Fair value measurements
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value | | Level 1 | | Level 2 | | Level 3 |
| Cash equivalents: | | | | | | | |
| Money market funds | $ | 59,857 | | | $ | 59,857 | | | $ | — | | | $ | — | |
| Corporate debt securities | 11,476 | | | — | | | 11,476 | | | — | |
| U.S. government debt securities | 3,000 | | | — | | | 3,000 | | | — | |
| Marketable securities: | | | | | | | |
| Corporate debt securities | 176,614 | | | — | | | 176,614 | | | — | |
| U.S. Treasury securities | 29,130 | | | — | | | 29,130 | | | — | |
| U.S. government debt securities | 16,753 | | | — | | | 16,753 | | | — | |
| Total cash equivalents and marketable securities | $ | 296,830 | | | $ | 59,857 | | | $ | 236,973 | | | $ | — | |
The following table sets forth the fair value of the Company’s financial assets by level within the fair value hierarchy at December 31, 2024 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value | | Level 1 | | Level 2 | | Level 3 |
| Cash equivalents: | | | | | | | |
| Money market funds | $ | 46,219 | | | $ | 46,219 | | | $ | — | | | $ | — | |
| U.S. Treasury securities | 9,043 | | | — | | | 9,043 | | | — | |
| | | | | | | |
| Marketable securities: | | | | | | | |
| Corporate debt securities | 186,931 | | | — | | | 186,931 | | | — | |
| U.S. Treasury securities | 18,302 | | | — | | | 18,302 | | | — | |
| U.S. government debt securities | 6,531 | | | — | | | 6,531 | | | — | |
| Total cash equivalents and marketable securities | $ | 267,026 | | | $ | 46,219 | | | $ | 220,807 | | | $ | — | |
The Company classifies its money market funds, which are valued based on quoted market prices in active markets, with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
Marketable securities consist of U.S. Treasury securities, U.S. government debt securities, and corporate debt securities, all of which are classified as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities. Marketable securities are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined using models or other valuation methodologies on a recurring basis.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.