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Cash, Cash Equivalents and Short-Term Investments

9 Months Ended

Sep. 30, 2023

Cash, Cash Equivalents and Short-Term Investments

Cash, Cash Equivalents and Short-Term Investments

Note 7. Cash, Cash Equivalents and Short-Term Investments

Cash, cash equivalents and short-term investments consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30,		December 31,
	2023		2022
Cash	$	40,760	$	34,752
Cash equivalents:
Money market mutual fund		18,713		1,843
Total cash and cash equivalents		59,473		36,595
Short-term investments:
U.S. Treasury notes and bills		129,931		190,718
Mutual funds		97,522		99,777
Corporate debt securities		178,936		196,233
Total short-term investments		406,389		486,728
Cash, cash equivalents and short-term investments	$	465,862	$	523,323

Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale investments by type of security at September 30, 2023 were as follows (in thousands):


	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
U.S. Treasury notes	$	127,887	$	2,122	$	(78)	$	129,931
Corporate debt securities		177,904		1,456		(424)		178,936
Total available-for-sale investments	$	305,791	$	3,578	$	(502)	$	308,867

The following table summarizes the fair value of available-for-sale investments based on stated contractual maturities as of September 30, 2023:


	Amortized Cost		Fair Value
Due within one year	$	124,440	$	126,880
Due after one year through five years		181,351		181,987
Due after five years through ten years		—		—
Total	$	305,791	$	308,867

The amortized cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale investments by type of security at December 31, 2022 were as follows (in thousands):


	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
U.S. Treasury notes	$	199,626	$	5	$	(8,913)	$	190,718
Corporate debt securities		210,764		1,243		(15,774)		196,233
Total available-for-sale investments	$	410,390	$	1,248	$	(24,687)	$	386,951

The following table summarizes the fair value of available-for-sale investments based on stated contractual maturities as of December 31, 2022:


	Amortized Cost		Fair Value
Due within one year	$	129,568	$	126,776
Due after one year through five years		280,822		260,175
Due after five years through ten years		—		—
Total	$	410,390	$	386,951

The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis, as well as adverse conditions related specifically to the security such as any changes to the credit rating of the security and the intent to sell or whether we will more likely than not be required to sell the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to that particular security.

The following table shows the Company’s gross unrealized losses and fair value of available-for-sale debt securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2023:


	Less than 12 Months				12 Months or More				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury notes	$	1,947	$	(19)	$	127,984	$	(59)	$	129,931	$	(78)
Corporate debt securities		13,657		(13)		165,279		(411)		178,936		(424)
Total	$	15,604	$	(32)	$	293,263	$	(470)	$	308,867	$	(502)

For U.S. Treasury notes, the unrealized losses were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider the U.S. Treasury notes to be other-than-temporarily impaired at September 30, 2023. For corporate debt securities, the unrealized losses were primarily caused by interest rate increases. The Company does not intend to sell these debt securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell these debt securities before recovery of their amortized cost bases, which may be at maturity. Based on the credit quality of the debt securities, and the Company’s estimates of future cash flows to be collected from those

securities, the Company believes the unrealized losses are not credit losses. Accordingly, the Company does not consider the corporate debt securities to be other-than-temporarily impaired at September 30, 2023.

During the three months ended September 30, 2023 and 2022 we had realized gains (losses) of $0.01 million and $(0.03) million on available-for-sale investments, respectively.

During the nine months ended September 30, 2023 and 2022 we had realized losses of $(0.06) million and $(0.1) million on available-for-sale investments, respectively.

Equity Investments

We held investments in equity securities with readily determinable fair values of $97.5 million at September 30, 2023. These investments consist of mutual funds that invest primarily in tax-free municipal bonds and treasury inflation protected securities.

Unrealized losses during 2023 and 2022 related to equity securities held at September 30, 2023 and 2022 are as follows (in thousands):


	Nine Months Ended September 30,
	2023		2022
Net losses recognized during the nine months on equity securities	$	(3,765)	$	(12,436)
Less: net gains (losses) recognized during the year on equity securities sold during the period		1,510		—
Unrealized losses recognized during the nine months on equity securities still held at September 30, 2023 and 2022	$	(2,255)	$	(12,436)