Cash and Cash Equivalents, Investments and Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents, Investments and Fair Value Measurements

The following tables present our cash and cash equivalents, and investments’ fair value level classification, adjusted cost, unrealized gain, unrealized loss and fair value as of March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024
	Fair Value Level	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash		$	46,996	$	—	$	—	$	46,996

Money market funds	Level 1	96,751		—		—		96,751

Total cash and cash equivalents		$	143,747	$	—	$	—	$	143,747
Short-term investments:

Corporate debt securities	Level 2	$	117,099	$	—	$	(425)	$	116,674
U.S. treasury securities	Level 1	66,670		—		(357)		66,313
Agency bonds	Level 2	64,207		—		(181)		64,026
Total short-term investments		$	247,976	$	—	$	(963)	$	247,013
Long-term investments:
Corporate debt securities	Level 2	$	169,302	$	287	$	(631)	$	168,958
U.S. treasury securities	Level 1	53,107		—		(400)		52,707

Total long-term investments		$	222,409	$	287	$	(1,031)	$	221,665


	December 31, 2023
	Fair Value Level	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash		$	45,050	$	—	$	—	$	45,050
Money market funds	Level 1	90,707		—		—		90,707

Total cash and cash equivalents		$	135,757	$	—	$	—	$	135,757
Short-term investments:

Corporate debt securities	Level 2	69,548		—		(170)		69,378
U.S. treasury securities	Level 1	25,734		—		(114)		25,620
Agency bonds	Level 2	99,505		—		(246)		99,259
Total short-term investments		$	194,787	$	—	$	(530)	$	194,257
Long-term investments:
Corporate debt securities	Level 2	$	191,467	$	898	$	(213)	$	192,152
U.S. treasury securities	Level 1	57,287		165		(57)		57,395

Total long-term investments		$	248,754	$	1,063	$	(270)	$	249,547

As of March 31, 2024, we determined that the unrealized losses on our investments were not driven by credit related factors. During the three months ended March 31, 2024 and 2023, we did not recognize any losses on our investments due to credit related factors and our realized gains and losses on investments were not significant.

The following table presents our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of March 31, 2024 (in thousands):


	Adjusted Cost		Fair Value
Due within one year	$	247,976	$	247,013
Due after one year through three years	222,409		221,665
Investments not due at a single maturity date	96,751		96,751
Total	$	567,136	$	565,429

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

Strategic Investments

In May 2023, we entered into a $15.0 million commitment to invest in Sound Ventures AI Fund, L.P. (Sound Ventures), a limited partnership that invests in artificial intelligence companies, for an approximate 6% ownership. We accounted for our investment under the equity method of accounting. As of December 31, 2023, the carrying amount of our investment was $11.7 million. On January 1, 2024, we sold our investment for a total cash consideration of $15.5 million, resulting in a gain of $3.8 million. The cash payment received was included within cash flows from investing activities on our condensed consolidated statements of cash flows and the gain was included within other income, net on our condensed consolidated statements of operations.

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 March 31, 2024 and 2023, 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 March 31, 2024 and 2023.

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 (defined below). 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 March 31, 2024 and December 31, 2023 was $205.4 million and $202.9 million, respectively. The estimated fair value of the 2025 notes as of March 31, 2024 and December 31, 2023 was $337.8 million and $329.5 million, respectively. For further information on the notes, refer to Note 5, “Convertible Senior Notes.”