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UNITED STATES  
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 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 or  
  
 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  
  
For the transition period from ________________ to ________________    
Commission file number:  000-25426  
    https://cdn.kscope.io/e4452c4f48ed63449b9638df229a96d1-nati-20210630_g1.jpg
NATIONAL INSTRUMENTS CORPORATION  
(Exact name of registrant as specified in its charter)  
Delaware74-1871327
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
  
11500 North MoPac Expressway 
Austin,78759
Texas
(Address of principal executive offices) (Zip code)
 
Registrant's telephone number, including area code:  (512) 683-0100  
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of exchange on which registered
Common Stock, $0.01 par valueNATINasdaq Stock 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  
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.  
ClassOutstanding at July 29, 2021
Common Stock, $0.01 par value132,980,932
1


NATIONAL INSTRUMENTS CORPORATION
INDEX  
Page No.
  
 
  
 
June 30, 2021 (unaudited) and December 31, 2020
  
 
(unaudited) for the three and six months ended June 30, 2021 and 2020
  
 
(unaudited) for the three and six months ended June 30, 2021 and 2020
  
 
(unaudited) for the six months ended June 30, 2021 and 2020
(unaudited) for the three and six months ended June 30, 2021 and 2020
  
  
  
  
  
  
 
  
  
  
  
  
2


PART I - FINANCIAL INFORMATION  

ITEM 1. Financial Statements
NATIONAL INSTRUMENTS CORPORATION  
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30,December 31,
20212020
Assets(unaudited) 
Cash and cash equivalents$250,421 $260,232 
Short-term investments14,110 59,923 
Accounts receivable, net258,641 266,869 
Inventories, net211,023 194,012 
Prepaid expenses and other current assets80,121 68,470 
Total current assets814,316 849,506 
Property and equipment, net250,761 254,399 
Goodwill483,136 467,547 
Intangible assets, net149,126 172,719 
Operating lease right-of-use assets57,812 67,674 
Other long-term assets76,878 72,643 
Total assets$1,832,029 $1,884,488 
Liabilities and stockholders' equity  
Accounts payable and accrued expenses$56,477 $51,124 
Accrued compensation68,932 87,068 
Deferred revenue - current125,986 132,151 
Operating lease liabilities - current13,389 15,801 
Other taxes payable39,339 48,129 
Debt, current 5,000 
Other current liabilities26,854 42,578 
Total current liabilities330,977 381,851 
Deferred income taxes28,359 25,288 
Income tax payable - non-current54,195 61,623 
Deferred revenue - non-current34,624 36,335 
Operating lease liabilities - non-current29,512 35,854 
Debt, non-current100,000 92,036 
Other long-term liabilities18,710 26,630 
Total liabilities596,377 659,617 
Commitments and contingencies
Stockholders' equity:  
Preferred stock:  par value $0.01;  5,000,000 shares authorized; none issued and outstanding 
  
Common stock:  par value $0.01;  360,000,000 shares authorized; 132,980,932 shares and 131,246,615 shares issued and outstanding, respectively 
1,330 1,312 
Additional paid-in capital1,087,622 1,033,284 
Retained earnings161,475 211,101 
Accumulated other comprehensive loss(14,775)(20,826)
Total stockholders’ equity1,235,652 1,224,871 
Total liabilities and stockholders’ equity$1,832,029 $1,884,488 
The accompanying notes are an integral part of the financial statements. 

3


NATIONAL INSTRUMENTS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)  
  
Three Months EndedSix Months Ended
June 30,June 30,
2021202020212020
    
Net sales:    
Product$306,490 $266,261 $601,583 $540,239 
Software maintenance40,206 35,068 80,295 70,470 
Total net sales346,696 301,329 681,878 610,709 
    
Cost of sales:    
Product95,722 83,795 187,379 165,866 
Software maintenance3,516 2,106 7,273 3,796 
Total cost of sales99,238 85,901 194,652 169,662 
    
Gross profit247,458 215,428 487,226 441,047 
    
Operating expenses:    
Sales and marketing111,199 105,419 227,983 221,165 
Research and development81,434 64,225 161,520 135,846 
General and administrative30,277 29,369 63,636 55,549 
Total operating expenses222,910 199,013 453,139 412,560 
Gain on sale of business/assets   159,753 
Operating income24,548 16,415 34,087 188,240 
    
Other expense(2,963)(1,143)(8,031)(583)
Income before income taxes21,585 15,272 26,056 187,657 
Provision for income taxes4,279 4,383 4,254 44,113 
    
Net income$17,306 $10,889 $21,802 $143,544 
    
Basic earnings per share$0.13 $0.08 $0.17 $1.10 
    
Weighted average shares outstanding - basic132,498 131,014 131,996 130,813 
    
Diluted earnings per share$0.13 $0.08 $0.16 $1.09 
    
Weighted average shares outstanding - diluted133,539 131,602 133,157 131,499 
    
Dividends declared per share$0.27 $0.26 $0.54 $0.52 
The accompanying notes are an integral part of these financial statements. 
4


NATIONAL INSTRUMENTS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)  
Three Months EndedSix Months Ended
June 30,June 30,
2021202020212020
    
Net income$17,306 $10,889 $21,802 $143,544 
Other comprehensive income (loss), before tax and net of reclassification adjustments:    
Foreign currency translation adjustment2,284 3,938 (4,911)(1,975)
Unrealized (loss) gain on securities available-for-sale(54)2,634 (141)(154)
Unrealized gain (loss) on derivative instruments2,381 (74)14,362 (598)
Other comprehensive income (loss), before tax4,611 6,498 9,310 (2,727)
Tax expense (benefit) related to items of other comprehensive income498 (56)3,259 68 
Other comprehensive income (loss), net of tax4,113 6,554 6,051 (2,795)
Comprehensive income$21,419 $17,443 $27,853 $140,749 
The accompanying notes are an integral part of these financial statements.

5


NATIONAL INSTRUMENTS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)  
Six Months Ended
June 30,
20212020
Cash flow from operating activities:  
Net income$21,802 $143,544 
Adjustments to reconcile net income to net cash provided by operating activities:  
Disposal gain on sale of business/assets (159,753)
Depreciation and amortization50,024 38,341 
Stock-based compensation37,208 27,335 
Loss from equity-method investees5,360 1,932 
Deferred income taxes1,301 2,711 
Changes in operating assets and liabilities(63,372)47,388 
Net cash provided by operating activities52,323 101,498 
  
Cash flow from investing activities:  
Acquisitions, net of cash received(19,784) 
Capital expenditures(17,411)(25,362)
Proceeds from sale of assets/business, net of cash divested 160,266 
Capitalization of internally developed software(721)(3,108)
Additions to other intangibles(1,519)(630)
Payments to acquire equity-method investments(12,551) 
Purchases of short-term investments (206,330)
Sales and maturities of short-term investments45,671 306,955 
Net cash (used in) provided by investing activities(6,315)231,791 
 
Cash flow from financing activities:  
Proceeds from revolving line of credit100,000 20,000 
Proceeds from term loan 70,000 
Payments on term loan(98,750) 
Debt issuance costs(1,993)(1,480)
Proceeds from issuance of common stock17,239 17,252 
Repurchase of common stock (23,680)
Dividends paid(71,428)(68,156)
Net cash (used in) provided by financing activities(54,932)13,936 
  
Effect of exchange rate changes on cash(887)(636)
  
Net change in cash and cash equivalents(9,811)346,589 
Cash and cash equivalents at beginning of period260,232 194,616 
Cash and cash equivalents at end of period$250,421 $541,205 
 
The accompanying notes are an integral part of these financial statements.   

6



NATIONAL INSTRUMENTS CORPORATION  
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data and per share data)
(unaudited)
June 30, 2021
(Unaudited)
Common Stock SharesCommon Stock AmountAdditional-Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Stockholders' Equity
Balance at March 31, 2021131,607,036 $1,316 $1,059,018 $180,063 $(18,888)$1,221,509 
Net income— — — 17,306 — 17,306 
Other comprehensive income, net of tax— — — — 4,113 4,113 
Issuance of common stock under employee plans1,373,896 14 8,660 — — 8,674 
Stock-based compensation— — 19,944 — — 19,944 
Dividends paid (1)— — — (35,894)— (35,894)
Balance at June 30, 2021132,980,932 1,330 1,087,622 161,475 (14,775)1,235,652 
Common Stock SharesCommon Stock AmountAdditional-Paid in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders' Equity
Balance at December 31, 2020131,246,615 1,312 1,033,284 211,101 (20,826)1,224,871 
Net income— — — 21,802 — 21,802 
Other comprehensive loss, net of tax— — — — 6,051 6,051 
Issuance of common stock under employee plans1,734,317 18 17,221 — — 17,239 
Stock-based compensation— — 37,117 — — 37,117 
Dividends paid (1)— — — (71,428)— (71,428)
Balance at June 30, 2021132,980,932 $1,330 $1,087,622 $161,475 $(14,775)$1,235,652 
(1) Cash dividends declared per share of common stock were $0.27 for the three months ended June 30, 2021, and $0.54 for the six months ended June 30, 2021.
 
The accompanying notes are an integral part of these financial statements. 
7



June 30, 2020
(Unaudited)
Common Stock SharesCommon Stock AmountAdditional-Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Stockholders' Equity
Balance at March 31, 2020130,595,203 $1,306 $973,354 $335,876 $(30,419)$1,280,117 
Net income— — — 10,889 — 10,889 
Other comprehensive gain, net of tax— — — — 6,554 6,554 
Issuance of common stock under employee plans1,344,231 13 8,248 — — 8,261 
Stock-based compensation— — 15,130 — — 15,130 
Repurchase of common stock(503,326)(5)(3,674)(13,474)— (17,153)
Dividends paid (1)— — — (34,159)— (34,159)
Balance at June 30, 2020131,436,108 1,314 993,058 299,132 (23,865)1,269,639 
Common Stock SharesCommon Stock AmountAdditional-Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income/(Loss)Total Stockholders' Equity
Balance at December 31, 2019130,504,535 1,305 953,578 242,537 (21,070)1,176,350 
Net income— — — 143,544 — 143,544 
Other comprehensive loss, net of tax— — — — (2,795)(2,795)
Issuance of common stock under employee plans1,599,772 16 17,236 — — 17,252 
Stock-based compensation— — 27,124 — — 27,124 
Repurchase of common stock(668,199)(7)(4,880)(18,793)— (23,680)
Dividends paid (1)— — — (68,156)— (68,156)
Balance at June 30, 2020131,436,108 $1,314 $993,058 $299,132 $(23,865)$1,269,639 
(1) Cash dividends declared per share of common stock were $0.26 for the three months ended June 30, 2020, and $0.52 for the six months ended June 30, 2020.

The accompanying notes are an integral part of these financial statements.
8





NATIONAL INSTRUMENTS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
  
Note 1 – Basis of presentation  
  
The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2020, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 23, 2021 (the "Form 10-K"). In our opinion, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly our financial position at June 30, 2021 and December 31, 2020, the results of our operations and comprehensive income for three and six months ended June 30, 2021 and 2020, our cash flows for the six months ended June 30, 2021 and 2020 and our statement of stockholders' equity for the three and six months ended June 30, 2021 and 2020. Our operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

Recently Adopted Accounting Pronouncements

Clarification of Equity Method Transition

In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815,” which clarifies the interaction of the accounting for equity investments under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We adopted ASU 2020-01 on January 1, 2021, and the new standard did not have a material impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

Although there are several other accounting pronouncements recently issued by the FASB, we do not expect the adoption of any of these accounting pronouncements had or will have a material impact on our consolidated financial statements.

Summary of Significant Accounting Policies

There were no changes in our significant accounting policies during the three and six months ended June 30, 2021 compared to the significant accounting policies described in our Form 10-K.

Divestitures

AWR

On January 15, 2020, we completed the sale of our AWR Corporation subsidiary ("AWR") for approximately $161 million. We recognized a gain of approximately $160 million on the sale. The gain is included within "Gain on sale of business/assets" in the consolidated statements of income, which also included approximately $1 million of transaction costs.


9


The divestiture of AWR resulted in the derecognition of the following assets and liabilities (in thousands):

Cash$1,027 
Accounts receivable, net7,233 
Prepaid and other current assets283 
Goodwill7,221 
Other non-current assets556 
Total Assets16,320 
Deferred revenue15,296 
Other current liabilities940 
Cumulative translation adjustment(660)
Total liabilities and stockholders' equity15,576 
Total assets divested, net (including cash)$744 

Other (Expense) Income

Other expense, net consisted of the following amounts (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
(Unaudited)(Unaudited)
2021202020212020
Interest income$113 $1,011 $274 $3,310 
Interest expense(1,224)(66)(1,927)(142)
Loss from equity-method investments(867)(907)(5,360)(1,932)
Net foreign exchange loss(896)(838)(1,455)(1,343)
Other(89)(343)437 (476)
Other expense, net$(2,963)$(1,143)$(8,031)$(583)

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which includes restricted stock units ("RSUs"), is computed using the treasury stock method. The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the three and six months ended June 30, 2021 and 2020 are as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
(Unaudited)(Unaudited)
2021202020212020
Weighted average shares outstanding-basic132,498 131,014 131,996 130,813 
Plus: Common share equivalents    
RSUs1,041 588 1,161 686 
Weighted average shares outstanding-diluted133,539 131,602 133,157 131,499 
Shares issuable upon vesting of RSU awards of 1,369,000 shares and 1,206,000 shares for the three months ended June 30, 2021 and 2020, respectively, and 166,000 shares and 249,000 shares for the six months ended June 30, 2021 and 2020, respectively, were excluded in the computations of diluted EPS because the effect of including the stock awards would have been anti-dilutive.
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Other Current Liabilities

Other current liabilities on our consolidated balance sheet includes the following amounts (in thousands):
As of June 30, 2021As of December 31,
(unaudited)2020
Income taxes payable - current$ $13,720 
Hedge payable - current7,671 13,031 
Other19,183 15,827 
Total$26,854 $42,578 


Note 2 - Revenue

Revenue Recognition

Revenue is recognized upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of our products or services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Disaggregation of Revenues

We disaggregate revenue from contracts with customers based on the timing of transfer of goods or services to customers (point-in-time or over time) and geographic region based on the billing location of the customer. We sell our products in the following three geographic regions: the Americas; Europe, Middle East and Africa region ("EMEA"); and Asia-Pacific region ("APAC").

Total net sales based on the disaggregation criteria described above are as follows:
Three Months Ended June 30,
(In thousands)(Unaudited)
20212020
Net sales:
Point-in-Time(1)
Over TimeTotal
Point-in-Time(1)
Over TimeTotal
Americas$112,215 $22,455 $134,670 $103,113 $18,595 $121,708 
EMEA67,252 21,917 89,169 56,203 18,453 74,656 
APAC111,894 10,963 122,857 94,419 10,546 104,965 
Total net sales(1)
$291,361 $55,335 $346,696 $253,735 $47,594 $301,329 
(1) Net sales contains hedging gains and losses, which do not represent revenues recognized from customers.
See Note - 5 Derivative instruments and hedging activities of Notes to Consolidated Financial Statements for more information on the impact of our hedging activities on our results of operations.
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Six Months Ended June 30,
(In thousands)(Unaudited)
20212020
Net sales:
Point-in-Time(1)
Over TimeTotal
Point-in-Time(1)
Over TimeTotal
Americas$216,801 $44,602 $261,403 $208,412 $38,313 $246,725 
EMEA132,355 42,336 174,691 123,896 37,489 161,385 
APAC224,524 21,260 245,784 181,607 20,992 202,599 
Total net sales(1)
$573,680 $108,198 $681,878 $513,915 $96,794 $610,709 
(1) Net sales contains hedging gains and losses, which do not represent revenues recognized from customers.
See Note - 5 Derivative instruments and hedging activities of Notes to Consolidated Financial Statements for more information on the impact of our hedging activities on our results of operations.

Information about Contract Balances

Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of our deferred revenue balance is related to extended hardware and software maintenance contracts. Payment terms and conditions vary by contract type, although payment is typically due within 30 to 90 days of contract inception. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers, such as invoicing at the beginning of a subscription term with a portion of the revenue recognized ratably over the contract period, or to provide customers with financing, such as multi-year on-premises licenses that are invoiced annually with revenue recognized upfront.

Changes in deferred revenue, current and non-current, during the six months ended June 30, 2021 were as follows:
Amount
(In thousands)
Balance as of December 31, 2020$168,486 
Deferral of revenue billed in current period, net of recognition78,324 
Recognition of revenue deferred in prior periods(83,991)
Foreign currency translation impact(2,209)
Balance as of June 30, 2021 (unaudited)$160,610 

For the six months ended June 30, 2021, revenue recognized from performance obligations satisfied in prior periods (for example, due to changes in transaction price) was not material. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables which are anticipated to be invoiced in the next twelve months are included in "Other current assets" on the consolidated balance sheet. Based on the nature of our contracts with customers, we do not typically recognize unbilled receivables related to revenues recognized in excess of amounts billed. For the six months ended June 30, 2021, the amounts recorded that were related to unbilled receivables were not material.

Unsatisfied Performance Obligations

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less and contracts where revenue is recognized as invoiced, was approximately $62 million as of June 30, 2021. Since we typically invoice customers at contract inception, this amount is included in our current and non-current deferred revenue balances. As of June 30, 2021, we expect to recognize approximately 27% of the revenue related to these unsatisfied performance obligations during the remainder of 2021, 40% during 2022, and 33% thereafter.



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Assets Recognized from the Costs to Obtain a Contract with a Customer

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Capitalized incremental costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another. Total capitalized costs to obtain a contract were not material during the periods presented and are included in other long-term assets on our consolidated balance sheets.

Note 3 – Short-term investments  
  
The following tables summarize unrealized gains and losses related to our short-term investments designated as available-for-sale debt securities:
As of June 30, 2021
(In thousands)(Unaudited)
 GrossGross 
Adjusted CostUnrealized GainUnrealized LossFair Value
Corporate bonds$14,089 $21 $ $14,110 
Total short-term investments$14,089 $21 $ $14,110 
(In thousands)As of December 31, 2020
 GrossGross 
Adjusted CostUnrealized GainUnrealized LossFair Value
Corporate bonds$59,761 $163 $(1)$59,923 
Total short-term investments$59,761 $163 $(1)$59,923 

The following tables summarize the contractual maturities of our short-term investments designated as available-for-sale debt securities:
As of June 30, 2021
(In thousands)(Unaudited)
Due in less than 1 yearAdjusted CostFair Value
Corporate bonds$14,089 $14,110 
Total available-for-sale debt securities$14,089 $14,110 

Equity-Method Investments

The carrying value of our equity method investments was $33 million and $25 million as of June 30, 2021 and December 31, 2020, respectively. During the first quarter of 2021, we determined there was an other than temporary impairment for one of our equity-method investments, based on revised forecasts. We recorded a $3.5 million impairment loss related to this investment during the three months ended March 31, 2021. Our proportionate share of the income/(loss) from equity-method investments is included within "Other expense". Refer to Note 1 - Basis of Presentation of Notes to Consolidated Financial Statements for additional information on these amounts for the three and six months ended June 30, 2021 and 2020.

13


        
Note 4 – Fair value measurements 
We define fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market that market participants may use when pricing the asset or liability.   
We follow a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value measurement is determined based on the lowest level input that is significant to the fair value measurement. The three values of the fair value hierarchy are the following:   
Level 1 – Quoted prices in active markets for identical assets or liabilities   
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly   
Level 3 – Inputs that are not based on observable market data   
Assets and liabilities measured at fair value on a recurring basis are summarized below:
Fair Value Measurements at Reporting Date Using
(In thousands)(Unaudited)
DescriptionJune 30, 2021Level 1Level 2Level 3
Assets    
Cash and cash equivalents:    
Money market funds$133,432 $133,432 $ $ 
Short-term investments available for sale:    
Corporate bonds14,110  14,110  
Derivatives8,164  8,164