INVESTMENTS AND FAIR VALUE MEASUREMENTS | 3 INVESTMENTS AND FAIR VALUE MEASUREMENTS Marketable Securities We invest surplus funds in excess of operational requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns, maintaining a high degree of liquidity, and seeking to avoid the permanent impairment of principal. We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, we will record an impairment charge and establish a new cost basis for the investment. Marketable securities as of September 30, 2023 December 31, 2022 September 30, 2023 Cost or Amortized Cost Unrealized Gains Unrealized Losses Fair Value Marketable equity securities Mutual funds $ 13,009 $ — $ (1,381 ) $ 11,628 Equity securities 69,253 3,087 (7,437 ) 64,903 Total marketable equity securities 82,262 3,087 (8,818 ) 76,531 Marketable debt securities U.S. treasury securities 58,237 808 (87 ) 58,958 Corporate bonds 16,123 273 (33 ) 16,363 Total marketable debt securities 74,360 1,081 (120 ) 75,321 $ 156,622 $ 4,168 $ (8,938 ) $ 151,852 December 31, 2022 Cost or Amortized Cost Unrealized Gains Unrealized Losses Fair Value Marketable equity securities Mutual funds $ 26,352 $ — $ (3,143 ) $ 23,209 Equity securities 53,273 2,776 (5,836 ) 50,213 Total marketable equity securities 79,625 2,776 (8,979 ) 73,422 Marketable debt securities U.S. treasury securities 25,640 182 (24 ) 25,798 Corporate bonds 13,496 48 (106 ) 13,438 Total marketable debt securities 39,136 230 (130 ) 39,236 $ 118,761 $ 3,006 $ (9,109 ) $ 112,658 The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of September 30, 2023 (in thousands) are as follows: September 30, 2023 Amortized Cost Fair Value Less than 1 $ 44,691 $ 45,466 1 5 29,669 29,855 Total $ 74,360 $ 75,321 Derivative Financial Instruments Our derivative instruments consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 Cost Unrealized Losses Fair Value Derivative instruments $ 9,306 $ 2,383 $ 11,689 $ 9,306 $ 2,383 $ 11,689 December 31, 2022 Cost Unrealized Losses Fair Value Derivative instruments $ 2,987 $ 662 $ 3,649 $ 2,987 $ 662 $ 3,649 A summary of realized and unrealized gains and losses from our equity securities and derivative instruments are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net unrealized gains (losses) recognized on marketable equity securities $ (287 ) $ (9,278 ) $ 472 $ (14,062 ) Net realized gains (losses) recognized on marketable equity securities (2,588 ) (555 ) 3,643 218 Net unrealized gains (losses) recognized on derivative instruments (1,631 ) 3,907 (1,825 ) (696 ) Net realized gains recognized on derivative instruments (72 ) 2,214 2,165 4,089 Net realized gains recognized on marketable debt securities — 188 217 556 Total net gains (losses) recognized in interest and other income (loss), net $ (4,578 ) $ (3,524 ) $ 4,672 $ (9,895 ) Fair Value Measurements Our financial instruments measured at fair value on a recurring basis consisted of money-market funds, mutual funds, equity securities, corporate debt securities and derivatives. Equity securities are classified within Level 1 2 Financial instruments valued based on unobservable inputs which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument are generally classified within Level 3 3 September 30, 2023 , and December 31, 2022 . Financial instruments measured at fair value on a recurring basis as of September 30, 2023 December 31, 2022 are classified based on the valuation technique in the table below (in thousands): September 30, 2023 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1 Significant Other Observable Inputs (Level 2 Significant Unobservable Inputs (Level 3 Total Assets: U.S. treasury securities $ 58,958 $ — $ — $ 58,958 Mutual funds 11,628 — — 11,628 Equity securities 64,903 — — 64,903 Corporate bonds — 16,363 — 16,363 Total assets at fair value $ 135,489 $ 16,363 $ — $ 151,852 Liabilities Derivative instruments $ — $ 11,689 $ — $ 11,689 Total liabilities at fair value $ — $ 11,689 $ — $ 11,689 December 31, 2022 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1 Significant Other Observable Inputs (Level 2 Significant Unobservable Inputs (Level 3 Total Assets: Certificate of deposit $ — $ 5,300 $ — $ 5,300 U.S. treasury securities 25,798 — — 25,798 Mutual funds 23,209 — — 23,209 Equity securities 50,213 — — 50,213 Corporate bonds — 13,438 — 13,438 Total assets at fair value $ 99,220 $ 18,738 $ — $ 117,958 Liabilities Derivative instruments $ — $ 3,649 $ — $ 3,649 Total liabilities at fair value $ — $ 3,649 $ — $ 3,649 |