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Fair Value Measurements | 6 Months Ended
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Jul. 31, 2022
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of July 31, 2022 (in thousands):
| Level 1 |  | Level 2 |  | Total
Cash equivalents: |  |  |  |  |
Money market funds | $ | 590,661 |  |  | $ | — |  |  | $ | 590,661 |
Commercial paper | — |  |  | 71,821 |  |  | 71,821 |
Corporate notes and bonds | — |  |  | 15,696 |  |  | 15,696 |
Short-term investments: |  |  |  |  |
Corporate notes and bonds | — |  |  | 1,729,751 |  |  | 1,729,751 |
Commercial paper | — |  |  | 889,803 |  |  | 889,803 |
Certificates of deposit | — |  |  | 289,481 |  |  | 289,481 |
U.S. government and agency securities | — |  |  | 137,442 |  |  | 137,442 |
Long-term investments: |  |  |  |  |
Corporate notes and bonds | — |  |  | 704,521 |  |  | 704,521 |
U.S. government and agency securities | — |  |  | 382,163 |  |  | 382,163 |
Total | $ | 590,661 |  |  | $ | 4,220,678 |  |  | $ | 4,811,339 |
The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of January 31, 2022 (in thousands):
| Level 1 |  | Level 2 |  | Total
Cash equivalents: |  |  |  |  |
Money market funds | $ | 722,492 |  |  | $ | — |  |  | $ | 722,492 |
Commercial paper | — |  |  | 77,794 |  |  | 77,794 |
U.S. government securities | — |  |  | 36,995 |  |  | 36,995 |
Corporate notes and bonds | — |  |  | 7,949 |  |  | 7,949 |
Short-term investments: |  |  |  |  |
Corporate notes and bonds | — |  |  | 1,662,436 |  |  | 1,662,436 |
Commercial paper | — |  |  | 883,636 |  |  | 883,636 |
U.S. government and agency securities | — |  |  | 116,712 |  |  | 116,712 |
Certificates of deposit | — |  |  | 103,580 |  |  | 103,580 |
Long-term investments: |  |  |  |  |
Corporate notes and bonds | — |  |  | 935,603 |  |  | 935,603 |
U.S. government and agency securities | — |  |  | 320,207 |  |  | 320,207 |
Certificates of deposit | — |  |  | 397 |  |  | 397 |
Total | $ | 722,492 |  |  | $ | 4,145,309 |  |  | $ | 4,867,801 |
The Company determines the fair value of its security holdings based on pricing from the Company’s service providers and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. Strategic Investments The tables above do not include the Company’s strategic investments, which consist primarily of (i) non-marketable equity securities recorded at cost minus impairment, if any, and adjusted for observable transactions for the same or similar investments of the same issuer (referred to as the Measurement Alternative), and (ii) marketable equity securities. The Company’s non-marketable equity securities accounted for using the Measurement Alternative are recorded at fair value on a non-recurring basis and classified within Level 3 of the fair value hierarchy because significant unobservable inputs or data in an inactive market are used in estimating their fair value. The estimation of fair value for these assets requires the use of an observable transaction price or other unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. The Company’s marketable equity securities are recorded at fair value on a recurring basis and classified within Level 1 of the fair value hierarchy because they are valued using the quoted market price. The following table presents the Company’s strategic investments by type (in thousands):
|  |  |  |  | July 31, 2022 |  | January 31, 2022
Equity securities: |  |  |  |  |  |  |
Non-marketable equity securities under Measurement Alternative |  |  |  |  | $ | 176,805 |  |  | $ | 170,860 |
Marketable equity securities |  |  |  |  | 29,168 |  |  | 34,646 |
Debt securities: |  |  |  |  |  |  |
Non-marketable debt securities |  |  |  |  | 1,500 |  |  | 2,250 |
Total strategic investments—included in other assets |  |  |  |  | $ | 207,473 |  |  | $ | 207,756 |
The following table summarizes the unrealized gains and losses included in the carrying value of the Company’s strategic investments in equity securities held as of July 31, 2022 (in thousands):
| Three Months Ended July 31, |  | Six Months Ended July 31, |  |
| 2022 |  | 2021 |  | 2022 |  | 2021 |  |
Non-marketable equity securities under Measurement Alternative: |  |  |  |  |  |  |  |  |
Upward adjustments | $ | — |  |  | $ | 8,060 |  |  | $ | — |  |  | $ | 8,060 |  |  |
Impairments | (26,555) |  |  | — |  |  | (26,555) |  |  | — |  |  |
Marketable equity securities: |  |  |  |  |  |  |  |  |
Net unrealized gains (losses)(1) | 3,382 |  |  | — |  |  | (5,477) |  |  | — |  |  |
Total—included in other income (expense), net | $ | (23,173) |  |  | $ | 8,060 |  |  | $ | (32,032) |  |  | $ | 8,060 |  |  |
________________ (1)The Company did not have any strategic investments in marketable equity securities during the three and six months ended July 31, 2021. No realized gains or losses were recognized on the Company’s strategic investments in equity securities during any of periods presented. The cumulative upward adjustments and the cumulative impairments to the carrying value of the non-marketable equity securities accounted for using the Measurement Alternative that the Company held as of July 31, 2022 were $33.0 million and $26.6 million, respectively.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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