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INVESTMENTS AND FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
INVESTMENTS AND FAIR VALUE MEASUREMENT INVESTMENTS AND FAIR VALUE MEASUREMENTS
Accounting Standards Codification (ASC) 820 “Fair Value Measurement” (ASC 820) defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable:

Level 1:
Quoted prices in active markets for identical assets or liabilities;
Level 2:
Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and
Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis for the periods presented below (in thousands):

Total Carrying ValueLevel 1Level 2Level 3
September 30, 2024
Assets:    
Funds held for clients
Money market funds$4,255 $4,255 $— $— 
Available-for-sale securities72,109 — 72,109 — 
Total$76,364 $4,255 $72,109 $— 
December 31, 2023
Assets:
Funds held for clients
Money market funds$3,431 $3,431 $— $— 
Available-for-sale securities71,770 — 71,770 — 
Total$75,201 $3,431 $71,770 $— 
Cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following for the periods presented below (in thousands):
Amortized
Cost
Gross
Unrealized
Gains (1)
Gross
Unrealized
Losses (1)
Aggregate
Estimated
Fair Value
September 30, 2024
Cash equivalents$4,262 $1 $(8)$4,255 
Available-for-sale securities:
Certificates of deposit738 1 — 739 
Corporate debt securities65,241 528 (430)65,339 
Municipal bonds3,716 — (119)3,597 
U.S. Government agency securities2,422 30 (18)2,434 
Total available-for-sale securities72,117 559 (567)72,109 
Total(2)
$76,379 $560 $(575)$76,364 
December 31, 2023
Cash equivalents$3,447 $— $(16)$3,431 
Available-for-sale securities:
Certificates of deposit845 2 (1)846 
Corporate debt securities67,277 258 (1,090)66,445 
Municipal bonds4,251 — (239)4,012 
U.S. Government agency securities500 — (33)467 
Total available-for-sale securities72,873 260 (1,363)71,770 
Total(2)
$76,320 $260 $(1,379)$75,201 

(1)Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of September 30, 2024 and December 31, 2023, there were 82 and 54 securities, respectively, in an unrealized gain position and there were 80 and 113 securities in an unrealized loss position, respectively. As of September 30, 2024, these unrealized losses were less than $35 individually and $576 in the aggregate. As of December 31, 2023, these unrealized losses were less than $61 individually and $1,363 in the aggregate. We invest in high quality securities with roughly 70% of our portfolio made up of A ratings and above with unrealized losses primarily attributable to macroeconomic factors rather than credit related. These securities have not been in a continuous unrealized gain or loss position for more than 12 months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible credit losses. Factors considered in determining whether a loss is a credit loss include the length of time and extent to which fair value has been less than the cost basis, the credit rating of the investment, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

(2)At September 30, 2024 and December 31, 2023, none of these securities were classified as cash and cash equivalents on the accompanying Condensed Consolidated Balance Sheets.

Funds held for clients represent assets that the Company has classified for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Condensed Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories for the periods presented below (in thousands):

September 30, 2024December 31, 2023
Cash and cash equivalents held to satisfy client funds obligations$121,480 $147,305 
Short-term marketable securities held to satisfy client funds obligations10,654 10,042 
Long-term marketable securities held to satisfy client funds obligations61,455 61,728 
Total funds held for clients$193,589 $219,075 
Expected maturities of available-for-sale securities are as follows for the period presented below (in thousands):

September 30, 2024
One year or less$10,654 
After one year through five years61,455 
Total$72,109