XML 31 R21.htm IDEA: XBRL DOCUMENT v3.25.1
Note 12 - Fair Value Measurements
 6 Months Ended
Mar. 31, 2025
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

12. Fair Value Measurements

 

See Note 2, Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item 8 of the 2024 Annual Report on Form 10-K for information on the fair value hierarchy and the level of inputs used by the Company in determining fair value.

 

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The following tables summarize assets and liabilities measured and recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets as of March 31, 2025 and  September 30, 2024 (in thousands):

 

​

 

As of March 31, 2025

 

Description

 

Total Fair Value

  

Level 1

  

Level 2

  

Level 3

 

Assets:

                

Cash equivalents

 $120,491  $119,989  $502  $— 

Available-for-sale securities

  251,478   23,743   227,735   — 

Investment in equity securities

  2,100   —   —   2,100 

Total assets

 $374,069  $143,732  $228,237  $2,100 

Liabilities:

                

Net investment hedge

  10,500   —   10,500   — 

Foreign exchange contracts

  340   —   340   — 

Total liabilities

 $10,840  $—  $10,840  $— 

 

​

 

As of September 30, 2024

 

Description

 

Total Fair Value

  

Level 1

  

Level 2

  

Level 3

 

Assets:

                

Cash equivalents

 $157,990  $157,990  $—  $— 

Available-for-sale securities

  198,616   37,584   161,032   — 

Convertible debt securities

  2,000   —   —   2,000 

Foreign exchange contracts

  9   —   9   — 

Total assets

 $358,615  $195,574  $161,041  $2,000 

Liabilities:

                

Net investment hedge

  1,915   —   1,915   — 

Foreign exchange contracts

  213  $—  $213  $— 

Total liabilities

 $2,128  $—  $2,128  $— 

 

Cash Equivalents

 

The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents primarily consist of money market funds and U.S. government backed securities with a maturity of three months or less. They are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The fair values of these investments approximate their carrying values. Investments classified as Level 2 consist of debt securities valued using matrix pricing benchmarking because they are not actively traded and bank certificates of deposit with a maturity of three months or less. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

 

Available-For-Sale Securities

 

Available-for-sale securities primarily consist of highly rated corporate debt securities, and U.S. government backed securities, which are classified as Level 1. Investments classified as Level 2 consist of debt securities that are valued using matrix pricing and benchmarking because they are not actively traded, and bank certificates of deposit. 

 

Convertible Debt Securities and Investment in Equity Securities

 

In the third quarter of fiscal year 2024, the Company purchased $2.0 million principal amount of convertible notes issued by a private company. The Company accounted for the investment in convertible notes at fair value with changes in fair value recognized in the income statement. As of the conversion date, the fair value of the convertible notes was $2.1 million.

 

During the first quarter of fiscal year 2025, the Company converted the convertible notes into 420,000 shares of preferred stock of the private company. The conversion did not result in the recognition of additional gain or loss on the convertible notes. The shares of preferred stock are equity securities and within the scope of ASC 321, Investments - Equity Securities. The Company elected the measurement alternative for its investment in the shares of preferred stock of the private company because the shares of preferred stock do not have a readily determinable fair value. As of March 31, 2025, the carrying value of the investment in the shares of preferred stock of the private company was $2.1 million and is included in “Other assets” on the Condensed Consolidated Balance Sheets. The fair value determination is based on unobservable inputs (Level 3 on the fair value hierarchy) which were based on the best information available in the circumstance, including transaction pricing, recent acquisition, and market participant assumptions. The unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of the assets as of the reporting date.

 

Foreign Exchange Contracts & Net Investment Hedge

 

The Company’s foreign exchange contract assets and liabilities, and its net investment hedge assets are measured and reported at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2.

 

Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

 

During the three and six months ended March 31, 2025 and 2024, the Company did not record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis.