Personalis, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Sensitivity The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates or exchange rates. As of March 31, 2022, we had cash and cash equivalents of $91.6 million, consisting of cash held in bank accounts and money market funds denominated in U.S. dollars. Cash equivalents also include commercial paper, corporate debt securities, and U.S. treasuries, which are highly liquid marketable debt securities with maturities at the time of purchase of three months or less. As of March 31, 2022, we held short-term marketable debt securities of $175.0 million, consisting of U.S. agency bonds, commercial paper, corporate bonds, U.S. treasuries, non-U.S. government securities, and asset-backed securities. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of interest rates in the United States. As of March 31, 2022, a hypothetical 100 basis point increase in interest rates would have resulted in an approximate $0.9 million decline in the fair value of our marketable debt securities and a hypothetical 100 basis point decrease in interest rates would have resulted in an approximate $0.8 million increase in the fair value of our marketable debt securities. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur. A 100 basis point change in interest rates would not have a material effect on the fair market value of our cash and cash equivalents, exclusive of the marketable debt securities. We do not enter into investments for trading purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Foreign Currency Risk The majority of our revenue, expense, and capital purchasing activities are transacted in U.S. dollars. An insignificant portion of our operations consists of activities outside of the U.S. transacted in other currencies, primarily the Chinese renminbi and British pound. To date, our results of operations and cash flows are not materially impacted by foreign currency movements. As we expand our presence in the international market, our results of operations and cash flows are expected to increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.