Marketable Securities and Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Debt Securities [Abstract]

Marketable Securities and Fair Value Measurements

NOTE 4. Marketable Securities and Fair Value Measurements

Marketable Securities

The following table summarizes the Company’s marketable securities (in thousands):

	March 31, 2024								December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Marketable securities:
Corporate debt securities	$	184,107	$	63	$	(1,547)	$	182,623	$	234,821	$	180	$	(1,604)	$	233,397
U.S. Treasury notes	126,085		53		(1,402)		124,736		138,329		261		(1,206)		137,384
Other	—		—		—		—		10,000		—		(8)		9,992
	$	310,192	$	116	$	(2,949)	$	307,359	$	383,150	$	441	$	(2,818)	$	380,773

For the three months ended March 31, 2024, the Company recognized total interest income of $5.4 million, of which $4.0 million was related to its marketable securities investments and $1.4 million was related to interest on cash and cash equivalent balances. For the three months ended March 31, 2023, the Company recognized total interest income of $8.3 million, of which $4.9 million was related to its marketable securities investments and $3.4 million was related to interest on cash and cash equivalent balances.

The following table summarizes the Company’s marketable securities maturity as of March 31, 2024 (in thousands):

Year	Amortized Cost		Fair Value
2024	$	92,005	$	91,495
2025	176,926		174,802
2026	41,261		41,062
	$	310,192	$	307,359

The following table summarizes the Company’s marketable securities with gross unrealized losses by security type aggregated by the length of time the investments have been in a continuous unrealized loss position as of March 31, 2024 (in thousands):

	Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Marketable securities:
Corporate debt securities	$	50,514	$	212	$	101,513	$	1,335
U.S. Treasury notes	49,359		615		63,494		787
	$	99,873	$	827	$	165,007	$	2,122

The following table summarizes the Company’s marketable securities with gross unrealized losses by security type aggregated by the length of time the investments have been in a continuous unrealized loss position as of December 31, 2023 (in thousands):

	Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Marketable securities:
Corporate debt securities	$	55,343	$	167	$	126,189	$	1,437
U.S. Treasury notes	37,486		303		75,980		903
Other	9,992		8		—		—
	$	102,821	$	478	$	202,169	$	2,340

The Company’s unrealized losses from marketable securities as of March 31, 2024 and December 31, 2023 were caused primarily by interest rate increases. The Company does not intend to sell marketable securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. There was no allowance for credit losses on available-for-sale marketable securities at March 31, 2024 and December 31, 2023.

Fair Value Measurements

The Company’s financial instruments consist of cash and cash equivalents, restricted cash and cash equivalents, marketable securities, receivables, other liabilities, accounts payable, certain accrued expenses, and borrowings which consist of a term loan and a revolving credit facility. The carrying values of the financial instruments classified as current in the consolidated balance sheets approximate their fair values due to their short-term maturities. The Company's cash and cash equivalents are classified within Level 1 of the fair value hierarchy. The Company may be required, from time to time, to measure its loans to physician partner groups, primarily in connection with taxes payable on shares distributed to them upon completion of the Company's initial public offering ("IPO"), at fair value on a nonrecurring basis. Such measurements are classified within Level 2 of the fair value hierarchy. The carrying values of the term loan and revolving credit facility are a reasonable estimate of fair value because the interest rates on such borrowings approximate market rates as of the reporting date. Such borrowings are classified within Level 2 of the fair value hierarchy. During the three months ended March 31, 2024 and 2023, there were no material transfers of financial assets or liabilities within the fair value hierarchy.

The Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:

•Level 1—quoted prices for identical instruments in active markets;

•Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

•Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The table below summarizes the Company’s financial instruments measured at fair value on a recurring basis (in thousands):

	March 31, 2024						December 31, 2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Marketable securities:
Corporate debt securities	$	—	$	182,623	$	—	$	—	$	233,397	$	—
U.S. Treasury notes	124,736		—		—		137,384		—		—
Other	—		—		—		9,992		—		—
	$	124,736	$	182,623	$	—	$	147,376	$	233,397	$	—