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Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

7. Fair Value Measurements

In accordance with the authoritative guidance on fair value measurements and disclosures under U.S. GAAP, the Company presents all financial assets and liabilities and any other assets and liabilities that are recognized or disclosed at fair value on a nonrecurring basis. The guidance defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair-value measurements. The guidance also requires fair value measurements be classified and disclosed in one of the following three categories:

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

Level 2: Observable inputs other than quoted prices in active markets for identical assets or liabilities.

Level 3: Unobservable inputs.

The Company values certain assets and liabilities, focusing on the inputs used to measure fair value, particularly in instances where the measurement uses significant unobservable (Level 3) inputs. The Company’s financial instruments are valued using quoted prices in active markets (Level 1) or based upon other observable inputs (Level 2). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability. In addition, the categories presented do not suggest how prices may be affected by the size of the purchases or sales, particularly with the largest highly liquid financial issuers who are in markets continuously with non-equity instruments, or how any such financial assets may be impacted by other factors such as U.S. government guarantees. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The availability of observable data is monitored to assess appropriate classification of financial instruments within the fair value hierarchy. Depending upon the availability of such inputs, specific securities may transfer between levels. In such instances, the transfer is reported at the end of the reporting period.

The fair values of the Company’s financial assets that are measured on a recurring basis are as follows (in thousands):

 

 

 

December 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Money market funds

 

$

28,241

 

 

$

—

 

 

$

—

 

 

$

28,241

 

Commercial paper

 

 

—

 

 

 

14,269

 

 

 

—

 

 

 

14,269

 

U.S. government bonds

 

 

2,987

 

 

 

2,981

 

 

 

—

 

 

 

5,968

 

Total

 

$

31,228

 

 

$

17,250

 

 

$

—

 

 

$

48,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Money market funds

 

$

12,288

 

 

$

—

 

 

$

—

 

 

$

12,288

 

Corporate bonds

 

 

—

 

 

 

13,992

 

 

 

—

 

 

 

13,992

 

Commercial paper

 

 

—

 

 

 

88,289

 

 

 

—

 

 

 

88,289

 

U.S. government bonds

 

 

42,797

 

 

 

4,994

 

 

 

—

 

 

 

47,791

 

Agency bonds

 

 

—

 

 

 

9,830

 

 

 

—

 

 

 

9,830

 

Total

 

$

55,085

 

 

$

117,105

 

 

$

—

 

 

$

172,190

 

 

The Company’s Level 2 investments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/default projections based on historical data and other observable inputs. During the years ended December 31, 2024 and 2023, the transfers of assets between levels was a total of $26.3 million and $20.4 million transfer from Level 1 to Level 2, respectively, as such US treasury notes and bills were changed to off-the-run when they were issued before the most recent issue and were still outstanding at measurement day.