Investments and Fair Value Measurements

6 Months Ended

Jun. 30, 2025

Marketable Investments

The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s intent is that all marketable investments are available for use in its current operations, including marketable investments with maturity dates greater than one year from June 30, 2025. The Company’s short-term

marketable investments as of June 30, 2025 and December 31, 2024 were as follows (in thousands):



	June 30, 2025
Short-Term Marketable Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	816	$	—	$	—	$	816
U.S. treasury securities	217,055		135		(53)		217,137
U.S. agency and government-sponsored securities	184,880		26		(175)		184,731
Commercial paper	5,701		2		—		5,703
Municipal bonds	900		—		—		900
Corporate bonds	21,042		68		—		21,110
Total	$	430,394	$	231	$	(228)	$	430,397



	December 31, 2024
Short-Term Marketable Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	802	$	—	$	—	$	802
U.S. treasury securities	442,353		442		(223)		442,572
U.S. agency and government-sponsored securities	146,762		16		(18)		146,760
Commercial paper	9,600		8		—		9,608
Corporate bonds	43,550		124		(6)		43,668
Total	$	643,067	$	590	$	(247)	$	643,410

The following table presents the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than 12 months as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025				December 31, 2024
	Less than 12 months				Less than 12 months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value

U.S. treasury securities	$	(53)	$	112,141	$	(223)	$	104,716
U.S. agency and government-sponsored securities	(175)		98,667		(18)		76,484


Corporate bonds	—		—		(6)		4,219
Total	$	(228)	$	210,808	$	(247)	$	185,419

Although the Company had certain available-for-sale debt securities in an unrealized loss position as of June 30, 2025, no impairment loss was recorded since it did not intend to sell them, did not anticipate a need to sell them, and the decline in fair value was not due to any credit-related factors.

The amortized cost and fair value of the Company’s marketable investments by contractual maturity as of June 30, 2025 were as follows (in thousands):


	Cost		Fair Value
Due within one year	$	195,141	$	195,156
Due after one year through two years	235,253		235,241
Total	$	430,394	$	430,397

Fair Value Measurements

The Company carries cash equivalents and marketable investments at fair value. Fair value is based on the price 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. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 — Observable inputs, which include unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices 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 based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques.

The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.

Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. The Company performs routine procedures such as comparing prices obtained from independent sources to ensure that appropriate fair values are recorded.

The following tables set forth the Company’s assets measured at fair value by level within the fair value hierarchy (in thousands):


	June 30, 2025
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	37,579	$	—	$	—	$	37,579






Total cash equivalents	$	37,579	$	—	$	—	$	37,579

Marketable investments
Certificates of deposit	$	—	$	816	$	—	$	816
U.S. treasury securities	217,137		—		—		217,137
U.S. agency and government sponsored securities	—		184,731		—		184,731
Commercial paper	—		5,703		—		5,703
Municipal bonds	—		900		—		900
Corporate bonds	—		21,110		—		21,110
Total marketable investments	$	217,137	$	213,260	$	—	$	430,397



	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	114,370	$	—	$	—	$	114,370
Certificates of deposit	—		496		—		496
U.S. treasury securities	42,946		—		—		42,946
U.S. agency and government-sponsored securities	—		41,832		—		41,832
Total cash equivalents	$	157,316	$	42,328	$	—	$	199,644

Marketable investments
Certificates of deposit	$	—	$	802	$	—	$	802
U.S. treasury securities	442,572		—		—		442,572
U.S. agency and government-sponsored securities	—		146,760		—		146,760
Commercial paper	—		9,608		—		9,608
Corporate bonds	—		43,668		—		43,668
Total marketable investments	$	442,572	$	200,838	$	—	$	643,410

In March 2024, the Company issued $747.5 million aggregate principal amount of 1.00% convertible senior notes due 2029 (the "2029 convertible senior notes") in a private offering. In connection with the issuance of the 2029 convertible senior notes, the Company used part of the net proceeds from the issuance to repurchase approximately $313.1 million aggregate principal amount of its 0.50% convertible senior notes due 2025 (the "2025 convertible senior notes"). As of December 31, 2024, the estimated fair value of the outstanding 2025 convertible senior notes was $423.2 million. The 2025 convertible senior notes matured on June 1, 2025, and the Company settled its obligations with respect to the 2025 senior notes in cash in connection therewith. As of June 30, 2025 and December 31, 2024, the estimated fair value of the outstanding 2029 convertible senior notes was $653.7 million and $674.8 million, respectively. The fair values were determined based on the quoted price of the convertible senior notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 in the fair value hierarchy. See Note 6 for further information on the Company’s convertible senior notes.

In February 2022, the Company made a $2.0 million equity investment in a privately-held company that the Company does not have the ability to exercise significant influence over. The Company elected to utilize the measurement alternative for an equity security without a readily determinable fair value. Accordingly, this investment is accounted for at its cost minus impairment, if any, and is classified within Level 3. If the Company identifies observable price changes in orderly transactions for such investment or a similar investment, it will measure the investment at fair value as of the date that the observable transactions or events occurred. During 2024, the Company noted an indicator of impairment of this investment and recorded a $1.3 million impairment charge. The Company concluded that there was no further indicator of impairment of this investment as of June 30, 2025.

Except for the equity investment described above, there were no assets or liabilities measured at fair value on a non-recurring basis as of June 30, 2025 and December 31, 2024.

The fair value of the Company’s other financial instruments, including accounts receivable, accounts payable and other current liabilities, approximate their carrying value due to the relatively short maturity of those instruments. The carrying amounts of the Company’s operating and finance leases approximate their fair value, which is the present value of expected future cash payments based on assumptions about current interest rates and the creditworthiness of the Company.