Investment Securities and Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Investment Securities and Fair Value Measurements

Note 3. Investment securities and fair value measurements

The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2024 and December 31, 2023:

	June 30, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Money market funds	$	218,382	$	—	$	—	$	218,382
U.S. government agency bonds		—		93,411		—		93,411
U.S. treasury bonds		233,834		—		—		233,834
Corporate debt securities		—		105,739		—		105,739
Totals	$	452,216	$	199,150	$	—	$	651,366

	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Money market funds	$	228,406	$	—	$	—	$	228,406
U.S. government agency bonds		—		193,076		—		193,076
U.S. treasury bonds		103,597		—		—		103,597
Corporate debt securities		—		84,605		—		84,605
Totals	$	332,003	$	277,681	$	—	$	609,684

Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market. U.S. treasury securities are also classified as Level 1 because they are valued using quoted prices. U.S. government agency and corporate securities are classified within Level 2 of the fair value hierarchy because they are valued using market-based models that consider inputs such as yield, prices of comparable securities, coupon rate, maturity, and credit quality.

During the periods presented, the Company has not changed the manner in which it values assets and liabilities that are measured at fair value. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the three and six months ended June 30, 2024 and 2023.

The Company's fixed income securities held as of June 30, 2024 and December 31, 2023 with original maturity dates beyond three months are classified as available-for-sale. The following table presents the amortized cost, fair value, and unrealized gains and losses by major security type, for the fixed income securities held by the Company:

	June 30, 2024
(in thousands)	Amortized cost		Gross unrealized gains in AOCI		Gross unrealized losses in AOCI			Fair value
U.S. government agency bonds	$	93,604	$	-	$	(193	)	$	93,411
U.S. treasury bonds		234,418		84		(668	)		233,834
Corporate debt securities		105,831		8		(100	)		105,739
Totals	$	433,853	$	92	$	(961	)	$	432,984

	December 31, 2023
(in thousands)	Amortized cost		Gross unrealized gains in AOCI		Gross unrealized losses in AOCI			Fair value
U.S. government agency bonds	$	193,231	$	90	$	(245	)	$	193,076
U.S. treasury bonds		103,476		156		(35	)		103,597
Corporate debt securities		84,536		114		(45	)		84,605
Totals	$	381,243	$	360	$	(325	)	$	381,278

The $5.0 million difference between the total amortized cost and total fair value as of June 30, 2024 in the table above and the total aggregate value of short-term and long-term investments on the balance sheet is due to a debt security for which the original maturity at purchase was less than three months, and is therefore classified as a cash equivalent on the balance sheet.

The following table presents the amortized cost and fair value of the Company's fixed income securities by maturity grouping. The $5.0 million reconciling difference between the total amortized cost and total fair value for the short-term investments, as noted in the above paragraph, also applies to the below table as of June 30, 2024.

	June 30, 2024
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	325,690	$	325,138
Due after one year through five years		108,163		107,846
Due after five years through ten years		—		—
Due after ten years		—		—
Total	$	433,853	$	432,984

	December 31, 2023
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	281,035	$	280,739
Due after one year through five years		100,208		100,539
Due after five years through ten years		—		—
Due after ten years		—		—
Total	$	381,243	$	381,278

There were no securities with expected credit losses or non-credit related impairment as of June 30, 2024 or December 31, 2023. There were no sales of securities which resulted in a realized loss during the three and six months ended June 30, 2024. The Company recognized $5.3 million and $9.6 million of interest income earned from its available-for-sale debt securities and cash and cash equivalents during the three and six months ended June 30, 2024, respectively. The Company recognized $2.8 million and $5.6 million of accretion on its available-for-sale debt securities during the three and six months ended June 30, 2024. The accretion recognized was recorded to interest income during these periods. The Company recognized $5.5 million and $10.5 million of interest income earned from its available-for-sale debt securities and money market funds during the three and six months ended June 30, 2023, respectively. The

Company also recognized $2.5 million and $5.4 million of accretion on its available-for-sale debt securities, which was recorded to interest income, during the three and six months ended June 30, 2023.