018.

The following table summarizes the Company’s forward foreign currency exchange contracts outstanding as of December 31, 2019 (notional amounts in thousands):

Foreign Exchange Contracts	Number of Contracts	Aggregate Notional(1) Amount in Foreign Currency	Maturity
Euros	23	1,500	Jan 2020 - Nov 2020
British Pounds	15	2,285	Jan 2020 - Jun 2020
Swiss Francs	10	129	Jan 2020 - Aug 2020
Total	48

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(1)The notional amount represents the net amount of foreign currency that will be received upon maturity of the forward contracts.

An immaterial derivative liability balance is recorded in other current liabilities on the Consolidated Balance Sheet as of December 31, 2019, and a derivative liability balance of $0.2 million is recorded in other current liabilities on the Consolidated Balance Sheet as of December 31, 2018. Immaterial derivative asset balances are recorded in prepaid assets and other current assets on the Consolidated Balance Sheets as of December 31, 2019 and 2018. A net gain of $0.2 million, and a net loss of $0.2 million, each associated with the Company's derivative instruments, are recognized in interest and other income, net on the Consolidated Statement of Operations and Comprehensive Loss for the years ended December 31, 2019 and 2018, respectively.