Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Note 9—Fair Value Measurements

The Company has characterized its investments, based on the priority of the inputs used to value the investments, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), and lowest priority to unobservable inputs (Level 3). If the inputs used to measure the investments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the investment. Investments recorded in the accompanying Consolidated Balance Sheets are categorized based on the inputs to valuation techniques as follows:

Level 1 These are investments where values are based on unadjusted quoted prices for identical assets in an active market that the Company has the ability to access.

Level 2 These are investments where values are based on quoted market prices in markets that are not active or model derived valuations in which all significant inputs are observable in active markets.

Level 3 These are financial instruments where values are derived from techniques in which one or more significant inputs are unobservable. The Company did not have any Level 3 instruments as of December 31, 2022.

Short- and long-term investments and certain cash equivalents consist of investments in debt securities that are available-for-sale.

In the year ended December 31, 2022, the Company set up the Impact Investment Fund through which the Company expects to deploy approximately $30 million to further the Company’s Impact strategy and goals. In the year ended December 31, 2023, the Company invested a portion of the Impact Investment Fund in four investments which are classified as long-term investments on its Consolidated Balance Sheet. The investments in loan receivables are measured on an amortized cost basis and the investments in third-party managed funds are measured on the net assets value (“NAV”) basis. The Company uses NAV or its equivalent to measure the value of certain investments in alternative investment funds, debt funds, equity funds, and private equity funds, which may be redeemable in the near term or restricted from redemption in the near term, as a practical expedient. NAV is primarily determined based on the information provided by external fund administrators for which the most recent financial information is typically received on a lag within the quarter following the Company’s balance sheet date.

The following table sets forth the cost, gross unrealized losses, gross unrealized gains, and fair values of the Company’s investments as of the dates indicated (in thousands):


	Cost		Gross Unrealized Holding Loss		Gross Unrealized Holding Gain		Fair Value		Cash and Cash Equivalents		Short-term Investments		Long-term Investments
December 31, 2023

Level 1

Money market funds (1)	$	377,021	$	—	$	—	$	377,021	$	376,941	$	80	$	—
U.S. Government securities	95,298		(164)		39		95,173		—		60,153		35,020
	472,319		(164)		39		472,194		376,941		60,233		35,020
Level 2
U.S. agency securities	15,635		(14)		3		15,624		—		15,624		—
Certificate of deposit	35,365		(1)		55		35,419		—		35,419		—
Commercial paper	62,463		(12)		54		62,505		4,449		58,056		—
Corporate bonds	100,386		(145)		128		100,369		1,566		66,786		32,017
	213,849		(172)		240		213,917		6,015		175,885		32,017
Level 3
Loans receivable - held for investment	6,000		—		—		6,000		—		—		6,000
	6,000		—		—		6,000		—		—		6,000
	$	692,168	$	(336)	$	279	$	692,111	$	382,956	$	236,118	$	73,037
Measured at NAV (2)
Third-party managed funds													$	13,639
													$	86,676

December 31, 2022

Level 1
Money market funds (1)	$	462,866	$	—	$	—	$	462,866	$	374,314	$	76	$	—
U.S. Government securities	64,968		(424)		4		64,548		2,995		61,553		—
	527,834		(424)		4		527,414		377,309		61,629		—
Level 2
U.S. agency securities	10,053		(1)		3		10,055		—		10,055		—
Certificate of deposit	40,915		(184)		7		40,738		5,471		35,267		—
Commercial paper	57,777		(101)		18		57,694		4,454		53,240		—
Corporate bonds	122,294		(1,729)		6		120,571		1,212		90,222		29,137
	231,039		(2,015)		34		229,058		11,137		188,784		29,137
	$	758,873	$	(2,439)	$	38	$	756,472	$	388,446	$	250,413	$	29,137

(1)There were no money market funds classified as funds receivable and seller accounts as of December 31, 2023. $88.5 million of money market funds were classified as funds receivable and seller accounts as of December 31, 2022.

(2)Third-party managed funds measured on the NAV basis have not been categorized in the fair value hierarchy. The amount presented in the table is intended to permit reconciliation of the long-term investments in the fair value hierarchy to the amount presented in the Consolidated Balance Sheet.

The table below shows the gross unrealized loss and fair value of the following investments in available-for-sale debt securities that are classified by the length of time that the securities have been in a continuous unrealized loss position as of the dates

indicated (in thousands):


	Gross Unrealized Holding Loss		Fair Value
December 31, 2023
Less than 12 months in a continuous unrealized loss position
U.S. agency securities	$	(14)	$	12,569
Certificate of deposit	(1)		7,178
Commercial paper	(12)		34,066
Corporate bonds	(73)		28,401
U.S. Government securities	(164)		71,536
	$	(264)	$	153,750
12 months or longer in a continuous unrealized loss position
Corporate bonds	$	(72)	$	20,808
	$	(72)	$	20,808
December 31, 2022
Less than 12 months in a continuous unrealized loss position
Corporate bonds	$	(281)	$	70,469
U.S. Government securities	(265)		51,075
	$	(546)	$	121,544
12 months or longer in a continuous unrealized loss position
Corporate bonds	$	(1,448)	$	50,102
U.S. Government securities	(159)		7,442
	$	(1,607)	$	57,544

As of December 31, 2022, the remaining available-for-sale debt securities in an unrealized loss position have been in a continuous unrealized loss position for less than 12 months.

The Company evaluates fair value for each individual security in the investment portfolio. When assessing the risk of credit loss, the Company considers factors such as the extent to which the fair value is less than the amortized cost basis, the credit rating, including whether there has been any changes to the rating of the security by a rating agency, available information relevant to the collectability of the security, and management’s intended holding period and time horizon for selling the security. The Company did not recognize a credit loss in the years ended December 31, 2023, 2022, and 2021.

Outside of the Company’s Impact Investment Fund, the Company typically invests in short- and long-term instruments, including fixed-income funds and U.S. Government securities aligned with the Company’s investment strategy. In accordance with the Company’s investment policy, all investments, other than investments made through its Impact Investment Fund, have maturities no longer than 37 months, with the average maturity of these investments maintained at 12 months or less.

Disclosure of Fair Values

The Company’s financial instruments that are not remeasured at fair value in the Consolidated Balance Sheets include the Notes. See “Note 13—Debt” for additional information. The Company estimates the fair value of the Notes through inputs that are observable in the market, classified as Level 2 as described above. The following table presents the carrying value and estimated fair value of the Notes as of the dates indicated (in thousands):


	As of December 31, 2023				As of December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
2021 Notes	$	991,529	$	799,000	$	989,629	$	863,300
2020 Notes	645,624		556,790		644,431		646,230
2019 Notes	646,664		747,630		645,536		998,361
2018 Notes	—		—		44		145
	$	2,283,817	$	2,103,420	$	2,279,640	$	2,508,036

The carrying value of other financial instruments, including accounts receivable, funds receivable and seller accounts, accounts payable, and funds payable and amounts due to sellers approximate fair value due to the immediate or short-term maturity associated with these instruments.

- 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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