Investments and Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

15. Investments and Fair Value Measurements

Fair Value Measurements

U.S. GAAP establishes a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:

•Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3. Unobservable inputs for which there is little or no market data, which require us to develop our own estimates and assumptions, which reflect those that a market participant would use.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of June 30, 2022 and December 31, 2021.

The valuation techniques that may be used to measure fair value are as follows:

•Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;

•Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts;

•Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost).

The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2022 and December 31, 2021 because of the relatively short duration of these instruments.

Investments

Our investment portfolio consists largely of debt investments classified as available-for-sale. Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, are recorded in other comprehensive income (loss). The components of our investments as of June 30, 2022 are as follows (in thousands):


	As of June 30, 2022
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Market Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities		Long-term Investments
Money market fund	Level 1	$	9,438	$	—	$	9,438	$	9,438	$	—	$	—
U.S. Treasuries	Level 1	17,985		(82)		17,903		—		17,903		—
Commercial paper	Level 2	23,110		—		23,110		—		23,110		—
Corporate bonds	Level 2	15,397		(130)		15,267		—		13,245		2,022
Asset-backed securities	Level 2	5,493		(3)		5,490		—		5,490		—
Total investments		$	71,423	$	(215)	$	71,208	$	9,438	$	59,748	$	2,022

At December 31, 2021, our investments consisted of the following (in thousands):


	As of December 31, 2021
	Fair Value Measurement							Balance Sheet Classification
	Fair Value Level	Cost Basis		Unrealized Gains (Losses)		Market Value		Cash and Cash Equivalents		Short-term Investments and Marketable Securities		Long-term Investments
Money market fund	Level 1	$	38,301	$	—	$	38,301	$	38,301	$	—	$	—
U.S. Treasury bonds	Level 1	8,171		—		8,171		—		8,171		—
Commercial paper	Level 2	23,312		—		23,312		—		23,312		—
Corporate bonds	Level 2	20,107		(14)		20,093		—		8,049		12,044
Asset-backed securities	Level 2	15,655		(8)		15,647		—		15,647		—
Total investments		$	105,546	$	(22)	$	105,524	$	38,301	$	55,179	$	12,044

There were no Level 3 assets held at any point during the three and six months ended June 30, 2022 and 2021. Additionally, there were no transfers between Levels 1 and 2 during the three and six months ended June 30, 2022 and 2021.

The amortized cost basis and fair value of debt securities as of June 30, 2022, by contractual maturity, are as follows (in thousands):


	As of June 30, 2022
	Cost Basis		Fair Value
Due in one year or less	$	69,398	$	69,186
Due after one year through five years	2,025		2,022
Total investments	$	71,423	$	71,208

Actual maturities may differ from the contractual maturities in the table above because borrowers have the right to call or prepay certain obligations.