Cash and Cash Equivalents, and Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 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 December 31, 2022 and 2021 (in thousands):


	December 31, 2022
	Fair Value Level	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash		$	33,532	$	—	$	—	$	33,532
Money market funds	Level 1	440,145		—		—		440,145
Total cash and cash equivalents		$	473,677	$	—	$	—	$	473,677
Short-term investments:
Commercial paper	Level 2	$	11,744	$	—	$	(29)	$	11,715
Corporate debt securities	Level 2	491,459		—		(4,130)		487,329
U.S. treasury securities	Level 1	85,271		—		(342)		84,929
Total short-term investments		$	588,474	$	—	$	(4,501)	$	583,973
Long-term investments:
Corporate debt securities	Level 2	$	125,735	$	158	$	(909)	$	124,984
Agency bonds	Level 2	60,635		—		(141)		60,494
U.S. treasury securities	Level 1	30,633		122		—		30,755
Total long-term investments		$	217,003	$	280	$	(1,050)	$	216,233


	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 December 31, 2022, we determined that the declines in the market value of our investment portfolio were not driven by credit related factors. During the years ended December 31, 2022, 2021 and 2020, we did not recognize any losses on our investments due to credit related factors.

The following table presents the gross realized gain and loss related to our investments (in thousands):


	Years Ended December 31,
		2022		2021		2020
Realized gain		$	64	$	84	$	308
Realized loss		(9,739)		(262)		—
Realized (loss)/gain on sale of investments		$	(9,675)	$	(178)	$	308

The following table shows our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of December 31, 2022 (in thousands):


	December 31, 2022
	Cost		Fair Value
Due within one year	$	588,474	$	583,973
Due after one year through three years	217,003		216,233
Investments not due at a single maturity date	440,145		440,145
Total	$	1,245,622	$	1,240,351

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

Strategic Investments

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 previously invested $2.0 million in TAPD, Inc., also known as Frank; a U.S.-based service that helps students access financial aid and $3.0 million in a foreign entity to explore expanding our reach internationally. In 2021, we sold our investments for total consideration of $17.5 million, resulting in a $12.5 million gain included within other income (expense), net on our consolidated statements of operations. We received cash payments of $16.1 million included within cash flows from investing activities on our consolidated statements of cash flows.

We did not record any impairment charges on our strategic investments, other than a $10.0 million impairment charge previously recorded in 2020 on our strategic investment in WayUp, Inc. During the years ended December 31, 2022, 2021 and 2020, 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 issuers during the years ended December 31, 2022, 2021 and 2020.

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 December 31, 2022 and 2021 was $385.0 million and $840.0 million, respectively. The estimated fair value of the 2025 notes as of December 31, 2022 and 2021 was $640.5 million and $682.2 million, respectively. For further information on the notes refer to Note 11, “Convertible Senior Notes.”