Fair Value Measurements

6 Months Ended

Jan. 31, 2023

We measure our financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Our money market funds are classified within Level I due to the highly liquid nature of these assets and have quoted prices in active markets. Certain of our investments in available-for-sale securities (i.e., U.S. treasury securities, U.S. government agency securities and corporate debt securities), as well as our assets and liabilities arising from our foreign currency forward contracts, are classified within Level II. The fair value of our Level II financial assets and liabilities is determined by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments, for substantially the full term of the financial assets and liabilities.

Assets and liabilities that are measured at fair value on a recurring basis as of January 31, 2023, consisted of the following:


			Level I		Level II		Level III
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs

Cash equivalents:	(in thousands)
Money market funds	$	436,581	$	436,581	$	—	$	—
U.S. treasury securities	26,931		—		26,931		—
U.S. government agency securities	369,245		—		369,245		—
Corporate debt securities	117,303		—		117,303		—
Total cash equivalents	$	950,060	$	436,581	$	513,479	$	—

Short-term investments:
U.S. treasury securities	$	31,573	$	—	$	31,573	$	—
U.S. government agency securities	269,807		—		269,807		—
Corporate debt securities	346,952		—		346,952		—
Total short-term investments	$	648,332	$	—	$	648,332	$	—

Total cash equivalents and short-term investments	$	1,598,392	$	436,581	$	1,161,811	$	—

Designated derivative instruments:
Foreign currency contracts assets-current (1)	$	7,770	$	—	$	7,770	$	—
Foreign currency contract assets-noncurrent (2)	$	5,368	$	—	$	5,368	$	—
Foreign currency contracts liabilities-current (3)	$	4,084	$	—	$	4,084	$	—
Foreign currency contracts liabilities-noncurrent (4)	$	145	$	—	$	145	$	—

Non-designated derivative instruments:
Foreign currency contracts assets-current (1)	$	617	$	—	$	617	$	—
Foreign currency contracts liabilities-current (3)	$	2,309	$	—	$	2,309	$	—

(1) Included within prepaid expenses and other current assets in the condensed consolidated balance sheets.

(2) Included within other noncurrent assets in the condensed consolidated balance sheets.

(3) Included within accrued expenses and other current liabilities in the condensed consolidated balance sheets.

(4) Included within other noncurrent liabilities in the condensed consolidated balance sheets.

Assets that are measured at fair value on a recurring basis consisted of the following as of July 31, 2022:


			Level I		Level II		Level III
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs

Cash equivalents:	(in thousands)
Money market funds	$	247,613	$	247,613	$	—	$	—
U.S. treasury securities	202,708		—		202,708		—
U.S. government agency securities	135,489		—		135,489		—
Corporate debt securities	106,272		—		106,272		—
Total	$	692,082	$	247,613	$	444,469	$	—
Short-term investments:
U.S. treasury securities	$	95,848	$	—	$	95,848	$	—
U.S. government agency securities	333,335		—		333,335		—
Corporate debt securities	288,946		—		288,946		—
Total	$	718,129	$	—	$	718,129	$	—

Total cash equivalents and short-term investments	$	1,410,211	$	247,613	$	1,162,598	$	—

Designated derivative instruments:
Foreign currency contracts assets-current (1)	$	178	$	—	$	178	$	—
Foreign currency contract assets-noncurrent (2)	$	17	$	—	$	17	$	—
Foreign currency contracts liabilities-current (3)	$	10,921	$	—	$	10,921	$	—
Foreign currency contracts liabilities-noncurrent (4)	$	588	$	—	$	588	$	—

Non-designated derivative instruments:
Foreign currency contracts assets-current (1)	$	452	$	—	$	452	$	—
Foreign currency contracts liabilities-current (3)	$	3,427	$	—	$	3,427	$	—

(1) Included within prepaid expenses and other current assets in the consolidated balance sheets.

(2) Included within other noncurrent assets in the consolidated balance sheets.

(3) Included within accrued expenses and other current liabilities in the consolidated balance sheets.

(4) Included within other noncurrent liabilities in the consolidated balance sheets.

We did not have transfers between levels of the fair value hierarchy of assets measured at fair value during the periods presented.

Refer to Note 8, Convertible Senior Notes, for the carrying amount and estimated fair value of our convertible senior notes as of January 31, 2023 and July 31, 2022.

- 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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