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Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

The fair values of financial instruments are classified into one of the following categories based upon the lowest level of input that is significant to the fair value measurement:

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Level 1 — Quoted prices in active markets for identical assets or liabilities.

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Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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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 fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.

Unrealized gains and losses on available-for-sale debt securities are reported as a component of accumulated comprehensive income (loss), with the exception of unrealized losses believed to be related to credit losses, if any, which are recognized in earnings in the period the impairment occurs. Impairment assessments are made at the individual security level each reporting period. When the fair value of an available-for-sale debt investment is less than its cost at the balance sheet date, a determination is made as to whether the impairment is related to a credit loss and, if it is, the portion of the impairment relating to credit loss is recorded as an allowance through net income. Realized gains and losses, if any, on available-for-sale securities are included in other income (expense), net, in the condensed consolidated statements of operations based on the specific identification method.

Financial assets and liabilities measured at fair value on a recurring basis are summarized as follows:


		Fair Value Measurements
		June 30, 2023
(in thousands)		Level 1			Level 2			Level 3			Total
Financial Assets:
Money market funds		$	45,660		$	—		$	—		$	45,660
Marketable debt securities:
U.S. government agency securities			12,806			—			—			12,806
U.S. treasury securities			35,553			—			—			35,553
Commercial paper and corporate notes			—			23,433			—			23,433
Currency contracts			—			8			—			8
Total		$	94,019		$	23,441		$	—		$	117,460
Financial Liabilities:
Currency contracts		$	—		$	90		$	—		$	90


		Fair Value Measurements
		December 31, 2022
(in thousands)		Level 1			Level 2			Level 3			Total
Financial Assets:
Money market funds		$	55,060		$	—		$	—		$	55,060
Marketable debt securities:
U.S. government agency securities			19,964			—			—			19,964
U.S. treasury securities			68,418			—			—			68,418
Commercial paper and corporate notes			—			48,203			—			48,203
Total		$	143,442		$	48,203		$	—		$	191,645

The cost, unrealized gains or losses, and fair value by investment type are summarized as follows:


		June 30, 2023
(in thousands)		Cost			Unrealized Gain			Unrealized (Loss)			Fair Value
Money market funds		$	45,660		$	—		$	—		$	45,660
U.S. government agency securities			12,815			—			(9)			12,806
U.S. treasury securities			35,564			6			(17)			35,553
Commercial paper and corporate notes			23,438			—			(5)			23,433
Total		$	117,477		$	6		$	(31)		$	117,452


		December 31, 2022
(in thousands)		Cost			Unrealized Gain			Unrealized (Loss)			Fair Value
Money market funds		$	55,060		$	—		$	—		$	55,060
U.S. government agency securities			19,929			35			—			19,964
U.S. treasury securities			68,431			8			(21)			68,418
Commercial paper and corporate notes			48,203			—			—			48,203
Total		$	191,623		$	43		$	(21)		$	191,645

The Company held 11 positions that were in unrealized loss positions as of June 30, 2023, and aggregated gross unrealized losses on available-for-sale debt securities were not material. No impairment was recognized in the three and six months ended June 30, 2023. As of June 30, 2023, the remaining contractual maturities of available-for-sale securities were less than one year, and the average maturity of investments upon acquisition was approximately 9 months. The accrued interest receivable on available-for-sale marketable securities was immaterial at June 30, 2023 and December 31, 2022, and is included in other prepaid and current assets.

There were no investments in marketable securities during the first six months of 2022; thus, no unrealized gain (loss) was recognized during the three and six months ended June 30, 2022.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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