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Fair Value Measurements
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company uses a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on whether the inputs to those valuation techniques are observable or unobservable. The three levels of fair value hierarchy are set forth below. The Company’s assessment of the hierarchy level of the assets or liabilities measured at fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, 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 assets or liabilities.
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. The Company does not have any assets or liabilities classified as Level 3 as of September 30, 2022 and December 31, 2021.
Fair Value Measurement of Financial Assets and Liabilities on a Recurring Basis
The following table presents information about the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and indicates the fair value hierarchy of the valuation (in thousands):
Total
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Time deposits(i)
$96,603 $96,603 $— $— 
Money market funds(ii)
313,783 313,783 — — 
Commercial paper(i)
35,604 — 35,604 — 
Corporate debt securities(iii)
21,608 — 21,608 — 
U.S. government and U.S. government agency securities(i)
38,458 — 38,458 — 
Non-U.S. government securities(iv)
3,916 — 3,916 — 
Total cash equivalents and investments
509,972 410,386 99,586 — 
Interest rate derivatives(v)
8,224 — 8,224 — 
Total assets$518,196 $410,386 $107,810 $— 
Liabilities:
Foreign currency derivatives(vi)
$4,267 $— $4,267 $— 
Total liabilities$4,267 $— $4,267 $— 
____________
(i)Included in cash equivalents and short-term investments on the condensed consolidated balance sheets.
(ii)Included in cash equivalents on the condensed consolidated balance sheets.
(iii)Included in short-term investments and other assets on the condensed consolidated balance sheets.
(iv)Included in short-term investments on the condensed consolidated balance sheets.
(v)Included in prepaid expenses and other current assets on the condensed consolidated balance sheets.
(vi)Included in accrued and other liabilities on the condensed consolidated balance sheets.
The following table presents information about the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis as of December 31, 2021 and indicates the fair value hierarchy of the valuation (in thousands):
Total
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Time deposits(i)
$41,024 $41,024 $— $— 
Money market funds(ii)
180,013 180,013 — — 
Total money market funds and time deposits
221,037 221,037 — — 
Foreign currency derivatives(iii)
1,609 — 1,609 — 
Total assets
$222,646 $221,037 $1,609 $— 
Liabilities:
 
 
 
Foreign currency derivatives(iv)
$52 $— $52 $— 
Interest rate derivatives(iv)
7,725 — 7,725 — 
Total liabilities
$7,777 $— $7,777 $— 
_____________
(i)Included in cash equivalents and short-term investments on the condensed consolidated balance sheets.
(ii)Included in cash equivalents on the condensed consolidated balance sheets.
(iii)Included in prepaid expenses and other current assets, and other assets on the condensed consolidated balance sheets.
(iv)Included in accrued liabilities on the condensed consolidated balance sheets.

Money Market Funds, Time Deposits, and Available-For-Sale Debt Securities

The Company uses a market approach for determining the fair value of all its Level 1 and Level 2 money market funds, time deposits, and available-for-sale debt securities.

To value its money market funds and time deposits, the Company values the funds at $1 stable net asset value, which is the market pricing convention for identical assets that the Company has the ability to access.

The Company's available-for-sale debt securities consist of commercial paper, corporate debt securities, U.S. government securities, U.S. government agency securities and non-U.S. government securities. The Company measures the fair values of these assets with the help of a pricing service that either provides quoted market prices in active markets for identical or similar securities or uses observable inputs for their pricing without applying significant adjustments.

Foreign Currency and Interest Rate Derivatives and Hedging Instruments
Level 2 inputs for the derivative valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically foreign currency rates and futures contracts) and inputs other than quoted prices that are observable for the asset or liability (specifically the LIBOR and Secured Overnight Financing Rate (“SOFR”) cash and swap rates, and credit risk at commonly quoted intervals). The Company records its derivative assets and liabilities on a gross basis in the condensed consolidated balance sheet and uses mid-market pricing as a practical expedient for fair value measurements.
Key inputs for foreign currency derivatives are the spot rates, forward rates, interest rates, and credit derivative market rates. The spot rate for each foreign currency is the same spot rate used for all balance sheet translations at the measurement date and is sourced from the Federal Reserve Bulletin. The following values are interpolated from commonly quoted intervals: forward points and the SOFR used to discount and determine the fair value of assets and liabilities. Credit default swap spread curves identified per counterparty at month end are used to discount derivative assets for counterparty non-performance risk, all of which have terms of
twelve months or less. The Company discounts derivative liabilities to reflect the Company’s own potential non-performance risk to lenders and has used the spread over SOFR on its most recent corporate borrowing rate.
Key inputs for interest rate derivatives are the LIBOR curve consisting of cash rates for very short term, futures rates and swap rates beyond the derivative maturity. These rates are used to provide spot rates at resets specified by each derivative. Derivatives are discounted to present value at the measurement date using the SOFR curve. Credit default swap spread curves per counterparty and the BB Industrial credit spread curves (representing the Company’s credit risk) at month end are used to discount the interest rate derivatives for non-performance risk using the potential method.
The counterparties associated with the Company’s foreign currency forward contracts and interest rate swaps are large credit-worthy financial institutions. The foreign currency derivatives transacted with these entities are relatively short in duration and the interest rate derivatives are spread between two counterparties; therefore, the Company does not consider counterparty concentration and non-performance to be material risks at this time. Both the Company and the counterparties are expected to perform under the contractual terms of the instruments.
There were no transfers between Level 1, Level 2 and Level 3 categories during the three and nine months ended September 30, 2022 and 2021.