Fair Value Measurements | 4. Fair Value Measurements We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. 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 near the measurement date; 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 fair value of our money market funds was determined based on “Level 1” inputs. The fair value of certificates of deposit, U.S. Treasury and agency bonds, and corporate bonds were determined based on “Level 2” inputs. The valuation techniques used to measure the fair value of certificates of deposit included observable market-based inputs for similar assets, which primarily include yield curves and time-to-maturity factors. The valuation techniques used to measure the fair value of U.S. Treasury and agency bonds and corporate bonds included standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets or benchmark securities and data provided by third parties as many of the bonds are not actively traded. There were no marketable securities measured on a recurring basis in the “Level 3” category. We have not elected the fair value option as prescribed by ASC 825, The Fair Value Option for Financial Assets and Financial Liabilities Instruments Measured at Fair Value on a Recurring Basis. As of September 30, 2017 Gross Cash and Unrealized Cash Short-term Long-term Cost Gains (Losses) Fair Value Equivalents Investments Investments Cash $ 89,377 $ — $ 89,377 $ 89,377 $ — $ — Level 1: Money market funds 6,399 — 6,399 6,399 — — Subtotal 6,399 — 6,399 6,399 — — Level 2: Certificates of deposit 2,584 — 2,584 — 2,584 — U.S. Treasury and agency bonds 52,537 (78 ) 52,459 — 27,569 24,890 Corporate bonds 31,790 (32 ) 31,758 — 30,659 1,099 Subtotal 86,911 (110 ) 86,801 — 60,812 25,989 Level 3 — — — — — — Total $ 182,687 $ (110 ) $ 182,577 $ 95,776 $ 60,812 $ 25,989 As of December 31, 2016 Gross Cash and Unrealized Cash Short-term Long-term Cost Gains (Losses) Fair Value Equivalents Investments Investments Cash $ 10,499 $ — $ 10,499 $ 10,499 $ — $ — Level 1: Money market funds 20,807 — 20,807 20,807 — — Subtotal 20,807 — 20,807 20,807 — — Level 2: — Certificates of deposit 10,552 — 10,552 — 10,552 — Corporate bonds 10,770 72 10,842 — 10,842 — Subtotal 21,322 72 21,394 — 21,394 — Level 3 — — — — — — Total $ 52,628 $ 72 $ 52,700 $ 31,306 $ 21,394 $ — There were no transfers between Level 1, Level 2, or Level 3 securities during the nine months ended September 30, 2017. As of September 30, 2017, there were 28 securities with a fair value of $77.9 million in an unrealized loss position for less than 12 months. The gross unrealized losses of $0.1 million as of September 30, 2017 were due to changes in market rates, and we have determined the losses are temporary in nature. All the long-term investments had maturities of between one and two years in duration as of September 30, 2017. Cash and cash equivalents, restricted cash, and investments as of September 30, 2017 and December 31, 2016 held domestically were approximately $166.9 million and $52.9 million, respectively. Contingent Consideration. The following table presents a reconciliation of the beginning and ending balances of acquisition-related accrued contingent consideration using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2017 (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Beginning balance $ 1,318 $ — $ — $ — Obligations assumed — — 1,160 — Change in fair value 32 — 190 — Settlement (375 ) — (375 ) — Ending balance $ 975 $ — $ 975 $ — Upon the achievement of certain milestones in connection with our acquisition of Semanta, we released 12,492 shares of Class A common stock to the former shareholders of Semanta in the nine months ended September 30, 2017. In addition, 4,824 shares were earned, but held back for customary indemnification matters in accordance with the acquisition agreement, and the value of the shares is presented within additional paid-in capital in the condensed consolidated balance sheet as of September 30, 2017. Subject to any indemnification claims that may arise during the indemnification period, these shares will be issued to the former shareholders upon the completion of the indemnification period. Instruments Not Recorded at Fair Value on a Recurring Basis. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis. |