Fair Value Measurements
We define fair value as the 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 we use to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We classify the inputs used to measure fair value into the following hierarchy:
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| Level 1 | | Unadjusted quoted prices in active markets for identical assets or liabilities. |
| Level 2 | | Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability. |
| Level 3 | | Unobservable inputs for the asset or liability. |
Our financial assets measured at fair value on a recurring basis are summarized below by their classification within the fair value hierarchy as follows (in thousands):
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| | December 31, 2025 | | | |
| | Carrying Value | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | | | |
| Cash equivalents | | | | | | | | | | | | | | | | | | |
| Money market funds | $ | 15,563 | | | $ | 15,563 | | | $ | — | | | $ | — | | | $ | 15,563 | | | | | | | | | | |
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| Short-term marketable securities | | | | | | | | | | | | | | | | | | |
| Commercial paper | 3,495 | | | — | | | 3,495 | | | — | | | 3,495 | | | | | | | | | | |
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| Total assets measured at fair value | $ | 19,058 | | | $ | 15,563 | | | $ | 3,495 | | | $ | — | | | $ | 19,058 | | | | | | | | | | |
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| December 31, 2024 |
| Carrying Value | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | | | | | | | | | |
| Cash equivalents | | | | | | | | | |
| Money market funds | $ | 15,090 | | | $ | 15,090 | | | $ | — | | | $ | — | | | $ | 15,090 | |
| Commercial paper | 10,562 | | | — | | | 10,562 | | | — | | | 10,562 | |
| Government securities | 2,618 | | | — | | | 2,618 | | | — | | | 2,618 | |
| Short-term marketable securities | | | | | | | | | |
| Commercial paper | 17,799 | | | — | | | 17,799 | | | — | | | 17,799 | |
| Government securities | 25,244 | | | — | | | 25,244 | | | — | | | 25,244 | |
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| Total assets measured at fair value | $ | 71,313 | | | $ | 15,090 | | | $ | 56,223 | | | $ | — | | | $ | 71,313 | |
We endeavor to utilize the best available information in measuring fair value. Our money market funds are measured at fair value based on quoted prices in active markets and are classified as Level 1 within the fair value hierarchy. Our available for sale marketable securities, which include commercial paper and government securities with maturities of less than one year, are measured at fair value using quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs and are classified as Level 2 within the fair value hierarchy. There were no transfers between the hierarchy levels during either of the years ended December 31, 2025 or 2024.
The following table summarizes our cash equivalents and available-for-sale debt securities by contractual maturity (in thousands):
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| As of December 31, 2025 | | As of December 31, 2024 |
| Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
| Due in 1 year | $ | 19,058 | | | $ | 19,058 | | | $ | 71,297 | | | $ | 71,313 | |
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Unrealized gains and losses on available-for-sale debt securities that are not credit related are included in accumulated other comprehensive loss and summarized as follows (in thousands):
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| December 31, 2025 |
| Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value |
| Cash equivalents | | | | | | | |
| Money market funds | $ | 15,563 | | | $ | — | | | $ | — | | | $ | 15,563 | |
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| Short-term marketable securities | | | | | | | |
| Commercial paper | 3,495 | | | — | | | — | | | 3,495 | |
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| Total | $ | 19,058 | | | $ | — | | | $ | — | | | $ | 19,058 | |
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| December 31, 2024 | | |
| Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value | | |
| Cash equivalents | | | | | | | | | |
| Money market funds | $ | 15,090 | | | $ | — | | | $ | — | | | $ | 15,090 | | | |
| Commercial paper | 10,565 | | | — | | | (3) | | | 10,562 | | | |
Government securities | 2,618 | | | — | | | — | | | 2,618 | | | |
| Short-term marketable securities | | | | | | | | | |
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Government securities | 17,792 | | | 7 | | | — | | | 17,799 | | | |
| Corporate bond | 25,232 | | | 12 | | | — | | | 25,244 | | | |
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| Total | $ | 71,297 | | | $ | 19 | | | $ | (3) | | | $ | 71,313 | | | |
As of December 31, 2025, we had no securities in a net unrealized loss position. As of December 31, 2024, we had 11 securities in a net unrealized loss position that were immaterial individually and in aggregate. We did not record any credit losses regarding our available-for-sale debt securities during the year ended December 31, 2025 or 2024. We do not intend to sell these securities and it is more likely than not that we will not be required to sell these securities before the recovery of their amortized cost basis. We recognized interest income of $3.9 million and $7.2 million for the years ended December 31, 2025 and 2024, respectively.
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.