v3.25.2
INVESTMENTS AND FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
INVESTMENTS AND FAIR VALUE MEASUREMENT INVESTMENTS AND FAIR VALUE MEASUREMENTS
Accounting Standards Codification (ASC) 820 “Fair Value Measurement” (“ASC 820”) defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable:

Level 1:
Quoted prices in active markets for identical assets or liabilities;
Level 2:
Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and
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 following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis for the periods presented below (in thousands):

Total Carrying ValueLevel 1Level 2Level 3
June 30, 2025
Assets:    
Funds held for clients
Money market funds$3,283 $3,283 $— $— 
Available-for-sale securities73,826 — 73,826 — 
Total$77,109 $3,283 $73,826 $— 
December 31, 2024
Assets:
Funds held for clients
Money market funds$8,105 $8,105 $— $— 
Available-for-sale securities68,328 — 68,328 — 
Total$76,433 $8,105 $68,328 $— 
Cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following for the periods presented below (in thousands):
Amortized
Cost
Gross
Unrealized
Gains (1)
Gross
Unrealized
Losses (1)
Aggregate
Estimated
Fair Value
June 30, 2025
Cash equivalents$3,291 $— $(8)$3,283 
Available-for-sale securities:
Corporate debt securities66,537 378 (244)66,671 
Municipal bonds2,006 — (49)1,957 
U.S. Government agency securities5,180 24 (6)5,198 
Total available-for-sale securities73,723 402 (299)73,826 
Total(2)
$77,014 $402 $(307)$77,109 
December 31, 2024
Cash equivalents$8,115 $— $(10)$8,105 
Available-for-sale securities:
Corporate debt securities63,253 164 (619)62,798 
Municipal bonds3,194 — (104)3,090 
U.S. Government agency securities2,449 6 (15)2,440 
Total available-for-sale securities68,896 170 (738)68,328 
Total(2)
$77,011 $170 $(748)$76,433 

(1)Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of June 30, 2025, and December 31, 2024, there were 88 and 45 securities, respectively, in an unrealized gain position and there were 52 and 89 securities in an unrealized loss position, respectively. As of June 30, 2025, these unrealized losses were less than $24 individually and $299 in the aggregate. As of December 31, 2024, these unrealized losses were less than $38 individually and $738 in the aggregate. We invest in high quality securities with roughly 69% of our portfolio made up of A ratings and above with unrealized losses primarily attributable to macroeconomic factors rather than credit related. We have no material individual securities that have been in a continuous unrealized loss position greater than twelve months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible credit losses. Factors considered in determining whether a loss is a credit loss include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

(2)At June 30, 2025 and December 31, 2024, none of these securities were classified as cash and cash equivalents on the accompanying Condensed Consolidated Balance Sheets.

Funds held for clients represent assets that we have classified for use solely for the purposes of satisfying the obligations to remit funds relating to our payroll and payroll tax filing services, which are classified as client funds obligations on our Condensed Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories for the periods presented below (in thousands):
June 30, 2025December 31, 2024
Restricted cash and cash equivalents held to satisfy client funds obligations$140,146 $124,287 
Restricted short-term marketable securities held to satisfy client funds obligations14,033 5,273 
Restricted long-term marketable securities held to satisfy client funds obligations59,793 63,055 
Total funds held for clients$213,972 $192,615 
Expected maturities of available-for-sale securities are as of June 30, 2025, are as follows (in thousands):
One year or less$14,033 
After one year through five years59,793 
Total$73,826