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Fair Value Measurements
 3 Months Ended
Oct. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 8—Fair Value Measurements

 

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

 

  

Level 1 (1)

  

Level 2 (2)

  

Level 3 (3)

  

Total

 
   (in thousands) 
October 31, 2022                    
Debt securities  $13,780   $6,031   $—   $19,811 
Equity investments included in current assets   9,369    —    —    9,369 
Equity investments included in noncurrent assets   —    —    1,105    1,105 
Total  $23,149   $6,031   $1,105  $30,285
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(2,203)  $(2,203)
Other noncurrent liabilities   —    —    (4,400)   (4,400)
Total  $—   $—   $(6,603)  $(6,603)
                     
July 31, 2022                    
Debt securities  $13,734   $8,569   $—   $22,303 
Equity investments included in current assets   17,091    —    —    17,091 
Equity investments included in noncurrent assets   —    1,230    1,132    2,362 
Total  $30,825   $9,799   $1,132   $41,756 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(2,578)  $(2,578)
Other noncurrent liabilities   —    —    (5,968)   (5,968)
Total  $—   $—   $(8,546)  $(8,546)

 

(1) – quoted prices in active markets for identical assets or liabilities
(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities
(3) – no observable pricing inputs in the market

 

 

At October 31, 2022 and July 31, 2022, the Company had $3.1 million and $3.2 million, respectively, in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they were not measured at fair value.

 

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

  

2022

  

2021

 
  

Three Months Ended

October 31,

 
  

2022

  

2021

 
    (in thousands)
Balance, beginning of period  $1,132   $2,465 
Total losses included in “Other expense, net”   (27)   (346)
           
Balance, end of period  $1,105   $2,119 
           
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period  $—   $— 

 

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

  

2022

  

2021

 
  

Three Months Ended

October 31,

  

2022

  

2021

 
    (in thousands)
Balance, beginning of period  $8,546   $1,025 
Payments   (375)   — 
Total gains included in:          
“Other operating gain (expense), net”   (1,565)   — 
“Foreign currency translation adjustment”   (3)   (10)
           
Balance, end of period  $6,603   $1,015 
           
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period  $—   $— 

 

In the three months ended October 31, 2022, the Company paid an aggregate of $0.4 million in contingent consideration related to prior acquisitions. In addition, in September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the acquisition of Leaf would not be met. The Company recorded a gain of $1.6 million on the write-off of this contingent consideration payment obligation, which was included in “Other operating gain (expense), net” in the accompanying consolidated statements of operations. There were no other changes in the estimated fair value of contingent consideration in the three months ended October 31, 2022.

 

Fair Value of Other Financial Instruments

 

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

 

 

Cash and cash equivalents, restricted cash and cash equivalents, other current assets, customer deposits, and other current liabilities. At October 31, 2022 and July 31, 2022, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level 1 and other current assets, customer deposits, and other current liabilities were classified as Level 2 of the fair value hierarchy.

 

Other assets and other liabilities. At October 31, 2022 and July 31, 2022, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.