Fair Value Measurements

9 Months Ended

Oct. 31, 2023

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


	October 31, 2023
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Level 1:
Cash equivalents(1)
Money market funds	$	697,467	$	—	$	—	$	697,467
Level 2:
Cash equivalents(1)
Commercial paper	26,950		—		(5)		26,945
U.S. governmental securities	38,784		—		—		38,784
Available-for-sale securities
Commercial paper	96,544		—		(37)		96,507
Corporate notes and bonds	257,224		—		(2,074)		255,150

U.S. governmental securities	105,680		—		(250)		105,430
Level 2 total	525,182		—		(2,366)		522,816
Total	$	1,222,649	$	—	$	(2,366)	$	1,220,283

	January 31, 2023
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Level 1:
Cash equivalents(1)
Money market funds	$	133,009	$	—	$	—	$	133,009
Level 2:
Cash equivalents(1)
Commercial paper	9,992		—		(2)		9,990
Available-for-sale securities
Commercial paper	85,957		—		(258)		85,699
Corporate notes and bonds	367,930		101		(3,771)		364,260
Municipal notes and bonds	7,983		—		(65)		7,918
U.S. governmental securities	38,344		4		(405)		37,943
Level 2 total	510,206		105		(4,501)		505,810
Total	$	643,215	$	105	$	(4,501)	$	638,819

(1) Included in “cash and cash equivalents” in our consolidated balance sheets as of October 31, 2023 and January 31, 2023, in addition to cash of $425.4 million and $578.9 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 values of our available-for-sale securities as of October 31, 2023, by remaining contractual maturities, were as follows (in thousands):


Due in one year or less	$	401,639
Due in one to two years	55,448
	$	457,087

As of October 31, 2023 and January 31, 2023, securities in an unrealized loss position were, individually and in aggregate, not material. 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.

We had no liabilities measured at fair value on a recurring basis as of October 31, 2023 and January 31, 2023.

Convertible Senior Notes

We estimated the fair value based on the estimated or actual bids and offers of the Notes in an over-the-counter market on the last 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—current” on our condensed consolidated balance sheets. Refer to Note 6 for further information.


(in thousands)	October 31, 2023		January 31, 2023
0.5% Convertible Senior Notes due in 2023
Aggregate principal amount	$	—	$	37,083
Fair value amount	—		38,981

0% Convertible Senior Notes due in 2024
Aggregate principal amount	$	690,000	$	690,000
Fair value amount	680,326		655,666

- 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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