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Financial Instruments | 6 Months Ended
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Jun. 30, 2024
Investments, All Other Investments [Abstract] |
Financial Instruments | Financial Instruments Cash, Cash Equivalents and Marketable Securities The following tables summarize our cash and cash equivalents, and marketable securities on our Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 (in thousands):
|  |  |  |  |  |  |  |  |  | Reported as:
June 30, 2024 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Cash and Cash Equivalents |  | Marketable securities, short-term |  | Marketable securities, long-term
Cash |  | $ | 759,803 |  |  | $ | — |  |  | $ | — |  |  | $ | 759,803 |  |  | $ | 759,803 |  |  | $ | — |  |  | $ | — |
Money market funds |  | 1,626 |  |  | — |  |  | — |  |  | 1,626 |  |  | 1,626 |  |  | — |  |  | — |
Corporate bonds |  | 19,560 |  |  | — |  |  | (208) |  |  | 19,352 |  |  | — |  |  | 19,352 |  |  | — |
Asset-backed securities |  | 324 |  |  | — |  |  | — |  |  | 324 |  |  | — |  |  | 324 |  |  |
U.S. government agency bonds |  | 1,009 |  |  | — |  |  | (3) |  |  | 1,006 |  |  | — |  |  | 1,006 |  |  | — |
Total |  | $ | 782,322 |  |  | $ | — |  |  | $ | (211) |  |  | $ | 782,111 |  |  | $ | 761,429 |  |  | $ | 20,682 |  |  | $ | — |
|  |  |  |  |  |  |  |  |  | Reported as:
December 31, 2023 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Cash and Cash Equivalents |  | Marketable securities, short-term |  | Marketable securities, long-term
Cash |  | $ | 887,682 |  |  | $ | — |  |  | $ | — |  |  | $ | 887,682 |  |  | $ | 887,682 |  |  | $ | — |  |  | $ | — |
Money market funds |  | 49,756 |  |  | — |  |  | — |  |  | 49,756 |  |  | 49,756 |  |  | — |  |  | — |
Corporate bonds |  | 31,943 |  |  | 5 |  |  | (676) |  |  | 31,272 |  |  | — |  |  | 28,704 |  |  | 2,568 |
U.S. government treasury bonds |  | 4,855 |  |  | — |  |  | (99) |  |  | 4,756 |  |  | — |  |  | — |  |  | 4,756 |
Asset-backed securities |  | 1,416 |  |  | 2 |  |  | (1) |  |  | 1,417 |  |  | — |  |  | 719 |  |  | 698 |
Municipal bonds |  | 702 |  |  | — |  |  | (2) |  |  | 700 |  |  | — |  |  | 700 |  |  | — |
U.S. government agency bonds |  | 5,215 |  |  | — |  |  | (34) |  |  | 5,181 |  |  | — |  |  | 5,181 |  |  | — |
Total |  | $ | 981,569 |  |  | $ | 7 |  |  | $ | (812) |  |  | $ | 980,764 |  |  | $ | 937,438 |  |  | $ | 35,304 |  |  | $ | 8,022 |
The following table summarizes the fair value of our available-for-sale marketable securities classified by contractual maturity as of June 30, 2024 and December 31, 2023 (in thousands):
|  | June 30, 2024 |  | December 31, 2023
Due in 1 year or less |  | $ | 20,358 |  |  | $ | 34,617 |
Due in 1 year through 5 years |  | 324 |  |  | 8,709 |
Total |  | $ | 20,682 |  |  | $ | 43,326 |
The securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. Our unrealized losses as of June 30, 2024 and December 31, 2023 are primarily due to changes in interest rates and credit spreads. The following tables summarize the fair value and gross unrealized losses as of June 30, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):
|  | As of June 30, 2024
|  | Less than 12 months |  | 12 Months of Greater |  | Total
June 30, 2024 |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  |  | Fair Value |  | Unrealized Loss
Corporate bonds |  | $ | 2,013 |  |  | $ | — |  |  | $ | 17,339 |  |  | $ | (208) |  |  |  | $ | 19,352 |  |  | $ | (208) |
Asset-backed securities |  | — |  |  | — |  |  | 324 |  |  | — |  |  |  | 324 |  |  | — |
U.S. government agency bonds |  | — |  |  | — |  |  | 1,006 |  |  | (3) |  |  |  | 1,006 |  |  | (3) |
Total |  | $ | 2,013 |  |  | $ | — |  |  | $ | 18,669 |  |  | $ | (211) |  |  |  | $ | 20,682 |  |  | $ | (211) |
|  | As of December 31, 2023
|  | Less than 12 months |  | 12 Months of Greater |  | Total
December 31, 2023 |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  |  | Fair Value |  | Unrealized Loss
Corporate bonds |  | $ | — |  |  | $ | — |  |  | $ | 27,939 |  |  | $ | (676) |  |  |  | $ | 27,939 |  |  | $ | (676) |
U.S. government treasury bonds |  | 2,044 |  |  | (11) |  |  | 2,712 |  |  | (88) |  |  |  | 4,756 |  |  | (99) |
Asset-backed securities |  | 1,018 |  |  | (1) |  |  | 83 |  |  | — |  |  |  | 1,101 |  |  | (1) |
Municipal bonds |  | — |  |  | — |  |  | 700 |  |  | (2) |  |  |  | 700 |  |  | (2) |
U.S. government agency bonds |  | 4,003 |  |  | (11) |  |  | 1,178 |  |  | (23) |  |  |  | 5,181 |  |  | (34) |
Total |  | $ | 7,065 |  |  | $ | (23) |  |  | $ | 32,612 |  |  | $ | (789) |  |  |  | $ | 39,677 |  |  | $ | (812) |
Fair Value Measurements Fair value is an exit price, representing the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value: Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. We obtain fair values for our Level 2 investments. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates. Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. The following tables summarize our financial assets measured at fair value as of June 30, 2024 and December 31, 2023 (in thousands):
Description |  | Balance as of June 30, 2024 |  | Level 1 |  | Level 2 |  |
Cash equivalents: |  |  |  |  |  |  |  |
Money market funds |  | $ | 1,626 |  |  | $ | 1,626 |  |  | $ | — |  |  |
Short-term investments: |  |  |  |  |  |  |  |
U.S. government agency bonds |  | 1,006 |  |  | — |  |  | 1,006 |  |  |
Corporate bonds |  | 19,352 |  |  | — |  |  | 19,352 |  |  |
Asset-backed securities |  | 324 |  |  | — |  |  | 324 |  |  |
|  | $ | 22,308 |  |  | $ | 1,626 |  |  | $ | 20,682 |  |  |
Description |  | Balance as of December 31, 2023 |  | Level 1 |  | Level 2
Cash equivalents: |  |  |  |  |  |
Money market funds |  | $ | 49,756 |  |  | $ | 49,756 |  |  | $ | — |
Short-term investments: |  |  |  |  |  |
Corporate bonds |  | 28,704 |  |  | — |  |  | 28,704 |
Municipal bonds |  | 700 |  |  | — |  |  | 700 |
U.S. government agency bonds |  | 5,181 |  |  | — |  |  | 5,181 |
Asset-backed securities |  | 719 |  |  | — |  |  | 719 |
Long-term investments: |  |  |  |  |  |
U.S. government treasury bonds |  | 4,756 |  |  | — |  |  | 4,756 |
Corporate bonds |  | 2,568 |  |  | — |  |  | 2,568 |
Asset-backed securities |  | 698 |  |  | — |  |  | 698 |
|  | $ | 93,082 |  |  | $ | 49,756 |  |  | $ | 43,326 |
Accounts Receivable Factoring We enter into factoring transactions on a non-recourse basis with financial institutions to sell certain of our non-U.S. accounts receivable. We account for these transactions as sales of financial assets and include the cash proceeds as a part of our cash flows from operations in the Condensed Consolidated Statements of Cash Flows. Total accounts receivable sold under the factoring arrangements was $11.3 million and $8.2 million during the three months ended June 30, 2024 and 2023, respectively, and $25.9 million and $16.2 million during the six months ended June 30, 2024 and 2023, respectively. Factoring fees on the sales of receivables were recorded in other income (expense), net in our Condensed Consolidated Statement of Operations and were not material. Investments in Privately Held Companies Our investments in privately held companies in which we cannot exercise significant influence and do not own a majority equity interest or otherwise control are accounted for as an investment in equity securities. We have elected to account for all investments in equity securities in accordance with the measurement alternative. Under the measurement alternative, we record the value of our investments in equity securities at cost, minus impairment, if any. Additionally, we adjust the carrying value of our investments in equity securities to fair value for observable transactions for identical or similar investments of the same issuer. On April 24, 2023 and April 22, 2024, we entered into Subscription Agreements (the “Subscription Agreements”) with Heartland Dental Holding Corporation (“Heartland”). Pursuant to the Subscription Agreements we acquired less than a 5% equity interest through the purchase of Class A Common Stock for $150 million in total. We are accounting for our investment in Heartland as an investment in equity securities. Based on a review of the relevant facts and circumstances, primarily observable transactions for Heartland's Class A Common Stock, we determined that no adjustment to the carrying value of our investment was necessary for the three or six months ended June 30, 2024. Our investments in privately held companies in which we can exercise significant influence are accounted for as equity method investments. We have elected to account for our equity method investments under the fair value option. The carrying value of our investments in equity securities and equity method investments are reported on our Condensed Consolidated Balance Sheets as Other assets and any fair value adjustments or impairment, if any, are recorded in other income (expense), net on our Condensed Consolidated Statement of Operations. Derivatives Not Designated as Hedging Instruments We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain assets and liabilities. These forward contracts are classified within Level 2 of the fair value hierarchy. As a result of the settlement of foreign currency forward contracts, we recognized a net gain of $7.5 million and $1.1 million, respectively, during the three months ended June 30, 2024 and 2023, and a net gain of $27.2 million and a net loss of $5.3 million, respectively, during the six months ended June 30, 2024 and 2023. Recognized gains and losses from the settlement of foreign currency forward contracts are recorded to Other income (expense), net in our Condensed Consolidated Statements of Operations. As of June 30, 2024 and December 31, 2023, the fair value of foreign exchange forward contracts outstanding were not material. The following tables present the gross notional value of all our foreign exchange forward contracts outstanding as of June 30, 2024 and December 31, 2023 (in thousands):
| June 30, 2024
| Local Currency Amount |  | Notional Contract Amount (USD)
Euro | €224,400 |  | $ | 240,601 |
British Pound | £114,500 |  | 144,867 |
Canadian Dollar | $102,400 |  | 74,790 |
Polish Zloty | PLN291,700 |  | 72,401 |
Chinese Yuan | ¥336,300 |  | 46,207 |
Japanese Yen | ¥4,700,000 |  | 29,419 |
Israeli Shekel | ILS69,600 |  |  | 18,554 |
Brazilian Real | R$91,600 |  | 16,390 |
Mexican Peso | M$288,500 |  | 15,750 |
Swiss Franc | CHF4,700 |  | 5,246 |
Australian Dollar | A$6,200 |  | 4,137 |
New Taiwan Dollar | NT$111,000 |  | 3,418 |
New Zealand Dollar | NZ$5,200 |  | 3,168 |
Korean Won | ₩3,100,000 |  | 2,244 |
Czech Koruna | Kč28,000 |  | 1,197 |
|  |  | $ | 678,389 |
| December 31, 2023
| Local Currency Amount |  | Notional Contract Amount (USD)
Euro | €337,780 |  | $ | 373,705 |
Canadian Dollar | $108,900 |  | 82,166 |
Polish Zloty | PLN276,900 |  | 70,393 |
British Pound | £45,590 |  | 58,005 |
Chinese Yuan | ¥244,500.00 |  | 34,361 |
Swiss Franc | CHF28,600 |  | 34,132 |
Japanese Yen | ¥3,577,000 |  | 25,347 |
Israeli Shekel | ILS78,700 |  | 21,800 |
Brazilian Real | R$80,500 |  | 16,563 |
Mexican Peso | M$230,000 |  |  | 13,593 |
New Zealand Dollar | NZ$6,600 |  | 4,161 |
Australian Dollar | A$4,300 |  | 2,921 |
New Taiwan Dollar | NT$89,000 |  | 2,919 |
Czech Koruna | Kč60,200 |  | 2,687 |
Korean Won | ₩2,200,000 |  | 1,709 |
|  |  | $ | 744,462 |

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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