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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-37824

 

IMPINJ, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

91-2041398

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

400 Fairview Avenue North, Suite 1200, Seattle, Washington

 

98109

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (206) 517-5300

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

PI

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No 

As of July 16, 2021, 24,290,417 shares of common stock were outstanding.

 

 


Table of Contents

 

IMPINJ, INC.

QUARTERLY REPORT ON FORM 10-Q

 

Table of Contents

 

 

 

 

 

Page

 

 

Risk Factor Summary

 

       3  

 

 

 

 

 

 

 

PART I. — FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements (Unaudited)

 

4

 

 

Condensed Consolidated Balance Sheets

 

4

 

 

Condensed Consolidated Statements of Operations

 

5

 

 

Condensed Consolidated Statements of Comprehensive Loss

 

6

 

 

Condensed Consolidated Statements of Cash Flows

 

7

 

 

Condensed Consolidated Statements of Changes in Stockholders' Equity

 

8

 

 

Notes to Condensed Consolidated Financial Statements

 

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

30

Item 4.

 

Controls and Procedures

 

30

 

 

PART II. — OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

31

Item 1A.

 

Risk Factors

 

31

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

52

Item 3.

 

Defaults Upon Senior Securities

 

52

Item 4.

 

Mine Safety Disclosures

 

52

Item 5.

 

Other Information

 

52

Item 6.

 

Exhibits

 

53

 

 

Signatures

 

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2


Table of Contents

 

 

Risk Factor Summary

 

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report captioned “Risk

Factors.” These risks include the following:

 

 

if RAIN market adoption does not continue to develop, or develops slower than we expect, or if RAIN adoption by retailers does not continue at the rate we expect, our business will suffer;

 

our market is very competitive, and if we fail to compete successfully, our business and operating results will suffer;

 

an inability or limited ability of enterprise systems to exploit RAIN information may adversely affect the market for our products;

 

if end users or our direct customers fail to design our products into their products and systems, our operating results and prospects will be adversely affected;

 

alternative technologies or standards, or changes in existing technologies or standards, may adversely affect RAIN market growth and our business;

 

we obtain products we sell through third parties who operate outside of United States and with whom we do not have long-term supply contracts, and if we are unable to effectively manage our relationships with suppliers our operating results and financial condition would be adversely affected;

 

we are vulnerable to silicon wafer shortages, which may adversely affect our ability to meet demand for our products;

 

our products must meet demanding technical and quality specifications and failure of our products to operate as expected could have an adverse effect on our operating results;

 

Covid-19 has adversely affected our business, and the magnitude and duration of future Covid-19 effects on our business are uncertain;

 

we rely on a small number of customers for a large share of our revenues;

 

because we sell and fulfill through channel partners, our ability to affect or determine end-user demand is limited;

 

our growth strategy depends in part on the success of strategic relationships with third parties and their continued performance and alignment;

 

if we are unable to protect our intellectual property, then our business could be adversely affected;

 

we may become party to intellectual property disputes, which could be time consuming, costly to prosecute, defend or settle, result in the loss of significant rights, and adversely affect RAIN adoption generally;

 

we have a history of losses and have only achieved profitability intermittently, and we cannot be certain that we will attain or sustain profitability in the future;

 

we have a history of significant fluctuations in our quarterly and annual operating results;

 

servicing $86.3 million aggregate principal amount 2.00% convertible senior notes due 2026, or the 2019 Notes, may require a significant amount of cash, and we may not have sufficient cash flow or the ability to raise the funds necessary to satisfy our obligations under the 2019 Notes, and our current and future indebtedness may limit our operating flexibility or otherwise affect our business; and

 

our executive officers, directors, principal stockholders, together with their affiliates, beneficially owned approximately 29.5% of our outstanding common stock as of June 30, 2021, and as a result are able to exercise significant influence over matters subject to stockholder approval.

 

3


Table of Contents

 

 

PART I — FINANCIAL INFORMATION

 

Item 1.

Financial Statements (unaudited)

IMPINJ, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value, unaudited)

 

 

June 30, 2021

 

 

December 31, 2020

 

Assets:

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

51,175

 

 

$

23,636

 

Short-term investments

 

60,788

 

 

 

82,453

 

Accounts receivable, net

 

25,976

 

 

 

25,003

 

Inventory, net

 

24,064

 

 

 

36,329

 

Prepaid expenses and other current assets

 

3,670

 

 

 

3,943

 

Total current assets

 

165,673

 

 

 

171,364

 

Property and equipment, net

 

26,306

 

 

 

16,531

 

Operating lease right-of-use assets

 

13,001

 

 

 

13,761

 

Other non-current assets

 

2,561

 

 

 

2,079

 

Goodwill

 

3,881

 

 

 

3,881

 

Total assets

$

211,422

 

 

$

207,616

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

10,671

 

 

$

10,144

 

Accrued compensation and employee related benefits

 

5,951

 

 

 

5,529

 

Accrued and other current liabilities

 

2,245

 

 

 

1,468

 

Current portion of operating lease liabilities

 

3,901

 

 

 

3,641

 

Restructuring liabilities

 

630

 

 

 

 

Current portion of long-term debt

 

84,045

 

 

 

 

Current portion of deferred revenue

 

263

 

 

 

6,811

 

Total current liabilities

 

107,706

 

 

 

27,593

 

Long-term debt, net of current portion

 

 

 

 

54,556

 

Operating lease liabilities, net of current portion

 

13,870

 

 

 

15,266

 

Other long-term liabilities

 

803

 

 

 

805

 

Deferred revenue, net of current portion

 

272

 

 

 

277

 

Total liabilities

 

122,651

 

 

 

98,497

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at June 30, 2021 and December 31, 2020

 

 

 

 

 

Common stock, $0.001 par value — 495,000 shares authorized,24,254 and 23,350 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

24

 

 

 

23

 

Additional paid-in capital

 

418,289

 

 

 

423,759

 

Accumulated other comprehensive income

 

4

 

 

 

3

 

Accumulated deficit

 

(329,546

)

 

 

(314,666

)

Total stockholders' equity

 

88,771

 

 

 

109,119

 

Total liabilities and stockholders' equity

$

211,422

 

 

$

207,616

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

4


Table of Contents

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

$

47,268

 

 

$

26,457

 

 

$

92,516

 

 

$

74,279

 

Cost of revenue

 

22,491

 

 

 

13,497

 

 

 

45,758

 

 

 

39,925

 

Gross profit

 

24,777

 

 

 

12,960

 

 

 

46,758

 

 

 

34,354

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

15,900

 

 

 

10,661

 

 

 

29,691

 

 

 

21,718

 

Sales and marketing

 

8,196

 

 

 

6,123

 

 

 

15,841

 

 

 

13,613

 

General and administrative

 

8,998

 

 

 

12,446

 

 

 

17,152

 

 

 

18,688

 

Restructuring costs

 

 

 

 

 

 

 

1,263

 

 

 

 

Total operating expenses

 

33,094

 

 

 

29,230

 

 

 

63,947

 

 

 

54,019

 

Loss from operations

 

(8,317

)

 

 

(16,270

)

 

 

(17,189

)

 

 

(19,665

)

Other income (expense), net

 

(4

)

 

 

126

 

 

 

19

 

 

 

535

 

Interest expense

 

(525

)

 

 

(1,349

)

 

 

(1,050

)

 

 

(2,661

)

Loss before income taxes

 

(8,846

)

 

 

(17,493

)

 

 

(18,220

)

 

 

(21,791

)

Income tax expense

 

(60

)

 

 

(41

)

 

 

(102

)

 

 

(69

)

Net loss

$

(8,906

)

 

$

(17,534

)

 

$

(18,322

)

 

$

(21,860

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share — basic and diluted

$

(0.37

)

 

$

(0.77

)

 

$

(0.77

)

 

$

(0.97

)

Weighted-average shares outstanding — basic and diluted

 

24,120

 

 

 

22,716

 

 

 

23,895

 

 

 

22,564

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

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IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

$

(8,906

)

 

$

(17,534

)

 

$

(18,322

)

 

$

(21,860

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on investments

 

1

 

 

 

(47

)

 

 

1

 

 

 

24

 

Total other comprehensive income (loss)

 

1

 

 

 

(47

)

 

 

1

 

 

 

24

 

Comprehensive loss

$

(8,905

)

 

$

(17,581

)

 

$

(18,321

)

 

$

(21,836

)

 

 

See accompanying notes to condensed consolidated financial statements.

 

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IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(18,322

)

 

$

(21,860

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

2,076

 

 

 

2,294

 

Stock-based compensation

 

 

18,031

 

 

 

9,818

 

Accretion of discount or amortization of premium on short-term investments

 

 

468

 

 

 

19

 

Amortization of debt issuance costs and debt discount

 

 

188

 

 

 

1,793

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(973

)

 

 

8,281

 

Inventory

 

 

12,265

 

 

 

(2,938

)

Prepaid expenses and other assets

 

 

(186

)

 

 

364

 

Deferred revenue

 

 

(6,553

)

 

 

280

 

Accounts payable

 

 

(3,053

)

 

 

(1,229

)

Accrued compensation and employee related benefits

 

 

422

 

 

 

(937

)

Operating lease right-of-use assets

 

 

1,458

 

 

 

1,331

 

Operating lease liabilities

 

 

(1,834

)

 

 

(1,659

)

Accrued and other liabilities

 

 

364

 

 

 

7,252

 

Restructuring liabilities

 

 

630

 

 

 

 

Net cash provided by operating activities

 

 

4,981

 

 

 

2,809

 

Investing activities:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(19,825

)

 

 

(5,103

)

Proceeds from maturities of investments

 

 

41,000

 

 

 

31,275

 

Purchases of property and equipment

 

 

(7,858

)

 

 

(1,237

)

Net cash provided by investing activities

 

 

13,317

 

 

 

24,935

 

Financing activities:

 

 

 

 

 

 

 

 

Principal payments on finance lease obligations

 

 

(2

)

 

 

(183

)

Proceeds from exercise of stock options and employee stock purchase plan

 

 

9,243

 

 

 

3,029

 

Net cash provided by financing activities

 

 

9,241

 

 

 

2,846

 

Net increase in cash and cash equivalents

 

 

27,539

 

 

 

30,590

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

23,636

 

 

 

66,898

 

End of period

 

$

51,175

 

 

$

97,488

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cashflow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

863

 

 

$

858

 

Purchases of property and equipment not yet paid

 

 

5,069

 

 

 

464

 

 

See accompanying notes to condensed consolidated financial statements.

 

 


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IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Equity

 

Balance at December 31, 2020

 

 

23,350

 

 

$

23

 

 

$

423,759

 

 

$

(314,666

)

 

$

3

 

 

$

109,119

 

Cumulative-effect adjustment from adoption of ASU 2020-06

 

 

 

 

 

 

 

 

(32,743

)

 

 

3,442

 

 

 

 

 

 

(29,301

)

Issuance of common stock

 

 

702

 

 

 

1

 

 

 

8,523

 

 

 

 

 

 

 

 

 

8,524

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,449

 

 

 

 

 

 

 

 

 

7,449

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(9,416

)

 

 

 

 

 

(9,416

)

Balance at March 31, 2021

 

 

24,052

 

 

$

24

 

 

$

406,988

 

 

$

(320,640

)

 

$

3

 

 

$

86,375

 

Issuance of common stock

 

 

202

 

 

 

 

 

 

719

 

 

 

 

 

 

 

 

 

719

 

Stock-based compensation

 

 

 

 

 

 

 

 

10,582

 

 

 

 

 

 

 

 

 

10,582

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,906

)

 

 

 

 

 

(8,906

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Balance at June 30, 2021

 

 

24,254

 

 

 

24

 

 

 

418,289

 

 

 

(329,546

)

 

 

4

 

 

 

88,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Equity

 

Balance at December 31, 2019

 

 

22,217

 

 

$

22

 

 

$

387,926

 

 

$

(262,743

)

 

$

34

 

 

$

125,239

 

Issuance of common stock

 

 

460

 

 

 

1

 

 

 

2,013

 

 

 

 

 

 

 

 

 

2,014

 

Stock-based compensation

 

 

 

 

 

 

 

 

5,221

 

 

 

 

 

 

 

 

 

5,221

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,326

)

 

 

 

 

 

(4,326

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71

 

 

 

71

 

Balance at March 31, 2020

 

 

22,677

 

 

$

23

 

 

$

395,160

 

 

$

(267,069

)

 

$

105

 

 

$

128,219

 

Issuance of common stock

 

 

109

 

 

 

 

 

 

1,015

 

 

 

 

 

 

 

 

 

1,015

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,597

 

 

 

 

 

 

 

 

 

4,597

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(17,534

)

 

 

 

 

 

(17,534

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47

)

 

 

(47

)

Balance at June 30, 2020

 

 

22,786

 

 

 

23

 

 

 

400,772

 

 

 

(284,603

)

 

 

58

 

 

 

116,250

 

 

 

See accompanying notes to condensed consolidated financial statements.

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IMPINJ, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include Impinj, Inc. and its wholly owned subsidiaries. We have eliminated intercompany balances and transactions in consolidation. We have prepared these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020 included in Impinj, Inc.’s Annual Report on Form 10-K, which was filed with the SEC on February 17, 2021. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited consolidated financial statements of Impinj, Inc.

The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary to state fairly our financial position, results of operations, and our cash flows for the periods presented. Interim results are not necessarily indicative of the results for a full year or for any other future period.

Use of Estimates

Preparing financial statements in conformity with GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, sales incentives, estimates to complete development contracts, deferred revenue, inventory excess and obsolescence, income taxes, determination of the fair value of stock awards and compensation and employee-related benefits. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected. Covid-19 has introduced significant additional uncertainty with respect to estimates, judgments and assumptions about current and forecasted demand, which may materially impact the estimates previously listed, among others.

Recently Adopted Accounting Standards

In August 2020, the FASB issued guidance on debt with conversion and other options, or ASU 2020-06. This guidance eliminates the beneficial- and cash-conversion accounting models for convertible instruments and amends the derivative scope exception for contracts in an entity’s own equity. Additionally, this guidance requires the application of the “if-converted” method to calculate the impact of convertible instruments on diluted earnings per share. We adopted ASU 2020-06 on January 1, 2021 using the modified retrospective transition method and accounted for our convertible notes due 2026, or the 2019 Notes, on a whole-instrument basis. Upon adoption, we recorded a $29.3 million increase to long-term debt, a $32.7 million decrease to additional paid-in capital and a $3.4 million decrease to accumulated deficit on January 1, 2021. Interest expense decreased for the three and six months ended June 30, 2021, as we no longer separate an equity component of the 2019 Notes and incurred amortization of debt discount. We had no changes to net deferred tax liabilities with a decrease in deferred tax liability offset by a corresponding increase in valuation allowance upon adoption. We use the “if-converted” method to calculate the impact of convertible instruments on diluted earnings per share for the three and six months ended June 30, 2021, upon adoption of this guidance.

The condensed consolidated financial statements as of and for the three and six months ended June 30, 2021, are presented under ASU 2020-06, while comparative prior reporting periods presented are not adjusted and continue to be reported in accordance with our historical accounting policy.

Recently Issued Accounting Standards Not Yet Adopted

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not have, or are not expected to have, a material impact on our present or future consolidated financial statements.

 

 

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Table of Contents

 

 

Note 2. Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

 

Level 1 — Quoted prices in active markets for identical assets or liabilities.

 

Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

 

Level 3 — Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

We applied the following methods and assumptions in estimating our fair value measurements:

Cash Equivalents — Cash equivalents consist of highly liquid investments, including money market funds with original maturities of less than three months at the acquisition date. We record the fair value measurement of these assets based on quoted market prices in active markets.

Investments — Our investments consist of fixed income securities, which typically include U.S. government agency securities, treasury bills, commercial paper, money market funds, corporate notes and bonds and asset-backed securities. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Long-term Debt — See Note 6 for the carrying amount and estimated fair value of our convertible senior notes due 2026.

The following table presents the balances of assets measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands):

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Cash equivalents: