Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 2023

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, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents:
Money market funds	$	576,565	$	576,565	$	—	$	—
U.S. treasury securities	10,079		—		10,079		—
Certificates of deposit	938		—		938		—
Prepaid expenses and other current assets and other assets:
Certificates of deposit	4,777		—		4,777		—
Marketable securities:
U.S. treasury securities	2,824,861		—		2,824,861		—
Publicly-traded equity securities	18,271		18,271		—		—
Total	$	3,435,491	$	594,836	$	2,840,655	$	—


	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		—
Prepaid expenses and other current assets and other assets:
Certificates of deposit	18,707		—		18,707		—
Marketable securities:
Publicly-traded equity securities	35,135		35,135		—		—
Total	$	1,209,935	$	1,184,437	$	25,498	$	—

Certificates of Deposit

The Company’s certificates of deposit are Level 2 instruments. 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.

Debt Securities

As of December 31, 2023, available-for-sale debt securities consisted of the following (in thousands):


	As of December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. treasury securities	$	2,831,505	$	4,520	$	(1,085)	$	2,834,940
Total debt securities	$	2,831,505	$	4,520	$	(1,085)	$	2,834,940
Included in cash and cash equivalents	$	10,078	$	1	$	—	$	10,079
Included in marketable securities	$	2,821,427	$	4,519	$	(1,085)	$	2,824,861

The Company sold $694.6 million of available-for-sale debt securities during the fiscal year ended December 31, 2023 and immediately reinvested such proceeds into additional available-for-sale debt securities. The realized gains and losses from those sales were immaterial. No credit or non-credit losses related to available-for sale debt securities were recorded as of December 31, 2023. As of December 31, 2023, available-for-sale debt securities of $236.0 million were in an unrealized loss position primarily due to unfavorable changes in interest rates subsequent to initial purchase. None of the available-for-sale debt securities held as of December 31, 2023 were in a continuous unrealized loss position for greater than 12 months. The decline in fair value below amortized cost basis was not considered other than temporary as it is more likely than not that the Company will hold the securities until maturity or a recovery of the cost basis, and no credit-related impairment losses were recorded as of December 31, 2023. All of the Company’s U.S. treasury securities had contractual maturities due within one year as of December 31, 2023.

As of December 31, 2022, the Company held an immaterial amount of debt securities.

Equity Securities

The Company has equity securities consisting of shares held in publicly-traded companies, which are recorded at fair market value each reporting period within marketable securities in the consolidated balance sheets. Additionally, we have accepted, and may continue to accept, securities as noncash consideration. Total equity securities received as noncash consideration was $41.7 million, $6.8 million, and an immaterial amount during the years ended December 31, 2023, 2022, and 2021, respectively. Realized and unrealized gains and losses are recorded in other income (expense), net in 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 and an immaterial amount during the years ended December 31, 2022 and 2021, respectively, for its publicly-traded equity securities. For the years ended December 31, 2023,

2022, and 2021 net unrealized losses from publicly-traded equity securities held at the end of each period were $4.5 million, $197.3 million, and $72.8 million respectively.

The Company also has equity securities in privately-held companies without readily determinable fair values that are recorded using the measurement alternative. As of December 31, 2023 and December 31, 2022, the total amount of privately-held equity securities included in other assets on the consolidated balance sheets was $32.6 million and $24.4 million, respectively. The Company classifies these fair value measurements as Level 3 within the fair value hierarchy. The Company did not record any material adjustments or impairments for the privately-held equity securities held as of December 31, 2023 and December 31, 2022.

Investments

From 2021 through 2022, the Company 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, 2022, the Company purchased shares for a total investment of $124.5 million. No Investments were purchased under such Investment Agreements during the fiscal year ended December 31, 2023.

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”). 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 Strategic Commercial Contracts was $376.5 million as of December 31, 2023, which is inclusive of $40.4 million of contractual options. The original terms of the Strategic Commercial Contracts with remaining deal value as of December 31, 2023, including contractual options, range from two years to seven years and are subject to termination for cause provisions. 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, 2023, the cumulative amount of revenue recognized from Strategic Commercial Contracts was $253.9 million, of which $87.3 million of revenue was recognized during the year ended December 31, 2023.

Alternative Investments

During the year ended December 31, 2021, the Company purchased $50.9 million in 100-ounce gold bars. During the year ended December 31, 2023, the Company sold all of its gold bars for total proceeds of $51.1 million and recorded an immaterial realized gain within other income (expense), net in the consolidated statements of operations.

- 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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