Stratasys Ltd. Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Fair Value Measurement

Fair Value Measurement

12 Months Ended

Dec. 31, 2023

Note 5. Fair Value Measurement

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, on its consolidated balance sheets:


	Dec 31, 2023				Dec 31, 2022
	(U.S. $ in thousands)				(U.S. $ in thousands)

Assets:	Level 2		Level 3		Level 2		Level 3
Foreign exchange forward contracts not
designated as hedging instruments	$	164	$	—	$	159	$	—
Foreign exchange forward contracts
designated as hedging instruments	2,087		—		3		—
Convertible notes	—		7,018				1,894
Liabilities:
Foreign exchange forward contracts not
designated as hedging instruments	(51)		—		(38)		—
Foreign exchange forward contracts
designated as hedging instruments	(657)		—		(1,640)		—
Contingent consideration6	—		(18,603)				(38,341)
	$	1,543	$	(11,585)	$	(1,516)	$	(36,447)

The fair value measurement for marketable securities is classified as Level 1 and amounts to $2.0 million and $2.8 million, as of December 31, 2023 and December 31, 2022, respectively.

The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).

Contingent consideration represents liabilities recorded at fair value in connection with acquisitions, and thus represents a Level 3 measurement within the fair value hierarchy (refer to Note 2).

Other financial instruments consist mainly of cash and cash equivalents, short term deposits, current and non-current receivables, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values.

The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs:


	Dec 31, 2023		Dec 31, 2022
	(U.S. $ in thousands)
Fair value at the beginning of the period	$	38,341	$	55,919
Acquisitions	3,009		—
Revaluation of Contingent considerations	(21,408)		(14,824)
Settlements of Contingent considerations	(1,339)		(2,754)
Fair value at the end of the period	$	18,603	$	38,341

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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