Fair Value Measurement

3 Months Ended

Mar. 31, 2024

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Carrying amounts of certain of the Company’s financial instruments including, cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments.

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of March 31, 2024:


	Valuation	Amortized		Unrealized		Unrealized			Fair
	Hierarchy	Cost		Gains		Losses			Value
		(in thousands)
Assets:
Cash equivalents:
Money market funds	Level 1	$	60,437	$	—	$	—		$	60,437
U.S Treasury securities	Level 2		17,492		—		—			17,492
U.S. government and agencies securities	Level 2		1,997		—		(1	)		1,996
Total		$	79,926	$	—	$	(1	)	$	79,925

Marketable securities:
U.S. Treasury securities	Level 2	$	112,556	$	—	$	(50	)	$	112,506
U.S. government and agencies securities	Level 2		182,109		—		(228	)		181,881
Total		$	294,665	$	—	$	(278	)	$	294,387

Total assets		$	374,591	$	—	$	(279	)	$	374,312

The Company’s marketable securities as of March 31, 2024 mature within a year.

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2023:


	Valuation	Amortized		Unrealized		Unrealized		Fair
	Hierarchy	Cost		Gains		Losses		Value
		(in thousands)
Assets:
Cash equivalents:
Money market funds	Level 1	$	398,017	$	—	$	—	$	398,017
Total		$	398,017	$	—	$	—	$	398,017

The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments, which generally have counterparties with high credit ratings, are based on quoted market prices when available. If quoted market prices are not available, the fair value for the security is estimated under the market or income approach using pricing models with market observable inputs.

During the three months ended March 31, 2024 and 2023, the Company did not recognize an allowance for credit-related losses or an other-than-temporary impairment charge for any of its investments.

- 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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