Fair Value of Financial Assets and Liabilities

3 Months Ended

Mar. 31, 2023

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]

Fair Value of Financial Assets and Liabilities

Note 9. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s assets as of March 31, 2023 and December 31, 2022 that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

	Fair Value Measurement
	at March 31, 2023 Using
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	484,195	$	—	$	—	$	484,195
Commercial paper		—		48,830		—		48,830
US government agencies		14,870		—		—		14,870
Short-term investments, other:
Certificate of deposit		—		2,033		—		2,033
Investment securities:
US Treasuries		456,104		—		—		456,104
US government agencies		203,976		—		—		203,976
Corporate debt securities		—		64,747		—		64,747
Commercial paper		—		184,934		—		184,934
Total	$	1,159,145	$	300,544	$	—	$	1,459,689
	Fair Value Measurement
	at December 31, 2022 Using
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	160,158	$	—	$	—	$	160,158
Commercial paper		—		61,277		—		61,277
Investment securities:
US Treasuries		423,688		—		—		423,688
US government agencies		210,188		—		—		210,188
Corporate debt securities		—		63,728		—		63,728
Commercial paper		—		178,111		—		178,111
Total	$	794,034	$	303,116	$	—	$	1,097,150

The fair values of the Company’s commercial paper and corporate debt securities are based on prices obtained from independent pricing sources. Securities with validated quotes from pricing services are reflected within Level 2, as they are primarily based on observable pricing for similar assets or other market observable inputs. Typical inputs used by these pricing services include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers or estimates of cash flow, prepayment spreads and default rates.

Certificates of deposit held for investment with an original maturity greater than three months and less than twelve months are carried at amortized cost and reported as short-term investments on the Company's consolidated balance sheet, which approximates their fair value based on Level 2 inputs.

The Company does not hold any securities classified as Level 3, which are securities valued using unobservable inputs. The Company has not transferred any investment securities between the classification levels.

The estimated fair value and amortized cost of the Company’s available-for-sale investments, by contractual maturity and security type, are summarized as follows (in thousands):

	March 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
US Treasuries (due within one year)		372,497		62		(1,258	)		371,301
US Treasuries (due after one year and less than three years)		84,773		256		(225	)		84,804
US government agencies (due within one year)		178,907		54		(156	)		178,805
US government agencies (due after one year and less than three years)		25,287		—		(115	)		25,172
Corporate debt securities (due within one year)		46,118		10		(118	)		46,010
Corporate debt securities (due after one year and less than three years)		18,735		24		(23	)		18,736
Commercial paper (due within one year)		185,059		—		(126	)		184,933
Total	$	911,376	$	406	$	(2,021	)	$	909,761
	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
US Treasuries (due within one year)	$	329,533	$	17	$	(2,044	)	$	327,506
US Treasuries (due after one year and less than three   years)		96,802		—		(620	)		96,182
US government agencies (due within one year)		178,319		54		(108	)		178,265
US government agencies (due after one year and less    than three years)		32,104		—		(181	)		31,923
Corporate debt securities (due within one year)		51,952		1		(170	)		51,783
Corporate debt securities (due after one year and less    than three years)		11,983		—		(38	)		11,945
Commercial paper (due within one year)		178,312		16		(217	)		178,111
Total	$	879,005	$	88	$	(3,378	)	$	875,715

The Company has classified all of its available-for-sale investment securities, including those with maturities beyond one year, as current assets on its consolidated balance sheets based on the highly liquid nature of the investment securities and because these investment securities are considered available for use in current operations.

The Company is required to determine whether a decline in the fair value below the amortized cost basis of available-for-sale securities is due to credit-related factors. At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are the result of credit losses. Impairment is assessed at the individual security level. Factors considered in determining whether a loss resulted from a credit loss or other factors include the Company’s intent and ability to hold the investment until the recovery of its amortized cost basis, the extent to which the fair value is less than the amortized cost basis, the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, any adverse legal or regulatory events affecting the issuer or issuer’s industry, and any significant deterioration in economic conditions.

Unrealized losses on available-for-sale securities presented in the previous table have not been recognized in the consolidated statements of operations because the securities are high credit quality, investment grade securities that the Company does not intend to sell and will not be required to sell prior to their anticipated recovery, and the decline in fair value is attributable to factors other than credit losses. Based on its evaluation, the Company determined its year-to-date credit losses related to its available-for-sale securities were immaterial at March 31, 2023 and December 31, 2022.