Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 2022

The following tables present the Company’s assets that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation (in thousands):


	As of December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents:
Money market funds	$	1,149,302	$	1,149,302	$	—	$	—
Certificates of deposit	6,791		—		6,791		—
Restricted cash, current and noncurrent
Certificates of deposit	18,707		—		18,707		—
Marketable securities:
Marketable securities	35,135		35,135		—		—
Total	$	1,209,935	$	1,184,437	$	25,498	$	—


	As of December 31, 2021
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents:
Money market funds	$	507,317	$	507,317	$	—	$	—
Certificates of deposit	6,844		—		6,844		—
Restricted cash, current and noncurrent
Certificates of deposit	45,048		—		45,048		—
Marketable securities:
Marketable securities	234,153		234,153		—		—
Total	$	793,362	$	741,470	$	51,892	$	—

Certificates of Deposit

The Company’s Level 2 instruments consist of restricted cash invested in certificates of deposit. The fair value of such instruments is estimated based on valuations obtained from third-party pricing services that utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include interest rate curves, foreign exchange rates, and credit ratings.

Marketable Securities

Marketable securities consist of equity securities in publicly-traded companies and are recorded at fair market value each reporting period. Realized and unrealized gains and losses are recorded in other income (expense), net on the consolidated statements of operations. During the years ended December 31, 2022 and 2021, the Company recorded net unrealized losses of $159.0 million and $72.8 million, respectively, and realized losses of $113.1 million during the year ended December 31, 2022. An immaterial amount of realized gains and losses were recorded during the year ended December 31, 2021. Net realized and unrealized gains and losses are recorded within other income (expense), net on the consolidated statements of operations.

Investments

Since 2021, the Company has approved and entered into certain agreements (“Investment Agreements”) to purchase shares of various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities (each, an “Investee,” and such purchases, the “Investments”). During the year ended December 31, 2021, the Company purchased shares for a total investment of $326.0 million.

The following table presents the details of the investments purchased under such Investment Agreements during the year ended December 31, 2022 (in thousands):


Entity (1)	Share Amount	Investment Amount
Fast Radius	2,000	$	20,000
Energy Vault	850	8,500
Tritium	2,500	15,000
Rigetti	1,000	10,000
Allego	2,000	20,000
Starry Group Holdings	2,133	16,000
Rubicon Technologies	3,500	35,000
Total	13,983	$	124,500

—————

(1) Investments are in publicly-traded marketable securities at the time of investment.

In connection with signing the Investment Agreements, each Investee or an associated entity and the Company entered into a commercial contract for access to the Company’s products and services (collectively, the “Strategic Commercial Contracts”). As of December 31, 2022, the terms of such contracts, including contractual options, range from three years to eight years and are subject to termination for cause provisions.

The Company assesses the concurrent agreements under the noncash and consideration paid or payable to a customer guidance within ASC 606, Revenue from Contracts with Customers, as well as the commercial substance of each arrangement considering the customer’s ability and intention to pay as well as the Company’s obligation to perform under each contract. As currently assessed, the total value of such Strategic Commercial Contracts with Investees or associated entities was $492.7 million as of December 31, 2022, which is inclusive of $63.7 million of contractual options. The Company performs ongoing assessments of customers’ financial condition, including the consideration of customers’ ability and intention to pay, and whether all or some portion of the value of such contracts continue to meet the criteria for revenue recognition, among other factors. As of December 31, 2022, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $166.6 million, of which $118.4 million of revenue was recognized during the year ended December 31, 2022.

Alternative Investments

During the year ended December 31, 2021, the Company purchased $50.9 million in 100-ounce gold bars. The gold bars are kept in a secure third-party facility located in the northeastern United States. The Company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice. Net unrealized losses related to alternative investments, which are recorded within other income (expense), net on the consolidated statements of operations, were not material for the years ended December 31, 2022 and 2021.

- Definition

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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