Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Class of Stock [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37622 | |
Entity Registrant Name | Square, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0429876 | |
Entity Address, Address Line One | 1455 Market Street | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94103 | |
City Area Code | 415 | |
Local Phone Number | 375-3176 | |
Title of 12(b) Security | Class A common stock, $0.0000001 par value per share | |
Trading Symbol | SQ | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001512673 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 371,293,974 | |
Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 72,237,774 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,972,762 | $ 1,047,118 |
Investments in short-term debt securities | 714,348 | 492,456 |
Settlements receivable | 879,464 | 588,692 |
Customer funds | 1,733,107 | 676,292 |
Loans held for sale | 567,499 | 164,834 |
Other current assets | 319,890 | 250,409 |
Total current assets | 6,187,070 | 3,219,801 |
Property and equipment, net | 167,062 | 149,194 |
Goodwill | 295,759 | 266,345 |
Acquired intangible assets, net | 99,802 | 69,079 |
Investments in long-term debt securities | 446,685 | 537,303 |
Operating lease right-of-use assets | 449,445 | 113,148 |
Other non-current assets | 166,449 | 196,388 |
Total assets | 7,812,272 | 4,551,258 |
Current liabilities: | ||
Customers payable | 2,568,418 | 1,273,135 |
Settlements payable | 179,131 | 95,834 |
Accrued expenses and other current liabilities | 393,576 | 297,841 |
Operating lease liabilities, current | 43,627 | 27,275 |
PPP Liquidity Facility advances | 447,764 | 0 |
Total current liabilities | 3,632,516 | 1,694,085 |
Long-term debt | 1,778,428 | 938,832 |
Operating lease liabilities, non-current | 384,801 | 108,830 |
Other non-current liabilities | 90,220 | 94,461 |
Total liabilities | 5,885,965 | 2,836,208 |
Commitments and contingencies (Note 17) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at June 30, 2020 and December 31, 2019. None issued and outstanding at June 30, 2020 and December 31, 2019. | 0 | 0 |
Additional paid-in capital | 2,549,638 | 2,223,749 |
Accumulated other comprehensive income | 4,366 | 1,629 |
Accumulated deficit | (627,697) | (510,328) |
Total stockholders’ equity | 1,926,307 | 1,715,050 |
Total liabilities and stockholders’ equity | 7,812,272 | 4,551,258 |
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 | Jun. 30, 2020 | Dec. 31, 2019 |
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) | 370,102,185 | 352,386,562 |
Common stock, shares outstanding (in shares) | 370,102,185 | 352,386,562 |
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) | 72,287,165 | 80,410,158 |
Common stock, shares outstanding (in shares) | 72,287,165 | 80,410,158 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Revenue | $ 1,923,625 | $ 1,174,238 | $ 3,304,734 | $ 2,133,597 |
Cost of revenue: | ||||
Total cost of revenue | 1,326,862 | 708,393 | 2,169,470 | 1,270,998 |
Gross profit | 596,763 | 465,845 | 1,135,264 | 862,599 |
Operating expenses: | ||||
Product development | 206,825 | 174,201 | 401,811 | 328,551 |
Sales and marketing | 238,096 | 156,421 | 432,631 | 290,134 |
General and administrative | 136,386 | 100,508 | 265,881 | 202,106 |
Transaction and loan losses | 37,603 | 34,264 | 146,486 | 62,105 |
Amortization of acquired customer assets | 4,134 | 3,958 | 8,286 | 7,445 |
Total operating expenses | 619,815 | 466,688 | 1,248,604 | 885,484 |
Operating loss | (23,052) | (843) | (113,340) | (22,885) |
Interest expense, net | 14,769 | 5,143 | 23,975 | 9,824 |
Other expense (income), net | (25,591) | 1,230 | (19,729) | 12,529 |
Loss before income tax | (12,230) | (7,216) | (117,586) | (45,238) |
Income tax benefit | (752) | (476) | (217) | (347) |
Net loss | $ (11,478) | $ (6,740) | $ (117,369) | $ (44,891) |
Net loss per share | ||||
Basic (in USD per share) | $ (0.03) | $ (0.02) | $ (0.27) | $ (0.11) |
Diluted (in USD per share) | $ (0.03) | $ (0.02) | $ (0.27) | $ (0.11) |
Weighted-average shares used to compute net loss per share | ||||
Basic (in shares) | 440,117 | 423,305 | 437,529 | 421,297 |
Diluted (in shares) | 440,117 | 423,305 | 437,529 | 421,297 |
Technology assets | ||||
Cost of revenue: | ||||
Amortization of acquired technology | $ 2,231 | $ 1,719 | $ 4,551 | $ 3,095 |
Customer assets | ||||
Operating expenses: | ||||
Amortization of acquired customer assets | 905 | 1,294 | 1,795 | 2,588 |
Transaction-based revenue | ||||
Revenue: | ||||
Revenue | 682,572 | 775,510 | 1,440,673 | 1,432,272 |
Cost of revenue: | ||||
Cost of revenue | 388,106 | 490,349 | 853,885 | 899,418 |
Subscription and services-based revenue | ||||
Revenue: | ||||
Revenue | 328,763 | 216,491 | 584,646 | 405,693 |
Revenue | 346,275 | 251,383 | 642,510 | 470,240 |
Cost of revenue: | ||||
Cost of revenue | 50,169 | 60,119 | 90,880 | 120,642 |
Hardware revenue | ||||
Revenue: | ||||
Revenue | 19,322 | 22,260 | 39,997 | 40,472 |
Cost of revenue: | ||||
Cost of revenue | 28,315 | 33,268 | 62,687 | 60,209 |
Bitcoin revenue | ||||
Revenue: | ||||
Revenue | 875,456 | 125,085 | 1,181,554 | 190,613 |
Cost of revenue: | ||||
Cost of revenue | $ 858,041 | $ 122,938 | $ 1,157,467 | $ 187,634 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (11,478) | $ (6,740) | $ (117,369) | $ (44,891) |
Net foreign currency translation adjustments | 6,367 | 261 | (2,021) | 527 |
Net unrealized gain on revaluation of intercompany loans | 0 | 0 | 0 | 75 |
Net unrealized gain on marketable debt securities | 1,431 | 2,237 | 4,758 | 4,525 |
Total comprehensive loss | $ (3,680) | $ (4,242) | $ (114,632) | $ (39,764) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (117,369) | $ (44,891) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 41,117 | 37,754 |
Non-cash interest and other | 32,769 | 16,013 |
Loss on extinguishment of long-term debt | 990 | 0 |
Share-based compensation | 173,713 | 140,554 |
Loss (gain) on revaluation of equity investment | (20,999) | 18,929 |
Non-cash lease expense | 32,343 | 14,354 |
Transaction and loan losses | 146,486 | 62,105 |
Change in deferred income taxes | (1,024) | (2,229) |
Changes in operating assets and liabilities: | ||
Settlements receivable | (302,103) | (1,148,376) |
Customer funds | (953,387) | (125,042) |
Purchase of loans held for sale | (1,466,391) | (1,035,500) |
Sales and principal payments of loans held for sale | 1,041,208 | 975,823 |
Customers payable | 1,291,968 | 1,052,867 |
Settlements payable | 83,297 | 236,515 |
Charge-offs to accrued transaction losses | (37,783) | (36,050) |
Other assets and liabilities | (96,668) | 3,010 |
Net cash provided by (used in) operating activities | (151,833) | 165,836 |
Cash flows from investing activities: | ||
Purchase of marketable debt securities | (724,862) | (354,908) |
Proceeds from maturities of marketable debt securities | 267,686 | 220,229 |
Proceeds from sale of marketable debt securities | 330,626 | 116,522 |
Purchase of marketable debt securities from customer funds | (265,287) | (88,064) |
Proceeds from maturities of marketable debt securities from customer funds | 142,000 | 63,000 |
Proceeds from sale of marketable debt securities from customer funds | 22,457 | 0 |
Purchase of property and equipment | (56,561) | (30,162) |
Payments for other investments | 0 | (2,000) |
Business combinations, net of cash acquired | (18,354) | (20,372) |
Net cash used in investing activities | (302,295) | (95,755) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible senior notes, net | 986,241 | 0 |
Purchase of convertible senior note hedges | (149,200) | 0 |
Proceeds from issuance of warrants | 99,500 | 0 |
Proceeds from PPP Liquidity Facility advances | 447,764 | 0 |
Payments for tax withholding related to vesting of restricted stock units | (93,654) | (106,663) |
Proceeds from the exercise of stock options and purchases under the employee stock purchase plan, net | 78,085 | 66,921 |
Other financing activities | (1,924) | (2,663) |
Net cash provided by (used in) financing activities | 1,366,812 | (42,405) |
Effect of foreign exchange rate on cash and cash equivalents | (5,182) | 2,340 |
Net increase in cash, cash equivalents, and restricted cash | 907,502 | 30,016 |
Cash, cash equivalents, and restricted cash, beginning of period | 1,098,706 | 632,847 |
Cash, cash equivalents, and restricted cash, end of period | $ 2,006,208 | $ 662,863 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED 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, 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 employee stock plans (in shares) | 5,582,633 | ||||
Shares issued in connection with employee stock plans | 25,364 | 25,364 | |||
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) |
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 | (44,891) | ||||
Ending balance (in shares) at Jun. 30, 2019 | 426,217,993 | ||||
Ending balance at Jun. 30, 2019 | 1,184,472 | $ 0 | 2,116,063 | (926) | (930,665) |
Beginning balance (in shares) at Mar. 31, 2019 | 421,623,946 | ||||
Beginning balance at Mar. 31, 2019 | 1,121,589 | $ 0 | 2,048,938 | (3,424) | (923,925) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (6,740) | (6,740) | |||
Shares issued in connection with employee stock plans (in shares) | 5,371,051 | ||||
Shares issued in connection with employee stock plans | 41,593 | 41,593 | |||
Change in other comprehensive loss | 2,498 | 2,498 | |||
Share-based compensation | 81,392 | 81,392 | |||
Tax withholding related to vesting of restricted stock units (in shares) | (777,006) | ||||
Tax withholding related to vesting of restricted stock units | (55,862) | (55,862) | |||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 (in shares) | 86 | ||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 | 2 | 2 | |||
Exercise of bond hedges in conjunction with the conversion of senior notes, due 2022 (in shares) | (84) | ||||
Ending balance (in shares) at Jun. 30, 2019 | 426,217,993 | ||||
Ending balance at Jun. 30, 2019 | 1,184,472 | $ 0 | 2,116,063 | (926) | (930,665) |
Beginning balance (in shares) at Dec. 31, 2019 | 432,796,720 | ||||
Beginning balance at Dec. 31, 2019 | 1,715,050 | $ 0 | 2,223,749 | 1,629 | (510,328) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (105,891) | (105,891) | |||
Shares issued in connection with employee stock plans (in shares) | 5,222,525 | ||||
Shares issued in connection with employee stock plans | 31,406 | 31,406 | |||
Issuance of common stock in connection with business combination (in shares) | 357,017 | ||||
Issuance of common stock in connection with business combination | 14,999 | 14,999 | |||
Change in other comprehensive loss | (5,061) | (5,061) | |||
Share-based compensation | 79,562 | 79,562 | |||
Tax withholding related to vesting of restricted stock units (in shares) | (722,606) | ||||
Tax withholding related to vesting of restricted stock units | (48,772) | (48,772) | |||
Conversion feature of convertible senior notes, net of allocated costs | 152,258 | 152,258 | |||
Purchase of bond hedges in conjunction with issuance of convertible senior notes, due 2025 | (149,200) | (149,200) | |||
Sale of warrants in conjunction with issuance of convertible senior notes | 99,500 | 99,500 | |||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 (in shares) | 1,109,980 | ||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 | 24,094 | 24,094 | |||
Ending balance (in shares) at Mar. 31, 2020 | 438,763,636 | ||||
Ending balance at Mar. 31, 2020 | 1,807,945 | $ 0 | 2,427,596 | (3,432) | (616,219) |
Beginning balance (in shares) at Dec. 31, 2019 | 432,796,720 | ||||
Beginning balance at Dec. 31, 2019 | 1,715,050 | $ 0 | 2,223,749 | 1,629 | (510,328) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (117,369) | ||||
Ending balance (in shares) at Jun. 30, 2020 | 442,389,351 | ||||
Ending balance at Jun. 30, 2020 | 1,926,307 | $ 0 | 2,549,638 | 4,366 | (627,697) |
Beginning balance (in shares) at Mar. 31, 2020 | 438,763,636 | ||||
Beginning balance at Mar. 31, 2020 | 1,807,945 | $ 0 | 2,427,596 | (3,432) | (616,219) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (11,478) | (11,478) | |||
Shares issued in connection with employee stock plans (in shares) | 4,802,969 | ||||
Shares issued in connection with employee stock plans | 46,679 | 46,679 | |||
Issuance of common stock in connection with business combination (in shares) | 250,957 | ||||
Issuance of common stock in connection with business combination | 20,320 | 20,320 | |||
Change in other comprehensive loss | 7,798 | 7,798 | |||
Share-based compensation | 99,925 | 99,925 | |||
Tax withholding related to vesting of restricted stock units (in shares) | (703,895) | ||||
Tax withholding related to vesting of restricted stock units | (44,882) | (44,882) | |||
Exercise of bond hedges in conjunction with the conversion of senior notes, due 2022 (in shares) | (724,316) | ||||
Ending balance (in shares) at Jun. 30, 2020 | 442,389,351 | ||||
Ending balance at Jun. 30, 2020 | $ 1,926,307 | $ 0 | $ 2,549,638 | $ 4,366 | $ (627,697) |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
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 empower businesses, sellers and individuals to participate in the economy. 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. Cash App is an easy way to send, spend, and store money. Square was founded in 2009 and is headquartered in San Francisco, with offices in the United States, Canada, Japan, Australia, Ireland, and the United Kingdom. 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, 2019 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 loss, and cash flows for the interim periods. All intercompany transactions and balances have been eliminated in consolidation. The interim results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, 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 the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. 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. Generally, the Company's estimates and assumptions consider current and past experience, to the extent that historical experience is predictive of future performance. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, credit loss allowances from marketable debt securities, contingencies, valuation of the debt component of convertible senior notes, valuation of loans held for sale including loans under the Paycheck Protection Program ("PPP"), valuation of goodwill and acquired intangible assets, determination of income and other taxes, operating and financing lease right-of-use assets and related liabilities, assessing the likelihood of adverse outcomes from claims and disputes, and share-based compensation. In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The Company operates in geographic locations that have been impacted by COVID-19 and that are subject to various mandated public health ordinances, which have negatively impacted the business operations of the Company and its customers. As a consequence of the pandemic and related public health orders, the Company’s customers are now exposed to a variety of uncertainties that could negatively impact their ability to repay outstanding amounts, or even continue in business. As of the date of issuance of the financial statements, the Company has revised or updated the carrying values of its assets or liabilities based on estimates, judgments and circumstances we are aware of, particularly, the expected impact of COVID-19. Due to the impact of the COVID-19 outbreak, the Company’s estimates of accrued transaction losses and valuation of loans held for sale were subject to greater uncertainty. The Company's estimates were based on historical experience, adjusted for market data relevant to the current economic environment. Additionally, the Company incorporated market data for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions. See Note 10, Other Consolidated Balance Sheet Components (Current) , for further details on transaction losses and Note 5, Fair Value of Financial Instruments , for further details on amortized cost over fair value of the loans. These estimates may change, as new events develop and additional information is obtained. Actual results could differ from these estimates, and such differences may be material to the Company's financial statements. The extent of the impact of COVID-19 on the Company's operational and financial performance will depend on certain developments, including, but not limited to, the duration, extent of spread and severity of the outbreak, duration and changes to local, state and federal issued public health orders, impact on our customers and our sales cycles, impact on our employees, various government stimulus assistance programs, and impact on regional and worldwide economies and financial markets in genera l, all of which are uncertain and cannot be predicted. Concentration of Credit Risk For the three and six months ended June 30, 2020 and June 30, 2019, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had two third-party payment processors that represented approximately 50% and 35% of settlements receivable as of June 30, 2020. As of December 31, 2019, the Company had three parties that represented approximately 48%, 29%, and 9% of settlements receivable. 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 two Recent Accounting Pronouncements Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses , which requires the measurement and recognition of expected credit losses for financial assets held. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available for sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The Company has concluded that the adoption of the guidance did not have a material impact on the balances reported in its consolidated financial statements. 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 for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments should be applied on a prospective basis. The Company adopted this guidance effective January 1, 2020 and will apply the guidance during its annual goodwill impairment test for the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU No. 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 adopted this guidance effective January 1, 2020 and has applied the guidance prospectively, and included additional disclosures required by the new guidance relating to significant unobservable inputs used to develop Level 3 fair value measurements. In August 2018, the FASB issued ASU No. 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 adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The amendments clarify the scope of the credit losses standard and hedge accounting among other things. The Company adopted ASC 326 on January 1, 2020 for credit losses. With respect to hedge accounting, the amendments address partial-term fair value hedges and fair value hedge basis adjustments, among other things. 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 as long an entity has also adopted the amendments in ASU No. 2016-13. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. For entities which have already adopted ASU No. 2017-12, they are permitted to elect either retrospectively or prospectively adopt the amendments. The Company had previously adopted ASU No. 2017-12 on January 1, 2019 and therefore is eligible to and has prospectively adopted the amendments. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes , as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other things, the new guidance simplifies intraperiod tax allocation and reduces the complexity in accounting for income taxes with year-to-date losses in interim periods. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption did not have a material impact on the consolidated financial statements and related disclosures. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2020 | |
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 Six Months Ended 2020 2019 2020 2019 Revenue from Contracts with Customers: Transaction-based revenue $ 682,572 $ 775,510 $ 1,440,673 $ 1,432,272 Subscription and services-based revenue 328,763 216,491 584,646 405,693 Hardware revenue 19,322 22,260 39,997 40,472 Bitcoin revenue 875,456 125,085 1,181,554 190,613 Revenue from other sources: Subscription and services-based revenue $ 17,512 $ 34,892 $ 57,864 $ 64,547 The deferred revenue balances were as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Deferred revenue, beginning of the period $ 47,046 $ 42,160 $ 44,331 $ 36,451 Deferred revenue, end of the period 51,549 44,812 51,549 44,812 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 16,288 $ 14,889 $ 26,483 $ 21,786 |
INVESTMENTS IN DEBT SECURITIES
INVESTMENTS IN DEBT SECURITIES | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS IN DEBT SECURITIES | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 206,566 $ 1,172 $ (287) $ 207,451 Corporate bonds 80,593 199 (187) 80,605 Commercial paper 8,992 — — 8,992 Municipal securities 8,933 57 (15) 8,975 U.S. government securities 380,662 1,743 (377) 382,028 Foreign government securities 26,279 42 (24) 26,297 Total $ 712,025 $ 3,213 $ (890) $ 714,348 Long-term debt securities: U.S. agency securities $ 131,430 $ 645 $ (541) $ 131,534 Corporate bonds 143,213 1,232 (310) 144,135 Municipal securities 6,026 84 (66) 6,044 U.S. government securities 127,916 1,670 (791) 128,795 Foreign government securities 35,973 307 (103) 36,177 Total $ 444,558 $ 3,938 $ (1,811) $ 446,685 The Company's short-term and long-term investments as of December 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 $ 131,124 $ 409 $ (11) $ 131,522 Corporate bonds 67,169 580 (28) 67,721 Municipal securities 6,667 109 — 6,776 U.S. government securities 264,069 1,083 (17) 265,135 Foreign government securities 21,270 48 (16) 21,302 Total $ 490,299 $ 2,229 $ (72) $ 492,456 Long-term debt securities: U.S. agency securities $ 63,645 $ 612 $ (189) $ 64,068 Corporate bonds 141,307 1,832 (61) 143,078 Municipal securities 9,594 151 (39) 9,706 U.S. government securities 294,682 1,287 (190) 295,779 Foreign government securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 47,472 $ (287) $ — $ — $ 47,472 $ (287) Corporate bonds 42,235 (187) — — 42,235 (187) Municipal securities 3,697 (15) — — 3,697 (15) U.S. government securities 127,860 (377) — — 127,860 (377) Foreign government securities 18,467 (24) — — 18,467 (24) Total $ 239,731 $ (890) $ — $ — $ 239,731 $ (890) Long-term debt securities: U.S. agency securities $ 13,382 $ (541) $ — $ — $ 13,382 $ (541) Corporate bonds 37,869 (310) — — 37,869 (310) Municipal securities 1,764 (66) — — 1,764 (66) U.S. government securities — (791) — — — (791) Foreign government securities 13,893 (103) — — 13,893 (103) Total $ 66,908 $ (1,811) $ — $ — $ 66,908 $ (1,811) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 23,896 $ (9) $ 4,996 $ (2) $ 28,892 $ (11) Corporate bonds 5,507 (27) 2,502 (1) 8,009 (28) U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign government securities 13,499 (16) — — 13,499 (16) Total $ 64,383 $ (60) $ 22,482 $ (12) $ 86,865 $ (72) Long-term debt securities: U.S. agency securities $ 16,740 $ (189) $ — $ — $ 16,740 $ (189) Corporate bonds 16,708 (61) — — 16,708 (61) Municipal securities 1,005 (39) — — 1,005 (39) U.S. government securities 42,210 (162) — (28) 42,210 (190) Foreign government securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ — $ (28) $ 93,046 $ (518) The U.S. government and U.S. agency securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. The corporate bonds are issued by highly rated entities. The foreign government securities are issued by highly rated international entities. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 712,025 $ 714,348 Due in one to five years 444,558 446,685 Total $ 1,156,583 $ 1,161,033 The following table presents the assets underlying customer funds (in thousands): June 30, 2020 December 31, 2019 Cash $ 117,658 $ 422,459 Cash Equivalents: Money market funds 1,229,498 233 Reverse repurchase agreement (i) 30,006 — U.S. agency securities 10,997 8,585 U.S. government securities 5,000 6,984 Short-term debt securities: U.S. agency securities 127,796 — U.S. government securities 212,152 238,031 Total $ 1,733,107 $ 676,292 (i) The Company has accounted for the reverse repurchase agreement with a third party as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement. The Company classifies the amounts due from the counterparty as cash equivalents due to the short term nature. The Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 127,727 $ 71 $ (2) $ 127,796 U.S. government securities 211,907 354 (109) 212,152 Total $ 339,634 $ 425 $ (111) $ 339,948 The Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. government securities $ 237,909 $ 144 $ (22) $ 238,031 Total $ 237,909 $ 144 $ (22) $ 238,031 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 19,987 $ (2) $ — $ — $ 19,987 $ (2) U.S. government securities 63,978 (109) — — 63,978 (109) Total $ 83,965 $ (111) $ — $ — $ 83,965 $ (111) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. government securities $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) Total $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) The unrealized losses above were caused by interest rate changes. The U.S. government securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 339,634 $ 339,948 Due in one to five years — — Total $ 339,634 $ 339,948 |
CUSTOMER FUNDS
CUSTOMER FUNDS | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
CUSTOMER FUNDS | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 206,566 $ 1,172 $ (287) $ 207,451 Corporate bonds 80,593 199 (187) 80,605 Commercial paper 8,992 — — 8,992 Municipal securities 8,933 57 (15) 8,975 U.S. government securities 380,662 1,743 (377) 382,028 Foreign government securities 26,279 42 (24) 26,297 Total $ 712,025 $ 3,213 $ (890) $ 714,348 Long-term debt securities: U.S. agency securities $ 131,430 $ 645 $ (541) $ 131,534 Corporate bonds 143,213 1,232 (310) 144,135 Municipal securities 6,026 84 (66) 6,044 U.S. government securities 127,916 1,670 (791) 128,795 Foreign government securities 35,973 307 (103) 36,177 Total $ 444,558 $ 3,938 $ (1,811) $ 446,685 The Company's short-term and long-term investments as of December 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 $ 131,124 $ 409 $ (11) $ 131,522 Corporate bonds 67,169 580 (28) 67,721 Municipal securities 6,667 109 — 6,776 U.S. government securities 264,069 1,083 (17) 265,135 Foreign government securities 21,270 48 (16) 21,302 Total $ 490,299 $ 2,229 $ (72) $ 492,456 Long-term debt securities: U.S. agency securities $ 63,645 $ 612 $ (189) $ 64,068 Corporate bonds 141,307 1,832 (61) 143,078 Municipal securities 9,594 151 (39) 9,706 U.S. government securities 294,682 1,287 (190) 295,779 Foreign government securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 47,472 $ (287) $ — $ — $ 47,472 $ (287) Corporate bonds 42,235 (187) — — 42,235 (187) Municipal securities 3,697 (15) — — 3,697 (15) U.S. government securities 127,860 (377) — — 127,860 (377) Foreign government securities 18,467 (24) — — 18,467 (24) Total $ 239,731 $ (890) $ — $ — $ 239,731 $ (890) Long-term debt securities: U.S. agency securities $ 13,382 $ (541) $ — $ — $ 13,382 $ (541) Corporate bonds 37,869 (310) — — 37,869 (310) Municipal securities 1,764 (66) — — 1,764 (66) U.S. government securities — (791) — — — (791) Foreign government securities 13,893 (103) — — 13,893 (103) Total $ 66,908 $ (1,811) $ — $ — $ 66,908 $ (1,811) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 23,896 $ (9) $ 4,996 $ (2) $ 28,892 $ (11) Corporate bonds 5,507 (27) 2,502 (1) 8,009 (28) U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign government securities 13,499 (16) — — 13,499 (16) Total $ 64,383 $ (60) $ 22,482 $ (12) $ 86,865 $ (72) Long-term debt securities: U.S. agency securities $ 16,740 $ (189) $ — $ — $ 16,740 $ (189) Corporate bonds 16,708 (61) — — 16,708 (61) Municipal securities 1,005 (39) — — 1,005 (39) U.S. government securities 42,210 (162) — (28) 42,210 (190) Foreign government securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ — $ (28) $ 93,046 $ (518) The U.S. government and U.S. agency securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. The corporate bonds are issued by highly rated entities. The foreign government securities are issued by highly rated international entities. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 712,025 $ 714,348 Due in one to five years 444,558 446,685 Total $ 1,156,583 $ 1,161,033 The following table presents the assets underlying customer funds (in thousands): June 30, 2020 December 31, 2019 Cash $ 117,658 $ 422,459 Cash Equivalents: Money market funds 1,229,498 233 Reverse repurchase agreement (i) 30,006 — U.S. agency securities 10,997 8,585 U.S. government securities 5,000 6,984 Short-term debt securities: U.S. agency securities 127,796 — U.S. government securities 212,152 238,031 Total $ 1,733,107 $ 676,292 (i) The Company has accounted for the reverse repurchase agreement with a third party as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement. The Company classifies the amounts due from the counterparty as cash equivalents due to the short term nature. The Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 127,727 $ 71 $ (2) $ 127,796 U.S. government securities 211,907 354 (109) 212,152 Total $ 339,634 $ 425 $ (111) $ 339,948 The Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. government securities $ 237,909 $ 144 $ (22) $ 238,031 Total $ 237,909 $ 144 $ (22) $ 238,031 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 19,987 $ (2) $ — $ — $ 19,987 $ (2) U.S. government securities 63,978 (109) — — 63,978 (109) Total $ 83,965 $ (111) $ — $ — $ 83,965 $ (111) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. government securities $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) Total $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) The unrealized losses above were caused by interest rate changes. The U.S. government securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 339,634 $ 339,948 Due in one to five years — — Total $ 339,634 $ 339,948 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash Equivalents: Money market funds $ 593,461 $ — $ — $ 213,576 $ — $ — U.S. agency securities — 27,334 — — 19,976 — U.S. government securities 21,084 — — 46,914 — — Municipal securities — 450 — — — — Customer funds: Money market funds 1,229,498 — — 233 — — Reverse repurchase agreement 30,006 — — — — — U.S. agency securities — 138,793 — — 8,585 — U.S. government securities 217,152 — — 245,015 — — Short-term debt securities: U.S. agency securities — 207,451 — — 131,522 — Corporate bonds — 80,605 — — 67,721 — Commercial paper — 8,992 — — — — Municipal securities — 8,975 — — 6,776 — U.S. government securities 382,028 — — 265,135 — — Foreign government securities — 26,297 — — 21,302 — Long-term debt securities: U.S. agency securities — 131,534 — — 64,068 — Corporate bonds — 144,135 — — 143,078 — Municipal securities — 6,044 — — 9,706 — U.S. government securities 128,795 — — 295,779 — — Foreign government securities — 36,177 — — 24,672 — Total $ 2,602,024 $ 816,787 $ — $ 1,066,652 $ 497,406 $ — 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): June 30, 2020 December 31, 2019 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2025 Notes $ 842,790 $ 1,134,270 $ — $ — 2023 Notes 764,121 1,282,098 748,564 962,516 2022 Notes 171,517 837,591 190,268 578,817 Total $ 1,778,428 $ 3,253,959 $ 938,832 $ 1,541,333 The estimated fair value and carrying value of loans held for sale is as follows (in thousands): June 30, 2020 December 31, 2019 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 567,499 $ 575,679 $ 164,834 $ 173,360 For the three and six months ended June 30, 2020, the Company recorded a charge for the excess of amortized cost over fair value of the loans of $0.5 million and $22.5 million, respectively. For the three and six months ended June 30, 2019, the Company recorded a charge for the excess of amortized cost over fair value of the loans of $6.4 million and $13.1 million, respectively. To determine the fair value of the loans held for sale, the Company utilizes industry-standard valuation modeling, such as discounted cash flow models, taking into account the estimated timing and amounts of periodic repayments. In estimating the expected timing and amounts of the future periodic repayments for the loans outstanding as of June 30, 2020, the Company considered other relevant market data in developing such estimates and assumptions, including the impact of the COVID-19 outbreak, as well as the conditions and uncertainty experienced during similar historical periods of recessionary economic conditions. With respect to PPP loans, the Company also considers the impact of government guarantees and loan forgiveness on the timing and amounts of future cash flows. As of June 30, 2020, $465.5 million of the carrying value of loans held for sale was attributable to loans under the PPP. As the loans under the PPP qualify for forgiveness if certain criteria are met or are guaranteed by the U.S. government through the Small Business Administration ("SBA"), the related credit losses were immaterial as of June 30, 2020. 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 and six months ended June 30, 2020 and 2019, 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 | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Leasehold improvements $ 131,175 $ 111,942 Computer equipment 114,501 106,469 Capitalized software 98,858 81,984 Office furniture and equipment 29,866 27,328 Total 374,400 327,723 Less: Accumulated depreciation and amortization (207,338) (178,529) Property and equipment, net $ 167,062 $ 149,194 |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONSIn the six months ended June 30, 2020, the Company completed certain acquisitions for a total consideration of $63.3 million comprised of $28.0 million in cash and $35.3 million in Class A common stock. Of the total purchase consideration, $29.5 million was allocated to goodwill which was primarily attributable to the value of expected synergies created by incorporating the acquired technology into the Company's technology platform and the value of the assembled workforce, while $39.0 million was allocated to intangible assets. None of the goodwill generated from the acquisition or the acquired intangible assets are expected to be deductible for tax purposes. |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 $ 266,345 Acquisitions 29,492 Other adjustments (78) Balance at June 30, 2020 $ 295,759 The Company performs an annual goodwill impairment test on December 31 and more frequently if events and circumstances indicate that the asset might be impaired. Effective June 30, 2020, the Company changed its operating and reporting segments to reflect the manner in which the Chief Operating Decision Maker (CODM) reviews and assesses performance. Accordingly, the Company has two operating and reportable segments, which are Seller and Cash App (defined further in Note 18, Segment and Geographical Information ), effective June 30, 2020. The Company allocated $183.4 million and $112.4 million of the goodwill balance at June 30, 2020 to Seller and Cash App, respectively. In addition, the Company completed an assessment of any potential goodwill impairment for the reporting units immediately before and after the reallocation and determined that no impairment existed as of June 30, 2020. |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS The following table presents the detail of acquired intangible assets as of the periods presented (in thousands): Balance at June 30, 2020 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 6 years $ 81,581 $ (36,424) $ 45,157 Customer assets 12 years 48,200 (8,729) 39,471 Trade name 6 years 18,028 (6,089) 11,939 Other 8 years 5,699 (2,464) 3,235 Total $ 153,508 $ (53,706) $ 99,802 Balance at December 31, 2019 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 53,900 $ (31,873) $ 22,027 Customer assets 12 years 44,000 (6,934) 37,066 Trade name 4 years 11,300 (4,473) 6,827 Other 8 years 5,299 (2,140) 3,159 Total $ 114,499 $ (45,420) $ 69,079 All intangible assets are amortized over their estimated useful lives. As a result of the COVID-19 pandemic, the Company performed an impairment assessment of its intangible assets as of June 30, 2020, and concluded that no impairment charges were required. The changes to the carrying value of intangible assets were as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Acquired intangible assets, net, beginning of the period $ 81,936 $ 79,697 $ 69,079 $ 77,102 Acquisitions 22,000 8,477 39,009 14,559 Amortization expense (4,134) (3,958) (8,286) (7,445) Acquired intangible assets, net, end of the period $ 99,802 $ 84,216 $ 99,802 $ 84,216 The estimated future amortization expense of intangible assets in future periods as of June 30, 2020 is as follows (in thousands): Remainder of 2020 $ 9,291 2021 18,069 2022 15,995 2023 14,743 2024 11,763 Thereafter 29,941 Total $ 99,802 |
OTHER CONSOLIDATED BALANCE SHEE
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Inventory, net $ 55,422 $ 47,683 Restricted cash 19,761 38,873 Processing costs receivable 114,706 67,281 Prepaid expenses 29,669 22,758 Accounts receivable, net 38,163 33,863 Other 62,169 39,951 Total $ 319,890 $ 250,409 Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands): June 30, 2020 December 31, 2019 Accrued expenses $ 124,461 $ 128,387 Accrued transaction losses (i) 109,061 34,771 Accounts payable 24,548 42,116 Deferred revenue, current 44,593 38,104 Square Payroll payable (ii) 36,983 27,969 Other 53,930 26,494 Total $ 393,576 $ 297,841 (i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. In estimating the accrued transaction losses as of June 30, 2020, the Company has revised its estimates to reflect expected increased chargebacks from non-delivery of goods and services as well as increased failure rates of its sellers due to the COVID-19 outbreak. Additionally, the Company has also incorporated market related data to credit losses for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions . The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Accrued transaction losses, beginning of the period $ 96,661 $ 36,047 $ 34,771 $ 33,682 Provision for transaction losses 32,770 22,190 112,073 41,998 Charge-offs to accrued transaction losses (20,370) (18,607) (37,783) (36,050) Accrued transaction losses, end of the period $ 109,061 $ 39,630 $ 109,061 $ 39,630 (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 Non-Current Assets The following table presents the detail of other non-current assets (in thousands): June 30, 2020 December 31, 2019 Investment in non-marketable equity securities (i) $ 130,999 $ 110,000 Non-current lease prepayments (ii) — 45,738 Restricted cash 13,685 12,715 Other 21,765 27,935 Total $ 166,449 $ 196,388 (i) This balance represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes. During the quarter ended June 30, 2020, the Company recorded an adjustment to the carrying value, with a gain of $21.0 million being recorded in Other income (expense) in the condensed consolidated statement of operations for observable price changes. (ii) The non-current lease prepayments as of December 31, 2019, have been reclassified to the operating lease right-of-use assets upon lease commencement. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): June 30, 2020 December 31, 2019 Statutory liabilities (i) $ 65,000 $ 54,762 Deferred revenue, non-current 6,956 6,227 Other 18,264 33,472 Total $ 90,220 $ 94,461 (i) 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. |
OTHER CONSOLIDATED BALANCE SH_2
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Inventory, net $ 55,422 $ 47,683 Restricted cash 19,761 38,873 Processing costs receivable 114,706 67,281 Prepaid expenses 29,669 22,758 Accounts receivable, net 38,163 33,863 Other 62,169 39,951 Total $ 319,890 $ 250,409 Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands): June 30, 2020 December 31, 2019 Accrued expenses $ 124,461 $ 128,387 Accrued transaction losses (i) 109,061 34,771 Accounts payable 24,548 42,116 Deferred revenue, current 44,593 38,104 Square Payroll payable (ii) 36,983 27,969 Other 53,930 26,494 Total $ 393,576 $ 297,841 (i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. In estimating the accrued transaction losses as of June 30, 2020, the Company has revised its estimates to reflect expected increased chargebacks from non-delivery of goods and services as well as increased failure rates of its sellers due to the COVID-19 outbreak. Additionally, the Company has also incorporated market related data to credit losses for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions . The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Accrued transaction losses, beginning of the period $ 96,661 $ 36,047 $ 34,771 $ 33,682 Provision for transaction losses 32,770 22,190 112,073 41,998 Charge-offs to accrued transaction losses (20,370) (18,607) (37,783) (36,050) Accrued transaction losses, end of the period $ 109,061 $ 39,630 $ 109,061 $ 39,630 (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 Non-Current Assets The following table presents the detail of other non-current assets (in thousands): June 30, 2020 December 31, 2019 Investment in non-marketable equity securities (i) $ 130,999 $ 110,000 Non-current lease prepayments (ii) — 45,738 Restricted cash 13,685 12,715 Other 21,765 27,935 Total $ 166,449 $ 196,388 (i) This balance represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes. During the quarter ended June 30, 2020, the Company recorded an adjustment to the carrying value, with a gain of $21.0 million being recorded in Other income (expense) in the condensed consolidated statement of operations for observable price changes. (ii) The non-current lease prepayments as of December 31, 2019, have been reclassified to the operating lease right-of-use assets upon lease commencement. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): June 30, 2020 December 31, 2019 Statutory liabilities (i) $ 65,000 $ 54,762 Deferred revenue, non-current 6,956 6,227 Other 18,264 33,472 Total $ 90,220 $ 94,461 (i) 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. |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS Revolving Credit Facility In November 2015, the Company entered into a revolving credit agreement with certain lenders, which provided for a $375 million revolving credit facility maturing in November 2020 (the "2015 Credit Facility"). In May 2020, the Company entered into a new revolving credit agreement with certain lenders, which extinguished the 2015 Credit Facility and provided a $500.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in May 2023. On May 28, 2020, the Company amended the credit agreement for the 2020 Credit facility to permit the Company’s wholly owned subsidiary, Square Capital, LLC (“Square Capital”), to incur indebtedness in an aggregate principal amount of up to $500.0 million pursuant to the Paycheck Protection Program Liquidity Facility (“PPPLF”) authorized under the Federal Reserve Act of 1913, as discussed below. The PPPLF permits participants which have originated or purchased PPP loans to borrow from an applicable Federal Reserve Bank in an amount up to 100% of the principal amount of the PPP loans pledged as collateral for such borrowing. Loans under the 2020 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 the adjusted LIBOR rate plus 1.00%, in each case, plus a margin ranging from 0.25% to 0.75% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.25% to 1.75%. The credit agreement includes provisions allowing the Company to replace or update LIBOR with a replacement rate. The margin is determined based on the Company’s total net leverage ratio, as defined in the agreement. The Company is obligated to pay other customary fees for a credit facility of this size and type including an unused commitment fee of 0.15%. To date no funds have been drawn and no letters of credit have been issued under the 2020 Credit Facility. The 2020 Credit Facility has certain restrictions including the amount and type of borrowing arrangements that are permitted. The Company incurred $0.1 million in unused commitment fees for the three and six months ended June 30, 2020 and June 30, 2019, respectively. As of June 30, 2020, the Company was in compliance with all financial covenants associated with the 2020 Credit Facility. Paycheck Protection Program Liquidity Facility On June 2, 2020, Square Capital LLC was approved to borrow under the PPPLF with the Federal Reserve Bank of San Francisco, at an annual interest rate of 0.35%. The PPPLF extends credit to eligible financial institutions that have originated or purchased PPP loans. Advances under the PPPLF are non-recourse and are secured by a pledge of PPP loans held by Square Capital up to an aggregate principal amount of $500.0 million. The maturity date of any PPPLF loan will be the maturity date of the PPP loans pledged to secure such PPPLF loan. The maturity date of any PPPLF loan will be accelerated on and to the extent of (i) the date of any loan forgiveness reimbursement by the SBA for any PPP loan securing such PPPLF loan; or (ii) the date of purchase by the SBA from Square Capital of any PPP loan securing such PPPLF loan to realize on the SBA’s guarantee of such PPP loan. The maturity date of all PPPLF Loans shall be accelerated upon the occurrence of certain events of default by Square Capital, including but not limited to the failure to comply with a requirement of the PPPLF agreement or any representation, warranty, or covenant of Square Capital under the PPPLF agreement being inaccurate on or as of the date it is deemed to be made or on any date on which an PPPLF loan remains outstanding. The Company can also at its option prepay the advances in full or in part without penalty. Square Capital also shall prepay PPPLF loans so that the amount of any PPPLF loans outstanding does not exceed the outstanding amount of PPP loans pledged to secure such PPPLF loans. As of June 30, 2020, $447.8 million of PPPLF advances were outstanding. Convertible Senior Notes due in 2025 On March 5, 2020, the Company issued an aggregate principal amount of $1.0 billion of convertible senior notes (2025 Notes). The 2025 Notes mature on March 1, 2025, unless earlier converted or repurchased, and bear interest at a rate of 0.1250% payable semi-annually on March 1 and September 1 of each year. The 2025 Notes are convertible at an initial conversion rate of 8.2641 shares of the Company's Class A common stock per $1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $121.01 per share of Class A common stock. Holders may convert their 2025 Notes at any time prior to the close of business on the business day immediately preceding December 1, 2024 only under the following circumstances: (1) during any calendar quarter, commencing after the calendar quarter ending on June 30, 2020 (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 2025 Notes) per $1,000 principal amount of 2025 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; (3) if the Company calls any or all of the 2025 Notes for redemption, such 2025 Notes called for redemption may be converted at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2025 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their notes in connection with such an event in certain circumstances. On or after December 1, 2024, 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 2025 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 2025 Notes were not met during the six months period ended June 30, 2020. The Company may redeem for cash all or any part of the 2025 notes, at its option, on or after March 5, 2023, if the last reported sale price of the Company's Class A common stock has been at least 130% of the conversion price for the 2025 notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In accounting for the issuance of the 2025 Notes, the Company separated the 2025 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 $154.6 million and was determined by deducting the fair value of the liability component from the par value of the 2025 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 2025 Notes at an effective interest rate of 3.81% over the contractual terms of the 2025 Notes. Debt issuance costs related to the 2025 Notes were comprised of discounts and commissions payable to the initial purchasers of $14.3 million and third party offering costs of $0.9 million. The Company allocated the total amount incurred to the liability and equity components of the 2025 Notes based on their relative values. Issuance costs attributable to the liability component were $12.8 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. As of June 30, 2020, the if-converted value of the 2025 Notes did not exceed the outstanding principal amount. 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 (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. In addition, following specified corporate events that occur prior to the maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert their notes in connection with such an event. 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 six months period ended June 30, 2020. 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 were 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. As of June 30, 2020, the if-converted value of the 2023 Notes exceeded the outstanding principal amount by $300.2 million. 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. In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their notes in connection with such an event in certain circumstances. 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 June 30, 2020. As of June 30, 2020, certain holders of the 2022 Notes have converted an aggregate principal amount of $253.7 million of their Notes, of which $25.5 million was converted during the quarter ended March 31, 2020. The Company has settled the conversions through a combination of $219.4 million in cash and issuance of 8.4 million shares of the Company's Class A common stock. The conversions during the quarter ended March 31, 2020 were settled entirely in shares of the Company's Class A common stock. 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 were 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 was accounted for as an extinguishment of debt, with the Company recording loss on extinguishment of $6.0 million, of which $1.0 million was recorded during the three and six months ended June 30, 2020, 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. As of June 30, 2020, the if-converted value of the 2022 Notes exceeded the outstanding principal amount by $665.4 million. The net carrying amount of the Notes were as follows (in thousands): Principal outstanding Unamortized debt discount Unamortized debt issuance costs Net carrying value June 30, 2020 2025 Notes $ 1,000,000 $ (144,633) $ (12,577) $ 842,790 2023 Notes 862,500 (95,428) (2,951) 764,121 2022 Notes 186,251 (13,261) (1,473) 171,517 Total $ 2,048,751 $ (253,322) $ (17,001) $ 1,778,428 December 31, 2019 2023 Notes $ 862,500 $ (110,518) $ (3,418) $ 748,564 2022 Notes 211,726 (19,312) (2,146) 190,268 Total $ 1,074,226 $ (129,830) $ (5,564) $ 938,832 The net carrying amount of the equity component of the Notes were as follows (in thousands): Amount allocated to conversion option Less: Equity component, net June 30, 2020 2025 Notes $ 154,600 $ (2,342) $ 152,258 2023 Notes 155,250 (1,231) 154,019 2022 Notes 36,490 (974) 35,516 Total $ 346,340 $ (4,547) $ 341,793 December 31, 2019 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 Six Months Ended 2020 2019 2020 2019 Contractual interest expense $ 1,565 $ 1,277 $ 2,938 $ 2,554 Amortization of debt discount and issuance costs 17,580 9,725 30,108 19,333 Total $ 19,145 $ 11,002 $ 33,046 $ 21,887 The effective interest rate of the liability component is 3.81%, 4.69%, and 5.34% for the 2025 Notes, 2023 Notes, and 2022 Notes, respectively. Convertible Note Hedge and Warrant Transactions In connection with the offering of the 2025 Notes, the Company entered into convertible note hedge transactions (2025 convertible note hedges) with certain financial institution counterparties (2020 Counterparties) whereby the Company has the option to purchase a total of approximately 8.26 million shares of its Class A common stock at a price of approximately $121.01 per share. The total cost of the 2025 convertible note hedge transactions was $149.2 million. In addition, the Company sold warrants (2025 warrants) to the 2020 Counterparties whereby the 2020 Counterparties have the option to purchase a total of 8.26 million shares of the Company’s Class A common stock at a price of approximately $161.34 per share. The Company received $99.5 million in cash proceeds from the sale of the 2025 warrants. Taken together, the purchase of the 2025 convertible note hedges and sale of the 2025 warrants are intended to reduce dilution from the conversion of the 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2025 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $121.01 per share to approximately $161.34 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2025 convertible note hedges and 2025 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 2025 convertible note hedge and 2025 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 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. The Company has 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 as of June 30, 2020, the Company has received 7.9 million shares of the Company's Class A common stock from the 2017 Counterparties, of which 0.7 million was received in the quarter ended June 30, 2020. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax benefit of $0.8 million and $0.2 million for the three and six months ended June 30, 2020, respectively, compared to an income tax benefit of $0.5 million and 0.3 million for the three and six months ended June 30, 2019, respectively. The income tax benefit recorded for the three and six months ended June 30, 2020 is primarily due to foreign income tax expense offset by excess stock based compensation tax deductions. The Company’s effective tax rate is 6.1% and 0.2% for the three and six months ended June 30, 2020, respectively, compared to an effective tax rate of 6.6% and 0.8% for the three and six months ended June 30, 2019, respectively. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three and six months ended June 30, 2020 and June 30, 2019 primarily relates to changes in the valuation allowance for tax losses in the U.S. and certain foreign jurisdictions for which no benefit can be taken. 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 June 30, 2020, 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 and six months ended June 30, 2020 and June 30, 2019, is 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. The Company also considered recent tax law changes in response to the COVID-19 pandemic, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted in the U.S. on March 27, 2020. The tax benefits and other changes provided under the CARES Act do not materially impact the Company’s income tax provision, and does not change the Company’s evaluation of the need for a valuation allowance against deferred tax assets in the U.S. or expectations on the permanent reinvestment of undistributed earnings for certain foreign subsidiaries. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Common Stock The Company has authorized the issuance of Class A common stock and Class B common stock. Holders of shares of Class A common stock are entitled to one vote per share, while holders of shares of Class B common stock are entitled to ten votes per share. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of its Class A common stock and generally convert into shares of its Class A common stock upon transfer. The holders of Class A common stock and Class B common stock have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares. 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 June 30, 2020, 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 June 30, 2020, there were 370,102,185 shares of Class A common stock and 72,287,165 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. Warrants In conjunction with the 2025 Notes offering, the Company sold the 2025 warrants whereby the 2020 Counterparties have the option to purchase a total of approximately 8.26 million shares of the Company’s Class A common stock at a price of $161.34 per share. None of the 2025 warrants were exercised as of June 30, 2020 and expire on June 1, 2025. 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. None of the 2023 warrants were exercised as of June 30, 2020 and expire on August 15, 2023. In conjunction with the 2022 Notes offering, the Company sold the 2022 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 2022 warrants were exercised as of June 30, 2020 and expire on June 1, 2022. Conversion of 2022 Notes In connection with the conversion of certain of the 2022 Notes, the Company issued 1.1 million shares of Class A common stock in the six months ended June 30, 2020. 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 granted in the future 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 (ISOs and NSOs, respectively), 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 administrator of the Plan. The administrator consists of the Board of Directors who then assigns the responsibilities to the Compensation Committee. As of June 30, 2020, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2015 Plan was 24,530,812, and 97,704,869 shares were available for future issuance. As of June 30, 2020, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2009 Plan was 12,775,030. A summary of stock option activity for the six months ended June 30, 2020 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Balance at December 31, 2019 23,619,804 $ 12.66 4.89 $ 1,191,746 Granted 1,502,356 57.40 Exercised (5,978,089) 9.31 Forfeited (46,231) 71.99 Balance at June 30, 2020 19,097,840 $ 17.07 4.87 $ 1,678,054 Options exercisable as of June 30, 2020 16,532,301 $ 10.84 4.21 $ 1,555,696 Restricted Stock Activity Activity related to RSAs and RSUs during the six months ended June 30, 2020 is set forth below: Number of Weighted Unvested as of December 31, 2019 13,917,461 $ 49.90 Granted 8,698,265 61.51 Vested (3,690,105) 38.01 Forfeited (717,619) 51.04 Unvested as of June 30, 2020 18,208,002 $ 57.82 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 following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Cost of revenue $ 95 $ 29 $ 171 $ 50 Product development 69,565 56,144 126,965 98,793 Sales and marketing 8,884 7,833 15,291 14,035 General and administrative 17,636 15,460 31,056 27,676 Total $ 96,180 $ 79,466 $ 173,483 $ 140,554 The Company recorded $4.1 million and $8.8 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three and six months ended June 30, 2020, respectively, compared to $4.7 million and $9.0 million during the three and six months ended June 30, 2019, respectively, which are included in the table above. The Company capitalized $3.5 million and $5.8 million of share-based compensation expense related to capitalized software costs during the three and six months ended June 30, 2020, respectively, compared to $1.9 million and $3.7 million during the three and six months ended June 30, 2019, respectively. As of June 30, 2020, there was $1.1 billion of total unrecognized compensation cost related to outstanding stock options and restricted stock awards that are expected to be recognized over a weighted-average period of 3.0 years. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHAREBasic 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. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Six Months Ended 2020 2019 2020 2019 Numerator: Net loss $ (11,478) $ (6,740) $ (117,369) $ (44,891) Denominator: Weighted-average shares used to compute basic and diluted net loss per share 440,117 423,305 437,529 421,297 Net loss per share: Basic $ (0.03) $ (0.02) $ (0.27) $ (0.11) Diluted $ (0.03) $ (0.02) $ (0.27) $ (0.11) 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 Six Months Ended 2020 2019 2020 2019 Stock options and restricted stock units 37,277 46,686 36,155 47,256 Common stock warrants 38,516 30,252 35,565 30,252 Convertible senior notes 27,459 20,305 24,923 20,305 Unvested shares 698 800 719 686 Employee stock purchase plan 179 169 198 195 Total anti-dilutive securities 104,129 98,212 97,560 98,694 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS In July 2019, the Company entered into a lease agreement to lease certain office space located in St. Louis, Missouri, from an affiliate of one of the Company’s co-founders and current member of its board and directors, Mr. Jim McKelvey, under an operating lease agreement as discussed in Note 17, Commitments and Contingencies |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
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 offices in Oakland, New York and St. Louis. The Company's leases have remaining lease terms of 1 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 elected to apply the short-term lease measurement and recognition exemption to its leases where applicable. Generally, operating lease right-of-use assets and operating lease liabilities are recognized at the present value of the future lease payments, generally for the base non-cancellable lease term on the lease commencement date of each lease. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate because the interest rate implicit in most of the Company's leases is not readily determinable. The Company's incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Operating lease right-of-use assets also include any prepaid lease payments and lease incentives. The Company's lease agreements generally contain lease and non-lease components. Non-lease components, which primarily include payments for maintenance and utilities, are combined with lease payments and accounted for as a single lease component. The Company includes the fixed non-lease components in the determination of the right-of-use assets and operating lease liabilities. The Company records the amortization of the right-of-use asset and the accretion of lease liability as a component of rent expense in the consolidated statement of operations. 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 5 year terms. The lease commencement date was January 15, 2020. In July 2019, the Company entered into a lease arrangement for 226,158 square feet of office space in St Louis, Missouri, with an affiliate of one of the Company’s co-founders, Mr. Jim McKelvey, who is also a Company stockholder and a member of its board of directors, for a term of 15.5 years with options to extend the lease term for two 5 year terms. The Company also has an option to terminate the lease for up to 50% of the leased space any time between January 1, 2024 and December 31, 2026, as well as an option to terminate the lease for the entire property on January 1, 2034. Termination penalties specified in the lease agreement will apply if the Company exercises any of the options to terminate the lease. The lease commencement date varies by floor beginning in May 2020 with total future minimum lease payments over the term of approximately $42.7 million. Additionally, the Company has finance leases for data center equipment, with remaining lease terms of approximately 0.5 years. The components of lease expense for the periods presented were as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Fixed operating lease costs $ 17,218 $ 7,487 $ 32,343 $ 14,177 Variable operating lease costs 3,287 1,536 9,011 2,173 Short term lease costs 1,921 377 3,777 818 Sublease income (2,179) — (3,616) — Finance lease costs Amortization of finance right-of-use assets 869 1,284 1,923 2,577 Total lease costs $ 21,116 $ 10,684 $ 43,438 $ 19,745 Other information related to leases were as follows: June 30, 2020 Weighted Average Remaining Lease Term: Operating leases 9.1 years Finance leases 0.5 years Weighted Average Discount Rate: Operating leases 4 % Finance leases — % Cash flows related to leases were as follows (in thousands): Six Months Ended 2020 2019 Cash flows from operating activities: Payments for operating lease liabilities $ (19,137) $ (16,067) Cash flows from financing activities: Principal payments on finance lease obligation $ (1,923) $ (2,568) Supplemental Cash Flow Data: Right-of-use assets obtained in exchange for operating lease obligations $ 304,132 $ 21,905 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 June 30, 2020 are as follows (in thousands): Finance Operating Year: Remainder of 2020 $ 522 $ 29,887 2021 — 70,520 2022 — 71,259 2023 — 65,724 2024 — 46,023 Thereafter — 273,368 Total $ 522 $ 556,781 Less: amount representing interest — 86,469 Less: leases executed but not yet commenced — 25,257 Less: lease incentives — 16,627 Total $ 522 $ 428,428 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 subject to, and may in the future be involved in, various litigation matters, legal claims, and investigations. In July 2020, the City and County of San Francisco approved a final settlement agreement between the City and the Company related to the City’s Gross Receipts Tax and Payroll Expense Tax. The settlement followed negotiations over assessments of additional taxes issued by the Treasurer & Tax Collector of the City and County of San Francisco related to the classification of the Company’s primary business activity and the associated taxation basis. The settlement resolved certain past taxes payable and the future taxation basis for the Company. The Settlement was not material to the consolidated financial statements as of, and for the period ended June 30, 2020. Other contingencies On June 15, 2020, the Texas Comptroller’s Office (the “Comptroller”) informed the Company that it had completed its sales and use tax audit for the period from January 1, 2015 through April 30, 2018, and that it would issue a written tax assessment to the Company seeking $38 million, including interest and penalties for this tax audit period. The Comptroller indicated that it believes the services that the Company has deemed to be nontaxable should be subject to sales tax. The Company believes the Comptroller’s position is without merit. Should the Company not prevail, the Company could be obligated to pay additional taxes together with associated penalties and interest for the audited tax period, as well as additional taxes for periods subsequent to the tax audit period, including penalties and interest, that could be material. We are under examination, or may be subject to tax examination, by several tax authorities. These examinations, including the matter discussed above, may lead to proposed adjustments to our taxes or net operating losses with respect to years under examination, as well as subsequent periods. We regularly assess the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of our provision for direct and indirect taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the effect, if any, on our provision for direct and indirect taxes. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with the Company’s expectations, we could be required to adjust our provision for direct and indirect taxes in the period such resolution occurs. From time to time, the Company is also subject to various legal 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. Although occasional adverse decisions or settlements may occur, the Company does not believe that the final disposition of any of these matters will have a material adverse effect on its 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 | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION Effective June 30, 2020, the Company changed its operating segments to reflect the manner in which the CODM reviews and assesses performance. Accordingly, the Company has two reportable segments, which are Seller and Cash App. Disclosures regarding the Company’s reportable segments for prior periods have been adjusted to conform to the current period presentation. Seller and Cash App are defined as follows: • Seller includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App. • Cash App includes the financial tools available to individuals within the mobile Cash App, including peer to peer (P2P) payments, bitcoin and stock investments. Cash App also includes Cash Card which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM. The primary financial measures used by the CODM to evaluate performance and allocate resources are net revenue and gross profit. The CODM does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not included. Information on the reportable segments revenue and segment operating profit are as follows (in thousands): Three Months Ended Six Months Ended Cash App Seller Total Cash App Seller Total Revenue Transaction-based revenue $ 53,657 $ 628,915 $ 682,572 $ 81,476 $ 1,359,197 $ 1,440,673 Subscription and services-based revenue 271,156 75,119 346,275 464,881 177,629 642,510 Hardware revenue — 19,322 19,322 — 39,997 39,997 Bitcoin revenue 875,456 — 875,456 1,181,554 — 1,181,554 Segment revenue 1,200,269 723,356 1,923,625 1,727,911 1,576,823 3,304,734 Segment gross profit $ 281,063 $ 315,700 $ 596,763 $ 463,795 $ 671,469 $ 1,135,264 Three Months Ended Six Months Ended Cash App Seller Total Cash App Seller Total Revenue Transaction-based revenue $ 16,966 $ 758,544 $ 775,510 $ 32,246 $ 1,400,026 $ 1,432,272 Subscription and services-based revenue 118,442 89,552 207,994 215,036 165,284 380,320 Hardware revenue — 22,260 22,260 — 40,472 40,472 Bitcoin revenue 125,085 — 125,085 190,613 — 190,613 Segment revenue 260,493 870,356 1,130,849 437,895 1,605,782 2,043,677 Segment gross profit $ 105,341 $ 347,208 $ 452,549 $ 190,152 $ 647,711 $ 837,863 In the table above, amounts exclude the Caviar business, a food ordering and delivery platform business, which was sold in the year ended December 31, 2019. A reconciliation of total segment revenues, as indicated above, to the Company's consolidated revenues is as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Total segment revenue $ 1,923,625 $ 1,130,849 $ 3,304,734 $ 2,043,677 Caviar revenue — 43,389 — 89,920 Total net revenue $ 1,923,625 $ 1,174,238 $ 3,304,734 $ 2,133,597 A reconciliation of total segment gross profit to the Company’s income before applicable income taxes is as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Total segment gross profit $ 596,763 $ 452,549 $ 1,135,264 $ 837,863 Add: Caviar gross profit — 13,296 — 24,736 Total reported operating gross profit 596,763 465,845 1,135,264 862,599 Less: Product development 206,825 174,201 401,811 328,551 Less: Sales and marketing 238,096 156,421 432,631 290,134 Less: General and administrative 136,386 100,508 265,881 202,106 Less: Transaction and loan losses 37,603 34,264 146,486 62,105 Less: Amortization of acquired customer assets 905 1,294 1,795 2,588 Less: Interest expense, net 14,769 5,143 23,975 9,824 Less: Other expense (income), net (25,591) 1,230 (19,729) 12,529 Loss before applicable income taxes $ (12,230) $ (7,216) $ (117,586) $ (45,238) Revenue Revenue by geography is based on the addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Revenue United States $ 1,865,985 $ 1,119,039 $ 3,179,571 $ 2,033,695 International 57,640 55,199 125,163 99,902 Total net revenue $ 1,923,625 $ 1,174,238 $ 3,304,734 $ 2,133,597 No individual country from the international markets contributed in excess of 10% of total revenue for the three and six months ended June 30, 2020 and June 30, 2019. Long-Lived Assets The following table sets forth long-lived assets by geographic area (in thousands): June 30, 2020 December 31, 2019 Long-lived assets United States $ 965,545 $ 586,702 International 46,523 11,064 Total long-lived assets $ 1,012,068 $ 597,766 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2020 | |
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): Six Months Ended 2020 2019 Analysis of cash, cash equivalents, and restricted cash Cash and cash equivalents $ 1,972,762 $ 617,282 Short-term restricted cash 19,761 31,148 Long-term restricted cash 13,685 14,433 Cash, cash equivalents, and restricted cash $ 2,006,208 $ 662,863 Six Months Ended 2020 2019 Supplemental Cash Flow Data: Cash paid for interest $ 2,553 $ 2,836 Cash paid for income taxes 3,156 1,717 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 304,132 21,905 Change in purchases of property and equipment in accounts payable and accrued expenses 8,010 14,047 Unpaid business combination purchase price 7,439 8,411 Fair value of common stock issued and issuable in future related to business combination (35,318) — Recovery of common stock in connection with indemnification settlement agreement — 789 Fair value of common stock issued to settle the conversion of senior notes, due 2022 (77,614) — |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 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 loss, and cash flows for the interim periods. All intercompany transactions and balances have been eliminated in consolidation. The interim results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, 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 the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. |
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. Generally, the Company's estimates and assumptions consider current and past experience, to the extent that historical experience is predictive of future performance. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, credit loss allowances from marketable debt securities, contingencies, valuation of the debt component of convertible senior notes, valuation of loans held for sale including loans under the Paycheck Protection Program ("PPP"), valuation of goodwill and acquired intangible assets, determination of income and other taxes, operating and financing lease right-of-use assets and related liabilities, assessing the likelihood of adverse outcomes from claims and disputes, and share-based compensation. |
Concentration of Credit Risk | Concentration of Credit Risk For the three and six months ended June 30, 2020 and June 30, 2019, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had two third-party payment processors that represented approximately 50% and 35% of settlements receivable as of June 30, 2020. As of December 31, 2019, the Company had three parties that represented approximately 48%, 29%, and 9% of settlements receivable. 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 two |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses , which requires the measurement and recognition of expected credit losses for financial assets held. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available for sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The Company has concluded that the adoption of the guidance did not have a material impact on the balances reported in its consolidated financial statements. 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 for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments should be applied on a prospective basis. The Company adopted this guidance effective January 1, 2020 and will apply the guidance during its annual goodwill impairment test for the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU No. 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 adopted this guidance effective January 1, 2020 and has applied the guidance prospectively, and included additional disclosures required by the new guidance relating to significant unobservable inputs used to develop Level 3 fair value measurements. In August 2018, the FASB issued ASU No. 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 adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The amendments clarify the scope of the credit losses standard and hedge accounting among other things. The Company adopted ASC 326 on January 1, 2020 for credit losses. With respect to hedge accounting, the amendments address partial-term fair value hedges and fair value hedge basis adjustments, among other things. 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 as long an entity has also adopted the amendments in ASU No. 2016-13. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. For entities which have already adopted ASU No. 2017-12, they are permitted to elect either retrospectively or prospectively adopt the amendments. The Company had previously adopted ASU No. 2017-12 on January 1, 2019 and therefore is eligible to and has prospectively adopted the amendments. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes , as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other things, the new guidance simplifies intraperiod tax allocation and reduces the complexity in accounting for income taxes with year-to-date losses in interim periods. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption did not have a material impact on the consolidated financial statements and related disclosures. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTSThe 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. |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 Six Months Ended 2020 2019 2020 2019 Revenue from Contracts with Customers: Transaction-based revenue $ 682,572 $ 775,510 $ 1,440,673 $ 1,432,272 Subscription and services-based revenue 328,763 216,491 584,646 405,693 Hardware revenue 19,322 22,260 39,997 40,472 Bitcoin revenue 875,456 125,085 1,181,554 190,613 Revenue from other sources: Subscription and services-based revenue $ 17,512 $ 34,892 $ 57,864 $ 64,547 |
Schedule of Deferred Revenue | The deferred revenue balances were as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Deferred revenue, beginning of the period $ 47,046 $ 42,160 $ 44,331 $ 36,451 Deferred revenue, end of the period 51,549 44,812 51,549 44,812 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 16,288 $ 14,889 $ 26,483 $ 21,786 |
INVESTMENTS IN DEBT SECURITIES
INVESTMENTS IN DEBT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments | The Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 206,566 $ 1,172 $ (287) $ 207,451 Corporate bonds 80,593 199 (187) 80,605 Commercial paper 8,992 — — 8,992 Municipal securities 8,933 57 (15) 8,975 U.S. government securities 380,662 1,743 (377) 382,028 Foreign government securities 26,279 42 (24) 26,297 Total $ 712,025 $ 3,213 $ (890) $ 714,348 Long-term debt securities: U.S. agency securities $ 131,430 $ 645 $ (541) $ 131,534 Corporate bonds 143,213 1,232 (310) 144,135 Municipal securities 6,026 84 (66) 6,044 U.S. government securities 127,916 1,670 (791) 128,795 Foreign government securities 35,973 307 (103) 36,177 Total $ 444,558 $ 3,938 $ (1,811) $ 446,685 The Company's short-term and long-term investments as of December 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 $ 131,124 $ 409 $ (11) $ 131,522 Corporate bonds 67,169 580 (28) 67,721 Municipal securities 6,667 109 — 6,776 U.S. government securities 264,069 1,083 (17) 265,135 Foreign government securities 21,270 48 (16) 21,302 Total $ 490,299 $ 2,229 $ (72) $ 492,456 Long-term debt securities: U.S. agency securities $ 63,645 $ 612 $ (189) $ 64,068 Corporate bonds 141,307 1,832 (61) 143,078 Municipal securities 9,594 151 (39) 9,706 U.S. government securities 294,682 1,287 (190) 295,779 Foreign government securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 47,472 $ (287) $ — $ — $ 47,472 $ (287) Corporate bonds 42,235 (187) — — 42,235 (187) Municipal securities 3,697 (15) — — 3,697 (15) U.S. government securities 127,860 (377) — — 127,860 (377) Foreign government securities 18,467 (24) — — 18,467 (24) Total $ 239,731 $ (890) $ — $ — $ 239,731 $ (890) Long-term debt securities: U.S. agency securities $ 13,382 $ (541) $ — $ — $ 13,382 $ (541) Corporate bonds 37,869 (310) — — 37,869 (310) Municipal securities 1,764 (66) — — 1,764 (66) U.S. government securities — (791) — — — (791) Foreign government securities 13,893 (103) — — 13,893 (103) Total $ 66,908 $ (1,811) $ — $ — $ 66,908 $ (1,811) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 23,896 $ (9) $ 4,996 $ (2) $ 28,892 $ (11) Corporate bonds 5,507 (27) 2,502 (1) 8,009 (28) U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign government securities 13,499 (16) — — 13,499 (16) Total $ 64,383 $ (60) $ 22,482 $ (12) $ 86,865 $ (72) Long-term debt securities: U.S. agency securities $ 16,740 $ (189) $ — $ — $ 16,740 $ (189) Corporate bonds 16,708 (61) — — 16,708 (61) Municipal securities 1,005 (39) — — 1,005 (39) U.S. government securities 42,210 (162) — (28) 42,210 (190) Foreign government securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ — $ (28) $ 93,046 $ (518) The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 19,987 $ (2) $ — $ — $ 19,987 $ (2) U.S. government securities 63,978 (109) — — 63,978 (109) Total $ 83,965 $ (111) $ — $ — $ 83,965 $ (111) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. government securities $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) Total $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) |
Contractual Maturities of Short-Term and Long-Term Investments | The contractual maturities of the Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 712,025 $ 714,348 Due in one to five years 444,558 446,685 Total $ 1,156,583 $ 1,161,033 The contractual maturities of the Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 339,634 $ 339,948 Due in one to five years — — Total $ 339,634 $ 339,948 |
CUSTOMER FUNDS (Tables)
CUSTOMER FUNDS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Assets Underlying Customer Funds | The following table presents the assets underlying customer funds (in thousands): June 30, 2020 December 31, 2019 Cash $ 117,658 $ 422,459 Cash Equivalents: Money market funds 1,229,498 233 Reverse repurchase agreement (i) 30,006 — U.S. agency securities 10,997 8,585 U.S. government securities 5,000 6,984 Short-term debt securities: U.S. agency securities 127,796 — U.S. government securities 212,152 238,031 Total $ 1,733,107 $ 676,292 |
Investments within Customer Funds | The Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 127,727 $ 71 $ (2) $ 127,796 U.S. government securities 211,907 354 (109) 212,152 Total $ 339,634 $ 425 $ (111) $ 339,948 The Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. government securities $ 237,909 $ 144 $ (22) $ 238,031 Total $ 237,909 $ 144 $ (22) $ 238,031 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 47,472 $ (287) $ — $ — $ 47,472 $ (287) Corporate bonds 42,235 (187) — — 42,235 (187) Municipal securities 3,697 (15) — — 3,697 (15) U.S. government securities 127,860 (377) — — 127,860 (377) Foreign government securities 18,467 (24) — — 18,467 (24) Total $ 239,731 $ (890) $ — $ — $ 239,731 $ (890) Long-term debt securities: U.S. agency securities $ 13,382 $ (541) $ — $ — $ 13,382 $ (541) Corporate bonds 37,869 (310) — — 37,869 (310) Municipal securities 1,764 (66) — — 1,764 (66) U.S. government securities — (791) — — — (791) Foreign government securities 13,893 (103) — — 13,893 (103) Total $ 66,908 $ (1,811) $ — $ — $ 66,908 $ (1,811) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 23,896 $ (9) $ 4,996 $ (2) $ 28,892 $ (11) Corporate bonds 5,507 (27) 2,502 (1) 8,009 (28) U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign government securities 13,499 (16) — — 13,499 (16) Total $ 64,383 $ (60) $ 22,482 $ (12) $ 86,865 $ (72) Long-term debt securities: U.S. agency securities $ 16,740 $ (189) $ — $ — $ 16,740 $ (189) Corporate bonds 16,708 (61) — — 16,708 (61) Municipal securities 1,005 (39) — — 1,005 (39) U.S. government securities 42,210 (162) — (28) 42,210 (190) Foreign government securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ — $ (28) $ 93,046 $ (518) The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): June 30, 2020 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 19,987 $ (2) $ — $ — $ 19,987 $ (2) U.S. government securities 63,978 (109) — — 63,978 (109) Total $ 83,965 $ (111) $ — $ — $ 83,965 $ (111) December 31, 2019 Less than 12 months Greater than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. government securities $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) Total $ 56,984 $ (22) $ — $ — $ 56,984 $ (22) |
Contractual Maturities of Short-Term and Long-Term Investments | The contractual maturities of the Company's short-term and long-term investments as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 712,025 $ 714,348 Due in one to five years 444,558 446,685 Total $ 1,156,583 $ 1,161,033 The contractual maturities of the Company's investments within customer funds as of June 30, 2020 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 339,634 $ 339,948 Due in one to five years — — Total $ 339,634 $ 339,948 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands): June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash Equivalents: Money market funds $ 593,461 $ — $ — $ 213,576 $ — $ — U.S. agency securities — 27,334 — — 19,976 — U.S. government securities 21,084 — — 46,914 — — Municipal securities — 450 — — — — Customer funds: Money market funds 1,229,498 — — 233 — — Reverse repurchase agreement 30,006 — — — — — U.S. agency securities — 138,793 — — 8,585 — U.S. government securities 217,152 — — 245,015 — — Short-term debt securities: U.S. agency securities — 207,451 — — 131,522 — Corporate bonds — 80,605 — — 67,721 — Commercial paper — 8,992 — — — — Municipal securities — 8,975 — — 6,776 — U.S. government securities 382,028 — — 265,135 — — Foreign government securities — 26,297 — — 21,302 — Long-term debt securities: U.S. agency securities — 131,534 — — 64,068 — Corporate bonds — 144,135 — — 143,078 — Municipal securities — 6,044 — — 9,706 — U.S. government securities 128,795 — — 295,779 — — Foreign government securities — 36,177 — — 24,672 — Total $ 2,602,024 $ 816,787 $ — $ 1,066,652 $ 497,406 $ — June 30, 2020 December 31, 2019 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2025 Notes $ 842,790 $ 1,134,270 $ — $ — 2023 Notes 764,121 1,282,098 748,564 962,516 2022 Notes 171,517 837,591 190,268 578,817 Total $ 1,778,428 $ 3,253,959 $ 938,832 $ 1,541,333 The estimated fair value and carrying value of loans held for sale is as follows (in thousands): June 30, 2020 December 31, 2019 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 567,499 $ 575,679 $ 164,834 $ 173,360 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Leasehold improvements $ 131,175 $ 111,942 Computer equipment 114,501 106,469 Capitalized software 98,858 81,984 Office furniture and equipment 29,866 27,328 Total 374,400 327,723 Less: Accumulated depreciation and amortization (207,338) (178,529) Property and equipment, net $ 167,062 $ 149,194 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Change in Carrying Value of Goodwill | The change in carrying value of goodwill in the period was as follows (in thousands): Balance at December 31, 2019 $ 266,345 Acquisitions 29,492 Other adjustments (78) Balance at June 30, 2020 $ 295,759 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite Lived Intangible Assets | The following table presents the detail of acquired intangible assets as of the periods presented (in thousands): Balance at June 30, 2020 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 6 years $ 81,581 $ (36,424) $ 45,157 Customer assets 12 years 48,200 (8,729) 39,471 Trade name 6 years 18,028 (6,089) 11,939 Other 8 years 5,699 (2,464) 3,235 Total $ 153,508 $ (53,706) $ 99,802 Balance at December 31, 2019 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 53,900 $ (31,873) $ 22,027 Customer assets 12 years 44,000 (6,934) 37,066 Trade name 4 years 11,300 (4,473) 6,827 Other 8 years 5,299 (2,140) 3,159 Total $ 114,499 $ (45,420) $ 69,079 The changes to the carrying value of intangible assets were as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Acquired intangible assets, net, beginning of the period $ 81,936 $ 79,697 $ 69,079 $ 77,102 Acquisitions 22,000 8,477 39,009 14,559 Amortization expense (4,134) (3,958) (8,286) (7,445) Acquired intangible assets, net, end of the period $ 99,802 $ 84,216 $ 99,802 $ 84,216 |
Schedule of Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets in future periods as of June 30, 2020 is as follows (in thousands): Remainder of 2020 $ 9,291 2021 18,069 2022 15,995 2023 14,743 2024 11,763 Thereafter 29,941 Total $ 99,802 |
OTHER CONSOLIDATED BALANCE SH_3
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Inventory, net $ 55,422 $ 47,683 Restricted cash 19,761 38,873 Processing costs receivable 114,706 67,281 Prepaid expenses 29,669 22,758 Accounts receivable, net 38,163 33,863 Other 62,169 39,951 Total $ 319,890 $ 250,409 |
Schedule of Accrued Expenses and Other Current Liabilities | The following table presents the detail of accrued expenses and other current liabilities (in thousands): June 30, 2020 December 31, 2019 Accrued expenses $ 124,461 $ 128,387 Accrued transaction losses (i) 109,061 34,771 Accounts payable 24,548 42,116 Deferred revenue, current 44,593 38,104 Square Payroll payable (ii) 36,983 27,969 Other 53,930 26,494 Total $ 393,576 $ 297,841 (i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. In estimating the accrued transaction losses as of June 30, 2020, the Company has revised its estimates to reflect expected increased chargebacks from non-delivery of goods and services as well as increased failure rates of its sellers due to the COVID-19 outbreak. Additionally, the Company has also incorporated market related data to credit losses for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions . The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Accrued transaction losses, beginning of the period $ 96,661 $ 36,047 $ 34,771 $ 33,682 Provision for transaction losses 32,770 22,190 112,073 41,998 Charge-offs to accrued transaction losses (20,370) (18,607) (37,783) (36,050) Accrued transaction losses, end of the period $ 109,061 $ 39,630 $ 109,061 $ 39,630 (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. |
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 Six Months Ended 2020 2019 2020 2019 Accrued transaction losses, beginning of the period $ 96,661 $ 36,047 $ 34,771 $ 33,682 Provision for transaction losses 32,770 22,190 112,073 41,998 Charge-offs to accrued transaction losses (20,370) (18,607) (37,783) (36,050) Accrued transaction losses, end of the period $ 109,061 $ 39,630 $ 109,061 $ 39,630 |
OTHER CONSOLIDATED BALANCE SH_4
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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): June 30, 2020 December 31, 2019 Investment in non-marketable equity securities (i) $ 130,999 $ 110,000 Non-current lease prepayments (ii) — 45,738 Restricted cash 13,685 12,715 Other 21,765 27,935 Total $ 166,449 $ 196,388 (i) This balance represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes. During the quarter ended June 30, 2020, the Company recorded an adjustment to the carrying value, with a gain of $21.0 million being recorded in Other income (expense) in the condensed consolidated statement of operations for observable price changes. |
Schedule of Other Non-Current Liabilities | The following table presents the detail of other non-current liabilities (in thousands): June 30, 2020 December 31, 2019 Statutory liabilities (i) $ 65,000 $ 54,762 Deferred revenue, non-current 6,956 6,227 Other 18,264 33,472 Total $ 90,220 $ 94,461 (i) 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. |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Net Carrying Amount of 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 June 30, 2020 2025 Notes $ 1,000,000 $ (144,633) $ (12,577) $ 842,790 2023 Notes 862,500 (95,428) (2,951) 764,121 2022 Notes 186,251 (13,261) (1,473) 171,517 Total $ 2,048,751 $ (253,322) $ (17,001) $ 1,778,428 December 31, 2019 2023 Notes $ 862,500 $ (110,518) $ (3,418) $ 748,564 2022 Notes 211,726 (19,312) (2,146) 190,268 Total $ 1,074,226 $ (129,830) $ (5,564) $ 938,832 The net carrying amount of the equity component of the Notes were as follows (in thousands): Amount allocated to conversion option Less: Equity component, net June 30, 2020 2025 Notes $ 154,600 $ (2,342) $ 152,258 2023 Notes 155,250 (1,231) 154,019 2022 Notes 36,490 (974) 35,516 Total $ 346,340 $ (4,547) $ 341,793 December 31, 2019 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 Six Months Ended 2020 2019 2020 2019 Contractual interest expense $ 1,565 $ 1,277 $ 2,938 $ 2,554 Amortization of debt discount and issuance costs 17,580 9,725 30,108 19,333 Total $ 19,145 $ 11,002 $ 33,046 $ 21,887 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2020 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Balance at December 31, 2019 23,619,804 $ 12.66 4.89 $ 1,191,746 Granted 1,502,356 57.40 Exercised (5,978,089) 9.31 Forfeited (46,231) 71.99 Balance at June 30, 2020 19,097,840 $ 17.07 4.87 $ 1,678,054 Options exercisable as of June 30, 2020 16,532,301 $ 10.84 4.21 $ 1,555,696 |
Schedule of Restricted Stock Awards and Restricted Stock Units Activity | Activity related to RSAs and RSUs during the six months ended June 30, 2020 is set forth below: Number of Weighted Unvested as of December 31, 2019 13,917,461 $ 49.90 Granted 8,698,265 61.51 Vested (3,690,105) 38.01 Forfeited (717,619) 51.04 Unvested as of June 30, 2020 18,208,002 $ 57.82 |
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 Six Months Ended 2020 2019 2020 2019 Cost of revenue $ 95 $ 29 $ 171 $ 50 Product development 69,565 56,144 126,965 98,793 Sales and marketing 8,884 7,833 15,291 14,035 General and administrative 17,636 15,460 31,056 27,676 Total $ 96,180 $ 79,466 $ 173,483 $ 140,554 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 Six Months Ended 2020 2019 2020 2019 Numerator: Net loss $ (11,478) $ (6,740) $ (117,369) $ (44,891) Denominator: Weighted-average shares used to compute basic and diluted net loss per share 440,117 423,305 437,529 421,297 Net loss per share: Basic $ (0.03) $ (0.02) $ (0.27) $ (0.11) Diluted $ (0.03) $ (0.02) $ (0.27) $ (0.11) |
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 Six Months Ended 2020 2019 2020 2019 Stock options and restricted stock units 37,277 46,686 36,155 47,256 Common stock warrants 38,516 30,252 35,565 30,252 Convertible senior notes 27,459 20,305 24,923 20,305 Unvested shares 698 800 719 686 Employee stock purchase plan 179 169 198 195 Total anti-dilutive securities 104,129 98,212 97,560 98,694 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Expense Components and Other Information Related to Leases | The components of lease expense for the periods presented were as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Fixed operating lease costs $ 17,218 $ 7,487 $ 32,343 $ 14,177 Variable operating lease costs 3,287 1,536 9,011 2,173 Short term lease costs 1,921 377 3,777 818 Sublease income (2,179) — (3,616) — Finance lease costs Amortization of finance right-of-use assets 869 1,284 1,923 2,577 Total lease costs $ 21,116 $ 10,684 $ 43,438 $ 19,745 Other information related to leases were as follows: June 30, 2020 Weighted Average Remaining Lease Term: Operating leases 9.1 years Finance leases 0.5 years Weighted Average Discount Rate: Operating leases 4 % Finance leases — % Cash flows related to leases were as follows (in thousands): Six Months Ended 2020 2019 Cash flows from operating activities: Payments for operating lease liabilities $ (19,137) $ (16,067) Cash flows from financing activities: Principal payments on finance lease obligation $ (1,923) $ (2,568) Supplemental Cash Flow Data: Right-of-use assets obtained in exchange for operating lease obligations $ 304,132 $ 21,905 |
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 June 30, 2020 are as follows (in thousands): Finance Operating Year: Remainder of 2020 $ 522 $ 29,887 2021 — 70,520 2022 — 71,259 2023 — 65,724 2024 — 46,023 Thereafter — 273,368 Total $ 522 $ 556,781 Less: amount representing interest — 86,469 Less: leases executed but not yet commenced — 25,257 Less: lease incentives — 16,627 Total $ 522 $ 428,428 |
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 June 30, 2020 are as follows (in thousands): Finance Operating Year: Remainder of 2020 $ 522 $ 29,887 2021 — 70,520 2022 — 71,259 2023 — 65,724 2024 — 46,023 Thereafter — 273,368 Total $ 522 $ 556,781 Less: amount representing interest — 86,469 Less: leases executed but not yet commenced — 25,257 Less: lease incentives — 16,627 Total $ 522 $ 428,428 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information on the reportable segments revenue and segment operating profit are as follows (in thousands): Three Months Ended Six Months Ended Cash App Seller Total Cash App Seller Total Revenue Transaction-based revenue $ 53,657 $ 628,915 $ 682,572 $ 81,476 $ 1,359,197 $ 1,440,673 Subscription and services-based revenue 271,156 75,119 346,275 464,881 177,629 642,510 Hardware revenue — 19,322 19,322 — 39,997 39,997 Bitcoin revenue 875,456 — 875,456 1,181,554 — 1,181,554 Segment revenue 1,200,269 723,356 1,923,625 1,727,911 1,576,823 3,304,734 Segment gross profit $ 281,063 $ 315,700 $ 596,763 $ 463,795 $ 671,469 $ 1,135,264 Three Months Ended Six Months Ended Cash App Seller Total Cash App Seller Total Revenue Transaction-based revenue $ 16,966 $ 758,544 $ 775,510 $ 32,246 $ 1,400,026 $ 1,432,272 Subscription and services-based revenue 118,442 89,552 207,994 215,036 165,284 380,320 Hardware revenue — 22,260 22,260 — 40,472 40,472 Bitcoin revenue 125,085 — 125,085 190,613 — 190,613 Segment revenue 260,493 870,356 1,130,849 437,895 1,605,782 2,043,677 Segment gross profit $ 105,341 $ 347,208 $ 452,549 $ 190,152 $ 647,711 $ 837,863 |
Reconciliation of Revenue from Segments to Consolidated | In the table above, amounts exclude the Caviar business, a food ordering and delivery platform business, which was sold in the year ended December 31, 2019. A reconciliation of total segment revenues, as indicated above, to the Company's consolidated revenues is as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Total segment revenue $ 1,923,625 $ 1,130,849 $ 3,304,734 $ 2,043,677 Caviar revenue — 43,389 — 89,920 Total net revenue $ 1,923,625 $ 1,174,238 $ 3,304,734 $ 2,133,597 |
Reconciliation of Total Segment Profit to Income before applicable Income Taxes | A reconciliation of total segment gross profit to the Company’s income before applicable income taxes is as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Total segment gross profit $ 596,763 $ 452,549 $ 1,135,264 $ 837,863 Add: Caviar gross profit — 13,296 — 24,736 Total reported operating gross profit 596,763 465,845 1,135,264 862,599 Less: Product development 206,825 174,201 401,811 328,551 Less: Sales and marketing 238,096 156,421 432,631 290,134 Less: General and administrative 136,386 100,508 265,881 202,106 Less: Transaction and loan losses 37,603 34,264 146,486 62,105 Less: Amortization of acquired customer assets 905 1,294 1,795 2,588 Less: Interest expense, net 14,769 5,143 23,975 9,824 Less: Other expense (income), net (25,591) 1,230 (19,729) 12,529 Loss before applicable income taxes $ (12,230) $ (7,216) $ (117,586) $ (45,238) |
Revenue by Geographic Area | Revenue by geography is based on the addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Revenue United States $ 1,865,985 $ 1,119,039 $ 3,179,571 $ 2,033,695 International 57,640 55,199 125,163 99,902 Total net revenue $ 1,923,625 $ 1,174,238 $ 3,304,734 $ 2,133,597 |
Long-lived Assets by Geographic Area | The following table sets forth long-lived assets by geographic area (in thousands): June 30, 2020 December 31, 2019 Long-lived assets United States $ 965,545 $ 586,702 International 46,523 11,064 Total long-lived assets $ 1,012,068 $ 597,766 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash and Cash Equivalents | The supplemental disclosures of cash flow information consist of the following (in thousands): Six Months Ended 2020 2019 Analysis of cash, cash equivalents, and restricted cash Cash and cash equivalents $ 1,972,762 $ 617,282 Short-term restricted cash 19,761 31,148 Long-term restricted cash 13,685 14,433 Cash, cash equivalents, and restricted cash $ 2,006,208 $ 662,863 |
Restrictions on Cash and Cash Equivalents | The supplemental disclosures of cash flow information consist of the following (in thousands): Six Months Ended 2020 2019 Analysis of cash, cash equivalents, and restricted cash Cash and cash equivalents $ 1,972,762 $ 617,282 Short-term restricted cash 19,761 31,148 Long-term restricted cash 13,685 14,433 Cash, cash equivalents, and restricted cash $ 2,006,208 $ 662,863 |
Schedule of Cash Flow, Supplemental Disclosures | Six Months Ended 2020 2019 Supplemental Cash Flow Data: Cash paid for interest $ 2,553 $ 2,836 Cash paid for income taxes 3,156 1,717 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 304,132 21,905 Change in purchases of property and equipment in accounts payable and accrued expenses 8,010 14,047 Unpaid business combination purchase price 7,439 8,411 Fair value of common stock issued and issuable in future related to business combination (35,318) — Recovery of common stock in connection with indemnification settlement agreement — 789 Fair value of common stock issued to settle the conversion of senior notes, due 2022 (77,614) — |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020customer | Jun. 30, 2019customer | Jun. 30, 2020third_party_processorcustomer | Jun. 30, 2019customer | Dec. 31, 2019third_party_processor | |
Minimum | |||||
Concentration Risk [Line Items] | |||||
Settlements receivable period | 1 day | ||||
Maximum | |||||
Concentration Risk [Line Items] | |||||
Settlements receivable period | 2 days | ||||
Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Number of customers accounting for greater than 10% of total net revenue | customer | 0 | 0 | 0 | 0 | |
Settlements Receivable | Credit Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Number of third party processors | third_party_processor | 2 | 3 | |||
Settlements Receivable | Credit Concentration Risk | Third Party Processor One | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, settlements receivable | 50.00% | 48.00% | |||
Settlements Receivable | Credit Concentration Risk | Third Party Processor Two | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, settlements receivable | 35.00% | 29.00% | |||
Settlements Receivable | Credit Concentration Risk | Third Party Processor Three | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, settlements receivable | 9.00% |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Transaction-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 682,572 | $ 775,510 | $ 1,440,673 | $ 1,432,272 |
Subscription and services-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 328,763 | 216,491 | 584,646 | 405,693 |
Revenues from other sources | 17,512 | 34,892 | 57,864 | 64,547 |
Hardware revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 19,322 | 22,260 | 39,997 | 40,472 |
Bitcoin revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 875,456 | $ 125,085 | $ 1,181,554 | $ 190,613 |
REVENUE - Deferred Revenue (Det
REVENUE - Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Movement in Deferred Revenue [Roll Forward] | ||||
Deferred revenue, beginning of the period | $ 47,046 | $ 42,160 | $ 44,331 | $ 36,451 |
Deferred revenue, end of the period | 51,549 | 44,812 | 51,549 | 44,812 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | $ 16,288 | $ 14,889 | $ 26,483 | $ 21,786 |
INVESTMENTS IN DEBT SECURITIE_2
INVESTMENTS IN DEBT SECURITIES - Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,156,583 | |
Fair Value | 1,161,033 | |
Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 712,025 | $ 490,299 |
Gross Unrealized Gains | 3,213 | 2,229 |
Gross Unrealized Losses | (890) | (72) |
Fair Value | 714,348 | 492,456 |
Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 444,558 | 533,853 |
Gross Unrealized Gains | 3,938 | 3,968 |
Gross Unrealized Losses | (1,811) | (518) |
Fair Value | 446,685 | 537,303 |
U.S. agency securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 206,566 | 131,124 |
Gross Unrealized Gains | 1,172 | 409 |
Gross Unrealized Losses | (287) | (11) |
Fair Value | 207,451 | 131,522 |
U.S. agency securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 131,430 | 63,645 |
Gross Unrealized Gains | 645 | 612 |
Gross Unrealized Losses | (541) | (189) |
Fair Value | 131,534 | 64,068 |
Corporate bonds | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 80,593 | 67,169 |
Gross Unrealized Gains | 199 | 580 |
Gross Unrealized Losses | (187) | (28) |
Fair Value | 80,605 | 67,721 |
Corporate bonds | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 143,213 | 141,307 |
Gross Unrealized Gains | 1,232 | 1,832 |
Gross Unrealized Losses | (310) | (61) |
Fair Value | 144,135 | 143,078 |
Commercial paper | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,992 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 8,992 | |
Municipal securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,933 | 6,667 |
Gross Unrealized Gains | 57 | 109 |
Gross Unrealized Losses | (15) | 0 |
Fair Value | 8,975 | 6,776 |
Municipal securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,026 | 9,594 |
Gross Unrealized Gains | 84 | 151 |
Gross Unrealized Losses | (66) | (39) |
Fair Value | 6,044 | 9,706 |
U.S. government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 380,662 | 264,069 |
Gross Unrealized Gains | 1,743 | 1,083 |
Gross Unrealized Losses | (377) | (17) |
Fair Value | 382,028 | 265,135 |
U.S. government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 127,916 | 294,682 |
Gross Unrealized Gains | 1,670 | 1,287 |
Gross Unrealized Losses | (791) | (190) |
Fair Value | 128,795 | 295,779 |
Foreign government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 26,279 | 21,270 |
Gross Unrealized Gains | 42 | 48 |
Gross Unrealized Losses | (24) | (16) |
Fair Value | 26,297 | 21,302 |
Foreign government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 35,973 | 24,625 |
Gross Unrealized Gains | 307 | 86 |
Gross Unrealized Losses | (103) | (39) |
Fair Value | $ 36,177 | $ 24,672 |
INVESTMENTS IN DEBT SECURITIE_3
INVESTMENTS IN DEBT SECURITIES - Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | $ 239,731 | $ 64,383 |
Less than 12 Months, Gross Unrealized Losses | (890) | (60) |
Greater than 12 months, Fair Value | 0 | 22,482 |
Greater than 12 months, Gross Unrealized Losses | 0 | (12) |
Total, Fair Value | 239,731 | 86,865 |
Total, Gross Unrealized Losses | (890) | (72) |
Short-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 47,472 | 23,896 |
Less than 12 Months, Gross Unrealized Losses | (287) | (9) |
Greater than 12 months, Fair Value | 0 | 4,996 |
Greater than 12 months, Gross Unrealized Losses | 0 | (2) |
Total, Fair Value | 47,472 | 28,892 |
Total, Gross Unrealized Losses | (287) | (11) |
Short-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 42,235 | 5,507 |
Less than 12 Months, Gross Unrealized Losses | (187) | (27) |
Greater than 12 months, Fair Value | 0 | 2,502 |
Greater than 12 months, Gross Unrealized Losses | 0 | (1) |
Total, Fair Value | 42,235 | 8,009 |
Total, Gross Unrealized Losses | (187) | (28) |
Short-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 3,697 | |
Less than 12 Months, Gross Unrealized Losses | (15) | |
Greater than 12 months, Fair Value | 0 | |
Greater than 12 months, Gross Unrealized Losses | 0 | |
Total, Fair Value | 3,697 | |
Total, Gross Unrealized Losses | (15) | |
Short-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 127,860 | 21,481 |
Less than 12 Months, Gross Unrealized Losses | (377) | (8) |
Greater than 12 months, Fair Value | 0 | 14,984 |
Greater than 12 months, Gross Unrealized Losses | 0 | (9) |
Total, Fair Value | 127,860 | 36,465 |
Total, Gross Unrealized Losses | (377) | (17) |
Short-term debt securities | Foreign government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 18,467 | 13,499 |
Less than 12 Months, Gross Unrealized Losses | (24) | (16) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 18,467 | 13,499 |
Total, Gross Unrealized Losses | (24) | (16) |
Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 66,908 | 93,046 |
Less than 12 Months, Gross Unrealized Losses | (1,811) | (490) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | (28) |
Total, Fair Value | 66,908 | 93,046 |
Total, Gross Unrealized Losses | (1,811) | (518) |
Long-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 13,382 | 16,740 |
Less than 12 Months, Gross Unrealized Losses | (541) | (189) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 13,382 | 16,740 |
Total, Gross Unrealized Losses | (541) | (189) |
Long-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 37,869 | 16,708 |
Less than 12 Months, Gross Unrealized Losses | (310) | (61) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 37,869 | 16,708 |
Total, Gross Unrealized Losses | (310) | (61) |
Long-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 1,764 | 1,005 |
Less than 12 Months, Gross Unrealized Losses | (66) | (39) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 1,764 | 1,005 |
Total, Gross Unrealized Losses | (66) | (39) |
Long-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 0 | 42,210 |
Less than 12 Months, Gross Unrealized Losses | (791) | (162) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | (28) |
Total, Fair Value | 0 | 42,210 |
Total, Gross Unrealized Losses | (791) | (190) |
Long-term debt securities | Foreign government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 13,893 | 16,383 |
Less than 12 Months, Gross Unrealized Losses | (103) | (39) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 13,893 | 16,383 |
Total, Gross Unrealized Losses | $ (103) | $ (39) |
INVESTMENTS IN DEBT SECURITIE_4
INVESTMENTS IN DEBT SECURITIES - Contractual Maturities of Short-Term and Long-Term Investments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Amortized Cost | |
Due in one year or less | $ 712,025 |
Due in one to five years | 444,558 |
Amortized Cost | 1,156,583 |
Fair Value | |
Due in one year or less | 714,348 |
Due in one to five years | 446,685 |
Fair Value | $ 1,161,033 |
CUSTOMER FUNDS - Assets Underly
CUSTOMER FUNDS - Assets Underlying Customer Funds (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 1,733,107 | $ 676,292 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 127,796 | 0 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 212,152 | 238,031 |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 117,658 | 422,459 |
Cash Equivalents | Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 1,229,498 | 233 |
Cash Equivalents | Reverse repurchase agreement (i) | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 30,006 | 0 |
Cash Equivalents | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 10,997 | 8,585 |
Cash Equivalents | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 5,000 | $ 6,984 |
CUSTOMER FUNDS - Investments wi
CUSTOMER FUNDS - Investments within Customer Funds (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,156,583 | |
Fair Value | 1,161,033 | |
Customer funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 339,634 | $ 237,909 |
Gross Unrealized Gains | 425 | 144 |
Gross Unrealized Losses | (111) | (22) |
Fair Value | 339,948 | 238,031 |
Customer funds | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 127,727 | |
Gross Unrealized Gains | 71 | |
Gross Unrealized Losses | (2) | |
Fair Value | 127,796 | |
Customer funds | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 211,907 | 237,909 |
Gross Unrealized Gains | 354 | 144 |
Gross Unrealized Losses | (109) | (22) |
Fair Value | $ 212,152 | $ 238,031 |
CUSTOMER FUNDS - Debt Securitie
CUSTOMER FUNDS - Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value (Details) - Customer funds - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | $ 83,965 | $ 56,984 |
Less than 12 Months, Gross Unrealized Losses | (111) | (22) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 83,965 | 56,984 |
Total, Gross Unrealized Losses | (111) | (22) |
U.S. agency securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 19,987 | |
Less than 12 Months, Gross Unrealized Losses | (2) | |
Greater than 12 months, Fair Value | 0 | |
Greater than 12 months, Gross Unrealized Losses | 0 | |
Total, Fair Value | 19,987 | |
Total, Gross Unrealized Losses | (2) | |
U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 63,978 | 56,984 |
Less than 12 Months, Gross Unrealized Losses | (109) | (22) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 63,978 | 56,984 |
Total, Gross Unrealized Losses | $ (109) | $ (22) |
CUSTOMER FUNDS - Contractual Ma
CUSTOMER FUNDS - Contractual Maturities of Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due in one year or less | $ 712,025 | |
Due in one to five years | 444,558 | |
Amortized Cost | 1,156,583 | |
Fair Value | ||
Due in one year or less | 714,348 | |
Due in one to five years | 446,685 | |
Fair Value | 1,161,033 | |
Customer funds | ||
Amortized Cost | ||
Due in one year or less | 339,634 | |
Due in one to five years | 0 | |
Amortized Cost | 339,634 | $ 237,909 |
Fair Value | ||
Due in one year or less | 339,948 | |
Due in one to five years | 0 | |
Fair Value | $ 339,948 | $ 238,031 |
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 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | $ 1,733,107 | $ 676,292 |
Short-term debt securities | 714,348 | 492,456 |
Long-term debt securities | 446,685 | 537,303 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 127,796 | 0 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 212,152 | 238,031 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 2,602,024 | 1,066,652 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 593,461 | 213,576 |
Customer funds | 1,229,498 | 233 |
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 | 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 1 | Reverse repurchase agreement (i) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 30,006 | 0 |
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 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 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 | 21,084 | 46,914 |
Customer funds | 217,152 | 245,015 |
Short-term debt securities | 382,028 | 265,135 |
Long-term debt securities | 128,795 | 295,779 |
Fair Value, Measurements, Recurring | Level 1 | Foreign government securities | ||
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 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 816,787 | 497,406 |
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 | 27,334 | 19,976 |
Customer funds | 138,793 | 8,585 |
Short-term debt securities | 207,451 | 131,522 |
Long-term debt securities | 131,534 | 64,068 |
Fair Value, Measurements, Recurring | Level 2 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 450 | 0 |
Short-term debt securities | 8,975 | 6,776 |
Long-term debt securities | 6,044 | 9,706 |
Fair Value, Measurements, Recurring | Level 2 | Reverse repurchase agreement (i) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 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 | 80,605 | 67,721 |
Long-term debt securities | 144,135 | 143,078 |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 8,992 | 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 | Foreign government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 26,297 | 21,302 |
Long-term debt securities | 36,177 | 24,672 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
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 | 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 | Reverse repurchase agreement (i) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 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 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 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 | Foreign government securities | ||
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 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 | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | $ 1,778,428 | $ 938,832 |
Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 3,253,959 | 1,541,333 |
2025 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 842,790 | 0 |
2025 Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 1,134,270 | 0 |
2023 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 764,121 | 748,564 |
2023 Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 1,282,098 | 962,516 |
2022 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 171,517 | 190,268 |
2022 Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | $ 837,591 | $ 578,817 |
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 | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
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 | $ 567,499 | $ 567,499 | $ 164,834 | ||
Carrying Value | Level 3 | Fair Value, Measurements, Recurring | Small Business Administration (SBA), Paycheck Protection Program, CARES Act | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held for sale | 465,500 | 465,500 | |||
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 | 575,679 | 575,679 | $ 173,360 | ||
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 | $ 500 | $ 6,400 | $ 22,500 | $ 13,100 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 374,400 | $ 374,400 | $ 327,723 | ||
Less: Accumulated depreciation and amortization | (207,338) | (207,338) | (178,529) | ||
Property and equipment, net | 167,062 | 167,062 | 149,194 | ||
Depreciation and amortization expense | 16,900 | $ 14,800 | 32,800 | $ 30,300 | |
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 131,175 | 131,175 | 111,942 | ||
Computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 114,501 | 114,501 | 106,469 | ||
Capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 98,858 | 98,858 | 81,984 | ||
Office furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 29,866 | $ 29,866 | $ 27,328 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 295,759,000 | $ 266,345,000 |
Series of Individually Immaterial Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Fair value of consideration transferred | 63,300,000 | |
Cash consideration | 28,000,000 | |
Equity consideration | 35,300,000 | |
Goodwill | 29,500,000 | |
Intangible assets, other than goodwill | 39,000,000 | |
Goodwill amount expected to be tax deductible | 0 | |
Intangible assets (excluding goodwill) amount expected to be tax deductible | $ 0 |
GOODWILL - Schedule of Change i
GOODWILL - Schedule of Change in Carrying Value of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 266,345 |
Acquisitions | 29,492 |
Other adjustments | (78) |
Goodwill, ending balance | $ 295,759 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020USD ($)segment | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Goodwill [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Number of operating segments | segment | 2 | ||
Goodwill | $ 295,759,000 | $ 295,759,000 | $ 266,345,000 |
Goodwill, impairment charges | 0 | ||
Seller | |||
Goodwill [Line Items] | |||
Goodwill | 183,400,000 | 183,400,000 | |
Cash App | |||
Goodwill [Line Items] | |||
Goodwill | $ 112,400,000 | $ 112,400,000 |
ACQUIRED INTANGIBLE ASSETS - Sc
ACQUIRED INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Cost | $ 153,508 | $ 114,499 | ||||
Accumulated Amortization | (53,706) | (45,420) | ||||
Net | $ 99,802 | $ 69,079 | $ 81,936 | $ 84,216 | $ 79,697 | $ 77,102 |
Technology assets | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization period | 6 years | 5 years | ||||
Cost | $ 81,581 | $ 53,900 | ||||
Accumulated Amortization | (36,424) | (31,873) | ||||
Net | $ 45,157 | $ 22,027 | ||||
Customer assets | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization period | 12 years | 12 years | ||||
Cost | $ 48,200 | $ 44,000 | ||||
Accumulated Amortization | (8,729) | (6,934) | ||||
Net | $ 39,471 | $ 37,066 | ||||
Trade name | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization period | 6 years | 4 years | ||||
Cost | $ 18,028 | $ 11,300 | ||||
Accumulated Amortization | (6,089) | (4,473) | ||||
Net | $ 11,939 | $ 6,827 | ||||
Other | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization period | 8 years | 8 years | ||||
Cost | $ 5,699 | $ 5,299 | ||||
Accumulated Amortization | (2,464) | (2,140) | ||||
Net | $ 3,235 | $ 3,159 |
ACQUIRED INTANGIBLE ASSETS - Na
ACQUIRED INTANGIBLE ASSETS - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets impairment | $ 0 |
ACQUIRED INTANGIBLE ASSETS - Ch
ACQUIRED INTANGIBLE ASSETS - Change in Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Acquired intangible assets, net, beginning of the period | $ 81,936 | $ 79,697 | $ 69,079 | $ 77,102 |
Acquisitions | 22,000 | 8,477 | 39,009 | 14,559 |
Amortization expense | (4,134) | (3,958) | (8,286) | (7,445) |
Acquired intangible assets, net, end of the period | $ 99,802 | $ 84,216 | $ 99,802 | $ 84,216 |
ACQUIRED INTANGIBLE ASSETS - Fu
ACQUIRED INTANGIBLE ASSETS - Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Remainder of 2020 | $ 9,291 | |||||
2021 | 18,069 | |||||
2022 | 15,995 | |||||
2023 | 14,743 | |||||
2024 | 11,763 | |||||
Thereafter | 29,941 | |||||
Net | $ 99,802 | $ 81,936 | $ 69,079 | $ 84,216 | $ 79,697 | $ 77,102 |
OTHER CONSOLIDATED BALANCE SH_5
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Inventory, net | $ 55,422 | $ 47,683 | |
Restricted cash | 19,761 | 38,873 | $ 31,148 |
Processing costs receivable | 114,706 | 67,281 | |
Prepaid expenses | 29,669 | 22,758 | |
Accounts receivable, net | 38,163 | 33,863 | |
Other | 62,169 | 39,951 | |
Total | $ 319,890 | $ 250,409 |
OTHER CONSOLIDATED BALANCE SH_6
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued expenses | $ 124,461 | $ 128,387 |
Accrued transaction losses | 109,061 | 34,771 |
Accounts payable | 24,548 | 42,116 |
Deferred revenue, current | 44,593 | 38,104 |
Square Payroll payable | 36,983 | 27,969 |
Other | 53,930 | 26,494 |
Total | $ 393,576 | $ 297,841 |
OTHER CONSOLIDATED BALANCE SH_7
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Schedule of Reserve for Transaction Losses (Details) - Transaction Losses - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Loss Contingency Accrual [Roll Forward] | ||||
Accrued transaction losses, beginning of the period | $ 96,661 | $ 36,047 | $ 34,771 | $ 33,682 |
Provision for transaction losses | 32,770 | 22,190 | 112,073 | 41,998 |
Charge-offs to accrued transaction losses | (20,370) | (18,607) | (37,783) | (36,050) |
Accrued transaction losses, end of the period | $ 109,061 | $ 39,630 | $ 109,061 | $ 39,630 |
OTHER CONSOLIDATED BALANCE SH_8
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Investment in non-marketable equity securities | $ 130,999 | $ 110,000 | |
Non-current lease prepayments | 0 | 45,738 | |
Restricted cash | $ 14,433 | 13,685 | 12,715 |
Other | 21,765 | 27,935 | |
Total | $ 166,449 | $ 196,388 | |
Gain recognized for observable price changes | $ 21,000 |
OTHER CONSOLIDATED BALANCE SH_9
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Statutory liabilities | $ 65,000 | $ 54,762 |
Deferred revenue, non-current | 6,956 | 6,227 |
Other | 18,264 | 33,472 |
Total | $ 90,220 | $ 94,461 |
INDEBTEDNESS - Facility Narrati
INDEBTEDNESS - Facility Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 02, 2020 | May 28, 2020 | Dec. 31, 2019 | Nov. 30, 2015 | |
Debt Instrument [Line Items] | |||||||||
PPP Liquidity Facility advances | $ 447,764,000 | $ 447,764,000 | $ 0 | ||||||
Line of Credit | Paycheck Protection Program Liquidity Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | |||||||
PPP Liquidity Facility advances | 447,800,000 | 447,800,000 | |||||||
Revolving Credit Facility | Line of Credit | 2015 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 375,000,000 | ||||||||
Revolving Credit Facility | Line of Credit | 2020 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||||
Amounts drawn to date | 0 | 0 | |||||||
Letters of credit outstanding | 0 | 0 | |||||||
Unused commitment fee percentage | 0.15% | ||||||||
Unused commitment fees | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | |||||
Revolving Credit Facility | Line of Credit | Federal Funds Rate | 2020 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Revolving Credit Facility | Line of Credit | LIBOR | 2020 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Revolving Credit Facility | Line of Credit | LIBOR | Minimum | 2020 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.25% | ||||||||
Additional basis spread on variable rate | 0.25% | ||||||||
Revolving Credit Facility | Line of Credit | LIBOR | Maximum | 2020 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.75% | ||||||||
Additional basis spread on variable rate | 0.75% |
INDEBTEDNESS - Convertible Seni
INDEBTEDNESS - Convertible Senior Notes Narrative (Details) $ / shares in Units, shares in Millions | Mar. 05, 2020USD ($)day$ / shares | May 25, 2018USD ($)day$ / shares | Mar. 06, 2017USD ($)day$ / shares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)shares | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of long-term debt | $ 990,000 | $ 0 | |||||||
Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in USD per share) | $ / shares | $ 121.01 | $ 77.85 | $ 22.95 | ||||||
Carrying amount of equity component | $ 341,793,000 | 341,793,000 | $ 341,793,000 | $ 194,392,000 | |||||
Issuance costs attributable to the liability component | 17,001,000 | 17,001,000 | 17,001,000 | 5,564,000 | |||||
Convertible Debt | 2025 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 1,000,000,000 | ||||||||
Interest rate | 0.125% | ||||||||
Conversion rate | 0.0082641 | ||||||||
Conversion price (in USD per share) | $ / shares | $ 121.01 | ||||||||
Redemption price, percentage | 100.00% | ||||||||
Carrying amount of equity component | $ 154,600,000 | $ 152,258,000 | $ 152,258,000 | $ 152,258,000 | |||||
Effective interest rate of the liability component | 3.81% | 3.81% | 3.81% | 3.81% | |||||
Discounts and commissions payable | $ 14,300,000 | ||||||||
Third party offering costs | 900,000 | ||||||||
Issuance costs attributable to the liability component | $ 12,800,000 | $ 12,577,000 | $ 12,577,000 | $ 12,577,000 | |||||
Amount of if-converted value in excess of outstanding principal amount | 0 | ||||||||
Convertible Debt | 2025 Notes | 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 | 2025 Notes | 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 | 2023 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 862,500,000 | ||||||||
Interest rate | 0.50% | ||||||||
Conversion rate | 0.0128456 | ||||||||
Conversion price (in USD per share) | $ / shares | $ 77.85 | ||||||||
Carrying amount of equity component | $ 155,300,000 | $ 154,019,000 | $ 154,019,000 | $ 154,019,000 | 154,019,000 | ||||
Effective interest rate of the liability component | 4.69% | 4.69% | 4.69% | 4.69% | |||||
Discounts and commissions payable | $ 6,000,000 | ||||||||
Third party offering costs | 800,000 | ||||||||
Issuance costs attributable to the liability component | $ 5,600,000 | $ 2,951,000 | $ 2,951,000 | $ 2,951,000 | 3,418,000 | ||||
Amount of if-converted value in excess of outstanding principal amount | 300,200,000 | ||||||||
Convertible Debt | 2023 Notes | 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 | 2023 Notes | 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 | 2022 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 440,000,000 | ||||||||
Interest rate | 0.375% | ||||||||
Conversion rate | 0.0435749 | ||||||||
Conversion price (in USD per share) | $ / shares | $ 22.95 | ||||||||
Carrying amount of equity component | $ 86,200,000 | $ 35,516,000 | $ 35,516,000 | $ 35,516,000 | 40,373,000 | ||||
Effective interest rate of the liability component | 5.34% | 5.34% | 5.34% | 5.34% | |||||
Discounts and commissions payable | $ 11,000,000 | ||||||||
Third party offering costs | 800,000 | ||||||||
Issuance costs attributable to the liability component | $ 9,400,000 | $ 1,473,000 | $ 1,473,000 | $ 1,473,000 | $ 2,146,000 | ||||
Notes converted | $ 25,500,000 | 253,700,000 | |||||||
Principal payment on conversion of senior notes | $ 219,400,000 | ||||||||
Shares issued upon conversion (in shares) | shares | 1.1 | 8.4 | |||||||
Loss on extinguishment of long-term debt | $ 1,000,000 | $ 1,000,000 | $ 6,000,000 | ||||||
Amount of if-converted value in excess of outstanding principal amount | $ 665,400,000 | ||||||||
Convertible Debt | 2022 Notes | 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 | 2022 Notes | 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 - Net Carrying Amo
INDEBTEDNESS - Net Carrying Amount of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 05, 2020 | Dec. 31, 2019 | May 25, 2018 | Mar. 06, 2017 |
Debt Instrument [Line Items] | |||||
Principal outstanding | $ 2,048,751 | $ 1,074,226 | |||
Unamortized debt discount | (253,322) | (129,830) | |||
Unamortized debt issuance costs | (17,001) | (5,564) | |||
Net carrying value | 1,778,428 | 938,832 | |||
2025 Notes | |||||
Debt Instrument [Line Items] | |||||
Principal outstanding | 1,000,000 | ||||
Unamortized debt discount | (144,633) | ||||
Unamortized debt issuance costs | (12,577) | $ (12,800) | |||
Net carrying value | 842,790 | ||||
2023 Notes | |||||
Debt Instrument [Line Items] | |||||
Principal outstanding | 862,500 | 862,500 | |||
Unamortized debt discount | (95,428) | (110,518) | |||
Unamortized debt issuance costs | (2,951) | (3,418) | $ (5,600) | ||
Net carrying value | 764,121 | 748,564 | |||
2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Principal outstanding | 186,251 | 211,726 | |||
Unamortized debt discount | (13,261) | (19,312) | |||
Unamortized debt issuance costs | (1,473) | (2,146) | $ (9,400) | ||
Net carrying value | $ 171,517 | $ 190,268 |
INDEBTEDNESS - Net Carrying A_2
INDEBTEDNESS - Net Carrying Amount of Equity Component of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 05, 2020 | Dec. 31, 2019 | May 25, 2018 | Mar. 06, 2017 |
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | $ 346,340 | $ 196,731 | |||
Less: allocated issuance costs | (4,547) | (2,339) | |||
Equity component, net | 341,793 | 194,392 | |||
2025 Notes | |||||
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | 154,600 | ||||
Less: allocated issuance costs | (2,342) | ||||
Equity component, net | 152,258 | $ 154,600 | |||
2023 Notes | |||||
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 | ||
2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | 36,490 | 41,481 | |||
Less: allocated issuance costs | (974) | (1,108) | |||
Equity component, net | $ 35,516 | $ 40,373 | $ 86,200 |
INDEBTEDNESS - Interest Expense
INDEBTEDNESS - Interest Expense on Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,565 | $ 1,277 | $ 2,938 | $ 2,554 |
Amortization of debt discount and issuance costs | 17,580 | 9,725 | 30,108 | 19,333 |
Total | $ 19,145 | $ 11,002 | $ 33,046 | $ 21,887 |
INDEBTEDNESS - Convertible Note
INDEBTEDNESS - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 05, 2020 | May 25, 2018 | Mar. 06, 2017 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 |
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of warrants | $ 99,500 | $ 0 | |||||
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price of convertible debt (in USD per share) | $ 121.01 | $ 77.85 | $ 22.95 | ||||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | $ 161.34 | $ 109.26 | $ 31.18 | ||||
Common Stock Warrant, 2025 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 8,260 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 161.34 | ||||||
Proceeds from issuance of warrants | $ 99,500 | ||||||
Common Stock Warrant, 2023 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11,100 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 109.26 | ||||||
Proceeds from issuance of warrants | $ 112,100 | ||||||
Common Stock Warrant, 2022 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 19,200 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 31.18 | ||||||
Proceeds from issuance of warrants | $ 57,200 | ||||||
Shares of common stock received due to exercise of note hedges (in shares) | 700 | 7,900 | |||||
Options | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 8,260 | 11,100 | 19,200 | ||||
Convertible note hedge, option to purchase common stock, price (in USD per share) | $ 121.01 | $ 77.85 | $ 22.95 | ||||
Cost of convertible note hedge | $ 149,200 | $ 172,600 | $ 92,100 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 752 | $ 476 | $ 217 | $ 347 |
Effective tax rate | 6.10% | 6.60% | 0.20% | 0.80% |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock, Warrants and Conversion of 2022 Notes Narrative (Details) | 6 Months Ended | 30 Months Ended | ||||
Jun. 30, 2020vote$ / sharesshares | Jun. 30, 2020$ / sharesshares | Mar. 05, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | May 25, 2018$ / sharesshares | Mar. 06, 2017$ / sharesshares | |
2022 Notes | Convertible Debt | ||||||
Class of Stock [Line Items] | ||||||
Shares issued upon conversion (in shares) | 1,100,000 | 8,400,000 | ||||
Common Stock Warrant, 2025 Notes | ||||||
Class of Stock [Line Items] | ||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 8,260,000 | |||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 161.34 | |||||
Number of warrants exercised (in shares) | 0 | 0 | ||||
Common Stock Warrant, 2023 Notes | ||||||
Class of Stock [Line Items] | ||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11,100,000 | |||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 109.26 | |||||
Number of warrants exercised (in shares) | 0 | 0 | ||||
Common Stock Warrant, 2022 Notes | ||||||
Class of Stock [Line Items] | ||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 19,200,000 | |||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 31.18 | |||||
Number of warrants exercised (in shares) | 0 | 0 | ||||
Class A | ||||||
Class of Stock [Line Items] | ||||||
Common stock, number of votes entitled for each share held (in votes) | vote | 1 | |||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||
Common stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | |||
Common stock, shares outstanding (in shares) | 370,102,185 | 370,102,185 | 352,386,562 | |||
Class B | ||||||
Class of Stock [Line Items] | ||||||
Common stock, number of votes entitled for each share held (in votes) | vote | 10 | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | |||
Common stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | |||
Common stock, shares outstanding (in shares) | 72,287,165 | 72,287,165 | 80,410,158 |
STOCKHOLDERS' EQUITY - Stock Pl
STOCKHOLDERS' EQUITY - Stock Plans and Share Based Compensation Narrative (Details) $ in Thousands | Nov. 17, 2015shares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)planshares | Jun. 30, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share based compensation plans | plan | 2 | ||||
Employee stock purchase plan, compensation expense | $ | $ 96,180 | $ 79,466 | $ 173,483 | $ 140,554 | |
Capitalized share-based compensation expense | $ | 3,500 | 1,900 | 5,800 | 3,700 | |
Unrecognized compensation cost, options | $ | 1,100,000 | $ 1,100,000 | |||
Unrecognized compensation cost, period for recognition | 3 years | ||||
Employee stock purchase plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employee stock purchase plan, compensation expense | $ | $ 4,100 | $ 4,700 | $ 8,800 | $ 9,000 | |
2009 Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future issuance (in shares) | 0 | 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) | 12,775,030 | 12,775,030 | |||
2015 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future issuance (in shares) | 97,704,869 | 97,704,869 | |||
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) | 24,530,812 | 24,530,812 | |||
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 Op
STOCKHOLDERS' EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Number of Stock Options Outstanding | |||
Beginning balance (in shares) | 23,619,804 | ||
Granted (in shares) | 1,502,356 | ||
Exercised (in shares) | (5,978,089) | ||
Forfeited (in shares) | (46,231) | ||
Ending balance (in shares) | 19,097,840 | 23,619,804 | |
Weighted Average Exercise Price | |||
Beginning balance (in USD per share) | $ 12.66 | ||
Granted (in USD per share) | 57.40 | ||
Exercised (in USD per share) | 9.31 | ||
Forfeited (in USD per share) | 71.99 | ||
Ending balance (in USD per share) | $ 12.66 | $ 12.66 | $ 17.07 |
Options Exercisable | |||
Options exercisable (in shares) | 16,532,301 | ||
Options exercisable (in USD per share) | $ 10.84 | ||
Additional Disclosures | |||
Weighted average remaining contractual term, options outstanding | 4 years 10 months 13 days | 4 years 10 months 20 days | |
Weighted average remaining contractual term, options exercisable | 4 years 2 months 15 days | ||
Aggregate intrinsic value, options outstanding | $ 1,191,746 | $ 1,678,054 | |
Aggregate intrinsic value, options exercisable | $ 1,555,696 |
STOCKHOLDERS' EQUITY - Restrict
STOCKHOLDERS' EQUITY - Restricted Stock Awards and Restricted Stock Units Activity (Details) - RSAs and RSUs | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of shares | |
Beginning balance (in shares) | shares | 13,917,461 |
Granted (in shares) | shares | 8,698,265 |
Vested (in shares) | shares | (3,690,105) |
Forfeited (in shares) | shares | (717,619) |
Ending balance (in shares) | shares | 18,208,002 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 49.90 |
Granted (in USD per share) | $ / shares | 61.51 |
Vested (in USD per share) | $ / shares | 38.01 |
Forfeited (in USD per share) | $ / shares | 51.04 |
Ending balance (in USD per share) | $ / shares | $ 57.82 |
STOCKHOLDERS' EQUITY - Effects
STOCKHOLDERS' EQUITY - Effects of Share-Based Compensation on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 96,180 | $ 79,466 | $ 173,483 | $ 140,554 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 95 | 29 | 171 | 50 |
Product development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 69,565 | 56,144 | 126,965 | 98,793 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 8,884 | 7,833 | 15,291 | 14,035 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 17,636 | $ 15,460 | $ 31,056 | $ 27,676 |
NET LOSS PER SHARE - Calculatio
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 | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||||
Net loss | $ (11,478) | $ (105,891) | $ (6,740) | $ (38,151) | $ (117,369) | $ (44,891) |
Denominator: | ||||||
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 440,117 | 423,305 | 437,529 | 421,297 | ||
Net loss per share: | ||||||
Basic (in USD per share) | $ (0.03) | $ (0.02) | $ (0.27) | $ (0.11) | ||
Diluted (in USD per share) | $ (0.03) | $ (0.02) | $ (0.27) | $ (0.11) |
NET LOSS PER SHARE - Antidiluti
NET LOSS PER SHARE - Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
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) | 104,129 | 98,212 | 97,560 | 98,694 |
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) | 37,277 | 46,686 | 36,155 | 47,256 |
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) | 38,516 | 30,252 | 35,565 | 30,252 |
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) | 27,459 | 20,305 | 24,923 | 20,305 |
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) | 698 | 800 | 719 | 686 |
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) | 179 | 169 | 198 | 195 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jul. 31, 2019 |
Related Party Transaction [Line Items] | |||
Lease executed but not yet commenced, term | 15 years 6 months | ||
Lease executed but not yet commenced | $ 25,257 | $ 42,700 | |
Operating lease right-of-use assets | 449,445 | $ 113,148 | |
Operating lease liability | 428,428 | ||
Affiliated Entity | Operating Lease Agreement | |||
Related Party Transaction [Line Items] | |||
Lease executed but not yet commenced, term | 15 years 6 months | ||
Lease executed but not yet commenced | $ 42,700 | ||
Operating lease right-of-use assets | 14,800 | ||
Operating lease liability | $ 21,300 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating and Finance Leases Narrative (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jul. 31, 2019USD ($)ft²renewal_option | Dec. 31, 2018ft²renewal_option | Jun. 30, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating lease renewal term | 5 years | ||
Operating lease option to terminate term | 1 year | ||
Leased area of office space executed but not yet commenced (in sq ft) | ft² | 226,158 | ||
Lease executed but not yet commenced, term | 15 years 6 months | ||
Lease executed but not yet commenced, number of renewal options | renewal_option | 2 | ||
Lease executed but not yet commenced renewal term | 5 years | ||
Lease executed but not yet commenced | $ | $ 42,700 | $ 25,257 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease remaining term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease remaining term | 12 years | ||
Lease executed but not yet commenced, option to terminate leased space (up to) | 50.00% | ||
Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Finance lease, remaining lease term | 6 months | ||
Oakland, California | Building | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease renewal term | 5 years | ||
Operating lease term | 12 years | ||
Leased area of office space (in sq ft) | ft² | 355,762 | ||
Operating lease, number of renewal options | renewal_option | 2 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Lease Expense Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Fixed operating lease costs | $ 17,218 | $ 7,487 | $ 32,343 | $ 14,177 |
Variable operating lease costs | 3,287 | 1,536 | 9,011 | 2,173 |
Short term lease costs | 1,921 | 377 | 3,777 | 818 |
Sublease income | (2,179) | 0 | (3,616) | 0 |
Finance lease costs | ||||
Amortization of finance right-of-use assets | 869 | 1,284 | 1,923 | 2,577 |
Total lease costs | $ 21,116 | $ 10,684 | $ 43,438 | $ 19,745 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Other Information Related to Leases (Details) | Jun. 30, 2020 |
Weighted Average Remaining Lease Term: | |
Operating leases | 9 years 1 month 6 days |
Finance leases | 6 months |
Weighted Average Discount Rate: | |
Operating leases | 4.00% |
Finance leases | 0.00% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Cash Flows Related to Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Payments for operating lease liabilities | $ (19,137) | $ (16,067) |
Cash flows from financing activities: | ||
Principal payments on finance lease obligation | (1,923) | (2,568) |
Supplemental Cash Flow Data: | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 304,132 | $ 21,905 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases and Finance Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jul. 31, 2019 |
Finance | ||
Remainder of 2020 | $ 522 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total | 522 | |
Less: amount representing interest | 0 | |
Less: leases executed but not yet commenced | 0 | |
Less: lease incentives | 0 | |
Total | 522 | |
Operating | ||
Remainder of 2020 | 29,887 | |
2021 | 70,520 | |
2022 | 71,259 | |
2023 | 65,724 | |
2024 | 46,023 | |
Thereafter | 273,368 | |
Total | 556,781 | |
Less: amount representing interest | 86,469 | |
Less: leases executed but not yet commenced | 25,257 | $ 42,700 |
Less: lease incentives | 16,627 | |
Total | $ 428,428 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Litigation and Other Contingencies (Details) $ in Millions | Jun. 15, 2020USD ($) |
TEXAS | |
Income Tax Examination [Line Items] | |
Estimate of possible liability for additional taxes, interest and penalties | $ 38 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) | 3 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION - Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,923,625 | $ 1,174,238 | $ 3,304,734 | $ 2,133,597 |
Gross profit | 596,763 | 465,845 | 1,135,264 | 862,599 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,923,625 | 1,130,849 | 3,304,734 | 2,043,677 |
Gross profit | 596,763 | 452,549 | 1,135,264 | 837,863 |
Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,200,269 | 260,493 | 1,727,911 | 437,895 |
Gross profit | 281,063 | 105,341 | 463,795 | 190,152 |
Seller | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 723,356 | 870,356 | 1,576,823 | 1,605,782 |
Gross profit | 315,700 | 347,208 | 671,469 | 647,711 |
Transaction-based revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 682,572 | 775,510 | 1,440,673 | 1,432,272 |
Transaction-based revenue | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 682,572 | 775,510 | 1,440,673 | |
Transaction-based revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 53,657 | 16,966 | 81,476 | 32,246 |
Transaction-based revenue | Seller | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 628,915 | 758,544 | 1,359,197 | 1,400,026 |
Subscription and services-based revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 328,763 | 216,491 | 584,646 | 405,693 |
Revenue | 346,275 | 251,383 | 642,510 | 470,240 |
Subscription and services-based revenue | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 346,275 | 207,994 | 642,510 | 380,320 |
Subscription and services-based revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 271,156 | 118,442 | 464,881 | 215,036 |
Subscription and services-based revenue | Seller | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 75,119 | 89,552 | 177,629 | 165,284 |
Hardware revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 19,322 | 22,260 | 39,997 | 40,472 |
Hardware revenue | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 19,322 | 22,260 | 39,997 | |
Hardware revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Hardware revenue | Seller | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 19,322 | 22,260 | 39,997 | 40,472 |
Bitcoin revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 875,456 | 125,085 | 1,181,554 | 190,613 |
Bitcoin revenue | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 875,456 | 125,085 | 1,181,554 | |
Bitcoin revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 875,456 | 125,085 | 1,181,554 | 190,613 |
Bitcoin revenue | Seller | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION - Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 1,923,625 | $ 1,174,238 | $ 3,304,734 | $ 2,133,597 |
Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 1,923,625 | 1,130,849 | 3,304,734 | 2,043,677 |
Segment Reconciling Items | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue from contracts with customers | $ 0 | $ 43,389 | $ 0 | $ 89,920 |
SEGMENT AND GEOGRAPHICAL INFO_6
SEGMENT AND GEOGRAPHICAL INFORMATION - Reconciliation of Total Segment Profit to Income before applicable Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | $ 596,763 | $ 465,845 | $ 1,135,264 | $ 862,599 |
Less: Product development | 206,825 | 174,201 | 401,811 | 328,551 |
Less: Sales and marketing | 238,096 | 156,421 | 432,631 | 290,134 |
Less: General and administrative | 136,386 | 100,508 | 265,881 | 202,106 |
Less: Transaction and loan losses | 37,603 | 34,264 | 146,486 | 62,105 |
Less: Amortization of acquired customer assets | 4,134 | 3,958 | 8,286 | 7,445 |
Less: Interest expense, net | 14,769 | 5,143 | 23,975 | 9,824 |
Less: Other expense (income), net | (25,591) | 1,230 | (19,729) | 12,529 |
Loss before income tax | (12,230) | (7,216) | (117,586) | (45,238) |
Customer assets | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Less: Amortization of acquired customer assets | 905 | 1,294 | 1,795 | 2,588 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | 596,763 | 452,549 | 1,135,264 | 837,863 |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | $ 0 | $ 13,296 | $ 0 | $ 24,736 |
SEGMENT AND GEOGRAPHICAL INFO_7
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 1,923,625 | $ 1,174,238 | $ 3,304,734 | $ 2,133,597 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 1,865,985 | 1,119,039 | 3,179,571 | 2,033,695 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 57,640 | $ 55,199 | $ 125,163 | $ 99,902 |
SEGMENT AND GEOGRAPHICAL INFO_8
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,012,068 | $ 597,766 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 965,545 | 586,702 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 46,523 | $ 11,064 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Analysis of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 1,972,762 | $ 1,047,118 | $ 617,282 | |
Short-term restricted cash | 19,761 | 38,873 | 31,148 | |
Long-term restricted cash | 13,685 | 12,715 | 14,433 | |
Cash, cash equivalents, and restricted cash | $ 2,006,208 | $ 1,098,706 | $ 662,863 | $ 632,847 |
SUPPLEMENTAL CASH FLOW INFORM_4
SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Data (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Data: | ||
Cash paid for interest | $ 2,553 | $ 2,836 |
Cash paid for income taxes | 3,156 | 1,717 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for operating lease obligations | 304,132 | 21,905 |
Change in purchases of property and equipment in accounts payable and accrued expenses | 8,010 | 14,047 |
Unpaid business combination purchase price | 7,439 | 8,411 |
Fair value of common stock issued and issuable in future related to business combination | (35,318) | 0 |
Recovery of common stock in connection with indemnification settlement agreement | 0 | 789 |
Fair value of common stock issued to settle the conversion of senior notes, due 2022 | $ (77,614) | $ 0 |