Revolution Medicines, Inc. Fair Value Disclosure
4. Fair value measurements
The following table presents information about the Company’s financial assets that are measured at fair value and indicates the fair value hierarchy of the valuation:
|
|
December 31, 2025 |
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|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
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||||
|
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(in thousands) |
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Assets: |
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|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
369,376 |
|
|
$ |
369,376 |
|
|
$ |
— |
|
|
$ |
— |
|
Commercial paper |
|
|
75,080 |
|
|
|
— |
|
|
|
75,080 |
|
|
|
— |
|
U.S. government and agency securities |
|
|
690,683 |
|
|
|
— |
|
|
|
690,683 |
|
|
|
— |
|
Corporate bonds |
|
|
889,057 |
|
|
|
— |
|
|
|
889,057 |
|
|
|
— |
|
Total |
|
$ |
2,024,196 |
|
|
$ |
369,376 |
|
|
$ |
1,654,820 |
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities |
|
|
18,546 |
|
|
|
10,376 |
|
|
|
8,170 |
|
|
|
— |
|
Total |
|
$ |
18,546 |
|
|
$ |
10,376 |
|
|
$ |
8,170 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
December 31, 2024 |
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|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
409,233 |
|
|
$ |
409,233 |
|
|
$ |
— |
|
|
$ |
— |
|
Commercial paper |
|
|
245,658 |
|
|
|
— |
|
|
|
245,658 |
|
|
|
— |
|
Certificates of deposit |
|
|
9,048 |
|
|
|
— |
|
|
|
9,048 |
|
|
|
— |
|
U.S. government and agency securities |
|
|
1,051,754 |
|
|
|
— |
|
|
|
1,051,754 |
|
|
|
— |
|
Corporate bonds |
|
|
571,654 |
|
|
|
— |
|
|
|
571,654 |
|
|
|
— |
|
Total |
|
$ |
2,287,347 |
|
|
$ |
409,233 |
|
|
$ |
1,878,114 |
|
|
$ |
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities |
|
|
3,189 |
|
|
|
1,784 |
|
|
|
1,405 |
|
|
|
— |
|
Total |
|
$ |
3,189 |
|
|
$ |
1,784 |
|
|
$ |
1,405 |
|
|
$ |
— |
|
Money market funds are measured at fair value on a recurring basis using quoted prices. U.S. government debt securities, government agency bonds, certificates of deposit, commercial paper and corporate bonds are measured at fair value, which is derived from independent pricing sources based on quoted prices in active markets for similar securities.
There were no transfers between Levels 1, 2 or 3 for any of the periods presented.
The fair value of the warrant liabilities was based on observable listed prices for such warrants. The fair value of the public warrants is categorized as Level 1. The fair value of the private warrants is categorized as Level 2 as they are equivalent to the public warrants as they have substantially the same terms; however, they are not actively traded.
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.