We define fair value 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. 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.

•Level 2 - Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; 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. These inputs are based on our own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

We measure our cash equivalents and marketable securities at fair value on a recurring basis. We classify these assets within Level 1 or Level 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. Our fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of our marketable securities were derived from non-binding market consensus prices that are corroborated by observable market data or quoted market prices for similar instruments.

The following tables summarize these assets by significant investment categories and their classification within the fair value hierarchy and in our condensed consolidated balance sheets at the end of fiscal 2026 and the first quarter of fiscal 2027 (in thousands):


	At the End of Fiscal 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities
Level 1
Money market accounts	$	—	$	—	$	—	$	297,462	$	297,462	$	—
Level 2
U.S. government treasury notes	289,069		790		(95)		289,764		19,387		270,377
U.S. government agencies	9,194		148		(1)		9,341		—		9,341
Corporate debt securities	335,347		2,341		(1)		337,687		—		337,687
Foreign government bonds	6,555		3		—		6,558		—		6,558
Asset-backed securities	47,768		324		—		48,092		—		48,092
Municipal bonds	20,381		18		(8)		20,391		—		20,391
Total	$	708,314	$	3,624	$	(105)	$	1,009,295	$	316,849	$	692,446


	At the End of the First Quarter of Fiscal 2027
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities
Level 1
Money market accounts	$	—	$	—	$	—	$	601,223	$	601,223	$	—

Level 2
U.S. government treasury notes	303,873		212		(967)		303,118		47,196		255,922
U.S. government agencies	9,193		200		—		9,393		—		9,393
Corporate debt securities	338,355		997		(280)		339,072		—		339,072
Foreign government bonds	1,484		—		(1)		1,483		—		1,483
Asset-backed securities	41,974		114		(27)		42,061		—		42,061
Municipal bonds	19,075		1		(52)		19,024		—		19,024
Total	$	713,954	$	1,524	$	(1,327)	$	1,315,374	$	648,419	$	666,955

The amortized cost and estimated fair value of our marketable securities are shown below by contractual maturity (in thousands):


	At the End of the First Quarter of Fiscal 2027
	Amortized Cost		Fair Value
Due within one year	$	220,882	$	221,528
Due in one to five years	445,683		445,234
Due in five to ten years	193		193
Total	$	666,758	$	666,955

Unrealized losses on our marketable securities have not been recorded into income because we do not intend to sell nor is it more likely than not that we will be required to sell these investments prior to recovery of their amortized cost basis. The fair value of our marketable securities is impacted by the interest rate environment and related credit spreads. The credit ratings associated with our marketable securities are highly rated and the issuers continue to make timely principal and interest payments. As a result, there were no credit or non-credit impairment charges recorded in the first quarter of fiscal 2026 and 2027. The following table presents the fair values and gross unrealized losses for those investments that were in a continuous unrealized loss position at the end of fiscal 2026 and the first quarter of fiscal 2027, aggregated by investment category (in thousands):


	At the End of Fiscal 2026
	Less than 12 months
	Fair Value		Unrealized Loss
U.S. government treasury notes	$	85,422	$	(95)
U.S. government agencies	2,999		(1)
Corporate debt securities	942		(1)
Foreign government bonds	2,970		—

Municipal bonds	6,610		(8)
Total	$	98,943	$	(105)


	At the End of the First Quarter of Fiscal 2027
	Less than 12 months
	Fair Value		Unrealized Loss
U.S. government treasury notes	$	175,407	$	(967)

Corporate debt securities	71,614		(280)
Foreign government bonds	1,483		(1)
Asset-backed securities	13,394		(27)
Municipal bonds	15,917		(52)
Total	$	277,815	$	(1,327)

Strategic investments primarily include equity investments in privately-held companies without readily determinable fair values and in which we do not own a controlling interest or exercise significant influence. At the end of fiscal 2026 and the first quarter of 2027, the carrying amount of these investments was $14.1 million, included primarily in other assets, non-current in our condensed consolidated balance sheets.

Strategic investments that are remeasured due to an observable event or impairment are classified as Level 3 in the fair value hierarchy as nonrecurring fair value measurements may include observable and unobservable inputs. No remeasurements occurred during the first quarter of fiscal 2026 and 2027.

The investments held in our nonqualified deferred compensation plan trust are considered trading securities that are measured at fair value using Level 1 inputs. The fair value of these investments was $15.9 million and $19.6 million at the end of fiscal 2026 and the first quarter of fiscal 2027.