v3.25.2
Fair Value Measurements, Cash Equivalents and Marketable Securities
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements, Cash Equivalents and Marketable Securities Fair Value Measurements, Cash Equivalents and Marketable Securities
Financial instruments consist of cash equivalents, marketable securities, accounts receivable, net, prepaid expenses and other current assets, net, and accounts payable and accrued liabilities. Cash equivalents and marketable securities are stated at fair value. Prepaid expenses and other current assets, net, and accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.
Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. 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.
A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows:
June 30, 2025
Fair ValueLevel 1Level 2Level 3
(unaudited)
(in thousands)
Financial Assets:
Money market funds
$564,274 $564,274 $— $— 
Income deposit funds105,686 — 105,686 — 
Total cash equivalents and restricted cash
$669,960 $564,274 $105,686 $— 
Financial Liabilities:
Contingent consideration
$4,770 $— $— $4,770 
Total
$4,770 $— $— $4,770 
December 31, 2024
Fair ValueLevel 1Level 2Level 3
(in thousands)
Financial Assets:
Money market funds
$57,151 $57,151 $— $— 
Income deposit funds103,581 — 103,581 — 
U.S. government debt securities
429,294 — 429,294 — 
Total cash equivalents and restricted cash
$590,026 $57,151 $532,875 $— 
U.S. government debt securities
$314,438 $— $314,438 $— 
Total short-term marketable debt securities
$314,438 $— $314,438 $— 
Total
$904,464 $57,151 $847,313 $— 
Financial Liabilities:
Contingent consideration
$6,050 $— $— $6,050 
Total
$6,050 $— $— $6,050 
The Company measures the fair value of money market funds based on quoted prices in active markets for identical securities. Income deposit funds and U.S. government debt securities are valued taking into consideration valuations obtained from third-party pricing services. 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 securities, issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.
In July 2022, one of the Company's equity investees, Lunit Inc., or Lunit, completed its initial public offering, or IPO, subsequent to which, the Company started to account for the investment in Lunit at fair value on a recurring basis, and classified the investment as marketable equity securities within Level 1 of the fair value hierarchy as the investment is valued using the quoted market price. The Company was subject to a 2-year lock-up period from Lunit's IPO date, during which the Company shall not transfer Lunit's shares between accounts, establish or cancel pledges, sell, or withdraw such shares, without approval from the Korea Exchange. In November 2023, Lunit issued bonus shares to its existing shareholders by allocating one new share for each existing share, and the Company was subject to the same lock-up period with the same restrictions for these bonus shares which expired in July 2024. In the second half of 2024, the Company sold all of its investment in Lunit. In addition, the Company recorded $15.5 million and $45.5 million unrealized losses for the three and six months ended June 30, 2024 on its investment in Lunit, included in other income (expense), net on the Company's condensed consolidated statements of operations.
There were no transfers between Level 1, Level 2 and Level 3 during the periods presented.
Acquisition-related contingent consideration is measured at fair value on a quarterly basis and changes in estimated contingent consideration to be paid are included in general and administrative expense in the condensed consolidated statements of operations. The fair value of acquisition-related contingent consideration is estimated using a multiple-outcome discounted cash flow valuation technique. Contingent consideration is classified within Level 3 of the fair value hierarchy, as it is based on a probability that includes significant unobservable inputs. The significant unobservable inputs include a probability-weighted estimate of achievement of certain commercialization milestones, and discount rate to present value the expected payments. A significant change in any of these input factors in isolation could have a material impact to fair value measurement. As of June 30, 2025 and December 31, 2024, the Company's acquisition-related contingent consideration liability was $4.8 million and $6.1 million, respectively, of which zero and $2.1 million was considered long-term and recorded within other long-term liabilities on the Company's condensed consolidated balance sheets.
The following table summarizes the activities for the Level 3 financial instruments:
Contingent Consideration
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(unaudited)
(in thousands)
Fair value — beginning of period$6,540 $6,660 $6,050 $6,540 
Increase in fair value 230 300 720 420 
Settlement(2,000)— (2,000)— 
Fair value — end of period$4,770 $6,960 $4,770 $6,960 
The Company considers the fair value of the Convertible Notes as of June 30, 2025, and December 31, 2024, to be a Level 2 measurement. The fair value of the Convertible Notes is primarily affected by the trading price of the Company's common stock and market interest rates. As such, the carrying value of the Convertible Notes does not reflect the market rate. See Note 6, Debt, for additional information related to the fair values of the Convertible Notes.
The following tables summarize the Company’s cash equivalents, restricted cash and marketable debt securities’ amortized costs, gross unrealized gains, gross unrealized losses and estimated fair values by significant investment category:
June 30, 2025
Amortized CostGross Unrealized GainGross Unrealized LossEstimated Fair Value
(unaudited)
(in thousands)
Money market funds
$564,274 $— $— $564,274 
Income deposit funds105,686 — — 105,686 
Total
$669,960 $— $— $669,960 
December 31, 2024
Amortized CostGross Unrealized GainGross Unrealized LossEstimated Fair Value
(in thousands)
Money market funds
$57,151 $— $— $57,151 
Income deposit funds
103,581 — — 103,581 
U.S. government debt securities
743,500 232 — 743,732 
Total
$904,232 $232 $— $904,464 
None of the Company’s marketable debt securities had been in a continuous unrealized loss position for more than one year as of June 30, 2025 and December 31, 2024, respectively. There have been no realized gains or losses and no recognition of credit losses on marketable debt securities for the periods presented.