Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 26, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Square, Inc. | |
Entity Central Index Key | 0001512673 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 336,267,871 | |
Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 86,698,955 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 521,676 | $ 583,173 |
Short-term investments | 566,539 | 540,991 |
Restricted cash | 33,220 | 33,838 |
Settlements receivable | 1,391,078 | 364,946 |
Customer funds | 445,417 | 334,017 |
Loans held for sale | 123,471 | 89,974 |
Other current assets | 185,121 | 164,966 |
Total current assets | 3,266,522 | 2,111,905 |
Property and equipment, net | 133,706 | 142,402 |
Goodwill | 267,012 | 261,705 |
Acquired intangible assets, net | 79,697 | 77,102 |
Long-term investments | 481,063 | 464,680 |
Restricted cash | 14,433 | 15,836 |
Built-to-suit lease asset | 0 | 149,000 |
Operating lease right-of-use assets | 111,956 | |
Other non-current assets | 48,202 | 58,393 |
Total assets | 4,402,591 | 3,281,023 |
Current liabilities: | ||
Customers payable | 1,661,894 | 749,215 |
Settlements payable | 266,121 | 54,137 |
Accrued transaction losses | 36,047 | 33,682 |
Accrued expenses | 87,812 | 82,354 |
Operating lease liabilities, current | 23,041 | 0 |
Other current liabilities | 108,644 | 99,153 |
Total current liabilities | 2,183,559 | 1,018,541 |
Long-term debt, net of current portion (Note 12) | 909,302 | 899,695 |
Built-to-suit lease liability | 0 | 149,000 |
Operating lease liabilities, non-current | 112,556 | |
Other non-current liabilities | 75,585 | 93,286 |
Total liabilities | 3,281,002 | 2,160,522 |
Commitments and contingencies (Note 17) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at March 31, 2019 and December 31, 2018. None issued and outstanding at March 31, 2019 and December 31, 2018. | 0 | 0 |
Additional paid-in capital | 2,048,938 | 2,012,328 |
Accumulated other comprehensive loss | (3,424) | (6,053) |
Accumulated deficit | (923,925) | (885,774) |
Total stockholders’ equity | 1,121,589 | 1,120,501 |
Total liabilities and stockholders’ equity | 4,402,591 | 3,281,023 |
Class A | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Class B | ||
Stockholders’ equity: | ||
Common stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Preferred stock, par value (in USD per share) | $ 0.00 | $ 0.00 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.00 | $ 0.00 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 334,650,231 | 323,546,864 |
Common stock, shares outstanding (in shares) | 334,650,231 | 323,546,864 |
Class B | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.00 | $ 0.00 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 86,973,715 | 93,501,142 |
Common stock, shares outstanding (in shares) | 86,973,715 | 93,501,142 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Revenue | $ 959,359 | $ 668,603 |
Cost of revenue: | ||
Total cost of revenue | 562,605 | 413,433 |
Gross profit | 396,754 | 255,170 |
Operating expenses: | ||
Product development | 153,559 | 105,095 |
Sales and marketing | 133,713 | 77,266 |
General and administrative | 101,598 | 75,501 |
Transaction, loan and advance losses | 27,841 | 18,031 |
Amortization of acquired customer assets | 2,085 | 269 |
Total operating expenses | 418,796 | 276,162 |
Operating loss | (22,042) | (20,992) |
Interest expense, net | 4,681 | 2,112 |
Other expense, net | 11,299 | 707 |
Loss before income tax | (38,022) | (23,811) |
Provision for income taxes | 129 | 175 |
Net loss | $ (38,151) | $ (23,986) |
Net loss per share: | ||
Basic (in USD per share) | $ (0.09) | $ (0.06) |
Diluted (in USD per share) | $ (0.09) | $ (0.06) |
Weighted-average shares used to compute net loss per share | ||
Basic (in shares) | 419,289 | 395,948 |
Diluted (in shares) | 419,289 | 395,948 |
Technology assets | ||
Cost of revenue: | ||
Amortization of acquired technology | $ 1,376 | $ 1,580 |
Transaction-based revenue | ||
Revenue: | ||
Revenue | 656,762 | 523,037 |
Cost of revenue: | ||
Cost of revenue | 409,069 | 327,911 |
Subscription and services-based revenue | ||
Revenue: | ||
Revenue | 190,307 | 77,215 |
Revenue | 218,857 | 97,054 |
Cost of revenue: | ||
Cost of revenue | 60,523 | 30,368 |
Hardware revenue | ||
Revenue: | ||
Revenue | 18,212 | 14,417 |
Cost of revenue: | ||
Cost of revenue | 26,941 | 19,702 |
Bitcoin revenue | ||
Revenue: | ||
Revenue | 65,528 | 34,095 |
Cost of revenue: | ||
Cost of revenue | $ 64,696 | $ 33,872 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (38,151) | $ (23,986) |
Net foreign currency translation adjustments | 266 | 549 |
Net unrealized gain on revaluation of intercompany loans | 75 | 665 |
Net unrealized gain (loss) on marketable debt securities, net of tax | 2,288 | (1,190) |
Total comprehensive loss | $ (35,522) | $ (23,962) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (38,151) | $ (23,986) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 18,971 | 10,160 |
Non-cash interest and other expense | 8,224 | 4,847 |
Share-based compensation | 61,088 | 46,824 |
Loss on revaluation of equity investment | 14,087 | 0 |
Amortization of operating lease right-of-use assets and accretion of operating lease liabilities | 6,690 | |
Recovery of common stock in connection with indemnification settlement agreement | (789) | 0 |
Transaction, loan and advance losses | 27,841 | 18,031 |
Change in deferred income taxes | (754) | (654) |
Changes in operating assets and liabilities: | ||
Settlements receivable | (1,027,472) | (81,452) |
Customer funds | (109,439) | (49,619) |
Purchase of loans held for sale | (507,755) | (344,976) |
Sales and principal payments of loans held for sale | 467,518 | 337,092 |
Other current assets | (19,327) | (13,444) |
Other non-current assets | (2,527) | (1,256) |
Customers payable | 912,749 | 147,977 |
Settlements payable | 211,984 | 2,114 |
Charge-offs to accrued transaction losses | (17,443) | (12,842) |
Accrued expenses | 15,721 | 2,703 |
Other current liabilities | 16,991 | 5,155 |
Payments for operating lease liabilities | (9,293) | |
Other non-current liabilities | 3,530 | 5,379 |
Net cash provided by operating activities | 32,444 | 52,053 |
Cash flows from investing activities: | ||
Purchase of marketable debt securities | (193,673) | (50,221) |
Proceeds from maturities of marketable debt securities | 111,505 | 45,450 |
Proceeds from sale of marketable debt securities | 44,810 | 0 |
Purchase of marketable debt securities from customer funds | (34,613) | 0 |
Proceeds from maturities of marketable debt securities from customer funds | 33,000 | 0 |
Purchase of property and equipment | (18,168) | (8,083) |
Payments for other investments | (2,000) | 0 |
Purchase of intangible assets | 0 | (1,584) |
Business combinations, net of cash acquired | (11,248) | (1,055) |
Net cash used in investing activities | (70,387) | (15,493) |
Cash flows from financing activities: | ||
Payment of deferred purchase consideration | (95) | 0 |
Principal payments on finance lease obligation | (1,284) | (665) |
Proceeds from the exercise of stock options, net | 25,328 | 31,354 |
Payments for tax withholding related to vesting of restricted stock units | (50,801) | (27,651) |
Net cash provided by (used in) financing activities | (26,852) | 3,038 |
Effect of foreign exchange rate on cash and cash equivalents | 1,277 | 1,397 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (63,518) | 40,995 |
Cash, cash equivalents and restricted cash, beginning of period | 632,847 | 735,081 |
Cash, cash equivalents and restricted cash, end of period | $ 569,329 | $ 776,076 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Class A and B common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2017 | 395,194,075 | ||||
Beginning balance at Dec. 31, 2017 | $ 786,333 | $ 0 | $ 1,630,386 | $ (1,318) | $ (842,735) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (23,986) | (23,986) | |||
Shares issued in connection with: | |||||
Exercise of stock options (in shares) | 4,213,775 | ||||
Exercise of stock options | 31,354 | 31,354 | |||
Vesting of early exercised stock options and other | 136 | 136 | |||
Vesting of restricted stock units (in shares) | 1,625,534 | ||||
Change in other comprehensive loss | 24 | 24 | |||
Share-based compensation | 48,356 | 48,356 | |||
Tax withholding related to vesting of restricted stock units (in shares) | (649,305) | ||||
Tax withholding related to vesting of restricted stock units | (27,651) | (27,651) | |||
Ending balance (in shares) at Mar. 31, 2018 | 400,384,079 | ||||
Ending balance at Mar. 31, 2018 | 809,980 | $ 0 | 1,682,581 | (1,294) | (871,307) |
Beginning balance (in shares) at Dec. 31, 2018 | 417,048,006 | ||||
Beginning balance at Dec. 31, 2018 | 1,120,501 | $ 0 | 2,012,328 | (6,053) | (885,774) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ (38,151) | (38,151) | |||
Shares issued in connection with: | |||||
Exercise of stock options (in shares) | 3,588,052 | 3,588,052 | |||
Exercise of stock options | $ 25,328 | 25,328 | |||
Vesting of early exercised stock options and other (in shares) | 425 | ||||
Vesting of early exercised stock options and other | $ 36 | 36 | |||
Vesting of restricted stock units (in shares) | 1,994,156 | ||||
Change in other comprehensive loss | 2,629 | 2,629 | |||
Share-based compensation | 62,835 | 62,835 | |||
Tax withholding related to vesting of restricted stock units (in shares) | (741,324) | ||||
Tax withholding related to vesting of restricted stock units | (50,801) | (50,801) | |||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 (in shares) | 43 | ||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 | 1 | 1 | |||
Exercise of bond hedges in conjunction with the conversion of senior notes, due 2022 (in shares) | (250,614) | ||||
Recovery of common stock in connection with indemnification settlement agreement (in shares) | (14,798) | ||||
Recovery of common stock in connection with indemnification settlement agreement | (789) | (789) | |||
Ending balance (in shares) at Mar. 31, 2019 | 421,623,946 | ||||
Ending balance at Mar. 31, 2019 | $ 1,121,589 | $ 0 | $ 2,048,938 | $ (3,424) | $ (923,925) |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Square, Inc. (together with its subsidiaries, Square or the Company) creates tools that help sellers start, run, and grow their businesses. Square enables sellers to accept card payments and also provides reporting and analytics, and next-day settlement. Square’s point-of-sale software and other business services help sellers manage inventory, locations, and employees; access financing; engage buyers; build a website or online store; and grow sales. The Cash App is an easy way to send, spend, and store money, and Caviar is a food-ordering service. Square was founded in 2009 and is headquartered in San Francisco, with offices in the United States, Canada, Japan, Australia, Ireland, and the UK. Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2018 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive income (loss), and cash flows for the interim periods. All intercompany transactions and balances have been eliminated in consolidation. The interim results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 , or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk,” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A, and 8, respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets and deferred revenue, income and other taxes, operating and financing lease right-of-use assets and related liabilities, and share-based compensation. Concentration of Credit Risk For the three months ended March 31, 2019 and 2018 , the Company had no customer that accounted for greater than 10% of total net revenue. The Company had three third-party payment processors that represented approximately 55% , 35% , and 6% of settlements receivable as of March 31, 2019 . The same three parties represented approximately 45% , 33% , and 9% of settlements receivable as of December 31, 2018 . All other third-party processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable debt securities, settlements receivables, customer funds, and loans held for sale. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable debt securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one or two business days to settle which mitigates the associated risk of concentration. The associated risk of concentration for loans held for sale is partially mitigated by credit evaluations that are performed prior to facilitating the offering of loans and ongoing performance monitoring of the Company’s loan customers. New Accounting Policies The Company adopted Accounting Standards Codification (ASC) 842, Leases on January 1, 2019, and elected the optional transition method to apply the transition provisions from the effective date of adoption, which requires the Company to report the cumulative effect of the adoption of the standard on the date of adoption with no changes to the prior period balances. Pursuant to the practical expedients, the Company has elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. Additionally, the Company has lease agreements with lease and non-lease components, which are accounted for separately. The Company recognized $112.0 million of operating right-of-use lease assets and $135.6 million of operating lease liabilities on its consolidated balance sheet as of March 31, 2019. Additionally, the Company derecognized $149 million related to the build-to-suit asset and liability upon adoption of this standard because the Company is no longer deemed to be the owner of the related asset under construction under the new standard. Refer to Note 17 for further detail. Except for the adoption of ASC 842, there have been no material changes to the Company’s accounting policies during the three months ended March 31, 2019 , as compared to the accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses , which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company intends to adopt this guidance effective January 1, 2020. The Company is currently evaluating the impact this guidance may have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . The new guidance eliminates the requirement to calculate the implied fair value of goodwill assuming a hypothetical purchase price allocation (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, not to exceed the carrying amount of goodwill. This standard should be adopted when the Company performs its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments should be applied on a prospective basis. The Company intends to adopt this guidance effective with its 2019 annual goodwill impairment test which it performs as of December 31. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, which will remove, modify, and add disclosure requirements for fair value measurements to improve the overall usefulness of such disclosures. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any removed or modified disclosure requirements. Transition is on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated. The Company currently does not intend to early adopt any portion of this disclosure guidance. The Company is currently evaluating the impact this guidance may have on the consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance provides flexibility in adoption, allowing for either retrospective adjustment or prospective adjustment for all implementation costs incurred after the date of adoption. The Company is currently evaluating whether to early adopt this guidance as well as the impact it may have on the consolidated financial statements and related disclosures. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The following table presents the Company's revenue disaggregated by revenue source (in thousands): Three Months Ended March 31, 2019 2018 Revenue from Contracts with Customers: Transaction-based revenue $ 656,762 $ 523,037 Subscription and services-based revenue 190,307 77,215 Hardware revenue 18,212 14,417 Bitcoin revenue $ 65,528 $ 34,095 Revenue from other sources: Subscription and services-based revenue $ 28,550 $ 19,839 The deferred revenue balances were as follows (in thousands): Three Months Ended March 31, 2019 2018 Deferred revenue, beginning of the period $ 36,451 $ 5,893 Less: cumulative impact of the adoption of ASC 606 — (4,303 ) Deferred revenue, beginning of the period, as adjusted 36,451 1,590 Deferred revenue, end of the period 42,160 3,353 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 12,306 $ 298 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 113,508 $ 142 $ (15 ) $ 113,635 Corporate bonds 84,832 289 (25 ) 85,096 Municipal securities 20,237 54 (18 ) 20,273 U.S. government securities 317,787 394 (71 ) 318,110 Non-U.S. government securities 29,355 70 — 29,425 Total $ 565,719 $ 949 $ (129 ) $ 566,539 Long-term debt securities: U.S. agency securities $ 85,993 $ 299 $ (28 ) $ 86,264 Corporate bonds 186,674 1,233 (11 ) 187,896 Municipal securities 23,267 128 (2 ) 23,393 U.S. government securities 174,515 541 (8 ) 175,048 Non-U.S. government securities 8,417 45 — 8,462 Total $ 478,866 $ 2,246 $ (49 ) $ 481,063 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70 ) $ 80,122 Corporate bonds 109,807 80 (368 ) 109,519 Municipal securities 27,839 52 (59 ) 27,832 U.S. government securities 292,615 161 (509 ) 292,267 Non-U.S. government securities 31,263 4 (16 ) 31,251 Total $ 541,684 $ 329 $ (1,022 ) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78 ) $ 114,560 Corporate bonds 159,783 419 (950 ) 159,252 Municipal securities 28,453 167 (26 ) 28,594 U.S. government securities 153,743 553 (172 ) 154,124 Non-U.S. government securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226 ) $ 464,680 For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short term nature of the investments. The contractual maturities of the Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 565,719 $ 566,539 Due in one to five years 478,866 481,063 Total $ 1,044,585 $ 1,047,602 CUSTOMER FUNDS The following table presents the assets underlying customer funds (in thousands): March 31, December 31, Cash $ 278,967 $ 158,697 Cash Equivalents: Money market funds 862 18 U.S. agency securities 14,539 39,991 U.S. government securities 49,125 35,349 Short-term debt securities: U.S. agency securities 22,286 27,291 U.S. government securities 79,638 72,671 Total $ 445,417 $ 334,017 The Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 22,281 $ 7 $ (2 ) $ 22,286 U.S. government securities 79,607 33 (2 ) 79,638 Total $ 101,888 $ 40 $ (4 ) $ 101,924 The Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities 27,293 2 (4 ) 27,291 U.S. government securities 72,662 12 (3 ) 72,671 Total $ 99,955 $ 14 $ (7 ) $ 99,962 For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short term nature of the investments. The contractual maturities of the Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 101,888 $ 101,924 Due in one to five years — — Total $ 101,888 $ 101,924 |
CUSTOMER FUNDS
CUSTOMER FUNDS | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
CUSTOMER FUNDS | INVESTMENTS The Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 113,508 $ 142 $ (15 ) $ 113,635 Corporate bonds 84,832 289 (25 ) 85,096 Municipal securities 20,237 54 (18 ) 20,273 U.S. government securities 317,787 394 (71 ) 318,110 Non-U.S. government securities 29,355 70 — 29,425 Total $ 565,719 $ 949 $ (129 ) $ 566,539 Long-term debt securities: U.S. agency securities $ 85,993 $ 299 $ (28 ) $ 86,264 Corporate bonds 186,674 1,233 (11 ) 187,896 Municipal securities 23,267 128 (2 ) 23,393 U.S. government securities 174,515 541 (8 ) 175,048 Non-U.S. government securities 8,417 45 — 8,462 Total $ 478,866 $ 2,246 $ (49 ) $ 481,063 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70 ) $ 80,122 Corporate bonds 109,807 80 (368 ) 109,519 Municipal securities 27,839 52 (59 ) 27,832 U.S. government securities 292,615 161 (509 ) 292,267 Non-U.S. government securities 31,263 4 (16 ) 31,251 Total $ 541,684 $ 329 $ (1,022 ) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78 ) $ 114,560 Corporate bonds 159,783 419 (950 ) 159,252 Municipal securities 28,453 167 (26 ) 28,594 U.S. government securities 153,743 553 (172 ) 154,124 Non-U.S. government securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226 ) $ 464,680 For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short term nature of the investments. The contractual maturities of the Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 565,719 $ 566,539 Due in one to five years 478,866 481,063 Total $ 1,044,585 $ 1,047,602 CUSTOMER FUNDS The following table presents the assets underlying customer funds (in thousands): March 31, December 31, Cash $ 278,967 $ 158,697 Cash Equivalents: Money market funds 862 18 U.S. agency securities 14,539 39,991 U.S. government securities 49,125 35,349 Short-term debt securities: U.S. agency securities 22,286 27,291 U.S. government securities 79,638 72,671 Total $ 445,417 $ 334,017 The Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 22,281 $ 7 $ (2 ) $ 22,286 U.S. government securities 79,607 33 (2 ) 79,638 Total $ 101,888 $ 40 $ (4 ) $ 101,924 The Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities 27,293 2 (4 ) 27,291 U.S. government securities 72,662 12 (3 ) 72,671 Total $ 99,955 $ 14 $ (7 ) $ 99,962 For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short term nature of the investments. The contractual maturities of the Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 101,888 $ 101,924 Due in one to five years — — Total $ 101,888 $ 101,924 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, and marketable equity investments at fair value. The Company classifies these investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands): March 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash Equivalents: Money market funds $ 164,457 $ — $ — $ 218,109 $ — $ — U.S. agency securities — 19,712 — — 46,423 — Commercial paper — 2,997 — — — — U.S. government securities 102,199 — — — — — Municipal securities — — — 86,239 — — Non-U.S. government securities — — — — 23,981 — Customer funds: Money market funds 862 — — 18 — — U.S. agency securities — 36,825 — — 67,282 — U.S. government securities 128,763 — — 108,020 — — Short-term debt securities: U.S. agency securities — 113,635 — — 80,122 — Corporate bonds — 85,096 — — 109,519 — Municipal securities — 20,273 — — 27,832 — U.S. government securities 318,110 — — 292,267 — — Non-U.S. government securities — 29,425 — — 31,251 — Long-term debt securities: U.S. agency securities — 86,264 — — 114,560 — Corporate bonds — 187,896 — — 159,252 — Municipal securities — 23,393 — — 28,594 — U.S. government securities 175,048 — — 154,124 — — Non-U.S. government securities — 8,462 — — 8,150 — Other: Equity investment 31,255 — — 45,342 — — Total $ 920,694 $ 613,978 $ — $ 904,119 $ 696,966 $ — The carrying amounts of certain financial instruments, including settlements receivable, accounts payable, customers payable, accrued expenses and settlements payable, approximate their fair values due to their short-term nature. The Company estimates the fair value of its convertible senior notes based on their last actively traded prices (Level 1) or market observable inputs (Level 2). The estimated fair value and carrying value of the convertible senior notes were as follows (in thousands): March 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2023 Notes $ 725,900 $ 1,042,987 $ 718,522 $ 901,468 2022 Notes 183,402 690,691 181,173 515,693 Total $ 909,302 $ 1,733,678 $ 899,695 $ 1,417,161 The estimated fair value and carrying value of loans held for sale is as follows (in thousands): March 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 123,471 $ 128,358 $ 89,974 $ 93,064 Total $ 123,471 $ 128,358 $ 89,974 $ 93,064 For the three months ended March 31, 2019 , the Company recorded a charge for the excess of amortized cost over fair value of the loans of $6.7 million . For the three months ended March 31, 2018 , the Company recorded a charge for the excess of amortized cost over fair value of the loans of $2.5 million . If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three months ended March 31, 2019 and 2018 , the Company did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands): March 31, December 31, Leasehold improvements $ 105,244 $ 107,611 Computer equipment 82,056 80,093 Capitalized software 64,233 58,908 Office furniture and equipment 20,713 20,699 272,246 267,311 Less: Accumulated depreciation and amortization (138,540 ) (124,909 ) Property and equipment, net $ 133,706 $ 142,402 Depreciation and amortization expense on property and equipment was $15.5 million for the three months ended March 31, 2019 . Depreciation and amortization expense on property and equipment was $8.3 million for the three months ended March 31, 2018 . |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Weebly, Inc. On May 31, 2018 , the Company acquired 100% of the outstanding shares of Weebly, a technology company that offers customers website hosting and domain name registration solutions. The acquisition of Weebly enables the Company to combine Weebly’s web presence tools with the Company's in-person and online offerings to create a cohesive solution for sellers to start or grow an omnichannel business. The acquisition expanded the Company’s customer base globally and added a new recurring revenue stream. The purchase consideration was comprised of $132.4 million in cash and 2,418,271 shares of the Company’s Class A common stock with an aggregate fair value of $140.1 million based on the closing price of the Company’s Class A common stock on the acquisition date. As part of the acquisition, the Company paid an aggregate of $17.7 million in cash and shares to settle outstanding vested and unvested employee options, of which $2.6 million was accounted for as post-combination compensation expense and is excluded from the purchase consideration. Third-party acquisition-related costs were insignificant. The results of Weebly's operations have been included in the consolidated financial statements since the closing date. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date and that the difference between the fair value of the consideration paid for the acquired entity and the fair value of the net assets acquired be recorded as goodwill, which is not amortized but is tested at least annually for impairment. The table below summarizes the consideration paid for Weebly and the preliminary assessment of the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). Consideration: Cash $ 132,432 Stock (2,418,271 shares of Class A common stock) 140,107 $ 272,539 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash acquired of $25,758) $ 46,814 Intangible customer assets 42,700 Intangible technology assets 14,900 Intangible trade name 11,300 Intangible other assets 961 Total liabilities assumed (including deferred revenue of $22,800) (37,592 ) Total identifiable net assets acquired 79,083 Goodwill 193,456 Total $ 272,539 The Company prepared an initial determination of the fair value of the assets acquired and liabilities assumed as of the acquisition date using preliminary information. Subsequently, the Company recognized measurement period adjustments to the purchase consideration and the fair value of certain liabilities assumed as a result of further refinements in the Company’s estimates. These adjustments were prospectively applied. The effect of these adjustments on the preliminary purchase price allocation was an increase in goodwill and tax liabilities assumed of $3.9 million and $4.8 million , respectively. There was no impact to the consolidated statements of operations as result of these adjustments. The Company continues the process of completing the evaluation of contingencies and potential tax exposures related to the acquisition. Accordingly, the preliminary values reflected in the table above are subject to change. As of March 31, 2019 , $19.1 million of cash and 357,780 shares of the total consideration were withheld as security for indemnification obligations related to general representations and warranties, in addition to certain potential tax exposures. Goodwill from the Weebly acquisition is primarily attributable to the value of expected synergies created by incorporating Weebly solutions into the Company's technology platform and the value of the assembled workforce. None of the goodwill generated from the Weebly acquisition or the acquired intangible assets are expected to be deductible for tax purposes. Additionally the acquisition would have resulted in recognition of deferred tax assets arising mainly from the net of deferred tax assets from acquired net operating losses (NOLs) and research and development credits, and deferred tax liabilities associated with intangible assets and deferred revenue. However, the realization of such deferred tax assets depends primarily on the Company's post-acquisition ability to generate taxable income in future periods. Accordingly, a valuation allowance was recorded against the net acquired deferred tax asset in accounting for the acquisition. The acquisition of Weebly did not have a material impact on the Company's reported revenue or net loss amounts for any period presented. Accordingly, pro forma financial information has not been presented. |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets acquired. The change in carrying value of goodwill in the period was as follows (in thousands): Balance at December 31, 2018 $ 261,705 Acquisitions 7,437 Other adjustments (2,130 ) Balance at March 31, 2019 $ 267,012 The Company performs a goodwill impairment test annually on December 31 and more frequently if events and circumstances indicate that the asset might be impaired. For the periods presented, the Company had recorded no impairment charges. |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS During the three months ended March 31, 2019 , the Company did not make any material acquisitions. The following table presents the detail of acquired intangible assets as of the periods presented (in thousands): Balance at March 31, 2019 Cost Accumulated Amortization Net Technology assets 49,007 (29,796 ) 19,211 Customer assets 57,109 (9,361 ) 47,748 Trade name 11,300 (2,354 ) 8,946 Other 5,299 (1,507 ) 3,792 Total $ 122,715 $ (43,018 ) $ 79,697 Balance at December 31, 2018 Cost Accumulated Amortization Net Technology assets 45,978 (28,420 ) 17,558 Customer assets 57,109 (8,068 ) 49,041 Trade name 11,300 (1,648 ) 9,652 Other 2,246 (1,395 ) 851 Total $ 116,633 $ (39,531 ) $ 77,102 All intangible assets are amortized over their estimated useful lives. The weighted average amortization periods for acquired technology, customer intangible assets, and acquired trade name are approximately 5 years , 11 years and 4 years , respectively. The changes to the carrying value of intangible assets were as follows (in thousands): Three Months Ended March 31, 2019 2018 Acquired intangible assets, net, beginning of the period $ 77,102 $ 14,334 Acquisitions 6,082 1,679 Amortization expense 3,487 1,875 Acquired intangible assets, net, end of the period $ 79,697 $ 14,138 The total estimated future amortization expense of these intangible assets as of March 31, 2019 is as follows (in thousands): 2019 (remaining 9 months) $ 11,185 2020 12,611 2021 11,413 2022 9,484 2023 7,953 Thereafter 27,051 Total $ 79,697 |
OTHER CONSOLIDATED BALANCE SHEE
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): March 31, December 31, Inventory, net $ 26,679 $ 28,627 Processing costs receivable 59,470 46,102 Prepaid expenses 23,526 21,782 Accounts receivable, net 28,665 22,393 Other 46,781 46,062 Total $ 185,121 $ 164,966 Accrued Expenses The following table presents the detail of accrued expenses (in thousands): March 31, December 31, Accrued facilities expenses $ 5,853 $ 13,040 Accrued payroll 18,282 9,612 Accrued professional fees 6,173 5,232 Accrued advertising and other marketing 15,940 12,201 Processing costs payable 13,190 12,683 Accrued non income tax liabilities 6,568 9,503 Accrued hardware costs 5,413 5,125 Other accrued liabilities 16,393 14,958 Total $ 87,812 $ 82,354 Other Current Liabilities The following table presents the detail of other current liabilities (in thousands): March 31, December 31, Accounts payable $ 24,635 $ 36,416 Deferred revenue, current 36,343 31,474 Square Capital payable (i) 18,459 6,092 Square Payroll payable (ii) 12,338 7,534 Other 16,869 17,637 Total $ 108,644 $ 99,153 (i) Square Capital payable represents unpaid amounts arising from the purchase of loans or loan repayments collected on behalf of third parties. (ii) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers' employee payroll and related obligations. OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands): March 31, December 31, Equity investment (i) $ 31,255 $ 45,342 Other 16,947 13,051 Total $ 48,202 $ 58,393 (i) This balance represents the Company's investment in Class B common shares of Eventbrite, Inc. (Eventbrite). The investment is carried at fair value with changes in fair value being recorded on the consolidated statement of operations. During the three months ended March 31, 2019 , the Company recorded a loss of $14.1 million to other expense (income), net on the consolidated statements of operations arising from revaluation of this investment. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): March 31, December 31, Statutory liabilities (ii) $ 57,839 $ 54,748 Deferred rent, non-current (iii) — 23,003 Deferred revenue, non-current 5,817 4,977 Other 11,929 10,558 Total $ 75,585 $ 93,286 (ii) Statutory liabilities represent loss contingencies that may arise from the Company's interpretation and application of certain guidelines and rules issued by various federal, state, local, and foreign regulatory authorities. (iii) The adoption of ASC 842 on January 1, 2019, resulted in the reclassification of deferred rent as an offset to right-of-use lease assets. |
OTHER CONSOLIDATED BALANCE SH_2
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): March 31, December 31, Inventory, net $ 26,679 $ 28,627 Processing costs receivable 59,470 46,102 Prepaid expenses 23,526 21,782 Accounts receivable, net 28,665 22,393 Other 46,781 46,062 Total $ 185,121 $ 164,966 Accrued Expenses The following table presents the detail of accrued expenses (in thousands): March 31, December 31, Accrued facilities expenses $ 5,853 $ 13,040 Accrued payroll 18,282 9,612 Accrued professional fees 6,173 5,232 Accrued advertising and other marketing 15,940 12,201 Processing costs payable 13,190 12,683 Accrued non income tax liabilities 6,568 9,503 Accrued hardware costs 5,413 5,125 Other accrued liabilities 16,393 14,958 Total $ 87,812 $ 82,354 Other Current Liabilities The following table presents the detail of other current liabilities (in thousands): March 31, December 31, Accounts payable $ 24,635 $ 36,416 Deferred revenue, current 36,343 31,474 Square Capital payable (i) 18,459 6,092 Square Payroll payable (ii) 12,338 7,534 Other 16,869 17,637 Total $ 108,644 $ 99,153 (i) Square Capital payable represents unpaid amounts arising from the purchase of loans or loan repayments collected on behalf of third parties. (ii) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers' employee payroll and related obligations. OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands): March 31, December 31, Equity investment (i) $ 31,255 $ 45,342 Other 16,947 13,051 Total $ 48,202 $ 58,393 (i) This balance represents the Company's investment in Class B common shares of Eventbrite, Inc. (Eventbrite). The investment is carried at fair value with changes in fair value being recorded on the consolidated statement of operations. During the three months ended March 31, 2019 , the Company recorded a loss of $14.1 million to other expense (income), net on the consolidated statements of operations arising from revaluation of this investment. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): March 31, December 31, Statutory liabilities (ii) $ 57,839 $ 54,748 Deferred rent, non-current (iii) — 23,003 Deferred revenue, non-current 5,817 4,977 Other 11,929 10,558 Total $ 75,585 $ 93,286 (ii) Statutory liabilities represent loss contingencies that may arise from the Company's interpretation and application of certain guidelines and rules issued by various federal, state, local, and foreign regulatory authorities. (iii) The adoption of ASC 842 on January 1, 2019, resulted in the reclassification of deferred rent as an offset to right-of-use lease assets. |
INDEBTEDNESS
INDEBTEDNESS | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS Revolving Credit Facility In November 2015 , the Company entered into a revolving credit agreement with certain lenders, which extinguished the prior revolving credit agreement and provided for a $375.0 million revolving secured credit facility maturing in November 2020 . This revolving credit agreement is secured by certain tangible and intangible assets. Loans under the credit facility bear interest at the Company’s option of (i) a base rate based on the highest of the prime rate, the federal funds rate plus 0.50% , and an adjusted LIBOR rate for a one-month interest period, in each case plus a margin ranging from 0.00% to 1.00% , or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 2.00% . This margin is determined based on the Company’s total leverage ratio for the preceding four fiscal quarters. The Company is obligated to pay other customary fees for a credit facility of this size and type including an annual administrative agent fee of $0.1 million and an unused commitment fee of 0.15% . To date no funds have been drawn under the credit facility, with $375.0 million remaining available. The Company paid $0.1 million and $0.1 million in unused commitment fees during both the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 , the Company was in compliance with all financial covenants associated with this credit facility. Convertible Senior Notes due in 2023 On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes (2023 Notes). The 2023 Notes mature on May 15, 2023, unless earlier converted or repurchased, and bear interest at a rate of 0.50% payable semi-annually on May 15 and November 15 of each year. The 2023 Notes are convertible at an initial conversion rate of 12.8456 shares of the Company's Class A common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $77.85 per share of Class A common stock. Holders may convert their 2023 Notes at any time prior to the close of business on the business day immediately preceding February 15, 2023 only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2023 Notes) per $1,000 principal amount of 2023 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2023 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after February 15, 2023, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2023 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The Company's current policy is to settle conversions entirely in shares of the Company's Class A common stock. The Company will reevaluate this policy from time to time as conversion notices are received from holders of the 2023 Notes. The circumstances required to allow the holders to convert their 2023 Notes were not met during the three months ended March 31, 2019. In accounting for the issuance of the 2023 Notes, the Company separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $155.3 million and was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the 2023 Notes at an effective interest rate of 4.69% over the contractual terms of the 2023 Notes. Debt issuance costs related to the 2023 Notes comprised of discounts and commissions payable to the initial purchasers of $6.0 million and third party offering costs of $0.8 million . The Company allocated the total amount incurred to the liability and equity components of the 2023 Notes based on their relative values. Issuance costs attributable to the liability component were $5.6 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Convertible Senior Notes due in 2022 On March 6, 2017, the Company issued an aggregate principal amount of $440.0 million of convertible senior notes (2022 Notes). The 2022 Notes mature on March 1, 2022, unless earlier converted or repurchased, and bear interest at a rate of 0.375% payable semi-annually on March 1 and September 1 of each year. The 2022 Notes are convertible at an initial conversion rate of 43.5749 shares of the Company's Class A common stock per $1,000 principal amount of 2022 Notes, which is equivalent to an initial conversion price of approximately $22.95 per share of Class A common stock. Holders may convert their 2022 Notes at any time prior to the close of business on the business day immediately preceding December 1, 2021 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2022 Notes) per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2022 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after December 1, 2021, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2022 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The circumstances required to allow the holders to convert their 2022 Notes were met starting January 1, 2018 and continued to be met through March 31, 2019 . In 2018, certain holders of the 2022 Notes converted an aggregate principal amount of $228.3 million of their Notes. The Company settled the conversions through a combination of $219.4 million in cash and issuance of 7.3 million shares of the Company's Class A common stock. Conversions in the three months ended March 31, 2019 were not material. The Company currently expects to settle future conversions entirely in shares of the Company's Class A common stock. The Company will reevaluate this policy from time to time as conversion notices are received from holders of the 2022 Notes. In accounting for the issuance of the 2022 Notes, the Company separated the 2022 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $86.2 million and was determined by deducting the fair value of the liability component from the par value of the 2022 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The debt discount is amortized to interest expense over the term of the 2022 Notes at an effective interest rate of 5.34% over the contractual terms of the 2022 Notes. Debt issuance costs related to the 2022 Notes comprised of discounts and commissions payable to the initial purchasers of $11.0 million and third party offering costs of $0.8 million . The Company allocated the total amount incurred to the liability and equity components of the 2022 Notes based on their relative values. Issuance costs attributable to the liability component were $9.4 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. The debt component associated with the 2022 Notes that were converted as of December 31, 2018, was accounted for as an extinguishment of debt, with the Company recording loss on extinguishment of $5.0 million , as the difference between the estimated fair value and the carrying value of such 2022 Notes. The equity component associated with the 2022 Notes that were converted was accounted for as a reacquisition of equity upon the conversion of such 2022 Notes. Accordingly, the excess of the fair value of the consideration issued to settle the conversion over the fair value of the debt component of $21.0 million was accounted for as a reduction to the additional paid in capital. The net carrying amount of the Notes were as follows (in thousands): Principal outstanding Unamortized debt discount Unamortized debt issuance costs Net carrying value March 31, 2019 2023 Notes $ 862,500 $ (131,767 ) $ (4,833 ) $ 725,900 2022 Notes 211,728 (25,563 ) (2,763 ) 183,402 Total $ 1,074,228 $ (157,330 ) $ (7,596 ) $ 909,302 December 31, 2018 2023 Notes $ 862,500 $ (138,924 ) $ (5,054 ) $ 718,522 2022 Notes 211,728 (27,569 ) (2,986 ) 181,173 $ 1,074,228 $ (166,493 ) $ (8,040 ) $ 899,695 The net carrying amount of the equity component of the 2023 Notes and 2022 Notes were as follows (in thousands): Amount allocated to conversion option Less: allocated issuance costs Equity component, net March 31, 2019 and December 31, 2018 2023 Notes $ 155,250 $ (1,231 ) $ 154,019 2022 Notes 41,481 (1,108 ) 40,373 Total 196,731 (2,339 ) 194,392 The Company recognized interest expense on the Notes as follows (in thousands, except for percentages): Three Months Ended March 31, 2019 2018 Contractual interest expense $ 1,277 $ 413 Amortization of debt discount and issuance costs 9,608 4,393 Total $ 10,885 $ 4,806 The effective interest rate of the liability component is 4.69% and 5.34% for the 2023 Notes and 2022 Notes, respectively. Convertible Note Hedge and Warrant Transactions In connection with the offering of the 2023 Notes, the Company entered into convertible note hedge transactions (2023 convertible note hedges) with certain financial institution counterparties (2018 Counterparties) whereby the Company has the option to purchase a total of approximately 11.1 million shares of its Class A common stock at a price of approximately $77.85 per share. The total cost of the 2023 convertible note hedge transactions was $172.6 million . In addition, the Company sold warrants (2023 warrants) to the 2018 Counterparties whereby the 2018 Counterparties have the option to purchase a total of 11.1 million shares of the Company’s Class A common stock at a price of approximately $109.26 per share. The Company received $112.1 million in cash proceeds from the sale of the 2023 warrants. Taken together, the purchase of the 2023 convertible note hedges and sale of the 2023 warrants are intended to reduce dilution from the conversion of the 2023 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2023 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $77.85 per share to approximately $109.26 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2023 convertible note hedges and 2023 warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the 2023 convertible note hedge and 2023 warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. In connection with the offering of the 2022 Notes, the Company entered into convertible note hedge transactions (2022 convertible note hedges) with certain financial institution counterparties (2017 Counterparties) whereby the Company has the option to purchase a total of approximately 19.2 million shares of its Class A common stock at a price of approximately $22.95 per share. The total cost of the 2022 convertible note hedge transactions was $92.1 million . In addition, the Company sold warrants (2022 warrants) to the 2017 Counterparties whereby the 2017 Counterparties have the option to purchase a total of 19.2 million shares of the Company’s Class A common stock at a price of approximately $31.18 per share. The Company received $57.2 million in cash proceeds from the sale of the 2022 warrants. Taken together, the purchase of the 2022 convertible note hedges and sale of the 2022 warrants are intended to reduce dilution from the conversion of the 2022 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2022 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $22.95 per share to approximately $31.18 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2022 convertible note hedges and 2022 warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the 2022 convertible note hedge and 2022 warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. In 2018, the Company exercised a pro-rata portion of the 2022 convertible note hedges to offset the shares of the Company's Class A common stock issued to settle the conversion of the 2022 Notes discussed above. The 2022 convertible note hedges were net share settled, and the Company received 6.9 million shares of the Company's Class A common stock from the 2017 Counterparties in 2018. During the three months ended March 31, 2019, the Company received an additional 0.3 million shares of the Company's Class A common stock. |
ACCRUED TRANSACTION LOSSES
ACCRUED TRANSACTION LOSSES | 3 Months Ended |
Mar. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
ACCRUED TRANSACTION LOSSES | ACCRUED TRANSACTION LOSSES The Company is exposed to transaction losses due to chargebacks as a result of fraud or uncollectibility. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended March 31, 2019 2018 Accrued transaction losses, beginning of the period $ 33,682 $ 26,893 Provision for transaction losses 19,808 14,258 Charge-offs to accrued transaction losses (17,443 ) (12,842 ) Accrued transaction losses, end of the period $ 36,047 $ 28,309 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax expense of $0.1 million for the three months ended March 31, 2019 , compared to income tax expense of $0.2 million for the three months ended March 31, 2018 . The income tax expense recorded for the three months ended March 31, 2019 was primarily due to state and foreign income tax expense as well as a change in the valuation allowance on the Company's deferred tax assets. The Company’s effective tax rate was (0.3)% for the three months ended March 31, 2019 , compared to an effective tax rate of (0.7)% for the three months ended March 31, 2018 . The difference between the effective tax rate and the federal statutory tax rate for the three months ended March 31, 2019 and March 31, 2018 primarily relates to fluctuations in the Company's pre-tax book income. The Company’s effective tax rate may be subject to fluctuation during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which the Company operates, valuation allowances against deferred tax assets, the recognition and de-recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. As of March 31, 2019 , the Company retains a full valuation allowance on its deferred tax assets in the U.S. and certain foreign jurisdictions. The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods. The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income. The tax provision for the three months ended March 31, 2019 and March 31, 2018 , was calculated on a jurisdictional basis. The Company estimated the foreign income tax provision using the effective income tax rate expected to be applicable for the full year. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Common Stock The Company has authorized the issuance of Class A common stock and Class B common stock. Class A common stock and Class B common stock are referred to as "common stock" throughout these Notes to the Condensed Consolidated Financial Statements, unless otherwise noted. As of March 31, 2019 , the Company was authorized to issue 1,000,000,000 shares of Class A common stock and 500,000,000 shares of Class B common stock, each with a par value of $0.0000001 per share. As of March 31, 2019 , there were 334,650,231 shares of Class A common stock and 86,973,715 shares of Class B common stock outstanding. Options and awards granted following the Company's initial public offering are related to underlying Class A common stock. Additionally, holders of Class B common stock are able to convert such shares into Class A common stock. Warrants In conjunction with the 2023 Notes offering, the Company sold the 2023 warrants whereby the 2018 Counterparties have the option to purchase a total of approximately 11.1 million shares of the Company’s Class A common stock at a price of $109.26 per share. The Company received $112.1 million in cash proceeds from the sale of the 2023 warrants. See Note 12 , Indebtedness , for more details on this transaction. In conjunction with the 2022 Notes offering, the Company sold warrants whereby the 2017 Counterparties have the option to purchase a total of approximately 19.2 million shares of the Company’s Class A common stock at a price of $31.18 per share. None of the warrants associated with the 2022 and 2023 Notes offering were exercised as of March 31, 2019. Stock Plans The Company maintains two share-based employee compensation plans: the 2009 Stock Plan (2009 Plan) and the 2015 Equity Incentive Plan (2015 Plan). The 2015 Plan serves as the successor to the 2009 Plan. The 2015 Plan became effective as of November 17, 2015. Outstanding awards under the 2009 Plan continue to be subject to the terms and conditions of the 2009 Plan. Since November 17, 2015, no additional awards have been nor will be in the future granted under the 2009 Plan. Under the 2015 Plan, shares of the Company's Class A common stock are reserved for the issuance of incentive and nonstatutory stock options, restricted stock awards (RSAs), restricted stock units (RSUs), performance shares, and stock bonuses to qualified employees, directors, and consultants. The awards must be granted at a price per share not less than the fair market value at the date of grant. Initially, 30,000,000 shares were reserved under the 2015 Plan, and any shares subject to options or other similar awards granted under the 2009 Plan that expire, are forfeited, are repurchased by the Company, or otherwise terminate unexercised, will become available under the 2015 Plan. The number of shares available for issuance under the 2015 Plan will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 40,000,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Company’s board of directors or a committee thereof. As of March 31, 2019 , the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2015 Plan was 20,822,979 , and 86,449,187 shares were available for future issuance. As of March 31, 2019 , the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2009 Plan was 24,792,142 . A summary of stock option activity for the three months ended March 31, 2019 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Balance at December 31, 2018 33,152,881 $ 9.52 5.45 $ 1,543,793 Granted 97,701 73.94 Exercised (3,588,052 ) 7.06 Forfeited (95,141 ) 11.78 Balance at March 31, 2019 29,567,389 $ 10.03 5.41 $ 1,918,661 Options exercisable as of March 31, 2019 27,693,334 $ 8.88 5.23 $ 1,828,856 Restricted Stock Activity Activity related to RSAs and RSUs during the three months ended March 31, 2019 is set forth below: Number of Weighted Unvested as of December 31, 2018 17,934,728 $ 31.34 Granted 552,596 69.20 Vested (1,880,545 ) 24.12 Forfeited (559,047 ) 29.35 Unvested as of March 31, 2019 16,047,732 $ 33.56 Share-Based Compensation The fair value of stock options and employee stock purchase plan rights are estimated on the date of grant using the Black-Scholes-Merton option valuation model. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The fair value of stock options granted was estimated using the following weighted-average assumptions: Three Months Ended March 31, 2019 Dividend yield — % Risk-free interest rate 2.59 % Expected volatility 38.55 % Expected term (years) 6.08 There were no stock options granted during the three months ended March 31, 2018 . The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Cost of revenue $ 21 $ 31 Product development 42,649 30,482 Sales and marketing 6,202 4,961 General and administrative 12,216 11,350 Total $ 61,088 $ 46,824 The Company recorded $4.3 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three months ended March 31, 2019 , compared to $2.3 million for the three months ended March 31, 2018 , which are included in the table above. The Company capitalized $1.7 million of share-based compensation expense related to capitalized software costs during the three months ended March 31, 2019 , compared to $1.5 million for the three months ended March 31, 2018 . As of March 31, 2019 , there was $527.0 million of total unrecognized compensation cost related to outstanding awards that are expected to be recognized over a weighted-average period of 2.7 years . |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | LOSS PER SHARE Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended March 31, 2019 2018 Net loss $ (38,151 ) $ (23,986 ) Basic shares: Weighted-average common shares outstanding 419,860 397,246 Weighted-average unvested shares (571 ) (1,298 ) Weighted-average shares used to compute basic net loss per share 419,289 395,948 Diluted shares: Weighted-average shares used to compute diluted net loss per share 419,289 395,948 Net loss per share: Basic $ (0.09 ) $ (0.06 ) Diluted $ (0.09 ) $ (0.06 ) Additionally, since the Company intends to settle future conversions of its outstanding 2022 Notes and 2023 Notes entirely in shares of its Class A common stock, the Company will consider the number of shares expected to be issued in calculating any potential dilutive effect of the conversions, if applicable. In the periods that the Company has reported a net loss the diluted loss per share is the same as basic loss per share for those periods. The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended March 31, 2019 2018 Stock options and restricted stock units 47,833 66,382 Common stock warrants 30,252 19,173 Convertible senior notes 20,305 — Unvested shares 571 1,298 Employee stock purchase plan 212 264 Total anti-dilutive securities 99,173 87,117 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating and Finance Leases The Company’s operating leases are primarily comprised of office facilities, with the most significant leases relating to corporate headquarters in San Francisco and an office in New York. The Company's leases have remaining lease terms of 1 year to 12 years, some of which include options to extend for 5 year terms, or include options to terminate the leases within 1 year. None of the options to extend the leases have been included in the measurement of the right of use asset or the associated lease liability. The Company elects to apply the short-term lease measurement and recognition exemption to its leases where applicable. In December 2018, the Company entered into a lease arrangement for 355,762 square feet of office space in Oakland, California for a term of 12 years with options to extend the lease term for two five year terms. The lease commencement date is expected to be in November 2019 with total lease payments over the term of approximately $276 million . Under the terms of this lease, the Company is required to make certain payments during the construction stage of the office space, which the Company will record as a prepaid lease asset. Additionally, the Company has finance leases for data center equipment, with remaining lease terms of approximately 2 years. The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease costs $ 6,690 Finance lease costs Amortization of right-of-use assets 1,293 Interest on lease liabilities — Total finance lease costs $ 1,293 For the periods presented, costs associated with short-term leases were not material. Other information related to leases was as follows: Three Months Ended March 31, 2019 Weighted Average Remaining Lease Term: Operating leases 4.80 years Finance leases 1.75 years Weighted Average Discount Rate: Operating leases 4 % Finance leases — % Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2019 are as follows (in thousands): Finance Operating Year: 2019 (remaining 9 months) $ 3,745 $ 20,112 2020 2,446 39,182 2021 — 53,426 2022 — 54,229 2023 — 47,952 Thereafter — 211,056 Total $ 6,191 $ 425,957 Less amount representing interest — 14,323 Less leases executed but not yet commenced — 276,037 Total $ 6,191 $ 135,597 The current portion of the finance lease liability is included within other current liabilities while the non-current portion is included within other non-current liabilities on the condensed consolidated balance sheets. The associated finance lease assets are included in property and equipment, net on the condensed consolidated balance sheets. Litigation The Company is currently a party to, and may in the future be involved in, various litigation matters (including intellectual property litigation), legal claims, and government investigations. The Treasurer & Tax Collector of the City and County of San Francisco (Tax Collector) has issued a decision for fiscal years 2014 and 2015, that the Tax Collector believes the Company’s primary business activity is financial services rather than information services, and accordingly, the Company would be liable for the Gross Receipts Tax and Payroll Expense Tax under the rules for financial services business activities. The Company paid the liability for fiscal years 2014 and 2015 in the first quarter of 2018, as assessed by the Tax Collector. The Company believes its position has merit and intends to vigorously defend its position, including possibly through litigation. Should the Company not prevail, the Company could be obligated to pay additional taxes together with any associated penalties and interest for subsequent years that together, in aggregate, could be material. The Company is currently unable to estimate the range of possible loss given the uncertainties associated with this matter, including uncertainties about the Tax Collector’s rationale for its position and about the amounts that may ultimately be subject to such taxes. On May 14, 2018, Joshua Woodle, on behalf of a class of couriers who have delivered with Caviar in California, filed a lawsuit in San Francisco County Superior Court against the Company doing business as Caviar, which alleges that Caviar misclassified Mr. Woodle and other similarly situated couriers as independent contractors and, in doing so, violated various provisions of the California Labor Code and California Business and Professions Code. Plaintiffs seek damages and injunctive relief. The Court compelled arbitration of Mr. Woodle’s arbitrable claims on November 5, 2018. On August 24, 2018, Mervyn Cole, on behalf of the State of California and similarly situated couriers who have delivered with Caviar in California filed a lawsuit in Los Angeles County Superior Court against the Company doing business as Caviar. The complaint alleges that Caviar misclassified Mr. Cole and other similarly situated couriers as independent contractors and, in doing so, violated certain provisions of the California Labor Code. The action is being brought as a representative action under the Private Attorneys General Act (“PAGA”). Plaintiffs seek civil penalties and injunctive relief. Given the early stage of these proceedings, it is not yet possible to reliably determine any potential liability that could result from these matters. In addition, from time to time, the Company is involved in various other litigation matters and disputes arising in the ordinary course of business. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability with respect to these other matters. While the Company does not believe, at this time, that any ultimate liability resulting from any of these other matters will have a material adverse effect on the Company's results of operations, financial position, or liquidity, the Company cannot give any assurance regarding the ultimate outcome of these other matters, and their resolution could be material to the Company's operating results for any particular period. |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is the chief executive officer who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company’s operations constitute a single operating segment and one reportable segment. Revenue Revenue by geography is based on the billing addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands): Three Months Ended March 31, 2019 2018 Revenue United States $ 914,656 $ 640,173 International 44,703 28,430 Total net revenue $ 959,359 $ 668,603 No individual country from the international markets contributed in excess of 10% of total revenue for the three months ended March 31, 2019 and 2018 . Long-Lived Assets The following table sets forth long-lived assets by geographic area (in thousands): March 31, December 31, Long-lived assets United States $ 579,397 $ 471,970 International 12,974 9,239 Total long-lived assets $ 592,371 $ 481,209 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The supplemental disclosures of cash flow information consist of the following (in thousands): Three Months Ended March 31, 2019 2018 Supplemental Cash Flow Data: Cash paid for interest $ 538 $ 966 Cash paid for income taxes 1,342 658 Right-of-use assets obtained in exchange for operating lease obligations 19,918 — Supplemental disclosures of non-cash investing and financing activities: Change in purchases of property and equipment in accounts payable and accrued expenses 13,114 (3,813 ) Unpaid business combination purchase price 6,447 1,151 Recovery of common stock in connection with indemnification settlement agreement 789 — |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2018 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive income (loss), and cash flows for the interim periods. All intercompany transactions and balances have been eliminated in consolidation. The interim results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 , or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk,” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A, and 8, respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets and deferred revenue, income and other taxes, operating and financing lease right-of-use assets and related liabilities, and share-based compensation. |
Concentration of Credit Risk | Concentration of Credit Risk For the three months ended March 31, 2019 and 2018 , the Company had no customer that accounted for greater than 10% of total net revenue. The Company had three third-party payment processors that represented approximately 55% , 35% , and 6% of settlements receivable as of March 31, 2019 . The same three parties represented approximately 45% , 33% , and 9% of settlements receivable as of December 31, 2018 . All other third-party processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable debt securities, settlements receivables, customer funds, and loans held for sale. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable debt securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one or two business days to settle which mitigates the associated risk of concentration. The associated risk of concentration for loans held for sale is partially mitigated by credit evaluations that are performed prior to facilitating the offering of loans and ongoing performance monitoring of the Company’s loan customers. |
New Accounting Policies and Recent Accounting Pronouncements | New Accounting Policies The Company adopted Accounting Standards Codification (ASC) 842, Leases on January 1, 2019, and elected the optional transition method to apply the transition provisions from the effective date of adoption, which requires the Company to report the cumulative effect of the adoption of the standard on the date of adoption with no changes to the prior period balances. Pursuant to the practical expedients, the Company has elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. Additionally, the Company has lease agreements with lease and non-lease components, which are accounted for separately. The Company recognized $112.0 million of operating right-of-use lease assets and $135.6 million of operating lease liabilities on its consolidated balance sheet as of March 31, 2019. Additionally, the Company derecognized $149 million related to the build-to-suit asset and liability upon adoption of this standard because the Company is no longer deemed to be the owner of the related asset under construction under the new standard. Refer to Note 17 for further detail. Except for the adoption of ASC 842, there have been no material changes to the Company’s accounting policies during the three months ended March 31, 2019 , as compared to the accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses , which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company intends to adopt this guidance effective January 1, 2020. The Company is currently evaluating the impact this guidance may have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . The new guidance eliminates the requirement to calculate the implied fair value of goodwill assuming a hypothetical purchase price allocation (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, not to exceed the carrying amount of goodwill. This standard should be adopted when the Company performs its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments should be applied on a prospective basis. The Company intends to adopt this guidance effective with its 2019 annual goodwill impairment test which it performs as of December 31. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, which will remove, modify, and add disclosure requirements for fair value measurements to improve the overall usefulness of such disclosures. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any removed or modified disclosure requirements. Transition is on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated. The Company currently does not intend to early adopt any portion of this disclosure guidance. The Company is currently evaluating the impact this guidance may have on the consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance provides flexibility in adoption, allowing for either retrospective adjustment or prospective adjustment for all implementation costs incurred after the date of adoption. The Company is currently evaluating whether to early adopt this guidance as well as the impact it may have on the consolidated financial statements and related disclosures. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by revenue source (in thousands): Three Months Ended March 31, 2019 2018 Revenue from Contracts with Customers: Transaction-based revenue $ 656,762 $ 523,037 Subscription and services-based revenue 190,307 77,215 Hardware revenue 18,212 14,417 Bitcoin revenue $ 65,528 $ 34,095 Revenue from other sources: Subscription and services-based revenue $ 28,550 $ 19,839 |
Schedule of Deferred Revenue | The deferred revenue balances were as follows (in thousands): Three Months Ended March 31, 2019 2018 Deferred revenue, beginning of the period $ 36,451 $ 5,893 Less: cumulative impact of the adoption of ASC 606 — (4,303 ) Deferred revenue, beginning of the period, as adjusted 36,451 1,590 Deferred revenue, end of the period 42,160 3,353 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 12,306 $ 298 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments | The Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 113,508 $ 142 $ (15 ) $ 113,635 Corporate bonds 84,832 289 (25 ) 85,096 Municipal securities 20,237 54 (18 ) 20,273 U.S. government securities 317,787 394 (71 ) 318,110 Non-U.S. government securities 29,355 70 — 29,425 Total $ 565,719 $ 949 $ (129 ) $ 566,539 Long-term debt securities: U.S. agency securities $ 85,993 $ 299 $ (28 ) $ 86,264 Corporate bonds 186,674 1,233 (11 ) 187,896 Municipal securities 23,267 128 (2 ) 23,393 U.S. government securities 174,515 541 (8 ) 175,048 Non-U.S. government securities 8,417 45 — 8,462 Total $ 478,866 $ 2,246 $ (49 ) $ 481,063 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70 ) $ 80,122 Corporate bonds 109,807 80 (368 ) 109,519 Municipal securities 27,839 52 (59 ) 27,832 U.S. government securities 292,615 161 (509 ) 292,267 Non-U.S. government securities 31,263 4 (16 ) 31,251 Total $ 541,684 $ 329 $ (1,022 ) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78 ) $ 114,560 Corporate bonds 159,783 419 (950 ) 159,252 Municipal securities 28,453 167 (26 ) 28,594 U.S. government securities 153,743 553 (172 ) 154,124 Non-U.S. government securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226 ) $ 464,680 |
Contractual Maturities of Short-Term and Long-Term Investments | The contractual maturities of the Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 565,719 $ 566,539 Due in one to five years 478,866 481,063 Total $ 1,044,585 $ 1,047,602 The contractual maturities of the Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 101,888 $ 101,924 Due in one to five years — — Total $ 101,888 $ 101,924 |
CUSTOMER FUNDS (Tables)
CUSTOMER FUNDS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Assets Underlying Customer Funds | The following table presents the assets underlying customer funds (in thousands): March 31, December 31, Cash $ 278,967 $ 158,697 Cash Equivalents: Money market funds 862 18 U.S. agency securities 14,539 39,991 U.S. government securities 49,125 35,349 Short-term debt securities: U.S. agency securities 22,286 27,291 U.S. government securities 79,638 72,671 Total $ 445,417 $ 334,017 |
Investments within Customer Funds | The Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities 27,293 2 (4 ) 27,291 U.S. government securities 72,662 12 (3 ) 72,671 Total $ 99,955 $ 14 $ (7 ) $ 99,962 The Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 22,281 $ 7 $ (2 ) $ 22,286 U.S. government securities 79,607 33 (2 ) 79,638 Total $ 101,888 $ 40 $ (4 ) $ 101,924 |
Contractual Maturities of Short-Term and Long-Term Investments within Customer Funds | The contractual maturities of the Company's short-term and long-term investments as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 565,719 $ 566,539 Due in one to five years 478,866 481,063 Total $ 1,044,585 $ 1,047,602 The contractual maturities of the Company's investments within customer funds as of March 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 101,888 $ 101,924 Due in one to five years — — Total $ 101,888 $ 101,924 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The estimated fair value and carrying value of the convertible senior notes were as follows (in thousands): March 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2023 Notes $ 725,900 $ 1,042,987 $ 718,522 $ 901,468 2022 Notes 183,402 690,691 181,173 515,693 Total $ 909,302 $ 1,733,678 $ 899,695 $ 1,417,161 The estimated fair value and carrying value of loans held for sale is as follows (in thousands): March 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 123,471 $ 128,358 $ 89,974 $ 93,064 Total $ 123,471 $ 128,358 $ 89,974 $ 93,064 The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands): March 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash Equivalents: Money market funds $ 164,457 $ — $ — $ 218,109 $ — $ — U.S. agency securities — 19,712 — — 46,423 — Commercial paper — 2,997 — — — — U.S. government securities 102,199 — — — — — Municipal securities — — — 86,239 — — Non-U.S. government securities — — — — 23,981 — Customer funds: Money market funds 862 — — 18 — — U.S. agency securities — 36,825 — — 67,282 — U.S. government securities 128,763 — — 108,020 — — Short-term debt securities: U.S. agency securities — 113,635 — — 80,122 — Corporate bonds — 85,096 — — 109,519 — Municipal securities — 20,273 — — 27,832 — U.S. government securities 318,110 — — 292,267 — — Non-U.S. government securities — 29,425 — — 31,251 — Long-term debt securities: U.S. agency securities — 86,264 — — 114,560 — Corporate bonds — 187,896 — — 159,252 — Municipal securities — 23,393 — — 28,594 — U.S. government securities 175,048 — — 154,124 — — Non-U.S. government securities — 8,462 — — 8,150 — Other: Equity investment 31,255 — — 45,342 — — Total $ 920,694 $ 613,978 $ — $ 904,119 $ 696,966 $ — |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands): March 31, December 31, Leasehold improvements $ 105,244 $ 107,611 Computer equipment 82,056 80,093 Capitalized software 64,233 58,908 Office furniture and equipment 20,713 20,699 272,246 267,311 Less: Accumulated depreciation and amortization (138,540 ) (124,909 ) Property and equipment, net $ 133,706 $ 142,402 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The table below summarizes the consideration paid for Weebly and the preliminary assessment of the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). Consideration: Cash $ 132,432 Stock (2,418,271 shares of Class A common stock) 140,107 $ 272,539 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash acquired of $25,758) $ 46,814 Intangible customer assets 42,700 Intangible technology assets 14,900 Intangible trade name 11,300 Intangible other assets 961 Total liabilities assumed (including deferred revenue of $22,800) (37,592 ) Total identifiable net assets acquired 79,083 Goodwill 193,456 Total $ 272,539 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in carrying value of goodwill in the period was as follows (in thousands): Balance at December 31, 2018 $ 261,705 Acquisitions 7,437 Other adjustments (2,130 ) Balance at March 31, 2019 $ 267,012 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite Lived Intangible Assets | The changes to the carrying value of intangible assets were as follows (in thousands): Three Months Ended March 31, 2019 2018 Acquired intangible assets, net, beginning of the period $ 77,102 $ 14,334 Acquisitions 6,082 1,679 Amortization expense 3,487 1,875 Acquired intangible assets, net, end of the period $ 79,697 $ 14,138 The following table presents the detail of acquired intangible assets as of the periods presented (in thousands): Balance at March 31, 2019 Cost Accumulated Amortization Net Technology assets 49,007 (29,796 ) 19,211 Customer assets 57,109 (9,361 ) 47,748 Trade name 11,300 (2,354 ) 8,946 Other 5,299 (1,507 ) 3,792 Total $ 122,715 $ (43,018 ) $ 79,697 Balance at December 31, 2018 Cost Accumulated Amortization Net Technology assets 45,978 (28,420 ) 17,558 Customer assets 57,109 (8,068 ) 49,041 Trade name 11,300 (1,648 ) 9,652 Other 2,246 (1,395 ) 851 Total $ 116,633 $ (39,531 ) $ 77,102 |
Schedule of Future Amortization Expense of Intangible Assets | The total estimated future amortization expense of these intangible assets as of March 31, 2019 is as follows (in thousands): 2019 (remaining 9 months) $ 11,185 2020 12,611 2021 11,413 2022 9,484 2023 7,953 Thereafter 27,051 Total $ 79,697 |
OTHER CONSOLIDATED BALANCE SH_3
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | The following table presents the detail of other current assets (in thousands): March 31, December 31, Inventory, net $ 26,679 $ 28,627 Processing costs receivable 59,470 46,102 Prepaid expenses 23,526 21,782 Accounts receivable, net 28,665 22,393 Other 46,781 46,062 Total $ 185,121 $ 164,966 |
Schedule of Accrued Expenses | The following table presents the detail of accrued expenses (in thousands): March 31, December 31, Accrued facilities expenses $ 5,853 $ 13,040 Accrued payroll 18,282 9,612 Accrued professional fees 6,173 5,232 Accrued advertising and other marketing 15,940 12,201 Processing costs payable 13,190 12,683 Accrued non income tax liabilities 6,568 9,503 Accrued hardware costs 5,413 5,125 Other accrued liabilities 16,393 14,958 Total $ 87,812 $ 82,354 |
Schedule of Other Current Liabilities | The following table presents the detail of other current liabilities (in thousands): March 31, December 31, Accounts payable $ 24,635 $ 36,416 Deferred revenue, current 36,343 31,474 Square Capital payable (i) 18,459 6,092 Square Payroll payable (ii) 12,338 7,534 Other 16,869 17,637 Total $ 108,644 $ 99,153 (i) Square Capital payable represents unpaid amounts arising from the purchase of loans or loan repayments collected on behalf of third parties. (ii) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers' employee payroll and related obligations. |
OTHER CONSOLIDATED BALANCE SH_4
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Non-Current Assets | The following table presents the detail of other non-current assets (in thousands): March 31, December 31, Equity investment (i) $ 31,255 $ 45,342 Other 16,947 13,051 Total $ 48,202 $ 58,393 (i) This balance represents the Company's investment in Class B common shares of Eventbrite, Inc. (Eventbrite). The investment is carried at fair value with changes in fair value being recorded on the consolidated statement of operations. During the three months ended March 31, 2019 , the Company recorded a loss of $14.1 million to other expense (income), net on the consolidated statements of operations arising from revaluation of this investment. |
Schedule of Other Non-Current Liabilities | The following table presents the detail of other non-current liabilities (in thousands): March 31, December 31, Statutory liabilities (ii) $ 57,839 $ 54,748 Deferred rent, non-current (iii) — 23,003 Deferred revenue, non-current 5,817 4,977 Other 11,929 10,558 Total $ 75,585 $ 93,286 (ii) Statutory liabilities represent loss contingencies that may arise from the Company's interpretation and application of certain guidelines and rules issued by various federal, state, local, and foreign regulatory authorities. (iii) The adoption of ASC 842 on January 1, 2019, resulted in the reclassification of deferred rent as an offset to right-of-use lease assets. |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes | The net carrying amount of the Notes were as follows (in thousands): Principal outstanding Unamortized debt discount Unamortized debt issuance costs Net carrying value March 31, 2019 2023 Notes $ 862,500 $ (131,767 ) $ (4,833 ) $ 725,900 2022 Notes 211,728 (25,563 ) (2,763 ) 183,402 Total $ 1,074,228 $ (157,330 ) $ (7,596 ) $ 909,302 December 31, 2018 2023 Notes $ 862,500 $ (138,924 ) $ (5,054 ) $ 718,522 2022 Notes 211,728 (27,569 ) (2,986 ) 181,173 $ 1,074,228 $ (166,493 ) $ (8,040 ) $ 899,695 The net carrying amount of the equity component of the 2023 Notes and 2022 Notes were as follows (in thousands): Amount allocated to conversion option Less: allocated issuance costs Equity component, net March 31, 2019 and December 31, 2018 2023 Notes $ 155,250 $ (1,231 ) $ 154,019 2022 Notes 41,481 (1,108 ) 40,373 Total 196,731 (2,339 ) 194,392 |
Interest Expense on Convertible Notes | The Company recognized interest expense on the Notes as follows (in thousands, except for percentages): Three Months Ended March 31, 2019 2018 Contractual interest expense $ 1,277 $ 413 Amortization of debt discount and issuance costs 9,608 4,393 Total $ 10,885 $ 4,806 |
ACCRUED TRANSACTION LOSSES (Tab
ACCRUED TRANSACTION LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Reserve for Transaction Losses | The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended March 31, 2019 2018 Accrued transaction losses, beginning of the period $ 33,682 $ 26,893 Provision for transaction losses 19,808 14,258 Charge-offs to accrued transaction losses (17,443 ) (12,842 ) Accrued transaction losses, end of the period $ 36,047 $ 28,309 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the three months ended March 31, 2019 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Balance at December 31, 2018 33,152,881 $ 9.52 5.45 $ 1,543,793 Granted 97,701 73.94 Exercised (3,588,052 ) 7.06 Forfeited (95,141 ) 11.78 Balance at March 31, 2019 29,567,389 $ 10.03 5.41 $ 1,918,661 Options exercisable as of March 31, 2019 27,693,334 $ 8.88 5.23 $ 1,828,856 |
Schedule of Restricted Stock Awards and Restricted Stock Units Activity | Activity related to RSAs and RSUs during the three months ended March 31, 2019 is set forth below: Number of Weighted Unvested as of December 31, 2018 17,934,728 $ 31.34 Granted 552,596 69.20 Vested (1,880,545 ) 24.12 Forfeited (559,047 ) 29.35 Unvested as of March 31, 2019 16,047,732 $ 33.56 |
Schedule of Fair Value Assumptions for Options | The fair value of stock options granted was estimated using the following weighted-average assumptions: Three Months Ended March 31, 2019 Dividend yield — % Risk-free interest rate 2.59 % Expected volatility 38.55 % Expected term (years) 6.08 |
Summary of the Effect of Share-Based Compensation on the Condensed Consolidated Statements of Operations | The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Cost of revenue $ 21 $ 31 Product development 42,649 30,482 Sales and marketing 6,202 4,961 General and administrative 12,216 11,350 Total $ 61,088 $ 46,824 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended March 31, 2019 2018 Net loss $ (38,151 ) $ (23,986 ) Basic shares: Weighted-average common shares outstanding 419,860 397,246 Weighted-average unvested shares (571 ) (1,298 ) Weighted-average shares used to compute basic net loss per share 419,289 395,948 Diluted shares: Weighted-average shares used to compute diluted net loss per share 419,289 395,948 Net loss per share: Basic $ (0.09 ) $ (0.06 ) Diluted $ (0.09 ) $ (0.06 ) |
Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended March 31, 2019 2018 Stock options and restricted stock units 47,833 66,382 Common stock warrants 30,252 19,173 Convertible senior notes 20,305 — Unvested shares 571 1,298 Employee stock purchase plan 212 264 Total anti-dilutive securities 99,173 87,117 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Expense Components and Other Information Related to Leases | The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease costs $ 6,690 Finance lease costs Amortization of right-of-use assets 1,293 Interest on lease liabilities — Total finance lease costs $ 1,293 For the periods presented, costs associated with short-term leases were not material. Other information related to leases was as follows: Three Months Ended March 31, 2019 Weighted Average Remaining Lease Term: Operating leases 4.80 years Finance leases 1.75 years Weighted Average Discount Rate: Operating leases 4 % Finance leases — % |
Future Minimum Lease Payments under Non-Cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2019 are as follows (in thousands): Finance Operating Year: 2019 (remaining 9 months) $ 3,745 $ 20,112 2020 2,446 39,182 2021 — 53,426 2022 — 54,229 2023 — 47,952 Thereafter — 211,056 Total $ 6,191 $ 425,957 Less amount representing interest — 14,323 Less leases executed but not yet commenced — 276,037 Total $ 6,191 $ 135,597 |
Future Minimum Finance Lease Payments | Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2019 are as follows (in thousands): Finance Operating Year: 2019 (remaining 9 months) $ 3,745 $ 20,112 2020 2,446 39,182 2021 — 53,426 2022 — 54,229 2023 — 47,952 Thereafter — 211,056 Total $ 6,191 $ 425,957 Less amount representing interest — 14,323 Less leases executed but not yet commenced — 276,037 Total $ 6,191 $ 135,597 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue by Geographic Area | Revenue by geography is based on the billing addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands): Three Months Ended March 31, 2019 2018 Revenue United States $ 914,656 $ 640,173 International 44,703 28,430 Total net revenue $ 959,359 $ 668,603 |
Long-lived Assets by Geographic Area | The following table sets forth long-lived assets by geographic area (in thousands): March 31, December 31, Long-lived assets United States $ 579,397 $ 471,970 International 12,974 9,239 Total long-lived assets $ 592,371 $ 481,209 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The supplemental disclosures of cash flow information consist of the following (in thousands): Three Months Ended March 31, 2019 2018 Supplemental Cash Flow Data: Cash paid for interest $ 538 $ 966 Cash paid for income taxes 1,342 658 Right-of-use assets obtained in exchange for operating lease obligations 19,918 — Supplemental disclosures of non-cash investing and financing activities: Change in purchases of property and equipment in accounts payable and accrued expenses 13,114 (3,813 ) Unpaid business combination purchase price 6,447 1,151 Recovery of common stock in connection with indemnification settlement agreement 789 — |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)customerthird_party_processor | Mar. 31, 2018customer | Dec. 31, 2018USD ($)third_party_processor | |
Concentration Risk [Line Items] | |||
Operating lease right-of-use assets | $ 111,956 | ||
Operating lease liability | 135,597 | ||
Derecognition of build-to-suit lease asset | 0 | $ (149,000) | |
Derecognition of build-to-suit lease liability | $ 0 | $ (149,000) | |
Total Net Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of customers accoutning for greater than 10% of total net revenue | customer | 0 | 0 | |
Settlements Receivable | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of third party processors | third_party_processor | 3 | 3 | |
Settlements Receivable | Credit Concentration Risk | Third Party Processor One | |||
Concentration Risk [Line Items] | |||
Concentration risk, settlements receivable | 55.00% | 45.00% | |
Settlements Receivable | Credit Concentration Risk | Third Party Processor Two | |||
Concentration Risk [Line Items] | |||
Concentration risk, settlements receivable | 35.00% | 33.00% | |
Settlements Receivable | Credit Concentration Risk | Third Party Processor Three | |||
Concentration Risk [Line Items] | |||
Concentration risk, settlements receivable | 6.00% | 9.00% | |
Minimum | |||
Concentration Risk [Line Items] | |||
Settlements receivable period | 1 day | ||
Maximum | |||
Concentration Risk [Line Items] | |||
Settlements receivable period | 2 days | ||
Accounting Standards Update 2016-02 | |||
Concentration Risk [Line Items] | |||
Operating lease right-of-use assets | $ 112,000 | ||
Operating lease liability | 135,600 | ||
Derecognition of build-to-suit lease asset | $ 149,000 | ||
Derecognition of build-to-suit lease liability | $ 149,000 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Transaction-based revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 656,762 | $ 523,037 |
Subscription and services-based revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 190,307 | 77,215 |
Revenues from other sources | 28,550 | 19,839 |
Hardware revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 18,212 | 14,417 |
Bitcoin revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 65,528 | $ 34,095 |
REVENUE - Deferred Revenue (Det
REVENUE - Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred revenue, beginning of the period | $ 36,451 | $ 1,590 |
Deferred revenue, end of the period | 42,160 | 3,353 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | 12,306 | 298 |
Balances without adoption of ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred revenue, beginning of the period | 36,451 | 5,893 |
Accounting Standards Update 2014-09 | Effect of change | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred revenue, beginning of the period | $ 0 | $ (4,303) |
INVESTMENTS - Short-Term and L
INVESTMENTS - Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,044,585 | |
Fair Value | 1,047,602 | |
Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 565,719 | $ 541,684 |
Gross Unrealized Gains | 949 | 329 |
Gross Unrealized Losses | (129) | (1,022) |
Fair Value | 566,539 | 540,991 |
Long-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 478,866 | 464,545 |
Gross Unrealized Gains | 2,246 | 1,361 |
Gross Unrealized Losses | (49) | (1,226) |
Fair Value | 481,063 | 464,680 |
U.S. agency securities | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 113,508 | 80,160 |
Gross Unrealized Gains | 142 | 32 |
Gross Unrealized Losses | (15) | (70) |
Fair Value | 113,635 | 80,122 |
U.S. agency securities | Long-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 85,993 | 114,444 |
Gross Unrealized Gains | 299 | 194 |
Gross Unrealized Losses | (28) | (78) |
Fair Value | 86,264 | 114,560 |
Corporate bonds | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 84,832 | 109,807 |
Gross Unrealized Gains | 289 | 80 |
Gross Unrealized Losses | (25) | (368) |
Fair Value | 85,096 | 109,519 |
Corporate bonds | Long-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 186,674 | 159,783 |
Gross Unrealized Gains | 1,233 | 419 |
Gross Unrealized Losses | (11) | (950) |
Fair Value | 187,896 | 159,252 |
Municipal securities | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20,237 | 27,839 |
Gross Unrealized Gains | 54 | 52 |
Gross Unrealized Losses | (18) | (59) |
Fair Value | 20,273 | 27,832 |
Municipal securities | Long-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,267 | 28,453 |
Gross Unrealized Gains | 128 | 167 |
Gross Unrealized Losses | (2) | (26) |
Fair Value | 23,393 | 28,594 |
U.S. government securities | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 317,787 | 292,615 |
Gross Unrealized Gains | 394 | 161 |
Gross Unrealized Losses | (71) | (509) |
Fair Value | 318,110 | 292,267 |
U.S. government securities | Long-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 174,515 | 153,743 |
Gross Unrealized Gains | 541 | 553 |
Gross Unrealized Losses | (8) | (172) |
Fair Value | 175,048 | 154,124 |
Non-U.S. government securities | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 29,355 | 31,263 |
Gross Unrealized Gains | 70 | 4 |
Gross Unrealized Losses | 0 | (16) |
Fair Value | 29,425 | 31,251 |
Non-U.S. government securities | Long-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,417 | 8,122 |
Gross Unrealized Gains | 45 | 28 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 8,462 | $ 8,150 |
INVESTMENTS - Contractual Matu
INVESTMENTS - Contractual Maturities of Short-Term and Long-Term Investments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Amortized Cost | |
Due in one year or less | $ 565,719 |
Due in one to five years | 478,866 |
Amortized Cost | 1,044,585 |
Fair Value | |
Due in one year or less | 566,539 |
Due in one to five years | 481,063 |
Fair Value | $ 1,047,602 |
CUSTOMER FUNDS - Assets Underly
CUSTOMER FUNDS - Assets Underlying Customer Funds (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 445,417 | $ 334,017 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 22,286 | 27,291 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 79,638 | 72,671 |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 278,967 | 158,697 |
Cash Equivalents | Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 862 | 18 |
Cash Equivalents | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 14,539 | 39,991 |
Cash Equivalents | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 49,125 | $ 35,349 |
CUSTOMER FUNDS - Investments wi
CUSTOMER FUNDS - Investments within Customer Funds (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,044,585 | |
Fair Value | 1,047,602 | |
Customer funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 101,888 | $ 99,955 |
Gross Unrealized Gains | 40 | 14 |
Gross Unrealized Losses | (4) | (7) |
Fair Value | 101,924 | 99,962 |
Customer funds | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 22,281 | 27,293 |
Gross Unrealized Gains | 7 | 2 |
Gross Unrealized Losses | (2) | (4) |
Fair Value | 22,286 | 27,291 |
Customer funds | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 79,607 | 72,662 |
Gross Unrealized Gains | 33 | 12 |
Gross Unrealized Losses | (2) | (3) |
Fair Value | $ 79,638 | $ 72,671 |
CUSTOMER FUNDS - Contractual Ma
CUSTOMER FUNDS - Contractual Maturities of Short-Term and Long-Term Investments within Customer Funds (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less | $ 565,719 | |
Due in one to five years | 478,866 | |
Amortized Cost | 1,044,585 | |
Fair Value | ||
Due in one year or less | 566,539 | |
Due in one to five years | 481,063 | |
Fair Value | 1,047,602 | |
Customer funds | ||
Amortized Cost | ||
Due in one year or less | 101,888 | |
Due in one to five years | 0 | |
Amortized Cost | 101,888 | $ 99,955 |
Fair Value | ||
Due in one year or less | 101,924 | |
Due in one to five years | 0 | |
Fair Value | $ 101,924 | $ 99,962 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | $ 445,417 | $ 334,017 |
Short-term debt securities | 566,539 | 540,991 |
Long-term debt securities | 481,063 | 464,680 |
Equity investment | 31,255 | 45,342 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 22,286 | 27,291 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 79,638 | 72,671 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment | 31,255 | 45,342 |
Total | 920,694 | 904,119 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 164,457 | 218,109 |
Customer funds | 862 | 18 |
Fair Value, Measurements, Recurring | Level 1 | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 102,199 | 0 |
Customer funds | 128,763 | 108,020 |
Short-term debt securities | 318,110 | 292,267 |
Long-term debt securities | 175,048 | 154,124 |
Fair Value, Measurements, Recurring | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 86,239 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Non-U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment | 0 | 0 |
Total | 613,978 | 696,966 |
Fair Value, Measurements, Recurring | Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 19,712 | 46,423 |
Customer funds | 36,825 | 67,282 |
Short-term debt securities | 113,635 | 80,122 |
Long-term debt securities | 86,264 | 114,560 |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,997 | 0 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 85,096 | 109,519 |
Long-term debt securities | 187,896 | 159,252 |
Fair Value, Measurements, Recurring | Level 2 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 20,273 | 27,832 |
Long-term debt securities | 23,393 | 28,594 |
Fair Value, Measurements, Recurring | Level 2 | Non-U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 23,981 |
Short-term debt securities | 29,425 | 31,251 |
Long-term debt securities | 8,462 | 8,150 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment | 0 | 0 |
Total | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Non-U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Convertible Senior Notes (Details) - Level 2 - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | $ 909,302 | $ 899,695 |
Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 1,733,678 | 1,417,161 |
2023 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 725,900 | 718,522 |
2023 Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 1,042,987 | 901,468 |
2022 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 183,402 | 181,173 |
2022 Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | $ 690,691 | $ 515,693 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Loans Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Carrying Value | Level 3 | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for sale | $ 123,471 | $ 89,974 | |
Fair Value (Level 3) | Level 3 | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for sale | 128,358 | $ 93,064 | |
Loans Receivable Held-For-Sale | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Excess amortized cost over fair value of loans | $ 6,700 | $ 2,500 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 272,246 | $ 267,311 | |
Less: Accumulated depreciation and amortization | (138,540) | (124,909) | |
Property and equipment, net | 133,706 | 142,402 | |
Depreciation and amortization expense | 15,500 | $ 8,300 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 105,244 | 107,611 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 82,056 | 80,093 | |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 64,233 | 58,908 | |
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 20,713 | $ 20,699 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - Weebly, Inc. - USD ($) $ in Thousands | May 31, 2018 | Mar. 31, 2019 |
Business Acquisition [Line Items] | ||
Percent of outstanding shares acquired | 100.00% | |
Cash consideration | $ 132,432 | |
Equity consideration (in shares) | 2,418,271 | |
Equity consideration fair value | $ 140,107 | |
Payment to settle outstanding vested and unvested employee options | 17,700 | |
Post-combination compensation expense | $ 2,600 | |
Goodwill adjustment to purchase price allocation | $ 3,900 | |
Tax liabilities adjustment to purchase price allocation | 4,800 | |
Cash withheld for indemnification | $ 19,100 | |
Shares withheld for indemnification (in shares) | 357,780 |
ACQUISITIONS - Schedule of Asse
ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | May 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 267,012 | $ 261,705 | |
Weebly, Inc. | |||
Consideration: | |||
Cash | $ 132,432 | ||
Stock (2,418,271 shares of Class A common stock) | $ 140,107 | ||
Stock (in shares) | 2,418,271 | ||
Total consideration | $ 272,539 | ||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Current assets (inclusive of cash acquired of $25,758) | 46,814 | ||
Cash acquired | 25,758 | ||
Total liabilities assumed (including deferred revenue of $22,800) | (37,592) | ||
Deferred revenue | 22,800 | ||
Total identifiable net assets acquired | 79,083 | ||
Goodwill | 193,456 | ||
Total | 272,539 | ||
Weebly, Inc. | Intangible customer assets | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Intangible assets | 42,700 | ||
Weebly, Inc. | Intangible technology assets | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Intangible assets | 14,900 | ||
Weebly, Inc. | Intangible trade name | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Intangible assets | 11,300 | ||
Weebly, Inc. | Intangible other assets | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Intangible assets | $ 961 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 261,705,000 | |
Acquisitions | 7,437,000 | |
Other adjustments | (2,130,000) | |
Goodwill, ending balance | 267,012,000 | |
Goodwill, impairment charges | $ 0 | $ 0 |
ACQUIRED INTANGIBLE ASSETS - N
ACQUIRED INTANGIBLE ASSETS - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Technology assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 5 years |
Customer assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 11 years |
Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 4 years |
ACQUIRED INTANGIBLE ASSETS - S
ACQUIRED INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 122,715 | $ 116,633 | ||
Accumulated Amortization | (43,018) | (39,531) | ||
Net | 79,697 | 77,102 | $ 14,138 | $ 14,334 |
Technology assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 49,007 | 45,978 | ||
Accumulated Amortization | (29,796) | (28,420) | ||
Net | 19,211 | 17,558 | ||
Customer assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 57,109 | 57,109 | ||
Accumulated Amortization | (9,361) | (8,068) | ||
Net | 47,748 | 49,041 | ||
Trade name | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 11,300 | 11,300 | ||
Accumulated Amortization | (2,354) | (1,648) | ||
Net | 8,946 | 9,652 | ||
Other | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 5,299 | 2,246 | ||
Accumulated Amortization | (1,507) | (1,395) | ||
Net | $ 3,792 | $ 851 |
ACQUIRED INTANGIBLE ASSETS - Ch
ACQUIRED INTANGIBLE ASSETS - Change in Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Acquired intangible assets, net, beginning of the period | $ 77,102 | $ 14,334 |
Acquisitions | 6,082 | 1,679 |
Amortization expense | 3,487 | 1,875 |
Acquired intangible assets, net, end of the period | $ 79,697 | $ 14,138 |
ACQUIRED INTANGIBLE ASSETS - F
ACQUIRED INTANGIBLE ASSETS - Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
2019 (remaining 9 months) | $ 11,185 | |||
2020 | 12,611 | |||
2021 | 11,413 | |||
2022 | 9,484 | |||
2023 | 7,953 | |||
Thereafter | 27,051 | |||
Net | $ 79,697 | $ 77,102 | $ 14,138 | $ 14,334 |
OTHER CONSOLIDATED BALANCE SH_5
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Inventory, net | $ 26,679 | $ 28,627 |
Processing costs receivable | 59,470 | 46,102 |
Prepaid expenses | 23,526 | 21,782 |
Accounts receivable, net | 28,665 | 22,393 |
Other | 46,781 | 46,062 |
Total | $ 185,121 | $ 164,966 |
OTHER CONSOLIDATED BALANCE SH_6
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued facilities expenses | $ 5,853 | $ 13,040 |
Accrued payroll | 18,282 | 9,612 |
Accrued professional fees | 6,173 | 5,232 |
Accrued advertising and other marketing | 15,940 | 12,201 |
Processing costs payable | 13,190 | 12,683 |
Accrued non income tax liabilities | 6,568 | 9,503 |
Accrued hardware costs | 5,413 | 5,125 |
Other accrued liabilities | 16,393 | 14,958 |
Total | $ 87,812 | $ 82,354 |
OTHER CONSOLIDATED BALANCE SH_7
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 24,635 | $ 36,416 |
Deferred revenue, current | 36,343 | 31,474 |
Square Capital payable | 18,459 | 6,092 |
Square Payroll payable | 12,338 | 7,534 |
Other | 16,869 | 17,637 |
Total | $ 108,644 | $ 99,153 |
OTHER CONSOLIDATED BALANCE SH_8
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Equity investment | $ 31,255 | $ 45,342 | |
Other | 16,947 | 13,051 | |
Total | 48,202 | $ 58,393 | |
Loss on equity investment | $ 14,087 | $ 0 |
OTHER CONSOLIDATED BALANCE SH_9
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Statutory liabilities | $ 57,839 | $ 54,748 |
Deferred rent, non-current | 0 | 23,003 |
Deferred revenue, non-current | 5,817 | 4,977 |
Other | 11,929 | 10,558 |
Total | $ 75,585 | $ 93,286 |
INDEBTEDNESS - Revolving Credi
INDEBTEDNESS - Revolving Credit Facility Narrative (Details) - Revolving Credit Facility - Line of Credit - USD ($) | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2015 | Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 375,000,000 | ||
Administrative agent fee | $ 100,000 | ||
Unused commitment fee percentage | 0.15% | ||
Remaining borrowing capacity | $ 375,000,000 | ||
Unused commitment fees | $ 100,000 | $ 100,000 | |
Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
One Month LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.00% | ||
One Month LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.00% |
INDEBTEDNESS - Convertible Seni
INDEBTEDNESS - Convertible Senior Notes Narrative (Details) $ / shares in Units, shares in Millions | Dec. 31, 2018USD ($) | May 25, 2018USD ($)day$ / shares | Mar. 06, 2017USD ($)day$ / shares | Dec. 31, 2018USD ($)shares | Mar. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||
Principal payment on conversion of senior notes | $ 219,400,000 | ||||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Conversion price (in USD per share) | $ / shares | $ 77.85 | $ 22.95 | |||
Carrying amount of equity component | $ 194,392,000 | 194,392,000 | $ 194,392,000 | ||
Issuance costs attributable to the liability component | 8,040,000 | 8,040,000 | 7,596,000 | ||
Convertible Debt | Convertible Senior Notes due in 2023 | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 862,500,000 | ||||
Over-allotment option as a percentage of a principal amount | 15.00% | ||||
Over-allotment option | $ 112,500,000 | ||||
Interest rate | 0.50% | ||||
Conversion rate | 0.0128456 | ||||
Conversion price (in USD per share) | $ / shares | $ 77.85 | ||||
Carrying amount of equity component | 154,019,000 | $ 155,300,000 | 154,019,000 | $ 154,019,000 | |
Effective interest rate of the liability component | 4.69% | 4.69% | |||
Discounts and commissions payable | $ 6,000,000 | ||||
Third party offering costs | 800,000 | ||||
Issuance costs attributable to the liability component | 5,054,000 | $ 5,600,000 | 5,054,000 | $ 4,833,000 | |
Convertible Debt | Convertible Senior Notes due in 2023 | Debt Instrument, Conversion Term One | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
Convertible Debt | Convertible Senior Notes due in 2023 | Debt Instrument Conversion Term Two | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 5 | ||||
Threshold consecutive trading days | day | 5 | ||||
Threshold percentage of stock price trigger | 98.00% | ||||
Convertible Debt | Convertible Senior Notes due in 2022 | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 440,000,000 | ||||
Over-allotment option as a percentage of a principal amount | 10.00% | ||||
Over-allotment option | $ 40,000,000 | ||||
Interest rate | 0.375% | ||||
Conversion rate | 0.0435749 | ||||
Conversion price (in USD per share) | $ / shares | $ 22.95 | ||||
Carrying amount of equity component | 40,373,000 | $ 86,200,000 | 40,373,000 | $ 40,373,000 | |
Effective interest rate of the liability component | 5.34% | 5.34% | |||
Discounts and commissions payable | $ 11,000,000 | ||||
Third party offering costs | 800,000 | ||||
Issuance costs attributable to the liability component | 2,986,000 | $ 9,400,000 | 2,986,000 | $ 2,763,000 | |
Notes converted | $ 228,300,000 | ||||
Shares issued upon conversion | shares | 7.3 | ||||
Loss on extinguishment of long-term debt | 5,000,000 | ||||
Reduction to additional paid in capital | $ 21,000,000 | ||||
Convertible Debt | Convertible Senior Notes due in 2022 | Debt Instrument, Conversion Term One | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
Convertible Debt | Convertible Senior Notes due in 2022 | Debt Instrument Conversion Term Two | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 5 | ||||
Threshold consecutive trading days | day | 5 | ||||
Threshold percentage of stock price trigger | 98.00% |
INDEBTEDNESS - Components of Co
INDEBTEDNESS - Components of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | May 25, 2018 | Mar. 06, 2017 |
Debt Instrument [Line Items] | ||||
Principal outstanding | $ 1,074,228 | $ 1,074,228 | ||
Unamortized debt discount | (157,330) | (166,493) | ||
Unamortized debt issuance costs | (7,596) | (8,040) | ||
Net carrying value | 909,302 | 899,695 | ||
Convertible Senior Notes due in 2023 | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 862,500 | 862,500 | ||
Unamortized debt discount | (131,767) | (138,924) | ||
Unamortized debt issuance costs | (4,833) | (5,054) | $ (5,600) | |
Net carrying value | 725,900 | 718,522 | ||
Convertible Senior Notes due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 211,728 | 211,728 | ||
Unamortized debt discount | (25,563) | (27,569) | ||
Unamortized debt issuance costs | (2,763) | (2,986) | $ (9,400) | |
Net carrying value | $ 183,402 | $ 181,173 |
INDEBTEDNESS - Carrying Amount
INDEBTEDNESS - Carrying Amount of Equity Component of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | May 25, 2018 | Mar. 06, 2017 |
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | $ 196,731 | $ 196,731 | ||
Less: allocated issuance costs | (2,339) | (2,339) | ||
Equity component, net | 194,392 | 194,392 | ||
Convertible Senior Notes due in 2023 | ||||
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | 155,250 | 155,250 | ||
Less: allocated issuance costs | (1,231) | (1,231) | ||
Equity component, net | 154,019 | 154,019 | $ 155,300 | |
Convertible Senior Notes due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | 41,481 | 41,481 | ||
Less: allocated issuance costs | (1,108) | (1,108) | ||
Equity component, net | $ 40,373 | $ 40,373 | $ 86,200 |
INDEBTEDNESS - Interest Expense
INDEBTEDNESS - Interest Expense on Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | May 25, 2018 | Mar. 06, 2017 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,277 | $ 413 | ||
Amortization of debt discount and issuance costs | 9,608 | 4,393 | ||
Total | $ 10,885 | $ 4,806 | ||
Convertible Senior Notes due in 2023 | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate of the liability component | 4.69% | 4.69% | ||
Convertible Senior Notes due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate of the liability component | 5.34% | 5.34% |
INDEBTEDNESS - Convertible Note
INDEBTEDNESS - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | May 25, 2018 | Mar. 06, 2017 | Mar. 31, 2019 | Dec. 31, 2018 |
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Conversion price of convertible debt (in USD per share) | $ 77.85 | $ 22.95 | ||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | $ 109.26 | $ 31.18 | ||
Common Stock Warrant | ||||
Debt Instrument [Line Items] | ||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11.1 | 19.2 | ||
Warrants, weighted average exercise price (in USD per share) | $ 109.26 | $ 31.18 | ||
Proceeds from issuance of warrants | $ 112.1 | $ 57.2 | ||
Shares of common stock received due to exercise of note hedges (in shares) | 0.3 | 6.9 | ||
Options | ||||
Debt Instrument [Line Items] | ||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11.1 | 19.2 | ||
Convertible note hedge, option to purchase common stock, price (in USD per share) | $ 77.85 | $ 22.95 | ||
Cost of convertible note hedge | $ 172.6 | $ 92.1 |
ACCRUED TRANSACTION LOSSES (Det
ACCRUED TRANSACTION LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Loss Contingency Accrual | ||
Accrued transaction losses, beginning of the period | $ 33,682 | |
Provision for transaction losses | 27,841 | $ 18,031 |
Accrued transaction losses, end of the period | 36,047 | |
Transaction Losses | ||
Loss Contingency Accrual | ||
Accrued transaction losses, beginning of the period | 33,682 | 26,893 |
Provision for transaction losses | 19,808 | 14,258 |
Charge-offs to accrued transaction losses | (17,443) | (12,842) |
Accrued transaction losses, end of the period | $ 36,047 | $ 28,309 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 129 | $ 175 |
Effective tax rate | (0.30%) | (0.70%) |
STOCKHOLDERS' EQUITY - Common
STOCKHOLDERS' EQUITY - Common Stock and Warrants Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | May 25, 2018 | Mar. 06, 2017 | Mar. 31, 2019 | Dec. 31, 2018 |
Common Stock Warrant | ||||
Class of Stock [Line Items] | ||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11,100,000 | 19,200,000 | ||
Warrants, weighted average exercise price (in USD per share) | $ 109.26 | $ 31.18 | ||
Proceeds from issuance of warrants | $ 112.1 | $ 57.2 | ||
Number of warrants exercised | 0 | |||
Class A | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||
Common stock, par value (in USD per share) | $ 0.00 | $ 0.00 | ||
Common stock, shares outstanding (in shares) | 334,650,231 | 323,546,864 | ||
Class B | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||
Common stock, par value (in USD per share) | $ 0.00 | $ 0.00 | ||
Common stock, shares outstanding (in shares) | 86,973,715 | 93,501,142 |
STOCKHOLDERS' EQUITY - Stock P
STOCKHOLDERS' EQUITY - Stock Plans and Share Based Compensation Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)planshares | Mar. 31, 2018USD ($)shares | Nov. 17, 2015shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of share based compensation plans | plan | 2 | ||
Granted (in shares) | 97,701 | 0 | |
Employee stock purchase plan, compensation expense | $ | $ 61,088 | $ 46,824 | |
Capitalized share-based compensation expense | $ | 1,700 | 1,500 | |
Unrecognized compensation cost, options | $ | 527,000 | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee stock purchase plan, compensation expense | $ | $ 4,300 | $ 2,300 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, period for recognition | 2 years 7 months 28 days | ||
2009 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future issuance (in shares) | 0 | ||
2009 Stock Option Plan | Stock options, RSAs, and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments outstanding (in shares) | 24,792,142 | ||
2015 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future issuance (in shares) | 86,449,187 | ||
Shares reserved for future issuance (in shares) | 30,000,000 | ||
Shares reserved for future issuance, percentage of annual increase | 5.00% | ||
2015 Equity Incentive Plan | Stock options, RSAs, and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments outstanding (in shares) | 20,822,979 | ||
2015 Equity Incentive Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for future issuance, amount of annual increase (in shares) | 40,000,000 |
STOCKHOLDERS' EQUITY - Stock O
STOCKHOLDERS' EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Mar. 31, 2019 | |
Number of Stock Options Outstanding | ||||
Beginning balance (in shares) | 33,152,881 | |||
Granted (in shares) | 97,701 | 0 | ||
Exercised (in shares) | (3,588,052) | |||
Forfeited (in shares) | (95,141) | |||
Ending balance (in shares) | 29,567,389 | 33,152,881 | ||
Weighted Average Exercise Price | ||||
Beginning balance (in USD per share) | $ 9.52 | |||
Granted (in USD per share) | 73.94 | |||
Exercised (in USD per share) | 7.06 | |||
Forfeited (in USD per share) | 11.78 | |||
Ending balance (in USD per share) | $ 9.52 | $ 9.52 | $ 10.03 | |
Options Exercisable | ||||
Options exercisable (in shares) | 27,693,334 | |||
Options exercisable (in USD per share) | $ 8.88 | |||
Additional Disclosures | ||||
Weighted average remaining contractual term, options outstanding | 5 years 4 months 28 days | 5 years 5 months 13 days | ||
Weighted average remaining contractual term, options exercisable | 5 years 2 months 23 days | |||
Aggregate intrinsic value, options outstanding | $ 1,543,793 | $ 1,918,661 | ||
Aggregate intrinsic value, options exercisable | $ 1,828,856 |
STOCKHOLDERS' EQUITY - Restric
STOCKHOLDERS' EQUITY - Restricted Stock Awards and Restricted Stock Units Activity (Details) - RSAs and RSUs | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of shares | |
Beginning balance (in shares) | shares | 17,934,728 |
Granted (in shares) | shares | 552,596 |
Vested (in shares) | shares | (1,880,545) |
Forfeited (in shares) | shares | (559,047) |
Ending balance (in shares) | shares | 16,047,732 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 31.34 |
Granted (in USD per share) | $ / shares | 69.20 |
Vested (in USD per share) | $ / shares | 24.12 |
Forfeited (in USD per share) | $ / shares | 29.35 |
Ending balance (in USD per share) | $ / shares | $ 33.56 |
STOCKHOLDERS' EQUITY - Stock_2
STOCKHOLDERS' EQUITY - Stock Option Fair Value Assumptions (Details) - Stock options | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Risk-free interest rate | 2.59% |
Expected volatility | 38.55% |
Expected term (years) | 6 years 29 days |
STOCKHOLDERS' EQUITY - Effects
STOCKHOLDERS' EQUITY - Effects of Share-Based Compensation on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 61,088 | $ 46,824 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 21 | 31 |
Product development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 42,649 | 30,482 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 6,202 | 4,961 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 12,216 | $ 11,350 |
NET LOSS PER SHARE - Calculati
NET LOSS PER SHARE - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (38,151) | $ (23,986) |
Basic shares: | ||
Weighted-average common shares outstanding (in shares) | 419,860 | 397,246 |
Weighted-average unvested shares (in shares) | (571) | (1,298) |
Weighted-average shares used to compute basic net loss per share (in shares) | 419,289 | 395,948 |
Diluted shares: | ||
Weighted-average shares used to compute diluted income (loss) per share (in shares) | 419,289 | 395,948 |
Net loss per share: | ||
Basic (in USD per share) | $ (0.09) | $ (0.06) |
Diluted (in USD per share) | $ (0.09) | $ (0.06) |
NET LOSS PER SHARE - Antidilut
NET LOSS PER SHARE - Antidilutive Securities Excluded from Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 99,173 | 87,117 |
Stock options and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 47,833 | 66,382 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 30,252 | 19,173 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 20,305 | 0 |
Unvested shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 571 | 1,298 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 212 | 264 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES - Operating and Finance Leases Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended |
Dec. 31, 2018USD ($)ft²renewal_option | Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease renewal term | 5 years | |
Operating lease option to terminate term | 1 year | |
Total lease payments over term | $ 425,957 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 12 years | |
Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease, remaining lease term | 2 years | |
Oakland, California | Building | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 12 years | |
Operating lease renewal term | 5 years | |
Leased area of office space (in sq ft) | ft² | 355,762 | |
Operating lease, number of renewal options | renewal_option | 2 | |
Total lease payments over term | $ 276,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Lease Expense Components (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease costs | $ 6,690 |
Finance lease costs | |
Amortization of right-of-use assets | 1,293 |
Interest on lease liabilities | 0 |
Total finance lease costs | $ 1,293 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other Information Related to Leases (Details) | Mar. 31, 2019 |
Weighted Average Remaining Lease Term: | |
Operating leases | 4 years 9 months 18 days |
Finance leases | 1 year 9 months |
Weighted Average Discount Rate: | |
Operating leases | 4.00% |
Finance leases | 0.00% |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases and Finance Leases (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Finance | |
2019 (remaining 9 months) | $ 3,745 |
2020 | 2,446 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | 6,191 |
Less amount representing interest | 0 |
Less leases executed but not yet commenced | 0 |
Total | 6,191 |
Operating | |
2019 (remaining 9 months) | 20,112 |
2020 | 39,182 |
2021 | 53,426 |
2022 | 54,229 |
2023 | 47,952 |
Thereafter | 211,056 |
Total | 425,957 |
Less amount representing interest | 14,323 |
Less leases executed but not yet commenced | 276,037 |
Total | $ 135,597 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 959,359 | $ 668,603 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 914,656 | 640,173 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 44,703 | $ 28,430 |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 592,371 | $ 481,209 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 579,397 | 471,970 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 12,974 | $ 9,239 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental Cash Flow Data: | ||
Cash paid for interest | $ 538 | $ 966 |
Cash paid for income taxes | 1,342 | 658 |
Right-of-use assets obtained in exchange for operating lease obligations | 19,918 | |
Supplemental disclosures of non-cash investing and financing activities: | ||
Change in purchases of property and equipment in accounts payable and accrued expenses | 13,114 | (3,813) |
Unpaid business combination purchase price | $ 6,447 | $ 1,151 |
Uncategorized Items - sq-201903
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,586,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,586,000) |