Fair Value Measurements

12 Months Ended

Jan. 31, 2021

The following table summarizes our financial assets that are measured at fair value on a recurring basis:


	January 31, 2021
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Level 1:
Cash equivalents(1)
Money market funds	$	284,312	$	—	$	—	$	284,312
Level 2:
Available-for-sale securities
Commercial paper	42,048		1		(23)		42,026
Corporate notes and bonds	199,277		375		(67)		199,585
U.S. Treasury securities	4,998		—		—		4,998
U.S. government agency securities	53,052		12		(6)		53,058
Level 2 total	299,375		388		(96)		299,667
Level 3:
Available-for-sale securities
Corporate notes and bonds	500		—		—		500
Total	$	584,187	$	388	$	(96)	$	584,479

	January 31, 2020
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Level 1:
Cash equivalents(1)
Money market funds	$	165,424	$	—	$	—	$	165,424
Level 2:



Available-for-sale securities
Commercial paper	14,919		7		(1)		14,925
Corporate notes and bonds	372,844		891		(31)		373,704
U.S. Treasury securities	90,697		153		(1)		90,849
U.S. government agency securities	175,086		153		(49)		175,190
Level 2 total	653,546		1,204		(82)		654,668
Total	$	818,970	$	1,204	$	(82)	$	820,092

(1)Included in "cash and cash equivalents" in our consolidated balance sheets as of January 31, 2021 and 2020, in addition to cash of $281.7 million and $75.8 million

We use quoted prices in active markets for identical assets to determine the fair value of our Level 1 investments. The fair value of our Level 2 investments is determined using pricing based on quoted market prices or alternative market

observable inputs. The fair value of our Level 3 investments is determined based on an income approach using unobservable inputs.

The fair value of our available-for-sale securities as of January 31, 2021, by remaining contractual maturities, were as follows (in thousands):


Due in one year or less	$	207,450
Due in one to two years	92,717
	$	300,167

As of January 31, 2021, we had a total of 93 available-for-sale securities, with 42 securities in an unrealized loss position. An allowance for credit losses was deemed unnecessary for these securities, given the extent of the unrealized loss positions as well as the issuers' high credit ratings and consistent payment history. As of January 31, 2020, we had a total of 178 available-for-sale securities, none of which were considered to be other-than-temporarily impaired.

We had no liabilities measured at fair value on recurring basis as of January 31, 2021 and 2020.

Convertible Senior Notes

We estimated the fair value based on the quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). The Notes are recorded at face value less unamortized debt discount and transaction costs as “Convertible senior notes, net—noncurrent” and “Convertible senior notes—current.” Refer to Note 9 for further information.


	January 31,
(in thousands)	2021		2020
0.5% Convertible Senior Notes due in 2023
Aggregate principal amount	$	115,000	$	575,000
Fair value amount	373,928		743,504

0.0% Convertible Senior Notes due in 2024
Aggregate principal amount	$	690,000	$	—
Fair value amount	725,100		—

- 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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