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Fair Value Measurements
 6 Months Ended
Jan. 31, 2023
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) 
January 31, 2023                
Debt securities  $23,764   $6,013   $—   $29,777 
Equity investments included in current assets   9,213    —    —    9,213 
Equity investments included in noncurrent assets   —    —    1,225    1,225 
                     
Total  $32,977   $6,013   $1,225   $40,215 
                     
Acquisition consideration included in:                    
Other current liabilities  $—   $—   $(2,275)  $(2,275)
Other noncurrent liabilities   —    —    (4,334)   (4,334)
                     
Total  $—   $—   $(6,609)  $(6,609)
                     
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 January 31, 2023 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):

  

                     
  

Three Months Ended

January 31,

  

Six Months Ended

January 31,

 
   2023   2022   2023   2022 
   (in thousands) 
Balance, beginning of period  $1,105   $2,119   $1,132   $2,465 
Total gains (losses) recognized in “Other income (expense), net”   120    142    

93

   (204)
                     
Balance, end of period  $1,225   $2,261   $1,225   $2,261 
                     
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):

  

                     
  

Three Months Ended

January 31,

  

Six Months Ended

January 31,

 
  

2023

  

2022

  

2023

  

2022

 
   (in thousands) 
Balance, beginning of period  $6,603   $1,015   $8,546   $1,025 
Payments   —    —    (375)   — 
Total (gains) losses included in:                    
“Other operating gain (expense), net”   —   (303)   (1,565)   (303)
“Foreign currency translation adjustment”   

6

   (9)   3   (19)
                     
Balance, end of period  $6,609   $703   $6,609   $703 
                     
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period  $—   $—   $—   $— 

 

In the six months ended January 31, 2023, the Company paid an aggregate of $0.4 million in contingent consideration related to prior acquisitions. In addition, in the six months ended January 31, 2023, the Company determined that the requirements for a portion of the contingent consideration payments related to the acquisition of Leaf would not be met, and, in the three months ended January 31, 2022, the Company determined that the requirements for a contingent consideration payment related to an acquisition in December 2019 would not be met before the expiration date. The Company recorded gains of $1.6 million and $0.3 million on the write-off of these contingent consideration payment obligations, which were included in “Other operating gain (expense), net” in the accompanying consolidated statements of income. There were no other changes in the estimated fair value of contingent consideration in the six months ended January 31, 2023 and 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 January 31, 2023 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 January 31, 2023 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.