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Fair Value Measurements
 3 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Available-for-sale debt securities are recorded at fair value on the condensed consolidated balance sheets. The carrying value of cash equivalents, accounts receivable, accounts payable, and accrued expenses and other current liabilities approximate their respective fair values due to their short maturities.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1—Inputs that are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
The following tables present the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands):
As of June 30, 2023
Level 1Level 2Level 3Total
Cash equivalents:
Corporate notes and bonds$— $4,070 $— $4,070 
Money market funds247,279 — — 247,279 
Total cash equivalents247,279 4,070 — 251,349 
Marketable securities:
Asset-backed securities— 12,921 — 12,921 
Certificates of deposit— 27,322 — 27,322 
Commercial paper— 58,975 — 58,975 
Corporate notes and bonds— 86,811 — 86,811 
Sovereign bonds— 7,387 — 7,387 
U.S. government and agency securities368,650 4,378 — 373,028 
Total marketable securities368,650 197,794 — 566,444 
Total cash equivalents and marketable securities$615,929 $201,864 $— $817,793 
Liabilities:
Contingent earn-out consideration liability$— $— $16,131 $16,131 
Total contingent earn-out consideration liability$— $— $16,131 $16,131 
As of March 31, 2023
Level 1Level 2Level 3Total
Cash equivalents:
Money market funds$126,275 $— $— $126,275 
Total cash equivalents126,275 — — 126,275 
Marketable securities:
Asset-backed securities— 7,200 — 7,200 
Certificates of deposit— 27,300 — 27,300 
Commercial paper— 78,489 — 78,489 
Corporate notes and bonds— 118,512 — 118,512 
Sovereign bonds— 7,384 — 7,384 
U.S. government and agency securities439,748 4,339 — 444,087 
Total marketable securities439,748 243,224 — 682,972 
Total cash equivalents and marketable securities$566,023 $243,224 $— $809,247 
Liabilities:
Contingent earn-out consideration liability$— $— $21,862 $21,862 
Total contingent earn-out consideration liability$— $— $21,862 $21,862 
During the three months ended June 30, 2023 and 2022, the Company had no transfers between levels of the fair value hierarchy.
Contingent Earn-out Consideration Liability
The following table summarizes the changes in the contingent earn-out consideration liability (in thousands):
Three Months Ended June 30,
20232022
Beginning fair value$21,862 $— 
Additions in the period— 21,134 
Change in fair value269 (54)
Payments(6,000)— 
Ending fair value$16,131 $21,080 
The contingent earn-out consideration liability relates to the AMiON acquisition, which closed on April 1, 2022. The fair value of the liability is remeasured at each reporting date until the related contingency is resolved, with any changes to the fair value recognized as sales and marketing expense in the condensed consolidated statements of operations.
To determine the fair value of the contingent earn-out consideration liability, the Company used the discounted cash flow method. The significant inputs used in the fair value measurement of the contingent earn-out consideration liability are the discount rate and the timing and amounts of the future payments, which are based upon estimates of future achievement of the performance metrics. As these inputs are not based on observable market data, they represent a Level 3 measurement within the fair value hierarchy. Changes in the significant inputs used would significantly impact the fair value of the contingent earn-out consideration liability.
See Note 8—Business Combinations for additional discussion regarding the AMiON acquisition.