Fair Value Measurements and Marketable Securities (Tables)

12 Months Ended

Jan. 31, 2020

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The Company’s fair value hierarchy for its financial assets and liabilities that are measured at fair value on a recurring basis are as follows:


	January 31, 2020
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents⁽¹⁾
Money market funds	$	205,379	$	—	$	—	$	205,379
Corporate debt securities	—		39,940		—		39,940
Total cash equivalents	205,379		39,940		—		245,319
Marketable securities
Corporate debt securities	—		495,022		—		495,022
US Treasury securities	84,431		—		—		84,431
Asset backed securities	—		67,813		—		67,813
Total marketable securities	84,431		562,835		—		647,266


Total assets	$	289,810	$	602,775	$	—	$	892,585

______________________________

(1)Included in “Cash and cash equivalents” on the consolidated balance sheets.


	January 31, 2019
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents⁽¹⁾
Money market funds	$	42,132	$	—	$	—	$	42,132
Corporate debt securities	—		27,941		—		27,941
Total cash equivalents	42,132		27,941		—		70,073
Marketable securities
Corporate debt securities	—		91,796		—		91,796
U.S. treasury securities	11,451		—		—		11,451
Total marketable securities	11,451		91,796		—		103,247
Total assets	$	53,583	$	119,737	$	—	$	173,320
Liability
Contingent consideration related to business combinations⁽²⁾	$	—	$	—	$	474	$	474
Redeemable convertible preferred stock warrant liability⁽³⁾	—		—		4,537		4,537
Total liabilities	$	—	$	—	$	5,011	$	5,011

______________________________

(1)Included in “Cash and cash equivalents” on the consolidated balance sheets.

(2)The contingent consideration consists of development milestone payments. The fair value of the contingent consideration was estimated by developing the risk-adjusted discounted value as well as discounted probability-weighted expected payments. That measure is based on Level 3 inputs which are significant inputs that are not observable in the market. Key assumptions at the acquisition date included (a) a discount rate range of 3%-3.02% and (b) three probability-adjusted milestone payments, each $0.2 million. As of January 31, 2019, the first milestone payment of $0.2 million had been made. During the year ended January 31, 2020, the remaining milestones were deemed not probable of being paid and the remaining contingent consideration of $0.5 million was written off to Other income (expense), net.

(3)Immediately prior to the closing of the IPO on June 14, 2019, the redeemable convertible preferred stock warrants converted into 336,386 warrants to purchase Class B common stock on a one-to-one basis. The redeemable convertible preferred stock warrant liability was reclassified to additional paid-in capital. Within the same month, the Company received notice from the holders of 336,386 warrants as to their intentions to exercise the warrants for shares of common stock of the Company. Such shares were settled via net settlement method, which was elected by the holders to reduce the number of shares issued upon exercise to reflect net settlement of the exercise price, resulting in the issuance of 322,278 shares of the Company’s common stock.

Marketable Securities

The following table presents the contractual maturities of marketable securities as of January 31, 2020:


	Amortized cost		Fair value
	(in thousands)
Due in one year or less	$	377,722	$	378,408
Due after one year through five years	266,670		267,728
Due after five years through nineteen years	1,127		1,130

	$	645,519	$	647,266

Schedule of Strategic Investments

The following summarizes the changes in strategic investments:


	Year Ended January 31
	2020
	(in thousands)
Total initial cost	$	1,000
Cumulative gain	—
Carrying value	$	1,000

There was no unrealized gain and loss included as an adjustment to the carrying value related to non-marketable securities as of January 31, 2020.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following summarizes the changes in the redeemable convertible preferred stock warrant liability, which is classified as a Level 3 instrument:


	Year Ended January 31
	2020		2019		2018
	(in thousands)
Balance at beginning of period	$	4,537	$	961	$	568
Additions	—		—		129
Adjustment resulting from change in fair value recognized in the consolidated statement of operations	6,022		3,576		264
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon IPO	(10,559)		—		—
Balance at end of period	$	—	$	4,537	$	961