XML 23 R10.htm IDEA: XBRL DOCUMENT v3.21.2
Investments
 6 Months Ended
Jul. 31, 2021
Investments, Debt and Equity Securities [Abstract]  
Investments Investments
Debt Securities
As of July 31, 2021, debt securities consisted of the following (in thousands):
Amortized CostUnrealized GainsUnrealized LossesAggregate Fair Value
U.S. treasury securities$1,096,642 $207 $(37)$1,096,812 
U.S. agency obligations189,188 66 — 189,254 
Corporate bonds372,240 275 (36)372,479 
Commercial paper780,888 — — 780,888 
$2,438,958 $548 $(73)$2,439,433 
Included in Cash and cash equivalents$359,551 $— $— $359,551 
Included in Marketable securities$2,079,407 $548 $(73)$2,079,882 
As of January 31, 2021, debt securities consisted of the following (in thousands):
Amortized CostUnrealized GainsUnrealized LossesAggregate Fair Value
U.S. treasury securities$1,054,146 $205 $(10)$1,054,341 
U.S. agency obligations504,298 196 (49)504,445 
Corporate bonds346,563 1,253 (14)347,802 
Commercial paper664,262 — — 664,262 
$2,569,269 $1,654 $(73)$2,570,850 
Included in Cash and cash equivalents$440,678 $— $— $440,678 
Included in Marketable securities$2,128,591 $1,654 $(73)$2,130,172 
We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We consider all debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets on the condensed consolidated balance sheets. Debt securities included in Marketable securities on the condensed consolidated balance sheets consist of securities with original maturities at the time of purchase greater than three months, and the remainder of the securities is included in Cash and cash equivalents.
The unrealized losses associated with our debt securities were immaterial as of July 31, 2021, and January 31, 2021, and we did not recognize any credit losses related to our debt securities during the three and six months ended July 31, 2021, or 2020.
We did not have any material sales of debt securities during the three months ended July 31, 2021, or July 31, 2020. We sold $10 million and $5 million of debt securities during the six months ended July 31, 2021, and 2020, respectively. The realized gains and losses from the sales were immaterial.
Equity Investments
Equity investments consisted of the following (in thousands):
Condensed Consolidated Balance Sheets LocationJuly 31, 2021January 31, 2021
Money market funds Cash and cash equivalents$414,663 $659,964 
Equity investments accounted for under the equity method Other assets— 48,222 
Non-marketable equity investments measured using the measurement alternative Other assets125,075 73,142 
Marketable equity investments Marketable securities141,006 21,300 
$680,744 $802,628 
Total realized and unrealized gains and losses associated with our equity investments consisted of the following (in thousands):
Three Months Ended July 31, Six Months Ended July 31,
2021202020212020
Net realized gains (losses) recognized on equity investments sold (1)
$2,767 $— $(6,379)$1,591 
Net unrealized gains (losses) recognized on equity investments held as of the end of the period103,478 1,909 106,575 (2,187)
Total net gains (losses) recognized in Other income (expense), net$106,245 $1,909 $100,196 $(596)
(1)Reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period.
Equity Investments Accounted for Under the Equity Method
We determine at the inception of each arrangement whether an investment or other interest is considered a variable interest entity (“VIE”). Investments in VIEs for which we are not the primary beneficiary or do not own a controlling interest but can exercise significant influence over the investee are accounted for under the equity method of accounting. During fiscal 2021, we made an equity investment of $50 million in a limited partnership, which represented an ownership interest of approximately 6%. We determined that the limited partnership was a VIE because the at-risk equity holders, as a group, lacked the characteristics of a controlling financial interest. We did not have majority voting rights nor the power to direct the activities of this entity, and therefore, we were not the primary beneficiary. The investment was accounted for under the equity method of accounting as it was considered to be more than minor and we had the ability to exercise significant influence over the entity. Under the equity method, our share of gains on this investment was $0.2 million and losses was $1 million for the three months ended July 31, 2021, and 2020, respectively, and our share of losses was $2 million for each of the six-month periods ended July 31, 2021, and 2020. There was no impairment loss recorded on this investment during the periods presented.
In June 2021, the limited partnership was liquidated and shares of common stock in a corporation were distributed to the partners. Immediately thereafter, the corporation completed its initial public offering (“IPO”). We no longer exercise significant influence over the entity and therefore we accounted for our interest in the common stock received as a marketable equity investment measured at fair value. Concurrent with the IPO, we sold a portion of our investment for proceeds of $5 million, resulting in a realized gain of $3 million. Our remaining investment, which had a carrying value of $141 million as of July 31, 2021, is subject to a lock-up agreement which restricts our ability to sell the securities until December 2021.
Non-Marketable Equity Investments Measured Using the Measurement Alternative
Non-marketable equity investments measured using the measurement alternative include investments in privately held companies without readily determinable fair values in which we do not own a controlling interest or exercise significant influence. The carrying values for our non-marketable equity investments are summarized below (in thousands):
July 31, 2021January 31, 2021
Total initial cost$105,819 $65,377 
Cumulative net unrealized gains (losses)19,256 7,765 
Carrying value$125,075 $73,142 
We recorded upward adjustments to the carrying value of non-marketable equity investments of $6 million and no material impairment losses for the three months ended July 31, 2021. No material adjustments or impairment losses were recorded for the three months ended July 31, 2020. We recorded upward adjustments of $14 million and impairment losses of $2 million for the six months ended July 31, 2021. We recorded no material adjustments and $3 million of impairment losses for the six months ended July 31, 2020.
Marketable Equity Investments
We hold marketable equity investments with readily determinable fair values over which we do not own a controlling interest or exercise significant influence. The carrying values for our marketable equity investments are summarized below (in thousands):
July 31, 2021January 31, 2021
Total initial cost$47,513 $5,000 
Cumulative net unrealized gains (losses)93,493 16,300 
Carrying value (1)
$141,006 $21,300 
(1)As of July 31, 2021, investments with a carrying value of $141 million are subject to a lock-up agreement through December 2021.
During the three months ended July 31, 2021, we sold marketable equity investments for proceeds of $15 million which had an initial cost of $6 million. This includes the $5 million sale of the investment previously accounted for under the equity method described above. During the six months ended July 31, 2021, we sold marketable equity investments for proceeds of $17 million which had an initial cost of $7 million. There were no sales of marketable equity investments during the comparative prior year periods.