Cash and Cash Equivalents, and Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents, and Investments and Fair Value Measurements

The following tables show our cash and cash equivalents, and investments’ fair value level classification, adjusted cost, unrealized gain, unrealized loss and fair value as of September 30, 2022 and December 31, 2021 (in thousands except for fair value levels):


	September 30, 2022
	Fair Value Level	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash		$	35,131	$	—	$	—	$	35,131

Money market funds	Level 1	34,218		—		—		34,218

Total cash and cash equivalents		$	69,349	$	—	$	—	$	69,349
Short-term investments:
Commercial paper	Level 2	$	11,720	$	—	$	(114)	$	11,606
Corporate debt securities	Level 2	770,221				(12,945)		757,276
U.S. treasury securities	Level 1	104,671		—		(2,145)		102,526

Total short-term investments		$	886,612	$	—	$	(15,204)	$	871,408
Long-term investments:
Corporate debt securities	Level 2	$	156,687	$	—	$	(4,065)	$	152,622
U.S. treasury securities	Level 1	101,890		—		(1,907)		99,983
Agency bonds	Level 2	34,119		57		—		34,176
Total long-term investments		$	292,696	$	57	$	(5,972)	$	286,781


	December 31, 2021
	Fair Value Level	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash		$	30,324	$	—	$	—	$	30,324
Money market funds	Level 1	823,754		—		—		823,754

Total cash and cash equivalents		$	854,078	$	—	$	—	$	854,078
Short-term investments:
Commercial paper	Level 2	$	124,211	$	2	$	(33)	$	124,180
Corporate debt securities	Level 2	552,609		36		(546)		552,099

Agency bonds	Level 2	15,500		2		—		15,502
Total short-term investments		$	692,320	$	40	$	(579)	$	691,781
Long-term investments:
Corporate debt securities	Level 2	$	724,517	$	—	$	(3,277)	$	721,240
U.S. treasury securities	Level 1	24,860		—		(107)		24,753

Total long-term investments		$	749,377	$	—	$	(3,384)	$	745,993

As of September 30, 2022, we determined that the declines in the market value of our investment portfolio were not driven by credit related factors. During the three and nine months ended September 30, 2022 and 2021 we did not recognize any losses on our investments due to credit related factors. During the three and nine months ended September 30, 2022 and 2021, our realized gains and losses on investments were not significant.

The following table shows our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of September 30, 2022 (in thousands):


	Adjusted Cost		Fair Value
Due in 1 year or less	$	886,612	$	871,408
Due in 1-2 years	292,696		286,781
Investments not due at a single maturity date	34,218		34,218
Total	$	1,213,526	$	1,192,407

Investments not due at a single maturity date in the preceding table consisted of money market funds.

Strategic Investment

In July 2022, we completed an investment of $6.0 million in Knack Technologies, Inc. (Knack), a privately held U.S. based peer-to-peer tutoring platform for higher education institutions. We do not have the ability to exercise significant influence over Knack's operating and financial policies and have elected to account for our investment at cost as it does not have a readily determinable fair value. We did not record any impairment charges during the three months ended September 30, 2022, as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment. There were no observable price changes in orderly transactions for the identical or similar investments of the same issuer during the three months ended September 30, 2022.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value with the exception of the notes. The estimated fair value of the notes was determined based on the trading price of the notes as of the last day of trading for the period. We consider the fair value of the notes to be a Level 2 measurement due to the limited trading activity. The estimated fair value of the 2026 notes as of September 30, 2022 and December 31, 2021 was $370.0 million and $840.0 million, respectively. The estimated fair value of the 2025 notes as of September 30, 2022 and December 31, 2021 was $595.0 million and $682.2 million, respectively. For further information on the notes, refer to Note 8, “Convertible Senior Notes.”