Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 24.6 | ||
Class of Stock [Line Items] | |||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2019. | ||
Entity Central Index Key | 0001512673 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 354,826,967 | ||
Class B | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 80,407,753 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,047,118 | $ 583,173 |
Investments in short-term debt securities | 492,456 | 540,991 |
Settlements receivable | 588,692 | 364,946 |
Customer funds | 676,292 | 334,017 |
Loans held for sale | 164,834 | 89,974 |
Other current assets | 250,409 | 198,804 |
Total current assets | 3,219,801 | 2,111,905 |
Property and equipment, net | 149,194 | 142,402 |
Goodwill | 266,345 | 261,705 |
Acquired intangible assets, net | 69,079 | 77,102 |
Investments in long-term debt securities | 537,303 | 464,680 |
Build-to-suit lease asset | 0 | 149,000 |
Operating lease right-of-use assets | 113,148 | |
Other non-current assets | 196,388 | 74,229 |
Total assets | 4,551,258 | 3,281,023 |
Current liabilities: | ||
Customers payable | 1,273,135 | 749,215 |
Settlements payable | 95,834 | 54,137 |
Accrued expenses and other current liabilities | 128,387 | 82,354 |
Operating lease liabilities, current | 27,275 | |
Total current liabilities | 1,694,085 | 1,018,541 |
Long-term debt | 938,832 | 899,695 |
Build-to-suit lease liability | 0 | 149,000 |
Operating lease liabilities, non-current | 108,830 | |
Other non-current liabilities | 94,461 | 93,286 |
Total liabilities | 2,836,208 | 2,160,522 |
Commitments and contingencies (Note 18) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at December 31, 2019 and December 31, 2018. None issued and outstanding at December 31, 2019 and December 31, 2018. | 0 | 0 |
Additional paid-in capital | 2,223,749 | 2,012,328 |
Accumulated other comprehensive income (loss) | 1,629 | (6,053) |
Accumulated deficit | (510,328) | (885,774) |
Total stockholders’ equity | 1,715,050 | 1,120,501 |
Total liabilities and stockholders’ equity | 4,551,258 | 3,281,023 |
Accrued Liabilities and Other Liabilities | 297,841 | 215,189 |
Class A | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Class B | ||
Stockholders’ equity: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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 | ||
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) | 323,546,864 | |
Common stock, shares outstanding (in shares) | 352,386,562 | 323,546,864 |
Class B | ||
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) | 93,501,142 | |
Common stock, shares outstanding (in shares) | 80,410,158 | 93,501,142 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Revenue | $ 4,713,500 | $ 3,298,177 | $ 2,214,253 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 136,385 | 94,114 | 62,393 |
Total cost of revenue | 2,823,815 | 1,994,477 | 1,374,947 |
Gross profit | 1,889,685 | 1,303,700 | 839,306 |
Operating expenses: | |||
Product development | 670,606 | 497,479 | 321,888 |
Sales and marketing | 624,832 | 411,151 | 253,170 |
General and administrative | 436,250 | 339,245 | 250,553 |
Transaction and loan losses | 126,959 | 88,077 | 67,018 |
Total operating expenses | 1,863,128 | 1,340,314 | 893,512 |
Operating income (loss) | 26,557 | (36,614) | (54,206) |
Gain on sale of asset group | (373,445) | 0 | 0 |
Interest expense, net | 21,516 | 17,982 | 10,053 |
Other expense (income), net | 273 | (18,469) | (1,595) |
Income (loss) before income tax | 378,213 | (36,127) | (62,664) |
Provision for income taxes | 2,767 | 2,326 | 149 |
Net income (loss) | $ 375,446 | $ (38,453) | $ (62,813) |
Net income (loss) per share: | |||
Basic (in USD per share) | $ 0.88 | $ (0.09) | $ (0.17) |
Diluted (in USD per share) | $ 0.81 | $ (0.09) | $ (0.17) |
Weighted-average shares used to compute net income (loss) per share: | |||
Basic (in shares) | 424,999 | 405,731 | 379,344 |
Diluted (in shares) | 466,076 | 405,731 | 379,344 |
Transaction-based revenue | |||
Revenue: | |||
Revenue | $ 3,081,074 | $ 2,471,451 | $ 1,920,174 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 1,937,971 | 1,558,562 | 1,230,290 |
Subscription and services-based revenue | |||
Revenue: | |||
Revenue | 883,922 | 499,010 | 185,485 |
Revenue | 1,031,456 | 591,706 | 252,664 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 234,270 | 169,884 | 75,720 |
Hardware revenue | |||
Revenue: | |||
Revenue | 84,505 | 68,503 | 41,415 |
Bitcoin revenue | |||
Revenue: | |||
Revenue | 516,465 | 166,517 | 0 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 508,239 | 164,827 | 0 |
Acquired technology | |||
Cost of Revenue [Abstract] | |||
Amortization of acquired technology | 6,950 | 7,090 | 6,544 |
Acquired customers | |||
Operating expenses: | |||
Amortization of acquired customer assets | $ 4,481 | $ 4,362 | $ 883 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 375,446 | $ (38,453) | $ (62,813) |
Net foreign currency translation adjustments | 1,879 | (4,496) | 1,900 |
Net unrealized gain on revaluation of intercompany loans | 75 | 303 | 385 |
Net unrealized gain (loss) on marketable debt securities | 5,728 | (542) | (1,614) |
Total comprehensive income (loss) | $ 383,128 | $ (43,188) | $ (62,142) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Convertible preferred stock | Class A and B common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2016 | 0 | 364,547,376 | ||||
Beginning balance at Dec. 31, 2016 | $ 576,153 | $ 0 | $ 0 | $ 1,357,381 | $ (1,989) | $ (779,239) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (62,813) | (62,813) | ||||
Shares issued in connection with: | ||||||
Exercise of stock options (in shares) | 24,510,745 | |||||
Exercise of stock options | 144,774 | 144,774 | ||||
Vesting of early exercised stock options and other | 661 | 661 | ||||
Purchases under employee stock purchase plan (in shares) | 1,670,045 | |||||
Purchases under employee stock purchase plan | 17,859 | 17,859 | ||||
Vesting of restricted stock units (in shares) | 5,964,153 | |||||
Repurchase of common stock (in shares) | (24,209) | |||||
Change in other comprehensive loss | 671 | 671 | ||||
Share-based compensation | 159,509 | 159,509 | ||||
Tax withholding related to vesting of restricted stock units (in shares) | (1,474,035) | |||||
Tax withholding related to vesting of restricted stock units | (44,682) | (44,682) | ||||
Conversion feature of convertible senior notes, due 2022, net of allocated debt issuance costs | 83,901 | 83,901 | ||||
Purchase of bond hedges in conjunction with issuance of convertible senior notes, due 2022 | (92,136) | (92,136) | ||||
Sale of warrants in conjunction with issuance of convertible senior notes, due 2022 | 57,244 | 57,244 | ||||
Payment for termination of Starbucks warrant | (54,808) | (54,808) | ||||
Ending balance at Dec. 31, 2017 | 786,333 | $ 0 | $ 0 | 1,630,386 | (1,318) | (842,735) |
Ending balance (in shares) at Dec. 31, 2017 | 0 | 395,194,075 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (38,453) | (38,453) | ||||
Shares issued in connection with: | ||||||
Exercise of stock options (in shares) | 13,402,680 | |||||
Exercise of stock options | 106,962 | 106,962 | ||||
Vesting of early exercised stock options and other | 177 | 177 | ||||
Purchases under employee stock purchase plan (in shares) | 826,356 | |||||
Purchases under employee stock purchase plan | 26,888 | 26,888 | ||||
Vesting of restricted stock units (in shares) | 8,046,640 | |||||
Issuance of common stock in connection with business combination (shares) | 2,649,590 | |||||
Issuance of common stock in connection with business combination | 140,107 | 140,107 | ||||
Replacement stock awards issued in connection with acquisition (in shares) | 24,613 | |||||
Replacement stock awards issued in connection with acquisition | 899 | 899 | ||||
Change in other comprehensive loss | (4,735) | (4,735) | ||||
Share-based compensation | 226,182 | 226,182 | ||||
Tax withholding related to vesting of restricted stock units (in shares) | (3,013,394) | |||||
Tax withholding related to vesting of restricted stock units | (189,124) | (189,124) | ||||
Conversion feature of convertible senior notes, due 2022, net of allocated debt issuance costs | 154,019 | 154,019 | ||||
Purchase of bond hedges in conjunction with issuance of convertible senior notes, due 2022 | (172,586) | (172,586) | ||||
Sale of warrants in conjunction with issuance of convertible senior notes, due 2022 | 112,125 | 112,125 | ||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 (in shares) | 7,288,907 | |||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 | $ (20,962) | (20,962) | ||||
Exercise of bond hedges in conjunction with the conversion of senior notes, due 2022 (in shares) | (6,901,567) | |||||
Recovery of common stock in connection with indemnification settlement agreement (in shares) | (469,894) | (469,894) | ||||
Recovery of common stock in connection with indemnification settlement agreement | $ (2,745) | (2,745) | ||||
Ending balance at Dec. 31, 2018 | 1,120,501 | $ 0 | $ 0 | 2,012,328 | (6,053) | (885,774) |
Ending balance (in shares) at Dec. 31, 2018 | 0 | 417,048,006 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ 375,446 | 375,446 | ||||
Shares issued in connection with: | ||||||
Exercise of stock options (in shares) | 10,176,170 | 10,176,170 | ||||
Exercise of stock options | $ 82,340 | 82,340 | ||||
Vesting of early exercised stock options and other (in shares) | 426 | |||||
Vesting of early exercised stock options and other | $ 36 | 36 | ||||
Purchases under employee stock purchase plan (in shares) | 673,661 | |||||
Purchases under employee stock purchase plan | 36,174 | 36,174 | ||||
Vesting of restricted stock units (in shares) | 8,338,035 | |||||
Cancellation of restricted stock awards (in shares) | (90,342) | |||||
Change in other comprehensive loss | 7,682 | 7,682 | ||||
Share-based compensation | 306,201 | 306,201 | ||||
Tax withholding related to vesting of restricted stock units (in shares) | (3,077,807) | |||||
Tax withholding related to vesting of restricted stock units | (212,264) | (212,264) | ||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 (in shares) | 127 | |||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022 | $ 3 | 3 | ||||
Exercise of bond hedges in conjunction with the conversion of senior notes, due 2022 (in shares) | (250,763) | |||||
Recovery of common stock in connection with indemnification settlement agreement (in shares) | (20,793) | (20,793) | ||||
Recovery of common stock in connection with indemnification settlement agreement | $ (1,069) | (1,069) | ||||
Ending balance at Dec. 31, 2019 | $ 1,715,050 | $ 0 | $ 0 | $ 2,223,749 | $ 1,629 | $ (510,328) |
Ending balance (in shares) at Dec. 31, 2019 | 0 | 432,796,720 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 375,446 | $ (38,453) | $ (62,813) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 75,598 | 60,961 | 37,279 |
Non-cash interest and other expense | 34,547 | 31,257 | 14,421 |
Loss on extinguishment of long-term debt | 0 | 5,047 | 0 |
Non-cash lease expense | 29,696 | 0 | 0 |
Share-based compensation | 297,863 | 216,881 | 155,836 |
Replacement stock awards issued in connection with acquisition | 0 | 899 | 0 |
Gain on sale of asset group | (373,445) | 0 | 0 |
Loss (gain) on revaluation of equity investment | 12,326 | (20,342) | 0 |
Recovery of common stock in connection with indemnification settlement agreement | (1,069) | (2,745) | 0 |
Transaction and loan losses | 126,959 | 88,077 | 67,018 |
Change in deferred income taxes | (1,376) | (646) | (1,385) |
Changes in operating assets and liabilities: | |||
Settlements receivable | (248,271) | 245,795 | (305,831) |
Customer funds | (204,208) | (131,004) | (59,468) |
Purchase of loans held for sale | (2,266,738) | (1,609,611) | (1,184,630) |
Sales and principal payments of loans held for sale | 2,168,682 | 1,579,834 | 1,145,314 |
Customers payable | 523,795 | 15,597 | 301,778 |
Settlements payable | 41,697 | (60,651) | 63,637 |
Charge-offs to accrued transaction losses | (78,325) | (58,192) | (46,148) |
Other assets and liabilities | (47,478) | (27,624) | 2,703 |
Net cash provided by operating activities | 465,699 | 295,080 | 127,711 |
Cash flows from investing activities: | |||
Purchase of marketable debt securities | (992,583) | (1,000,346) | (544,910) |
Proceeds from maturities of marketable debt securities | 430,888 | 197,454 | 168,224 |
Proceeds from sale of marketable debt securities | 548,619 | 171,992 | 89,087 |
Purchase of marketable debt securities from customer funds | (311,499) | (148,096) | 0 |
Proceeds from maturities of marketable debt securities from customer funds | 158,055 | 0 | 0 |
Proceeds from sale of marketable debt securities from customer funds | 17,493 | 48,334 | 0 |
Purchase of property and equipment | (62,498) | (61,203) | (26,097) |
Purchase of other investments | (15,250) | 0 | (25,000) |
Proceeds from sale of equity investment | 33,016 | 0 | 0 |
Purchase of intangible assets | 0 | (1,584) | 0 |
Proceeds from sale of asset group | 309,324 | 0 | 0 |
Business combinations, net of cash acquired | (20,372) | (112,399) | (1,915) |
Net cash provided by (used in) investing activities: | 95,193 | (905,848) | (340,611) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible senior notes, net | 0 | 855,663 | 428,250 |
Purchase of convertible senior note hedges | 0 | (172,586) | (92,136) |
Proceeds from issuance of warrants | 0 | 112,125 | 57,244 |
Principal payment on conversion of senior notes | 0 | (219,384) | 0 |
Payment for termination of Starbucks warrant | 0 | 0 | (54,808) |
Proceeds from the exercise of stock options and purchases under the employee stock purchase plan, net | 118,514 | 133,850 | 162,504 |
Payments for tax withholding related to vesting of restricted stock units | (212,264) | (189,124) | (44,682) |
Other financing activities | (5,124) | (4,789) | (1,439) |
Net cash provided by (used in) financing activities | (98,874) | 515,755 | 454,933 |
Effect of foreign exchange rate on cash and cash equivalents | 3,841 | (7,221) | 4,303 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 465,859 | (102,234) | 246,336 |
Cash, cash equivalents and restricted cash, beginning of the year | 632,847 | 735,081 | 488,745 |
Cash, cash equivalents and restricted cash, end of the year | $ 1,098,706 | $ 632,847 | $ 735,081 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Square, Inc. (together with its subsidiaries, Square or the Company) creates tools that 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. On October 31, 2019, the Company completed the sale of the Caviar business, a food ordering service. Square was founded in 2009 and is headquartered in San Francisco, with offices in the United States, Canada, Japan, Australia, Ireland, and the UK. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, contingencies, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets and deferred revenue, income and other taxes, operating and financing lease right-of-use assets and related liabilities, assessing the likelihood of adverse outcomes from claims and disputes, and share-based compensation. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition. Refer to Note 2 for the impact of this adoption. Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Transaction-based revenue The Company charges its sellers a transaction fee for managed payments solutions that is generally calculated as a percentage of the total transaction amount processed. The Company selectively offers custom pricing for certain sellers. The Company collects the transaction amount from the seller's customer's bank, net of acquiring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the sellers. The Company acts as the merchant of record for its sellers and works directly with payment card networks and banks so that its sellers do not need to manage the complex systems, rules, and requirements of the payments industry. The Company satisfies its performance obligations and therefore recognizes the transaction fees as revenue upon authorization of a transaction by the seller's customer's bank. The Company applies the optional exemption allowed under ASC 606 not to disclose consideration attributable to performance obligations for future transaction processing since the term of the contract with a seller is not defined and any future consideration on the contract would be dependent on the value and volume of transactions processed in the future, which are not determinable. Revenue is recognized net of refunds, which arise from reversals of transactions initiated by sellers. The transaction fees collected from sellers are recognized as revenue on a gross basis as the Company is the principal in the delivery of the managed payments solutions to the sellers. The Company has concluded it is the principal because as the merchant of record, it controls the services before delivery to the seller, it is primarily responsible for the delivery of the services to its sellers, and it has discretion in setting prices charged to sellers. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the merchant of record, Square is liable for the costs of processing the transactions for its sellers, and records such costs within cost of revenue. Subscription and services-based revenue Subscription and services-based revenue is primarily comprised of revenue the Company generates from Instant Deposit and Cash Card, Square Capital, website hosting and domain name registration services, and various other software as a service (SaaS) products. Instant Deposit is a functionality within the Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. The Company charges a per transaction fee which is recognized as revenue when customers instantly deposit funds to their bank account. The Company also offers Cash App customers the ability to use funds stored in the Cash App via a Visa prepaid card (Cash Card), for which the Company charges a per transaction fee that is recorded as revenue. Square Capital facilitates a loan that is offered through a partnership with an industrial bank that is either repaid through withholding a percentage of the collections of the seller's receivables processed by the Company or a specified monthly amount. The Company generally facilitates loans to its sellers through a pre-qualification process that includes an analysis of the aggregated data of the seller’s business which includes, but is not limited to, the seller’s historical processing volumes, transaction count, chargebacks, growth, and length of time as a Square customer. The Company also facilitates loans to the customers of certain sellers as well as to the sellers of its partners who do not process payments through the Company. The loans are generally originated by a bank partner, from whom the Company purchases the loans obtaining all rights, title, and interest. The loans have no stated coupon rate but the seller is charged a one-time origination fee by the bank partner based upon their risk rating, which is derived primarily from processing activity. It is the Company’s intent to sell all of its rights, title, and interest of these loans to third-party investors for an upfront fee when the loans are sold. The Company records the net amounts paid to the bank as the cost of the loans purchased and subsequently records a gain on sale of the loans to the third-party investors as revenue upon transfer of title. The Company is retained by the third-party investors to service the loans and earns a servicing fee for facilitating the repayment of these receivables through its managed payments solutions. The Company records servicing revenue as servicing is delivered. For the loans which are not immediately sold to third-party investors, the Company recognizes a portion of the expected seller repayments over the cost of the loans as revenue in proportion to the loan principal reduction. Following the acquisition of Weebly in May 2018, the Company offers customers website hosting services for a fee that is generally billed at inception. The Company also acts as a reseller of domain names registration services for a registrar for a fee, which is also generally billed at inception. The Company considers that it satisfies its performance obligations over time and as such recognizes revenue ratably over the term of the relevant arrangements, which vary from one month to twenty four months for website hosting, and one year to ten years for domain name registration. SaaS represents software products and solutions that provide customers with access to various technologies for a fee which is recognized as revenue ratably as the service is provided. The Company's contracts with customers are generally for a term of one month and renew automatically each month. The Company invoices its customers monthly. The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month. Subscription and services revenue also included revenue generated from Caviar, a food ordering platform that facilitated food delivery services that was sold by the Company on October 31, 2019. The performance obligations were the delivery of food orders from restaurants to customers and the provision of catered meals to corporate customers. For delivery of food orders, the Company charged fees to restaurants, as sellers, and also charged delivery and service fees to individuals. For provision of catered meals the Company charged corporate customers a fee. All fees were billed upon delivery of food orders or catered meals, when the Company considers that it has satisfied its performance obligations. Revenue was recognized upon delivery of the food orders or catered meals, net of refunds. Refunds were estimated based on historical experience. Hardware revenue The Company generates revenue through the sale of hardware through e-commerce and through its retail distribution channels. The Company satisfies its performance obligation upon delivery of hardware to its customers who include end user customers, distributors, and retailers. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing. Distributors and retailers have payment terms that range from 30 to 90 days after delivery. The Company offers hardware installment sales to customers with terms ranging from three to twenty four months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less. Bitcoin revenue During the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company satisfies its performance obligation and records revenue when bitcoin is transferred to the customer's account. Arrangements with Multiple Performance Obligations The Company's contracts with customers generally do not include multiple performance obligations with differing patterns of revenue recognition, except for domain name registration offered with website hosting services sold after May 31, 2018 following the acquisition of Weebly (Note 7). The Company offers its customers the option to buy website hosting bundled with domain name registration, and infrequently the Company has offered its hardware customers free managed payments solutions with the purchase of its hardware as part of a marketing promotion. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company determines standalone selling prices based on the prices charged to customers since the Company's products and services are normally sold on a stand alone basis. Cost of Revenue Transaction-based costs Transaction-based costs consist primarily of interchange and assessment fees, processing fees and bank settlement fees paid to third-party payment processors and financial institutions. Subscription and services-based costs Subscription and services-based costs consist primarily of Caviar-related costs, which included processing fees, payments to third-party couriers for deliveries and the cost of equipment provided to sellers. Caviar-related costs for catered meals also included food costs and personnel costs. Subscriptions and services-based costs also include costs associated with Cash Card and Instant Deposit. Hardware costs Hardware costs consist of all product costs associated with contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal and third-party peripherals. Product costs consist of third-party manufacturing costs. Bitcoin costs Bitcoin cost of revenue comprises of the amounts the Company pays to purchase bitcoin, which will fluctuate in line with the price of bitcoin in the market. Other Costs Other costs such as employee costs including share based compensation, rent, and occupancy charges are generally not allocated to cost of revenues and are reflected in operating expenses. Sales and Marketing Expenses Advertising costs are expensed as incurred and included in sales and marketing expense in the consolidated statements of operations. Total advertising costs for the years ended December 31, 2019, 2018, and 2017 were $142.7 million, $101.9 million, and $81.9 million, respectively. Costs associated with the Cash Card and certain peer-to-peer service offered to the Cash App customers for free are included in sales and marketing expenses as the Company consider these to be marketing tools to encourage the usage of Cash App. Share-based Compensation Share-based compensation expense relates to stock options, restricted stock awards (RSAs), restricted stock units (RSUs), and purchases under the Company’s 2015 Employee Stock Purchase Plan (ESPP) which is measured based on the grant-date fair value. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The fair value of stock options and ESPP shares granted to employees is estimated on the date of grant using the Black-Scholes-Merton option valuation model. This share-based compensation expense valuation model requires the Company to make assumptions and judgments regarding the variables used in the calculation. These variables include the expected term (weighted average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s stock, expected risk-free interest rate and expected dividends. The Company uses the simplified calculation of expected term, as the Company does not have sufficient historical data to use any other method to estimate expected term. Expected volatility is based on a weighted average of the historical volatilities of the Company's common stock along with several entities with characteristics similar to those of the Company. The Company will continue to weight its own volatility more heavily as more of its own historical stock price information becomes available. Once its own historical data is equal to that of the expected term of option grants a peer group is no longer considered necessary. The expected risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Share-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. Income and Other Taxes The Company reports income taxes under the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company considers historical information, tax planning strategies, the expected timing of the reversal of existing temporary differences, and may rely on financial projections to support its position on the recoverability of deferred tax assets. The Company’s judgment regarding future profitability contains significant assumptions and estimates of future operations. If such assumptions were to differ significantly from actual future results of operations, it may have a material impact on the Company’s ability to realize its deferred tax assets. At the end of each period, the Company assesses the ability to realize the deferred tax assets. If it is more likely than not that the Company would not realize the deferred tax assets, then the Company would establish a valuation allowance for all or a portion of the deferred tax assets. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income tax expense on the consolidated statements of operations. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments, including money market funds, with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2019 and 2018, restricted cash of $38.9 million and $33.8 million, respectively, is related to pledged cash deposited into savings accounts at the financial institutions that process the Company's sellers' payment transactions and as collateral pursuant to an agreement with the originating bank for the Company's loan product. The Company uses the restricted cash to secure letters of credit with the financial institution to provide collateral for cash flow timing differences in the processing of these payments. The Company has recorded this amount as a current asset on the consolidated balance sheets due to the short-term nature of these cash flow timing differences and that there is no minimum time frame during which the cash must remain restricted. Additionally, this balance includes certain amounts held as collateral pursuant to multi-year lease agreements, discussed in the paragraph below that we expect to become unrestricted within the next year. As of December 31, 2019 and 2018, the remaining restricted cash of $12.7 million and $15.8 million, respectively, is primarily related to cash held as collateral pursuant to multi-year lease agreements (Note 18). The Company has recorded this amount as a non-current asset on the consolidated balance sheets as the terms of the related leases extend beyond one year. Concentration of Credit Risk For the years ended December 31, 2019, 2018 and 2017, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had three third-party payment processors that represented approximately 48%, 29%, and 9% of settlements receivable as of December 31, 2019. The same three parties represented approximately 45%, 33%, and 9% of settlements receivable as of December 31, 2018. All other third-party processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable debt securities, settlements receivables, customer funds, and loans held for sale. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable debt securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one or two business days to settle which mitigates the associated risk of concentration. The associated risk of concentration for loans held for sale is partially mitigated by credit evaluations that are performed prior to facilitating the offering of loans and ongoing performance monitoring of the Company’s loan customers. Investments in marketable debt securities The Company's short-term and long-term investments include marketable debt securities such as government and agency securities, corporate bonds, commercial paper and municipal securities. The Company determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable debt securities as available-for-sale. Investments are reviewed periodically to identify possible other-than-temporary impairments. If any impairment is considered other-than-temporary, the Company writes down the investment to its fair value and records the corresponding charge through other income (expense), net on its consolidated statements of operations. The Company carries these investments at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which we record within other expense (income), net. We determine any realized gains or losses on the sale of marketable debt securities on a specific identification method, and we record such gains and losses as a component of other expense (income), net. Investments in equity securities The Company holds marketable and non-marketable equity investments, over which the Company does not have a controlling interest or significant influence. Marketable equity investments are measured using quoted prices in active markets with changes recorded in Other income (expense), net on the consolidated statements of operations. Non-marketable equity investments have no readily determinable fair values and are measured using the measurement alternative, which is defined as cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded in Other income (expense), net on the consolidated statements of operations. Non-marketable equity investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity. The carrying value for these investments is not adjusted if there are no observable transactions for identical or similar investments of the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. Valuations of non-marketable equity investments are inherently complex due to the lack of readily available market data. In addition, the determination of whether an orderly transaction is for an identical or similar investment requires significant management judgment, including understanding the differences in the rights and obligations of the investments and the extent to which those differences would affect the fair values of those investments. The Company assesses the impairment of its non-marketable equity investments on a quarterly basis. The impairment analysis encompasses an assessment of the severity and duration of the impairment and a qualitative and quantitative analysis of other key factors including the investee’s financial metrics, market acceptance of the investee’s product or technology, other competitive products or technology in the market, general market conditions, and the rate at which the investee is using its cash. If the investment is considered to be impaired, the Company will record an impairment in Other income (expense), net on the consolidated statements of operations and establish a new carrying value for the investment. Customer funds Customer funds held in deposit represent Cash App customers' stored balances that customers would later use to send money or make payments, or customers cash in transit. During the year ended December 31, 2018, the Company started investing a portion of these stored balances in short-term marketable debt securities (Note 4). The Company determines the appropriate classification of the investments in marketable debt securities within customer funds at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable debt securities within customer funds as available-for-sale. Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value accounting establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 Inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. Loans Held for Sale The Company classifies customer loans as held for sale upon purchase from an industrial bank partner, as there is an available market for such loans and it is the Company’s intent to sell all of its rights, title, and interest in these loans to third-party investors. Loans held for sale are recorded at the lower of amortized cost or fair value determined on an individual loan basis. To determine the fair value the Company utilizes industry-standard valuation modeling, such as discounted cash flow models, taking into account the estimated timing and amounts of periodic repayments. The Company recognizes a charge within transaction and loan losses on the consolidated statement of operations whenever the amortized cost of a loan exceeds its fair value, with such charges being reversed for subsequent increases in fair value, but only to the extent that such reversals do not result in the amortized cost of a loan exceeding its fair value. A loan that is initially designated as held for sale may be reclassified to held for investment if and when the Company's intent for that loan changes. There have been no reclassifications made to date. Settlements Receivable Settlements receivable represents amounts due from third-party payment processors for customer transactions. Settlements receivable are typically received within one or two business days of the transaction date. No valuation allowances have been established, as funds are due from large, well-established financial institutions with no historical collections issue. Inventory Inventory is comprised of contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal and third-party peripherals, as well as component parts that are used to manufacture these products. Inventory is stated at the lower of cost (generally on a first-in, first-out basis) or net realizable value. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on the estimated selling prices in the ordinary course of business. The Company's inventory is held at third party warehouses and contract manufacturer premises. Deferred Revenue Deferred revenue is primarily comprised of payments for website hosting and domain name registration received from customers at inception of the arrangements prior to the services being rendered. Deferred revenue also includes unearned revenue related to managed payments services offered in conjunction with hardware sales for which the cash payments from customers are received and due upon the sale of the hardware. Cryptocurrency transactions During the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company purchases bitcoin from private broker dealers or from Cash App customers. Upon purchase, the Company records the cost of bitcoin within other current assets in its consolidated balance sheets. Upon sale, the Company records the total sale amount received from customers as bitcoin revenue and the associated cost as cost of revenue. The Company does not hold bitcoin for speculation purposes. The carrying value of bitcoin held by the Company was $1.0 million and $0.2 million as of December 31, 2019 and 2018, respectively. The Company assesses the carrying value of bitcoin held by the Company at each reporting date and records an impairment charge if the carrying value exceeds the fair value. Losses on bitcoin for the years ended December 31, 2019, 2018, and 2017 were insignificant. Property and Equipment Property and equipment are recorded at historical cost less accumulated depreciation, which is computed on a straight-line basis over the asset’s estimated useful life. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Two Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in operating expenses. Capitalized Software The Company capitalizes certain costs incurred in developing internal-use software when capitalization requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. Capitalized costs are included i |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Adoption of ASC 606, Revenue from Contracts with Customers The Company recorded a net reduction to retained earnings of $4.6 million as of January 1, 2018, due to the cumulative impact of adopting ASC 606, primarily related to the effect on revenue and associated cost of revenue from hardware sold through the retail distribution channels and hardware installment sales. The impact to revenue for the year ended December 31, 2018 was an increase of $6.4 million as a result of applying ASC 606. Practical Expedients The Company does not recognize a financing component for hardware installment sales that have a term of one year or less. The following table presents the Company's revenue disaggregated by revenue source (in thousands): Year Ended December 31, 2019 2018 2017 Revenue from Contracts with Customers: Transaction-based revenue $ 3,081,074 $ 2,471,451 $ 1,920,174 Subscription and services-based revenue 883,922 499,010 185,485 Hardware revenue 84,505 68,503 41,415 Bitcoin revenue 516,465 166,517 — Revenue from other sources: Subscription and services-based revenue $ 147,534 $ 92,696 $ 67,179 The deferred revenue balances were as follows (in thousands): Year Ended December 31, 2019 2018 Deferred revenue, beginning of the period $ 36,451 $ 5,893 Less: cumulative impact of the adoption of ASC 606 — (4,303) Deferred revenue, beginning of the period, as adjusted 36,451 1,590 Deferred revenue, end of the period 44,331 36,451 Deferred revenue arising from business combination — 22,800 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 31,510 $ 1,590 |
INVESTMENTS IN DEBT SECURITIES
INVESTMENTS IN DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
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 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 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 securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70) $ 80,122 Corporate bonds 109,807 80 (368) 109,519 Municipal securities 27,839 52 (59) 27,832 U.S. government securities 292,615 161 (509) 292,267 Foreign securities 31,263 4 (16) 31,251 Total $ 541,684 $ 329 $ (1,022) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78) $ 114,560 Corporate bonds 159,783 419 (950) 159,252 Municipal securities 28,453 167 (26) 28,594 U.S. government securities 153,743 553 (172) 154,124 Foreign securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226) $ 464,680 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. For the years ended December 31, 2019, 2018 and 2017, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) Municipal securities 1,004 — — — 1,004 — U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign securities 13,499 (16) — — 13,499 (16) Total $ 65,387 $ (60) $ 22,482 $ (12) $ 87,869 $ (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 securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ (28) $ 93,046 $ (518) December 31, 2018 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 $ 78,134 $ (70) $ — $ — $ 78,134 $ (70) Corporate bonds 38,052 (61) 62,479 (307) 100,531 (368) Municipal securities 2,251 (1) 22,915 (58) 25,166 (59) U.S. government securities 240,979 (148) 41,131 (361) 282,110 (509) Foreign securities 27,280 (16) — — 27,280 (16) Total $ 386,696 $ (296) $ 126,525 $ (726) $ 513,221 $ (1,022) Long-term debt securities: U.S. agency securities $ 20,504 $ (29) $ 10,133 $ (49) $ 30,637 $ (78) Corporate bonds 119,333 (824) 20,306 (126) 139,639 (950) Municipal securities 9,701 (14) 3,260 (12) 12,961 (26) U.S. government securities 25,850 (32) 24,576 (140) 50,426 (172) Foreign securities 1,000 — — — 1,000 — Total $ 176,388 $ (899) $ 58,275 $ (327) $ 234,663 $ (1,226) The contractual maturities of the Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 490,299 $ 492,456 Due in one to five years 533,853 537,303 Total $ 1,024,152 $ 1,029,759 The following table presents the assets underlying customer funds (in thousands): December 31, December 31, Cash $ 422,459 $ 158,697 Cash Equivalents: Money market funds 233 18 U.S. agency securities 8,585 39,991 U.S. government securities 6,984 35,349 Short-term debt securities: U.S. agency securities — 27,291 U.S. government securities 238,031 72,671 Total $ 676,292 $ 334,017 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 Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 27,293 $ 2 $ (4) $ 27,291 U.S. government securities 72,662 12 (3) 72,671 Total $ 99,955 $ 14 $ (7) $ 99,962 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) December 31, 2018 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 $ 11,843 $ (4) $ — $ — $ 11,843 $ (4) U.S. government securities 34,818 (3) — — 34,818 (3) Total $ 46,661 $ (7) $ — $ — $ 46,661 $ (7) The contractual maturities of the Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 237,909 $ 238,031 Due in one to five years — — Total $ 237,909 $ 238,031 |
CUSTOMER FUNDS
CUSTOMER FUNDS | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
CUSTOMER FUNDS | INVESTMENTS IN DEBT SECURITIES 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 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 securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70) $ 80,122 Corporate bonds 109,807 80 (368) 109,519 Municipal securities 27,839 52 (59) 27,832 U.S. government securities 292,615 161 (509) 292,267 Foreign securities 31,263 4 (16) 31,251 Total $ 541,684 $ 329 $ (1,022) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78) $ 114,560 Corporate bonds 159,783 419 (950) 159,252 Municipal securities 28,453 167 (26) 28,594 U.S. government securities 153,743 553 (172) 154,124 Foreign securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226) $ 464,680 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. For the years ended December 31, 2019, 2018 and 2017, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) Municipal securities 1,004 — — — 1,004 — U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign securities 13,499 (16) — — 13,499 (16) Total $ 65,387 $ (60) $ 22,482 $ (12) $ 87,869 $ (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 securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ (28) $ 93,046 $ (518) December 31, 2018 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 $ 78,134 $ (70) $ — $ — $ 78,134 $ (70) Corporate bonds 38,052 (61) 62,479 (307) 100,531 (368) Municipal securities 2,251 (1) 22,915 (58) 25,166 (59) U.S. government securities 240,979 (148) 41,131 (361) 282,110 (509) Foreign securities 27,280 (16) — — 27,280 (16) Total $ 386,696 $ (296) $ 126,525 $ (726) $ 513,221 $ (1,022) Long-term debt securities: U.S. agency securities $ 20,504 $ (29) $ 10,133 $ (49) $ 30,637 $ (78) Corporate bonds 119,333 (824) 20,306 (126) 139,639 (950) Municipal securities 9,701 (14) 3,260 (12) 12,961 (26) U.S. government securities 25,850 (32) 24,576 (140) 50,426 (172) Foreign securities 1,000 — — — 1,000 — Total $ 176,388 $ (899) $ 58,275 $ (327) $ 234,663 $ (1,226) The contractual maturities of the Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 490,299 $ 492,456 Due in one to five years 533,853 537,303 Total $ 1,024,152 $ 1,029,759 The following table presents the assets underlying customer funds (in thousands): December 31, December 31, Cash $ 422,459 $ 158,697 Cash Equivalents: Money market funds 233 18 U.S. agency securities 8,585 39,991 U.S. government securities 6,984 35,349 Short-term debt securities: U.S. agency securities — 27,291 U.S. government securities 238,031 72,671 Total $ 676,292 $ 334,017 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 Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 27,293 $ 2 $ (4) $ 27,291 U.S. government securities 72,662 12 (3) 72,671 Total $ 99,955 $ 14 $ (7) $ 99,962 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) December 31, 2018 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 $ 11,843 $ (4) $ — $ — $ 11,843 $ (4) U.S. government securities 34,818 (3) — — 34,818 (3) Total $ 46,661 $ (7) $ — $ — $ 46,661 $ (7) The contractual maturities of the Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 237,909 $ 238,031 Due in one to five years — — Total $ 237,909 $ 238,031 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, and marketable equity investments at fair value. The Company classifies these investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands): December 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash Equivalents: Money market funds $ 213,576 $ — $ — $ 218,109 $ — $ — U.S. agency securities — 19,976 — — 46,423 — Commercial paper — — — — — — U.S. government securities 46,914 — — 86,239 — — Foreign securities — — — — 23,981 — Customer Funds: Money market funds 233 — — 18 — — U.S. agency securities — 8,585 — — 67,282 — U.S. government securities 245,015 — — 108,020 — — Short-term debt securities: U.S. agency securities — 131,522 — — 80,122 — Corporate bonds — 67,721 — — 109,519 — Commercial paper — — — — — — Municipal securities — 6,776 — — 27,832 — U.S. government securities 265,135 — — 292,267 — — Foreign securities — 21,302 — — 31,251 — Long-term debt securities: U.S. agency securities — 64,068 — — 114,560 — Corporate bonds — 143,078 — — 159,252 — Municipal securities — 9,706 — — 28,594 — U.S. government securities 295,779 — — 154,124 — — Foreign securities — 24,672 — — 8,150 — Other: Marketable equity investment — — — 45,342 — — Total $ 1,066,652 $ 497,406 $ — $ 904,119 $ 696,966 $ — The carrying amounts of certain financial instruments, including settlements receivable, accounts payable, customers payable, accrued expenses and settlements payable, approximate their fair values due to their short-term nature. The Company estimates the fair value of its convertible senior notes based on their last actively traded prices (Level 1) or market observable inputs (Level 2). The estimated fair value and carrying value of the convertible senior notes were as follows (in thousands): December 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2023 Notes $ 748,564 $ 962,516 $ 718,522 $ 901,468 2022 Notes 190,268 578,817 181,173 515,693 Total $ 938,832 $ 1,541,333 $ 899,695 $ 1,417,161 The estimated fair value and carrying value of loans held for sale is as follows (in thousands): December 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 164,834 $ 173,360 $ 89,974 $ 93,064 Total $ 164,834 $ 173,360 $ 89,974 $ 93,064 For the years ended December 31, 2019, 2018, and 2017, the Company recorded a charge for the excess of amortized cost over the fair value of the loans of $23.2 million, $13.2 million, and $8.0 million, respectively. 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 years ended December 31, 2019, 2018 and 2017, 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 | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands): December 31, December 31, Leasehold improvements $ 111,942 $ 107,611 Computer equipment 106,469 80,093 Capitalized software 81,984 58,908 Office furniture and equipment 27,328 20,699 Total 327,723 267,311 Less: Accumulated depreciation and amortization (178,529) (124,909) Property and equipment, net $ 149,194 $ 142,402 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Weebly, Inc. On May 31, 2018, the Company acquired 100% of the outstanding shares of Weebly, a technology company that offers customers website hosting and domain name registration solutions. The acquisition of Weebly enabled the Company to combine Weebly’s web presence tools with the Company's in-person and online offerings to create a cohesive solution for sellers to start or grow an omnichannel business. The acquisition expanded the Company’s customer base globally and added a new recurring revenue stream. The purchase consideration was comprised of $132.4 million in cash and 2,418,271 shares of the Company’s Class A common stock with an aggregate fair value of $140.1 million based on the closing price of the Company’s Class A common stock on the acquisition date. As part of the acquisition, the Company paid an aggregate of $17.7 million in cash and shares to settle outstanding vested and unvested employee options, of which $2.6 million was accounted for as post-combination compensation expense and is excluded from the purchase consideration. Third-party acquisition-related costs were insignificant. The results of Weebly's operations have been included in the consolidated financial statements since the closing date. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date and that the difference between the fair value of the consideration paid for the acquired entity and the fair value of the net assets acquired be recorded as goodwill, which is not amortized but is tested at least annually for impairment. The table below summarizes the consideration paid for Weebly and the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). Consideration: Cash $ 132,432 Stock (2,418,271 shares of Class A common stock) 140,107 $ 272,539 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash acquired of $25,758) $ 46,978 Intangible customer assets 42,700 Intangible technology assets 14,900 Intangible trade name 11,300 Intangible other assets 961 Total liabilities assumed (including deferred revenue of $22,800) (37,509) Total identifiable net assets acquired 79,330 Goodwill 193,209 Total $ 272,539 The Company prepared an initial determination of the fair value of the assets acquired and liabilities assumed as of the acquisition date using preliminary information. Subsequently, the Company recognized measurement period adjustments to the purchase consideration and the fair value of certain liabilities assumed as a result of further refinements in the Company’s estimates. These adjustments were prospectively applied. The effect of these adjustments on the purchase price allocation was an increase in goodwill, current assets and tax liabilities assumed of $3.7 million, $2.3 million and $4.7 million, respectively. There was no impact to the consolidated statements of operations as result of these adjustments. As of December 31, 2019, $0.5 million of cash and 8,873 shares of the total consideration were withheld as security for indemnification obligations related to general representations and warranties, in addition to certain potential tax exposures. Goodwill from the Weebly acquisition was primarily attributable to the value of expected synergies created by incorporating Weebly solutions into the Company's technology platform and the value of the assembled workforce. None of the goodwill generated from the Weebly acquisition or the acquired intangible assets are expected to be deductible for tax purposes. Additionally the acquisition would have resulted in recognition of deferred tax assets arising mainly from the net of deferred tax assets from acquired net operating losses (NOLs) and research and development credits, and deferred tax liabilities associated with intangible assets and deferred revenue. However, the realization of such deferred tax assets depends primarily on the Company's post-acquisition ability to generate taxable income in future periods. Accordingly, a valuation allowance was recorded against the net acquired deferred tax asset in accounting for the acquisition. The acquisition of Weebly did not have a material impact on the Company's reported revenue or net loss amounts for any period presented. Accordingly, pro forma financial information has not been presented. Other acquisitions The Company spent an aggregate of $20.4 million, $9.9 million, and $1.9 million, net of cash acquired, in connection with other immaterial acquisitions during the year ended December 31, 2019, 2018 and 2017, respectively, which resulted in the recognition of additional intangible assets and goodwill. Pro forma financial information has not been presented for any of these acquisitions as the impact to our consolidated financial statements was not material. |
SALE OF ASSET GROUP
SALE OF ASSET GROUP | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF ASSET GROUP | SALE OF ASSET GROUP On October 31, 2019, the Company completed the sale of certain assets that comprised its Caviar business to DoorDash, Inc. (DoorDash) for $410 million in gross proceeds comprised of $310 million in cash and $100 million of DoorDash, Inc.'s preferred stock. The Company agreed to indemnify DoorDash for potential losses and costs that may arise from certain legal and other matters. The Caviar business, which offered food ordering and delivery services to customers, was a small component of the Company's overall business comprising less than 5% of the Company's consolidated total assets and revenues. The sale was in line with the Company's strategy of focusing investment on its larger and growing seller and Cash App businesses. Accordingly the sale of the Caviar business did not represent a strategic shift that will have a major effect on the Company's operations and financial results, and did not therefore qualify for reporting as a discontinued operation. The following table summarizes the calculation of the gain on the sale of Caviar business (in thousands): Consideration received: Cash $ 310,000 Preferred Stock 100,000 $ 410,000 Net assets sold: Intangible and other assets, net $ 8,659 Goodwill 4,221 Disposal costs and other adjustments 23,675 $ 36,555 Gain on sale of asset group $ 373,445 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets acquired. The change in carrying value of goodwill in the period was as follows (in thousands): Balance at December 31, 2017 $ 58,327 Acquisitions completed during the year ended December 31, 2018 203,378 Balance at December 31, 2018 261,705 Acquisitions completed during the year ended December 31, 2019 10,832 Sale of asset group (Note 8) (4,221) Other adjustments (1,971) Balance at December 31, 2019 $ 266,345 The Company performed its annual goodwill impairment test as of December 31, 2019. The Company determined that the business operations as a whole is represented by a single reporting unit and through qualitative analysis concluded that it was more likely than not that the fair value of the reporting unit was greater than its carrying amount. As a result, the two-step goodwill impairment test was not required, and no impairments of goodwill were recognized during the year ended December 31, 2019. |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS The Company entered into various transactions accounted for as business combinations during the years ended December 31, 2019 and December 31, 2018, that involved the acquisition of intangible assets. Refer to Note 7 for further details. The following table presents the detail of acquired intangible assets as of the periods presented (in thousands): Balance at December 31, 2019 Cost Accumulated Amortization Net Technology assets $ 53,900 $ (31,873) $ 22,027 Customer assets 44,000 (6,934) 37,066 Trade name 11,300 (4,473) 6,827 Other 5,299 (2,140) 3,159 Total $ 114,499 $ (45,420) $ 69,079 Balance at December 31, 2018 Cost Accumulated Amortization Net Technology assets $ 45,978 $ (28,420) $ 17,558 Customer assets 57,109 (8,068) 49,041 Trade name 11,300 (1,648) 9,652 Other 2,246 (1,395) 851 Total $ 116,633 $ (39,531) $ 77,102 All intangible assets are amortized over their estimated useful lives. The weighted average amortization periods for acquired technology, customer intangible assets, and acquired trade name are approximately 5 years, 12 years, and 4 years, respectively. The changes to the carrying value of intangible assets were as follows (in thousands): Year Ended December 31, 2019 2018 2017 Acquired intangible assets, net, beginning of the period $ 77,102 $ 14,334 $ 19,292 Acquisitions 14,559 75,871 2,657 Amortization expense (15,000) (13,103) (7,615) Sale of asset group (Note 8) (7,582) — — Acquired intangible assets, net, end of the period $ 69,079 $ 77,102 $ 14,334 The total estimated future amortization expense of these intangible assets as of December 31, 2019 is as follows (in thousands): 2020 $ 12,800 2021 11,829 2022 10,134 2023 8,917 2024 5,940 Thereafter 19,459 Total $ 69,079 |
OTHER CONSOLIDATED BALANCE SHEE
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): December 31, December 31, Inventory, net $ 47,683 $ 28,627 Restricted cash 38,873 33,838 Processing costs receivable 67,281 46,102 Prepaid expenses 22,758 21,782 Accounts receivable, net 33,863 22,393 Other 39,951 46,062 Total $ 250,409 $ 198,804 Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses (in thousands): December 31, December 31, Accrued expenses $ 128,387 $ 82,354 Accrued transaction losses (i) 34,771 33,682 Accounts payable 42,116 36,416 Deferred revenue, current 38,104 31,474 Square Payroll payable (ii) 27,969 7,534 Other 26,494 23,729 Total $ 297,841 $ 215,189 (i) The Company is exposed to transaction losses that arise due to chargebacks as a result of fraud or uncollectibility. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Year Ended December 31, 2019 2018 Accrued transaction losses, beginning of the year $ 33,682 $ 26,893 Provision for transaction losses 79,414 64,981 Charge-offs to accrued transaction losses (78,325) (58,192) Accrued transaction losses, end of the year $ 34,771 $ 33,682 (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): December 31, December 31, Investment in non-marketable equity securities $ 110,000 $ — Investment in marketable equity securities — 45,342 Non-current lease prepayments 45,738 — Restricted cash 12,715 15,836 Other 27,935 13,051 Total $ 196,388 $ 74,229 Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): December 31, December 31, Statutory liabilities (i) $ 54,762 $ 54,748 Deferred rent, non-current (ii) — 23,003 Deferred revenue, non-current 6,227 4,977 Other 33,472 10,558 Total $ 94,461 $ 93,286 (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. (ii) The adoption of ASC 842 on January 1, 2019 resulted in the reclassification of deferred rent as an offset to right-of-use lease assets. |
OTHER CONSOLIDATED BALANCE SH_2
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): December 31, December 31, Inventory, net $ 47,683 $ 28,627 Restricted cash 38,873 33,838 Processing costs receivable 67,281 46,102 Prepaid expenses 22,758 21,782 Accounts receivable, net 33,863 22,393 Other 39,951 46,062 Total $ 250,409 $ 198,804 Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses (in thousands): December 31, December 31, Accrued expenses $ 128,387 $ 82,354 Accrued transaction losses (i) 34,771 33,682 Accounts payable 42,116 36,416 Deferred revenue, current 38,104 31,474 Square Payroll payable (ii) 27,969 7,534 Other 26,494 23,729 Total $ 297,841 $ 215,189 (i) The Company is exposed to transaction losses that arise due to chargebacks as a result of fraud or uncollectibility. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Year Ended December 31, 2019 2018 Accrued transaction losses, beginning of the year $ 33,682 $ 26,893 Provision for transaction losses 79,414 64,981 Charge-offs to accrued transaction losses (78,325) (58,192) Accrued transaction losses, end of the year $ 34,771 $ 33,682 (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): December 31, December 31, Investment in non-marketable equity securities $ 110,000 $ — Investment in marketable equity securities — 45,342 Non-current lease prepayments 45,738 — Restricted cash 12,715 15,836 Other 27,935 13,051 Total $ 196,388 $ 74,229 Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): December 31, December 31, Statutory liabilities (i) $ 54,762 $ 54,748 Deferred rent, non-current (ii) — 23,003 Deferred revenue, non-current 6,227 4,977 Other 33,472 10,558 Total $ 94,461 $ 93,286 (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. (ii) The adoption of ASC 842 on January 1, 2019 resulted in the reclassification of deferred rent as an offset to right-of-use lease assets. |
INDEBTEDNESS
INDEBTEDNESS | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS Revolving Credit Facility In November 2015, the Company entered into a revolving credit agreement with certain lenders, which extinguished the prior revolving credit agreement and provided for a $375.0 million revolving secured credit facility maturing in November 2020. This revolving credit agreement is secured by certain tangible and intangible assets. Loans under the credit facility bear interest, at the Company’s option of (i) a base rate based on the highest of the prime rate, the federal funds rate plus 0.50% and an adjusted LIBOR rate for a one-month interest period in each case plus a margin ranging from 0.00% to 1.00%, or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 2.00%. This margin is determined based on the Company’s total leverage ratio for the preceding four fiscal quarters. The Company is obligated to pay other customary fees for a credit facility of this size and type including an annual administrative agent fee of $0.1 million and an unused commitment fee of 0.15%. To date no funds have been drawn under the credit facility, with $375.0 million remaining available. The Company paid $0.6 million in unused commitment fees for both the years ended December 31, 2019 and 2018. As of December 31, 2019, the Company was in compliance with all financial covenants associated with this credit facility. Convertible Senior Notes due in 2023 On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes (2023 Notes). The 2023 Notes mature on May 15, 2023, unless earlier converted or repurchased, and bear interest at a rate of 0.50% payable semi-annually on May 15 and November 15 of each year. The 2023 Notes are convertible at an initial conversion rate of 12.8456 shares of the Company's Class A common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $77.85 per share of Class A common stock. Holders may convert their 2023 Notes at any time prior to the close of business on the business day immediately preceding February 15, 2023 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2023 Notes) per $1,000 principal amount of 2023 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2023 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after February 15, 2023, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2023 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The Company's current policy is to settle conversions entirely in shares of the Company's Class A common stock. The Company will reevaluate this policy from time to time as conversion notices are received from holders of the 2023 Notes. The circumstances required to allow the holders to convert their 2023 Notes were not met during the year ended December 31, 2019. In accounting for the issuance of the 2023 Notes, the Company separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $155.3 million and was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the 2023 Notes at an effective interest rate of 4.69% over the contractual terms of the 2023 Notes. Debt issuance costs related to the 2023 Notes comprised of discounts and commissions payable to the initial purchasers of $6.0 million and third party offering costs of $0.8 million. The Company allocated the total amount incurred to the liability and equity components of the 2023 Notes based on their relative values. Issuance costs attributable to the liability component were $5.6 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Convertible Senior Notes due in 2022 On March 6, 2017, the Company issued an aggregate principal amount of $440.0 million of convertible senior notes (2022 Notes). The 2022 Notes mature on March 1, 2022, unless earlier converted or repurchased, and bear interest at a rate of 0.375% payable semi-annually on March 1 and September 1 of each year. The 2022 Notes are convertible at an initial conversion rate of 43.5749 shares of the Company's Class A common stock per $1,000 principal amount of 2022 Notes, which is equivalent to an initial conversion price of approximately $22.95 per share of Class A common stock. Holders may convert their 2022 Notes at any time prior to the close of business on the business day immediately preceding December 1, 2021 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2022 Notes) per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2022 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after December 1, 2021, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2022 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The circumstances required to allow the holders to convert their 2022 Notes were met starting January 1, 2018 and continued to be met through December 31, 2019. In 2018, certain holders of the 2022 Notes converted an aggregate principal amount of $228.3 million of their Notes. The Company settled the conversions through a combination of $219.4 million in cash and issuance of 7.3 million shares of the Company's Class A common stock. Conversions in the year ended December 31, 2019 were not material. The Company currently expects to settle future conversions entirely in shares of the Company's Class A common stock. The Company will reevaluate this policy from time to time as conversion notices are received from holders of the 2022 Notes. In accounting for the issuance of the 2022 Notes, the Company separated the 2022 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $86.2 million and was determined by deducting the fair value of the liability component from the par value of the 2022 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The debt discount is amortized to interest expense over the term of the 2022 Notes at an effective interest rate of 5.34% over the contractual terms of the 2022 Notes. Debt issuance costs related to the 2022 Notes comprised of discounts and commissions payable to the initial purchasers of $11.0 million and third party offering costs of $0.8 million. The Company allocated the total amount incurred to the liability and equity components of the 2022 Notes based on their relative values. Issuance costs attributable to the liability component were $9.4 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. The debt component associated with the 2022 Notes that were converted was accounted for as an extinguishment of debt, with the Company recording loss on extinguishment of $5.0 million, as the difference between the estimated fair value and the carrying value of such 2022 Notes. The equity component associated with the 2022 Notes that were converted was accounted for as a reacquisition of equity upon the conversion of such 2022 Notes. Accordingly, the excess of the fair value of the consideration issued to settle the conversion over the fair value of the debt component of $21.0 million was accounted for as a reduction to the additional paid in capital. The net carrying amount of the Notes were as follows (in thousands): Principal outstanding Unamortized debt discount Unamortized debt issuance costs Net carrying value 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 December 31, 2018 2023 Notes $ 862,500 $ (138,924) $ (5,054) $ 718,522 2022 Notes 211,728 (27,569) (2,986) 181,173 Total $ 1,074,228 $ (166,493) $ (8,040) $ 899,695 The net carrying amount of the equity component of the Notes were as follows (in thousands): Amount allocated to conversion option Less: allocated issuance costs Equity component, net December 31, 2019 and December 31, 2018 2023 Notes $ 155,250 $ (1,231) $ 154,019 2022 Notes 41,481 (1,108) 40,373 Total $ 196,731 $ (2,339) $ 194,392 The Company recognized interest expense on the Notes as follows (in thousands, except for percentages): Year Ended December 31, 2019 2018 2017 Contractual interest expense $ 5,108 $ 4,023 $ 1,351 Amortization of debt discount and issuance costs 39,139 32,855 14,223 Total $ 44,247 $ 36,878 $ 15,574 The effective interest rate of the liability component is 4.69% and 5.34% for the 2023 Notes and 2022 Notes, respectively. Convertible Note Hedge and Warrant Transactions In connection with the offering of the 2023 Notes, the Company entered into convertible note hedge transactions (2023 convertible note hedges) with certain financial institution counterparties (2018 Counterparties) whereby the Company has the option to purchase a total of approximately 11.1 million shares of its Class A common stock at a price of approximately $77.85 per share. The total cost of the 2023 convertible note hedge transactions was $172.6 million. In addition, the Company sold warrants (2023 warrants) to the 2018 Counterparties whereby the 2018 Counterparties have the option to purchase a total of 11.1 million shares of the Company’s Class A common stock at a price of approximately $109.26 per share. The Company received $112.1 million in cash proceeds from the sale of the 2023 warrants. Taken together, the purchase of the 2023 convertible note hedges and sale of the 2023 warrants are intended to reduce dilution from the conversion of the 2023 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2023 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $77.85 per share to approximately $109.26 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2023 convertible note hedges and 2023 warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the 2023 convertible note hedge and 2023 warrant transactions were recorded as a reduction to additional paid-in capital on the 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 consolidated balance sheets. During the year ended December 31, 2018, the Company exercised a pro-rata portion of the 2022 convertible note hedges to offset the shares of the Company's Class A common stock issued to settle the conversion of the 2022 Notes discussed above. The 2022 convertible note hedges were net share settled, and the Company received 6.9 million shares of the Company's Class A common stock from the 2017 Counterparties in 2018. During the year ended December 31, 2019, the Company received an additional 0.3 million shares of the Company's Class A common stock. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The domestic and foreign components of income (loss) before income taxes are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ 456,335 $ 44,538 $ (10,900) Foreign (78,122) (80,665) (51,764) Income (loss) before income taxes $ 378,213 $ (36,127) $ (62,664) The components of the provision for income taxes are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ 114 $ (4) $ (1,192) State 930 752 739 Foreign 3,099 2,224 1,987 Total current provision for income taxes 4,143 2,972 1,534 Deferred: Federal (777) (404) (1,169) State (399) 35 57 Foreign (200) (277) (273) Total deferred provision for income taxes (1,376) (646) (1,385) Total provision for income taxes $ 2,767 $ 2,326 $ 149 The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate: Balance at December 31, 2019 2018 2017 Tax at federal statutory rate 21.0 % 21.0 % 34.0 % State taxes, net of federal benefit 0.1 (1.1) (0.4) Foreign rate differential 1.4 (14.7) (14.9) Non-deductible meals 0.3 (3.4) (0.3) Other non-deductible expenses 1.5 (1.7) (0.7) Credits (13.9) 164.8 41.5 Other items (0.5) 2.3 (1.2) Change in valuation allowance 34.9 (718.5) (119.5) Impact of U.S. tax reform — — (209.1) Share-based compensation (45.8) 549.0 243.5 Change in uncertain tax positions 0.5 (4.1) (2.4) Termination of warrant — — 29.3 Sale of Caviar business line 1.2 — — Total 0.7 % (6.4) % (0.2) % The tax effects of temporary differences and related deferred tax assets and liabilities are as follows (in thousands): Balance at December 31, 2019 2018 2017 Deferred tax assets: Capitalized costs $ 23,708 $ 30,131 $ 35,608 Accrued expenses 33,044 31,494 23,553 Net operating loss carryforwards 575,245 485,562 244,197 Tax credit carryforwards 183,977 133,275 60,567 Property, equipment and intangible assets — — 7,390 Share-based compensation 38,427 38,265 35,728 Deferred Interest 4,072 8,290 — Other 3,424 105 2,519 Operating Lease, net 5,761 — — Total deferred tax assets 867,658 727,122 409,562 Valuation allowance (859,564) (719,040) (409,043) Total deferred tax assets, net of valuation allowance 8,094 8,082 519 Deferred tax liabilities: Property, equipment and intangible assets (6,862) (7,361) — Indefinite-lived intangibles (253) (275) (644) Total deferred tax liabilities (7,115) (7,636) (644) Net deferred tax assets (liabilities) $ 979 $ 446 $ (125) Realization of deferred tax assets is dependent upon the generation of future taxable income, the timing and amount of which are uncertain. Due to the history of losses generated in the U.S. and certain foreign jurisdictions, the Company believes that it is more likely than not that its deferred tax assets in these jurisdictions will not be realized as of December 31, 2019. Accordingly, the Company retained a full valuation allowance on its deferred tax assets in these jurisdictions. 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 valuation allowance increased by approximately $140.5 million, $310.0 million, and $154.1 million during the years ended December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019, the Company had $2,012.8 million of federal, $2,311.3 million of state, and $300.1 million of foreign net operating loss carryforwards, which will begin to expire in 2031 for federal and 2021 for state tax purposes. The foreign net operating loss carryforwards do not expire. As of December 31, 2019, the Company had $141.7 million of federal, $88.2 million of state, and $4.1 million of Canadian research credit carryforwards. The federal credit carryforward will begin to expire in 2029, the state credit carryforward has no expiration date, and the Canadian credit carryforward will begin to expire in 2037. The Company has federal AMT credit carryforwards of $1.4 million that will be refunded over the 2018-2021 tax years under the 2017 Tax Act. The Company has California Enterprise Zone credit carryforwards of $3.4 million, which will begin to expire in 2023. Utilization of the net operating loss carryforwards and credits may be subject to annual limitations due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before they are able to be utilized. The Company does not expect any previous ownership changes, as defined under Section 382 and 383 of the Internal Revenue Code, to result in a limitation that will reduce the total amount of net operating loss carryforwards and credits that can be utilized. As of December 31, 2019, the unrecognized tax benefit was $217.6 million, of which $7.6 million would impact the annual effective tax rate if recognized and the remainder of which would result in a corresponding adjustment to the valuation allowance. A reconciliation of the beginning and ending amount of unrecognized tax benefit is presented below (in thousands): Year Ended December 31, 2019 2018 2017 Balance at the beginning of the year $ 198,540 $ 70,799 $ 92,134 Gross increases and decreases related to prior period tax positions (11,571) 513 — Gross increases and decreases related to current period tax positions 30,676 119,261 4,193 Reductions related to lapse of statute of limitations (149) (142) (91) Gross increases and decreases related to U.S. tax reform — — (25,437) Gross increases and decreases related to acquisition 78 8,109 — Balance at the end of the year $ 217,574 $ 198,540 $ 70,799 The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. As of December 31, 2019, there were no significant accrued interest and penalties related to uncertain tax positions. It is reasonably possible that over the next 12-month period the Company may experience a decrease in its unrecognized tax benefits as a result of tax examinations or lapses of statute of limitations. The estimated decrease in unrecognized tax benefits may range up to $5.7 million. The Company is subject to taxation in the United States and various state and foreign jurisdictions. The Company is currently under examination in California for tax years 2013 and 2014 and in Texas for tax years 2015-2017. The Company’s various tax years starting with 2009 to 2018 remain open in various taxing jurisdictions. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDER'S EQUITY | STOCKHOLDERS' EQUITY Convertible Preferred Stock As of December 31, 2019, the Company is authorized to issue 100,000,000 shares of preferred stock, with a $0.0000001 par value. No shares of preferred stock are outstanding as of December 31, 2019. Common Stock The Company has authorized the issuance of Class A common stock and Class B common stock. Holders of the Company's Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by the Company's board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of December 31, 2019, the Company did not declare any dividends. 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 Consolidated Financial Statements, unless otherwise noted. As of December 31, 2019, the Company was authorized to issue 1,000,000,000 shares of Class A common stock and 500,000,000 shares of Class B common stock, each with a par value of $0.0000001 per share. As of December 31, 2019, there were 352,386,562 shares of Class A common stock and 80,410,158 shares of Class B common stock outstanding. Options and awards granted following the Company's November 2015 initial public offering are related to underlying Class A common stock. Additionally, holders of Class B common stock are able to convert such shares into Class A common stock. Warrants On February 24, 2017, the Company and Starbucks entered into a Warrant Cancellation and Payment Agreement pursuant to which the Company paid Starbucks cash consideration of approximately $54.8 million in return for the termination of the Warrant to Purchase Stock dated August 7, 2012, as amended, that provided Starbucks with the right to purchase an aggregate of approximately 9.5 million shares of the Company’s common stock. In conjunction with the 2022 Notes offering, the Company sold warrants whereby the Counterparties have the option to purchase a total of approximately 19.2 million shares of the Company’s Class A common stock at a price of $31.18 per share. None of the warrants were exercised as of December 31, 2019. In conjunction with the 2023 Notes offering, the Company sold the 2023 warrants whereby the 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 warrants were exercised as of December 31, 2019. Indemnification Arrangements During the years ended December 31, 2019 and 2018, the Company received 20,793 and 469,894 shares of common stock, respectively, that were forfeited back to the Company as indemnification against liabilities related to certain acquired businesses preacquisition matters. The receipt of the forfeited shares was accounted for as equity repurchases. Conversion of 2022 Notes and Exercise of the 2022 Convertible Note Hedges In connection with the conversion of certain of the 2022 Notes in 2018, the Company issued 7.3 million shares of Class A common stock. The Company also exercised a pro-rata portion of the 2022 convertible note hedges and received 7.2 million shares of Class A common stock from the counterparties to offset the shares issued. 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 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. As of December 31, 2019, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2015 Plan was 19,340,627 shares, and 84,133,011 shares were available for future issuance. Under the 2009 Plan, shares of common stock are reserved for the issuance of ISOs or NSOs to eligible participants. The options may be granted at a price per share not less than the fair market value at the date of grant. Options granted generally vest over a 4 year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to 10 years from the date of grant. The Plan allows for early exercise of employee stock options whereby the option holder is allowed to exercise prior to vesting. Any unvested shares are subject to repurchase by the Company at their original exercise prices. As of December 31, 2019, the total number of options and RSUs outstanding under the 2009 Plan was 18,196,638 shares. A summary of stock option activity for the year ended December 31, 2019 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Balance at December 31, 2018 33,152,881 $ 9.52 5.45 $ 1,543,793 Granted 1,184,657 72.15 Exercised (10,176,170) 8.09 Forfeited (541,564) 39.88 Balance at December 31, 2019 23,619,804 $ 12.66 4.89 $ 1,191,746 Options exercisable as of December 31, 2019 22,107,017 $ 9.77 4.63 $ 1,168,770 Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding, “in-the-money” options. Aggregate intrinsic value for stock options exercised through December 31, 2019, 2018, and 2017 was $616.3 million, $720.1 million, and $464.1 million, respectively. The total weighted average grant-date fair value of options granted was $30.58, $16.25 and $5.97 per share for the years ended December 31, 2019, 2018 and 2017, respectively. Restricted Stock Activity The Company issues RSAs and RSUs under the 2015 Plan, which typically vest over a term of four years. Activity related to RSAs and RSUs during the year ended December 31, 2019 is set forth below: Number of Weighted Unvested as of December 31, 2018 17,934,728 $ 31.34 Granted 7,028,055 70.61 Vested (8,023,399) 30.19 Forfeited (3,021,923) 40.25 Unvested as of December 31, 2019 13,917,461 $ 49.90 Employee Stock Purchase Plan On November 17, 2015, the Company’s 2015 Employee Stock Purchase Plan (ESPP) became effective. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, (or 25% for offering periods that commence after November 1, 2019), subject to any plan limitations. The ESPP provides for 12-month offering periods. The offering periods are scheduled to start on the first trading day on or after May 15 and November 15 of each year. Each offering period includes two purchase periods, which begin on the first trading day on or after November 15 and May 15, and ending on the last trading day on or before May 15 and November 15, respectively. Employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or the last trading day of the purchase period. The number of shares available for sale under the ESPP will be increased annually on the first day of each fiscal year, equal to the least of (i) 8,400,000 shares, (ii) 1% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (iii) such other amount as determined by the administrator. As of December 31, 2019, 5,022,962 shares had been purchased under the ESPP and 14,294,425 shares were available for future issuance under the ESPP. The Company recorded $18.9 million, $9.0 million, and $6.0 million of share-based compensation expense related to the ESPP during the year ended December 31, 2019, 2018, and 2017, respectively. Share-Based Compensation The fair value of stock options granted was estimated using the following weighted-average assumptions: Year Ended December 31, 2019 2018 2017 Dividend yield — % — % — % Risk-free interest rate 2.37 % 2.92 % 1.88 % Expected volatility 40.48 % 30.87 % 32.22 % Expected term (years) 6.02 6.19 6.02 The following table summarizes the effects of share-based compensation on the Company's consolidated statements of operations (in thousands): Year Ended December 31, 2019 2018 2017 Cost of revenue $ 155 $ 97 $ 77 Product development 210,840 144,601 98,310 Sales and marketing 26,720 22,797 17,568 General and administrative 60,148 49,386 39,881 Total $ 297,863 $ 216,881 $ 155,836 The Company recorded $18.9 million, $9.0 million, and $6.0 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the year ended December 31, 2019, 2018 and 2017, respectively. The Company capitalized $8.2 million, $9.3 million, and $3.7 million of share-based compensation expense related to capitalized software during the year ended December 31, 2019, 2018 and 2017, respectively. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock. In the years when the Company reported a net loss, diluted loss per share is the same as basic loss per share because the effects of potentially dilutive items were anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Net income (loss) $ 375,446 $ (38,453) $ (62,813) Basic shares: Weighted-average common shares outstanding 425,728 406,313 380,921 Weighted-average unvested shares (729) (582) (1,577) Weighted-average shares used to compute basic net income (loss) per share 424,999 405,731 379,344 Diluted shares: Stock options and restricted stock units 30,602 — — Convertible senior notes — — — Common stock warrants 10,432 — — Employee stock purchase plan 43 — — Weighted-average shares used to compute diluted net income (loss) per share $ 466,076 $ 405,731 $ 379,344 Net income (loss) per share: Basic $ 0.88 $ (0.09) $ (0.17) Diluted $ 0.81 $ (0.09) $ (0.17) The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Year Ended December 31, 2019 2018 2017 Stock options and restricted stock units 13,867 60,589 68,588 Common stock warrants 19,820 25,798 19,173 Convertible senior notes 20,305 23,820 — Unvested shares 728 582 1,300 Employee stock purchase plan 165 140 157 Total anti-dilutive securities 54,885 110,929 89,218 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
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 18, Commitments and Contingencies . The lease commencement date is expected to be in July 2020. The term of the agreement is 15.5 years with total future minimum lease payments over the term of approximately $42.7 million. The Company has not yet recognized a right of use asset and lease obligation under this agreement as of December 31, 2019. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating and Finance Leases The Company’s operating leases are primarily comprised of office facilities, with the most significant leases relating to corporate headquarters in San Francisco and an office in New York. The Company's leases have remaining lease terms of 1 year to 12 years, some of which include options to extend for 5 year terms, or include options to terminate the leases within 1 year. None of the options to extend the leases have been included in the measurement of the right of use asset or the associated lease liability. 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 is January 15, 2020 with total lease payments over the term of approximately $276 million. Under the terms of this lease, the Company is required to make certain payments during the construction stage of the office space, which the Company will record as a prepaid lease asset. In July 2019, the Company entered into a lease arrangement for 226,258 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 is expected to be in July 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 2 years. The components of lease expense for the year ended December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Fixed operating lease costs $ 29,422 Variable operating lease costs 5,737 Short term lease costs 2,512 Sublease income (3,381) Finance lease costs Amortization of finance right-of-use assets 5,029 Interest on finance lease liabilities — Total lease costs $ 39,319 Other information related to leases was as follows: December 31, Weighted Average Remaining Lease Term: Operating leases 4.5 years Finance leases 0.7 years Weighted Average Discount Rate: Operating leases 4 % Finance leases — % Cash flows related to leases were as follows (in thousands): Year Ended December 31, 2019 Cash flows from operating activities: Payments for operating lease liabilities $ 33,340 Cash flows from financing activities: Principal payments on finance lease obligation $ 5,029 Supplemental Cash Flow Data: Right-of-use assets obtained in exchange for operating lease obligations $ 40,555 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 December 31, 2019 are as follows (in thousands): Finance Operating Year: 2020 $ 2,446 $ 42,173 2021 — 65,503 2022 — 68,106 2023 — 62,847 2024 — 43,058 Thereafter — 253,091 Total $ 2,446 $ 534,778 Less: amount representing interest — 13,494 Less: leases executed but not yet commenced — 383,669 Less: lease incentives and transfer to held for sale — 1,510 Total $ 2,446 $ 136,105 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 consolidated balance sheets. The associated finance lease assets are included in property and equipment, net on the consolidated balance sheets. The Company recognized total rental expenses for operating leases of $32.5 million, $23.3 million, and $12.9 million during the years ended December 31, 2019, 2018, and 2017, respectively. Litigation The Company is currently a party to, and may in the future be involved in, various litigation matters, legal claims, and government investigations. The Treasurer & Tax Collector of the City and County of San Francisco (Tax Collector) has issued decisions for fiscal years 2014, 2015, 2016, and 2017 that the Tax Collector believes the Company’s primary business activity is financial services rather than information, and accordingly, the Company would be liable for the Gross Receipts Tax and Payroll Expense Tax under the rules for financial services business activities. We are required to pay tax assessments prior to contesting any such assessments. This requirement is commonly referred to as “pay-to-play.” In connection with the tax audits, the Company paid an additional $1.3 million for fiscal years 2014 and 2015 in the first quarter of 2018, and an additional $8.4 million for fiscal years 2016 and 2017 in the fourth quarter of 2019, as assessed by the Tax Collector, even though the Company strongly disagrees with the Tax Collector’s assessment of the Company’s primary business activity. The Company believes its position has merit and intends to vigorously pursue all available remedies. On September 6, 2019, the Company filed a lawsuit against the Tax Collector and the City and County of San Francisco in San Francisco County Superior Court for a refund of the additional amount of $1.3 million paid for the fiscal years of 2014 and 2015. The Company has filed a petition for redetermination with respect to the fiscal years 2016 and 2017. While the Company believes it has strong arguments, there is no assurance that courts will rule in the Company’s favor. Should the Company not reach a settlement or prevail in its legal challenge against the application of San Francisco’s Gross Receipts Tax to its business, the Company estimates that it could incur losses associated with taxes, interest, and penalties that range from approximately $0 to $63 million in the aggregate for the fiscal years 2016, 2017, 2018 and 2019, over and above the taxes the Company has already paid under the information classification. Additional taxes, interest, and penalties for future periods could be material as well. The Company regularly assesses the likelihood of adverse outcomes resulting from tax disputes such as this and examinations for all open years to determine the necessity and adequacy of any tax reserves. Given the uncertainty of the possible outcome, the Company has not recorded reserves for the exposure related to the dispute with the Tax Collector on San Francisco’s Gross Receipts Tax. In addition, from time to time, the Company is involved in various other litigation matters and disputes arising in the ordinary course of business. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability with respect to these other matters. While the Company does not believe, at this time, that any ultimate liability resulting from any of these other matters will have a material adverse effect on the Company's results of operations, financial position, or liquidity, the Company cannot give any assurance regarding the ultimate outcome of these other matters, and their resolution could be material to the Company's operating results for any particular period. |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHICAL INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is the chief executive officer who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company’s operations constitute a single operating segment and one reportable segment. Revenue Revenue by geography is based on the billing addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands): Year Ended December 31, 2019 2018 2017 Revenue United States $ 4,472,473 $ 3,138,859 $ 2,120,088 International 241,027 159,318 94,165 Total net revenue $ 4,713,500 $ 3,298,177 $ 2,214,253 No individual country from the international markets contributed in excess of 10% of total revenue for the years ended December 31, 2019, 2018, and 2017. Long-Lived Assets The following table sets forth long-lived assets by geographic area (in thousands): December 31, 2019 2018 Long-lived assets United States $ 586,702 $ 471,970 International 11,064 9,239 Total long-lived assets $ 597,766 $ 481,209 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The supplemental disclosures of cash flow information consist of the following (in thousands): Year Ended December 31, 2019 2018 2017 Supplemental Cash Flow Data: Cash paid for interest $ 5,677 $ 4,125 $ 1,374 Cash paid for income taxes 2,744 1,622 1,254 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 40,555 — — Change in purchases of property and equipment in accounts payable and accrued expenses (419) 15,067 143 Unpaid business combination purchase price 8,411 3,995 2,115 Non-cash proceeds from sale of asset group 100,000 — — Fair value of common stock issued related to business combination — (140,107) — Recovery of common stock in connection with indemnification settlement agreement 789 2,745 — Fair value of common stock issued to settle the conversion of senior notes, due 2022 — (571,408) — Fair value of shares received to settle senior note hedges, due 2022 — 544,276 — |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, contingencies, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets and deferred revenue, income and other taxes, operating and financing lease right-of-use assets and related liabilities, assessing the likelihood of adverse outcomes from claims and disputes, and share-based compensation. |
Revenue Recognition and Cost of Revenue | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition. Refer to Note 2 for the impact of this adoption. Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Transaction-based revenue The Company charges its sellers a transaction fee for managed payments solutions that is generally calculated as a percentage of the total transaction amount processed. The Company selectively offers custom pricing for certain sellers. The Company collects the transaction amount from the seller's customer's bank, net of acquiring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the sellers. The Company acts as the merchant of record for its sellers and works directly with payment card networks and banks so that its sellers do not need to manage the complex systems, rules, and requirements of the payments industry. The Company satisfies its performance obligations and therefore recognizes the transaction fees as revenue upon authorization of a transaction by the seller's customer's bank. The Company applies the optional exemption allowed under ASC 606 not to disclose consideration attributable to performance obligations for future transaction processing since the term of the contract with a seller is not defined and any future consideration on the contract would be dependent on the value and volume of transactions processed in the future, which are not determinable. Revenue is recognized net of refunds, which arise from reversals of transactions initiated by sellers. The transaction fees collected from sellers are recognized as revenue on a gross basis as the Company is the principal in the delivery of the managed payments solutions to the sellers. The Company has concluded it is the principal because as the merchant of record, it controls the services before delivery to the seller, it is primarily responsible for the delivery of the services to its sellers, and it has discretion in setting prices charged to sellers. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the merchant of record, Square is liable for the costs of processing the transactions for its sellers, and records such costs within cost of revenue. Subscription and services-based revenue Subscription and services-based revenue is primarily comprised of revenue the Company generates from Instant Deposit and Cash Card, Square Capital, website hosting and domain name registration services, and various other software as a service (SaaS) products. Instant Deposit is a functionality within the Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. The Company charges a per transaction fee which is recognized as revenue when customers instantly deposit funds to their bank account. The Company also offers Cash App customers the ability to use funds stored in the Cash App via a Visa prepaid card (Cash Card), for which the Company charges a per transaction fee that is recorded as revenue. Square Capital facilitates a loan that is offered through a partnership with an industrial bank that is either repaid through withholding a percentage of the collections of the seller's receivables processed by the Company or a specified monthly amount. The Company generally facilitates loans to its sellers through a pre-qualification process that includes an analysis of the aggregated data of the seller’s business which includes, but is not limited to, the seller’s historical processing volumes, transaction count, chargebacks, growth, and length of time as a Square customer. The Company also facilitates loans to the customers of certain sellers as well as to the sellers of its partners who do not process payments through the Company. The loans are generally originated by a bank partner, from whom the Company purchases the loans obtaining all rights, title, and interest. The loans have no stated coupon rate but the seller is charged a one-time origination fee by the bank partner based upon their risk rating, which is derived primarily from processing activity. It is the Company’s intent to sell all of its rights, title, and interest of these loans to third-party investors for an upfront fee when the loans are sold. The Company records the net amounts paid to the bank as the cost of the loans purchased and subsequently records a gain on sale of the loans to the third-party investors as revenue upon transfer of title. The Company is retained by the third-party investors to service the loans and earns a servicing fee for facilitating the repayment of these receivables through its managed payments solutions. The Company records servicing revenue as servicing is delivered. For the loans which are not immediately sold to third-party investors, the Company recognizes a portion of the expected seller repayments over the cost of the loans as revenue in proportion to the loan principal reduction. Following the acquisition of Weebly in May 2018, the Company offers customers website hosting services for a fee that is generally billed at inception. The Company also acts as a reseller of domain names registration services for a registrar for a fee, which is also generally billed at inception. The Company considers that it satisfies its performance obligations over time and as such recognizes revenue ratably over the term of the relevant arrangements, which vary from one month to twenty four months for website hosting, and one year to ten years for domain name registration. SaaS represents software products and solutions that provide customers with access to various technologies for a fee which is recognized as revenue ratably as the service is provided. The Company's contracts with customers are generally for a term of one month and renew automatically each month. The Company invoices its customers monthly. The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month. Subscription and services revenue also included revenue generated from Caviar, a food ordering platform that facilitated food delivery services that was sold by the Company on October 31, 2019. The performance obligations were the delivery of food orders from restaurants to customers and the provision of catered meals to corporate customers. For delivery of food orders, the Company charged fees to restaurants, as sellers, and also charged delivery and service fees to individuals. For provision of catered meals the Company charged corporate customers a fee. All fees were billed upon delivery of food orders or catered meals, when the Company considers that it has satisfied its performance obligations. Revenue was recognized upon delivery of the food orders or catered meals, net of refunds. Refunds were estimated based on historical experience. Hardware revenue The Company generates revenue through the sale of hardware through e-commerce and through its retail distribution channels. The Company satisfies its performance obligation upon delivery of hardware to its customers who include end user customers, distributors, and retailers. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing. Distributors and retailers have payment terms that range from 30 to 90 days after delivery. The Company offers hardware installment sales to customers with terms ranging from three to twenty four months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less. Bitcoin revenue During the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company satisfies its performance obligation and records revenue when bitcoin is transferred to the customer's account. Arrangements with Multiple Performance Obligations The Company's contracts with customers generally do not include multiple performance obligations with differing patterns of revenue recognition, except for domain name registration offered with website hosting services sold after May 31, 2018 following the acquisition of Weebly (Note 7). The Company offers its customers the option to buy website hosting bundled with domain name registration, and infrequently the Company has offered its hardware customers free managed payments solutions with the purchase of its hardware as part of a marketing promotion. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company determines standalone selling prices based on the prices charged to customers since the Company's products and services are normally sold on a stand alone basis. Cost of Revenue Transaction-based costs Transaction-based costs consist primarily of interchange and assessment fees, processing fees and bank settlement fees paid to third-party payment processors and financial institutions. Subscription and services-based costs Subscription and services-based costs consist primarily of Caviar-related costs, which included processing fees, payments to third-party couriers for deliveries and the cost of equipment provided to sellers. Caviar-related costs for catered meals also included food costs and personnel costs. Subscriptions and services-based costs also include costs associated with Cash Card and Instant Deposit. Hardware costs Hardware costs consist of all product costs associated with contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal and third-party peripherals. Product costs consist of third-party manufacturing costs. Bitcoin costs Bitcoin cost of revenue comprises of the amounts the Company pays to purchase bitcoin, which will fluctuate in line with the price of bitcoin in the market. Other Costs |
Sales and Marketing Expenses | Sales and Marketing Expenses Advertising costs are expensed as incurred and included in sales and marketing expense in the consolidated statements of operations. Total advertising costs for the years ended December 31, 2019, 2018, and 2017 were $142.7 million, $101.9 million, and $81.9 million, respectively. Costs associated with the Cash Card and certain peer-to-peer service offered to the Cash App customers for free are included in sales and marketing expenses as the Company consider these to be marketing tools to encourage the usage of Cash App. |
Share-based Compensation | Share-based CompensationShare-based compensation expense relates to stock options, restricted stock awards (RSAs), restricted stock units (RSUs), and purchases under the Company’s 2015 Employee Stock Purchase Plan (ESPP) which is measured based on the grant-date fair value. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The fair value of stock options and ESPP shares granted to employees is estimated on the date of grant using the Black-Scholes-Merton option valuation model. This share-based compensation expense valuation model requires the Company to make assumptions and judgments regarding the variables used in the calculation. These variables include the expected term (weighted average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s stock, expected risk-free interest rate and expected dividends. The Company uses the simplified calculation of expected term, as the Company does not have sufficient historical data to use any other method to estimate expected term. Expected volatility is based on a weighted average of the historical volatilities of the Company's common stock along with several entities with characteristics similar to those of the Company. The Company will continue to weight its own volatility more heavily as more of its own historical stock price information becomes available. Once its own historical data is equal to that of the expected term of option grants a peer group is no longer considered necessary. The expected risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Share-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. |
Income and Other Taxes | Income and Other Taxes The Company reports income taxes under the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company considers historical information, tax planning strategies, the expected timing of the reversal of existing temporary differences, and may rely on financial projections to support its position on the recoverability of deferred tax assets. The Company’s judgment regarding future profitability contains significant assumptions and estimates of future operations. If such assumptions were to differ significantly from actual future results of operations, it may have a material impact on the Company’s ability to realize its deferred tax assets. At the end of each period, the Company assesses the ability to realize the deferred tax assets. If it is more likely than not that the Company would not realize the deferred tax assets, then the Company would establish a valuation allowance for all or a portion of the deferred tax assets. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income tax expense on the consolidated statements of operations. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments, including money market funds, with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2019 and 2018, restricted cash of $38.9 million and $33.8 million, respectively, is related to pledged cash deposited into savings accounts at the financial institutions that process the Company's sellers' payment transactions and as collateral pursuant to an agreement with the originating bank for the Company's loan product. The Company uses the restricted cash to secure letters of credit with the financial institution to provide collateral for cash flow timing differences in the processing of these payments. The Company has recorded this amount as a current asset on the consolidated balance sheets due to the short-term nature of these cash flow timing differences and that there is no minimum time frame during which the cash must remain restricted. Additionally, this balance includes certain amounts held as collateral pursuant to multi-year lease agreements, discussed in the paragraph below that we expect to become unrestricted within the next year. |
Concentration of Credit Risk | Concentration of Credit Risk For the years ended December 31, 2019, 2018 and 2017, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had three third-party payment processors that represented approximately 48%, 29%, and 9% of settlements receivable as of December 31, 2019. The same three parties represented approximately 45%, 33%, and 9% of settlements receivable as of December 31, 2018. All other third-party processors were insignificant. |
Investments in marketable debt securities and Investments in equity securities | Investments in marketable debt securities The Company's short-term and long-term investments include marketable debt securities such as government and agency securities, corporate bonds, commercial paper and municipal securities. The Company determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable debt securities as available-for-sale. Investments are reviewed periodically to identify possible other-than-temporary impairments. If any impairment is considered other-than-temporary, the Company writes down the investment to its fair value and records the corresponding charge through other income (expense), net on its consolidated statements of operations. The Company carries these investments at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which we record within other expense (income), net. We determine any realized gains or losses on the sale of marketable debt securities on a specific identification method, and we record such gains and losses as a component of other expense (income), net. Investments in equity securities The Company holds marketable and non-marketable equity investments, over which the Company does not have a controlling interest or significant influence. Marketable equity investments are measured using quoted prices in active markets with changes recorded in Other income (expense), net on the consolidated statements of operations. Non-marketable equity investments have no readily determinable fair values and are measured using the measurement alternative, which is defined as cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded in Other income (expense), net on the consolidated statements of operations. Non-marketable equity investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity. The carrying value for these investments is not adjusted if there are no observable transactions for identical or similar investments of the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. Valuations of non-marketable equity investments are inherently complex due to the lack of readily available market data. In addition, the determination of whether an orderly transaction is for an identical or similar investment requires significant management judgment, including understanding the differences in the rights and obligations of the investments and the extent to which those differences would affect the fair values of those investments. The Company assesses the impairment of its non-marketable equity investments on a quarterly basis. The impairment analysis encompasses an assessment of the severity and duration of the impairment and a qualitative and quantitative analysis of other key factors including the investee’s financial metrics, market acceptance of the investee’s product or technology, other competitive products or technology in the market, general market conditions, and the rate at which the investee is using its cash. If the investment is considered to be impaired, the Company will record an impairment in Other income (expense), net on the consolidated statements of operations and establish a new carrying value for the investment. |
Customer funds | Customer funds Customer funds held in deposit represent Cash App customers' stored balances that customers would later use to send money or make payments, or customers cash in transit. During the year ended December 31, 2018, the Company started investing a portion of these stored balances in short-term marketable debt securities (Note 4). The Company determines the appropriate classification of the investments in marketable debt securities within customer funds at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable debt securities within customer funds as available-for-sale. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value accounting establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 Inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
Loans Held for Sale | Loans Held for SaleThe Company classifies customer loans as held for sale upon purchase from an industrial bank partner, as there is an available market for such loans and it is the Company’s intent to sell all of its rights, title, and interest in these loans to third-party investors. Loans held for sale are recorded at the lower of amortized cost or fair value determined on an individual loan basis. To determine the fair value the Company utilizes industry-standard valuation modeling, such as discounted cash flow models, taking into account the estimated timing and amounts of periodic repayments. The Company recognizes a charge within transaction and loan losses on the consolidated statement of operations whenever the amortized cost of a loan exceeds its fair value, with such charges being reversed for subsequent increases in fair value, but only to the extent that such reversals do not result in the amortized cost of a loan exceeding its fair value. A loan that is initially designated as held for sale may be reclassified to held for investment if and when the Company's intent for that loan changes. There have been no reclassifications made to date. |
Settlements Receivable | Settlements Receivable Settlements receivable represents amounts due from third-party payment processors for customer transactions. Settlements receivable are typically received within one or two business days of the transaction date. No valuation allowances have been established, as funds are due from large, well-established financial institutions with no historical collections issue. |
Inventory | InventoryInventory is comprised of contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal and third-party peripherals, as well as component parts that are used to manufacture these products. Inventory is stated at the lower of cost (generally on a first-in, first-out basis) or net realizable value. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on the estimated selling prices in the ordinary course of business. The Company's inventory is held at third party warehouses and contract manufacturer premises. |
Deferred Revenue | Deferred Revenue Deferred revenue is primarily comprised of payments for website hosting and domain name registration received from customers at inception of the arrangements prior to the services being rendered. Deferred revenue also includes unearned revenue related to managed payments services offered in conjunction with hardware sales for which the cash payments from customers are received and due upon the sale of the hardware. |
Cryptocurrency transactions | Cryptocurrency transactionsDuring the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company purchases bitcoin from private broker dealers or from Cash App customers. Upon purchase, the Company records the cost of bitcoin within other current assets in its consolidated balance sheets. Upon sale, the Company records the total sale amount received from customers as bitcoin revenue and the associated cost as cost of revenue. The Company does not hold bitcoin for speculation purposes. The carrying value of bitcoin held by the Company was $1.0 million and $0.2 million as of December 31, 2019 and 2018, respectively. The Company assesses the carrying value of bitcoin held by the Company at each reporting date and records an impairment charge if the carrying value exceeds the fair value. Losses on bitcoin for the years ended December 31, 2019, 2018, and 2017 were insignificant. |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost less accumulated depreciation, which is computed on a straight-line basis over the asset’s estimated useful life. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Two Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in operating expenses. |
Capitalized Software | Capitalized SoftwareThe Company capitalizes certain costs incurred in developing internal-use software when capitalization requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. Capitalized costs are included in property and equipment, net, and amortized on a straight-lined basis over the estimated useful life of the software and included in product development costs on the consolidated statements of operations. |
Leases | Leases The Company leases office space and equipment under non-cancellable finance and operating leases with various expiration dates. The Company adopted Accounting Standards Codification (ASC) 842, Leases (ASC 842) on January 1, 2019, and elected the optional transition method to apply the transition provisions from the effective date of adoption, which requires the Company to report the cumulative effect of the adoption of the standard on the date of adoption with no changes to the prior period balances. Pursuant to the practical expedients, the Company elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. The Company elected to apply the short-term lease measurement and recognition exemption to its leases where applicable. 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 noncancellable lease term, at the lease commencement date for 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. The accounting for finance leases remained substantially unchanged. Upon adoption of ASC 842, the Company recognized $112.0 million of operating right-of-use lease assets and $135.6 million of operating lease liabilities on its consolidated balance sheet. Additionally, the Company derecognized $149.0 million related to the build-to-suit asset and liability upon adoption of this standard because the Company was no longer deemed to be the owner of the related asset under construction under the new standard. When lease agreements provide allowances for leasehold improvements, the Company assesses whether it is the owner of the leasehold improvements for accounting purposes. When the Company concludes that it is the owner, it capitalizes the leasehold improvement assets and recognizes the related depreciation expense on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. Additionally, the Company recognizes the amounts of allowances to be received from the lessor as a reduction of the lease liability and the associated right of use asset. When the Company concludes that it is not the owner, the payments that the Company makes towards the leasehold improvements are accounted as a component of the lease payments. The Company records a liability for the estimated fair value for any asset retirement obligation (ARO) associated with its leases, with an offsetting asset. In the determination of the fair value of AROs, the Company uses various assumptions and judgments, including such factors as the existence of a legal obligation, estimated amounts and timing of settlements, and discount and inflation rates. The liability is subsequently accreted while the asset is depreciated. As of December 31, 2019, the Company had a liability for AROs, gross of accretion, of $3.6 million and an associated asset, net of depreciation, of $1.6 million. |
Asset Retirement Obligations | The Company records a liability for the estimated fair value for any asset retirement obligation (ARO) associated with its leases, with an offsetting asset. In the determination of the fair value of AROs, the Company uses various assumptions and judgments, including such factors as the existence of a legal obligation, estimated amounts and timing of settlements, and discount and inflation rates. The liability is subsequently accreted while the asset is depreciated. |
Business Combinations | Business Combinations The purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of total consideration over the fair values of the assets acquired and the liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of |
Long-lived Assets, including Goodwill and Acquired Intangibles | Long-Lived Assets, including Goodwill and Acquired Intangibles The Company evaluates the recoverability of property and equipment and finite lived intangible assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated. If the carrying amount of the long–lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third–party independent appraisals, as considered necessary. For the periods presented, the Company had recorded no impairment charges. The Company performs a goodwill impairment test annually on December 31 and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value. The Company has concluded that its business operations as a whole comprise one reporting unit. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. For the periods presented, the Company had recorded no impairment charges. Acquired intangibles consist of acquired technology and customer relationships associated with various acquisitions. Acquired technology is amortized over its estimated useful life on a straight-line basis within cost of revenue. Customer relationships acquired are amortized on a straight-line basis over their estimated useful lives within operating expenses. The Company evaluates the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining period of amortization. |
Assets Held for Sale | Assets Held for SaleThe Company classifies an asset group (‘asset’) as held for sale in the period that (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year (subject to certain events or circumstances), (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in other income (expenses), net, in the consolidated statement of operations. Conversely, gains are generally not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation or amortization expense on the asset. The Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is sold or is no longer classified as held for sale. Upon sale of the asset any excess of the sale proceeds over the carrying value of the asset is recorded as a gain on sale of asset group in the consolidated statement of operations. |
Customers Payable | Customers PayableCustomers payable represents the transaction amounts, less revenue earned by the Company, owed to sellers or Cash App customers. The payable amount comprises amounts owed to customers due to timing differences as the Company typically settles within one |
Accrued Transaction Losses | Accrued Transaction LossesThe Company establishes a reserve for estimated transaction losses due to chargebacks, which represent a potential loss due to disputes between a seller and their customer or due to a fraudulent transaction. This also includes estimated transaction losses on Cash App activity related to peer-to-peer payments sent from a credit card, Cash for Business and Cash Card. The reserve is estimated based on available data as of the reporting date, including expectations of future chargebacks, and historical trends related to loss rates. Additions to the reserve are reflected in current operating results, while realized losses are offset against the reserve. These amounts are classified within transaction and loan losses on the consolidated statements of operations, except for the amounts associated with the peer-to-peer service offered to Cash App customers for free that is classified within sales and marketing expenses. |
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 determined that the new guidance does not have a material impact on the balances reported in its consolidated financial statements and will include additional disclosures in the first reporting period subsequent to adoption. Beginning with the first quarter of 2020, the Company will expand disclosures in the financial statements to discuss how it develops its expected credit loss estimates, the methodology applied to estimate the allowance for credit losses, and the factors that influence the Company's estimates. For available for sale debt securities with unrealized losses where the Company concludes that an allowance for credit losses is not necessary, the Company will disclose the associated fair value of such securities as well as the basis for conclusions that an allowance for credit losses was not necessary, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position. For available for sale debt securities subject to credit losses, the Company will disclose the methodology and significant inputs used to measure the allowance for credit losses, the Company’s policy of recognizing uncollectible available for sale debt securities, and provide a tabular roll forward of the credit losses by major security type. 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 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 for the 2020 annual goodwill impairment test which will be performed as of December 31. 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 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 will include additional disclosures required by the new guidance relating to significant unobservable inputs used to develop Level 3 fair value measurements in the first quarter of 2020. Recently issued accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-15, C ustomer’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 does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. In April 2019, the FASB issued ASU 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 among other things. With respect to hedge accounting, the amendments address partial-term fair value hedges and fair value hedge basis adjustments, among other things. On recognizing and measuring financial instruments, they address the scope of the guidance, the requirement for remeasurement to fair value when using the measurement alternative, and certain disclosure requirements 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 2016-13. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 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 does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Estimated Useful Lives of Property and Equipment | The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Two Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands): December 31, December 31, Leasehold improvements $ 111,942 $ 107,611 Computer equipment 106,469 80,093 Capitalized software 81,984 58,908 Office furniture and equipment 27,328 20,699 Total 327,723 267,311 Less: Accumulated depreciation and amortization (178,529) (124,909) Property and equipment, net $ 149,194 $ 142,402 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Revenue Source | The following table presents the Company's revenue disaggregated by revenue source (in thousands): Year Ended December 31, 2019 2018 2017 Revenue from Contracts with Customers: Transaction-based revenue $ 3,081,074 $ 2,471,451 $ 1,920,174 Subscription and services-based revenue 883,922 499,010 185,485 Hardware revenue 84,505 68,503 41,415 Bitcoin revenue 516,465 166,517 — Revenue from other sources: Subscription and services-based revenue $ 147,534 $ 92,696 $ 67,179 |
Schedule of Deferred Revenue | The deferred revenue balances were as follows (in thousands): Year Ended December 31, 2019 2018 Deferred revenue, beginning of the period $ 36,451 $ 5,893 Less: cumulative impact of the adoption of ASC 606 — (4,303) Deferred revenue, beginning of the period, as adjusted 36,451 1,590 Deferred revenue, end of the period 44,331 36,451 Deferred revenue arising from business combination — 22,800 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 31,510 $ 1,590 |
INVESTMENTS IN DEBT SECURITIES
INVESTMENTS IN DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments | The Company's short-term and long-term investments as of 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 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 securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70) $ 80,122 Corporate bonds 109,807 80 (368) 109,519 Municipal securities 27,839 52 (59) 27,832 U.S. government securities 292,615 161 (509) 292,267 Foreign securities 31,263 4 (16) 31,251 Total $ 541,684 $ 329 $ (1,022) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78) $ 114,560 Corporate bonds 159,783 419 (950) 159,252 Municipal securities 28,453 167 (26) 28,594 U.S. government securities 153,743 553 (172) 154,124 Foreign securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226) $ 464,680 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 Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 27,293 $ 2 $ (4) $ 27,291 U.S. government securities 72,662 12 (3) 72,671 Total $ 99,955 $ 14 $ (7) $ 99,962 |
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 December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) Municipal securities 1,004 — — — 1,004 — U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign securities 13,499 (16) — — 13,499 (16) Total $ 65,387 $ (60) $ 22,482 $ (12) $ 87,869 $ (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 securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ (28) $ 93,046 $ (518) December 31, 2018 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 $ 78,134 $ (70) $ — $ — $ 78,134 $ (70) Corporate bonds 38,052 (61) 62,479 (307) 100,531 (368) Municipal securities 2,251 (1) 22,915 (58) 25,166 (59) U.S. government securities 240,979 (148) 41,131 (361) 282,110 (509) Foreign securities 27,280 (16) — — 27,280 (16) Total $ 386,696 $ (296) $ 126,525 $ (726) $ 513,221 $ (1,022) Long-term debt securities: U.S. agency securities $ 20,504 $ (29) $ 10,133 $ (49) $ 30,637 $ (78) Corporate bonds 119,333 (824) 20,306 (126) 139,639 (950) Municipal securities 9,701 (14) 3,260 (12) 12,961 (26) U.S. government securities 25,850 (32) 24,576 (140) 50,426 (172) Foreign securities 1,000 — — — 1,000 — Total $ 176,388 $ (899) $ 58,275 $ (327) $ 234,663 $ (1,226) The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) December 31, 2018 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 $ 11,843 $ (4) $ — $ — $ 11,843 $ (4) U.S. government securities 34,818 (3) — — 34,818 (3) Total $ 46,661 $ (7) $ — $ — $ 46,661 $ (7) |
Short-term and Long-term Investments Classified by Contractual Maturities | The contractual maturities of the Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 490,299 $ 492,456 Due in one to five years 533,853 537,303 Total $ 1,024,152 $ 1,029,759 The contractual maturities of the Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 237,909 $ 238,031 Due in one to five years — — Total $ 237,909 $ 238,031 |
CUSTOMER FUNDS (Tables)
CUSTOMER FUNDS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Assets Underlying Customer Funds | The following table presents the assets underlying customer funds (in thousands): December 31, December 31, Cash $ 422,459 $ 158,697 Cash Equivalents: Money market funds 233 18 U.S. agency securities 8,585 39,991 U.S. government securities 6,984 35,349 Short-term debt securities: U.S. agency securities — 27,291 U.S. government securities 238,031 72,671 Total $ 676,292 $ 334,017 |
Investments within Customer Funds | 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 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 securities 24,625 86 (39) 24,672 Total $ 533,853 $ 3,968 $ (518) $ 537,303 The Company's short-term and long-term investments as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 80,160 $ 32 $ (70) $ 80,122 Corporate bonds 109,807 80 (368) 109,519 Municipal securities 27,839 52 (59) 27,832 U.S. government securities 292,615 161 (509) 292,267 Foreign securities 31,263 4 (16) 31,251 Total $ 541,684 $ 329 $ (1,022) $ 540,991 Long-term debt securities: U.S. agency securities $ 114,444 $ 194 $ (78) $ 114,560 Corporate bonds 159,783 419 (950) 159,252 Municipal securities 28,453 167 (26) 28,594 U.S. government securities 153,743 553 (172) 154,124 Foreign securities 8,122 28 — 8,150 Total $ 464,545 $ 1,361 $ (1,226) $ 464,680 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 Company's investments within customer funds as of December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 27,293 $ 2 $ (4) $ 27,291 U.S. government securities 72,662 12 (3) 72,671 Total $ 99,955 $ 14 $ (7) $ 99,962 |
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 December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) Municipal securities 1,004 — — — 1,004 — U.S. government securities 21,481 (8) 14,984 (9) 36,465 (17) Foreign securities 13,499 (16) — — 13,499 (16) Total $ 65,387 $ (60) $ 22,482 $ (12) $ 87,869 $ (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 securities 16,383 (39) — — 16,383 (39) Total $ 93,046 $ (490) $ (28) $ 93,046 $ (518) December 31, 2018 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 $ 78,134 $ (70) $ — $ — $ 78,134 $ (70) Corporate bonds 38,052 (61) 62,479 (307) 100,531 (368) Municipal securities 2,251 (1) 22,915 (58) 25,166 (59) U.S. government securities 240,979 (148) 41,131 (361) 282,110 (509) Foreign securities 27,280 (16) — — 27,280 (16) Total $ 386,696 $ (296) $ 126,525 $ (726) $ 513,221 $ (1,022) Long-term debt securities: U.S. agency securities $ 20,504 $ (29) $ 10,133 $ (49) $ 30,637 $ (78) Corporate bonds 119,333 (824) 20,306 (126) 139,639 (950) Municipal securities 9,701 (14) 3,260 (12) 12,961 (26) U.S. government securities 25,850 (32) 24,576 (140) 50,426 (172) Foreign securities 1,000 — — — 1,000 — Total $ 176,388 $ (899) $ 58,275 $ (327) $ 234,663 $ (1,226) The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2019 and 2018, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands): 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) December 31, 2018 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 $ 11,843 $ (4) $ — $ — $ 11,843 $ (4) U.S. government securities 34,818 (3) — — 34,818 (3) Total $ 46,661 $ (7) $ — $ — $ 46,661 $ (7) |
Investments within Customer Funds Classified by Contractual Maturities | The contractual maturities of the Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 490,299 $ 492,456 Due in one to five years 533,853 537,303 Total $ 1,024,152 $ 1,029,759 The contractual maturities of the Company's investments within customer funds as of December 31, 2019 are as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 237,909 $ 238,031 Due in one to five years — — Total $ 237,909 $ 238,031 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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): December 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash Equivalents: Money market funds $ 213,576 $ — $ — $ 218,109 $ — $ — U.S. agency securities — 19,976 — — 46,423 — Commercial paper — — — — — — U.S. government securities 46,914 — — 86,239 — — Foreign securities — — — — 23,981 — Customer Funds: Money market funds 233 — — 18 — — U.S. agency securities — 8,585 — — 67,282 — U.S. government securities 245,015 — — 108,020 — — Short-term debt securities: U.S. agency securities — 131,522 — — 80,122 — Corporate bonds — 67,721 — — 109,519 — Commercial paper — — — — — — Municipal securities — 6,776 — — 27,832 — U.S. government securities 265,135 — — 292,267 — — Foreign securities — 21,302 — — 31,251 — Long-term debt securities: U.S. agency securities — 64,068 — — 114,560 — Corporate bonds — 143,078 — — 159,252 — Municipal securities — 9,706 — — 28,594 — U.S. government securities 295,779 — — 154,124 — — Foreign securities — 24,672 — — 8,150 — Other: Marketable equity investment — — — 45,342 — — Total $ 1,066,652 $ 497,406 $ — $ 904,119 $ 696,966 $ — December 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2023 Notes $ 748,564 $ 962,516 $ 718,522 $ 901,468 2022 Notes 190,268 578,817 181,173 515,693 Total $ 938,832 $ 1,541,333 $ 899,695 $ 1,417,161 The estimated fair value and carrying value of loans held for sale is as follows (in thousands): December 31, 2019 December 31, 2018 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 164,834 $ 173,360 $ 89,974 $ 93,064 Total $ 164,834 $ 173,360 $ 89,974 $ 93,064 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Two Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands): December 31, December 31, Leasehold improvements $ 111,942 $ 107,611 Computer equipment 106,469 80,093 Capitalized software 81,984 58,908 Office furniture and equipment 27,328 20,699 Total 327,723 267,311 Less: Accumulated depreciation and amortization (178,529) (124,909) Property and equipment, net $ 149,194 $ 142,402 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The table below summarizes the consideration paid for Weebly and the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). Consideration: Cash $ 132,432 Stock (2,418,271 shares of Class A common stock) 140,107 $ 272,539 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash acquired of $25,758) $ 46,978 Intangible customer assets 42,700 Intangible technology assets 14,900 Intangible trade name 11,300 Intangible other assets 961 Total liabilities assumed (including deferred revenue of $22,800) (37,509) Total identifiable net assets acquired 79,330 Goodwill 193,209 Total $ 272,539 |
SALE OF ASSET GROUP (Tables)
SALE OF ASSET GROUP (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Calculation of Gain on Sale | The following table summarizes the calculation of the gain on the sale of Caviar business (in thousands): Consideration received: Cash $ 310,000 Preferred Stock 100,000 $ 410,000 Net assets sold: Intangible and other assets, net $ 8,659 Goodwill 4,221 Disposal costs and other adjustments 23,675 $ 36,555 Gain on sale of asset group $ 373,445 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in carrying value of goodwill in the period was as follows (in thousands): Balance at December 31, 2017 $ 58,327 Acquisitions completed during the year ended December 31, 2018 203,378 Balance at December 31, 2018 261,705 Acquisitions completed during the year ended December 31, 2019 10,832 Sale of asset group (Note 8) (4,221) Other adjustments (1,971) Balance at December 31, 2019 $ 266,345 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 December 31, 2019 Cost Accumulated Amortization Net Technology assets $ 53,900 $ (31,873) $ 22,027 Customer assets 44,000 (6,934) 37,066 Trade name 11,300 (4,473) 6,827 Other 5,299 (2,140) 3,159 Total $ 114,499 $ (45,420) $ 69,079 Balance at December 31, 2018 Cost Accumulated Amortization Net Technology assets $ 45,978 $ (28,420) $ 17,558 Customer assets 57,109 (8,068) 49,041 Trade name 11,300 (1,648) 9,652 Other 2,246 (1,395) 851 Total $ 116,633 $ (39,531) $ 77,102 The changes to the carrying value of intangible assets were as follows (in thousands): Year Ended December 31, 2019 2018 2017 Acquired intangible assets, net, beginning of the period $ 77,102 $ 14,334 $ 19,292 Acquisitions 14,559 75,871 2,657 Amortization expense (15,000) (13,103) (7,615) Sale of asset group (Note 8) (7,582) — — Acquired intangible assets, net, end of the period $ 69,079 $ 77,102 $ 14,334 |
Schedule of Annual Future Amortization Expense of Intangible Assets | The total estimated future amortization expense of these intangible assets as of December 31, 2019 is as follows (in thousands): 2020 $ 12,800 2021 11,829 2022 10,134 2023 8,917 2024 5,940 Thereafter 19,459 Total $ 69,079 |
OTHER CONSOLIDATED BALANCE SH_3
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Current Assets | The following table presents the detail of other current assets (in thousands): December 31, December 31, Inventory, net $ 47,683 $ 28,627 Restricted cash 38,873 33,838 Processing costs receivable 67,281 46,102 Prepaid expenses 22,758 21,782 Accounts receivable, net 33,863 22,393 Other 39,951 46,062 Total $ 250,409 $ 198,804 |
Accrued Expenses and Other Current Liabilities | The following table presents the detail of accrued expenses (in thousands): December 31, December 31, Accrued expenses $ 128,387 $ 82,354 Accrued transaction losses (i) 34,771 33,682 Accounts payable 42,116 36,416 Deferred revenue, current 38,104 31,474 Square Payroll payable (ii) 27,969 7,534 Other 26,494 23,729 Total $ 297,841 $ 215,189 (i) The Company is exposed to transaction losses that arise due to chargebacks as a result of fraud or uncollectibility. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Year Ended December 31, 2019 2018 Accrued transaction losses, beginning of the year $ 33,682 $ 26,893 Provision for transaction losses 79,414 64,981 Charge-offs to accrued transaction losses (78,325) (58,192) Accrued transaction losses, end of the year $ 34,771 $ 33,682 (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): Year Ended December 31, 2019 2018 Accrued transaction losses, beginning of the year $ 33,682 $ 26,893 Provision for transaction losses 79,414 64,981 Charge-offs to accrued transaction losses (78,325) (58,192) Accrued transaction losses, end of the year $ 34,771 $ 33,682 |
OTHER CONSOLIDATED BALANCE SH_4
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Non-Current Assets | The following table presents the detail of other non-current assets (in thousands): December 31, December 31, Investment in non-marketable equity securities $ 110,000 $ — Investment in marketable equity securities — 45,342 Non-current lease prepayments 45,738 — Restricted cash 12,715 15,836 Other 27,935 13,051 Total $ 196,388 $ 74,229 |
Other Non-Current Liabilities | The following table presents the detail of other non-current liabilities (in thousands): December 31, December 31, Statutory liabilities (i) $ 54,762 $ 54,748 Deferred rent, non-current (ii) — 23,003 Deferred revenue, non-current 6,227 4,977 Other 33,472 10,558 Total $ 94,461 $ 93,286 (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. (ii) The adoption of ASC 842 on January 1, 2019 resulted in the reclassification of deferred rent as an offset to right-of-use lease assets. |
Accrued Expenses and Other Current Liabilities | The following table presents the detail of accrued expenses (in thousands): December 31, December 31, Accrued expenses $ 128,387 $ 82,354 Accrued transaction losses (i) 34,771 33,682 Accounts payable 42,116 36,416 Deferred revenue, current 38,104 31,474 Square Payroll payable (ii) 27,969 7,534 Other 26,494 23,729 Total $ 297,841 $ 215,189 (i) The Company is exposed to transaction losses that arise due to chargebacks as a result of fraud or uncollectibility. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Year Ended December 31, 2019 2018 Accrued transaction losses, beginning of the year $ 33,682 $ 26,893 Provision for transaction losses 79,414 64,981 Charge-offs to accrued transaction losses (78,325) (58,192) Accrued transaction losses, end of the year $ 34,771 $ 33,682 (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. |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes | The net carrying amount of the Notes were as follows (in thousands): Principal outstanding Unamortized debt discount Unamortized debt issuance costs Net carrying value 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 December 31, 2018 2023 Notes $ 862,500 $ (138,924) $ (5,054) $ 718,522 2022 Notes 211,728 (27,569) (2,986) 181,173 Total $ 1,074,228 $ (166,493) $ (8,040) $ 899,695 The net carrying amount of the equity component of the Notes were as follows (in thousands): Amount allocated to conversion option Less: allocated issuance costs Equity component, net December 31, 2019 and December 31, 2018 2023 Notes $ 155,250 $ (1,231) $ 154,019 2022 Notes 41,481 (1,108) 40,373 Total $ 196,731 $ (2,339) $ 194,392 |
Interest Expense on Convertible Notes | The Company recognized interest expense on the Notes as follows (in thousands, except for percentages): Year Ended December 31, 2019 2018 2017 Contractual interest expense $ 5,108 $ 4,023 $ 1,351 Amortization of debt discount and issuance costs 39,139 32,855 14,223 Total $ 44,247 $ 36,878 $ 15,574 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Domestic and Foreign Components of Income (Loss) Before Income Taxes | The domestic and foreign components of income (loss) before income taxes are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ 456,335 $ 44,538 $ (10,900) Foreign (78,122) (80,665) (51,764) Income (loss) before income taxes $ 378,213 $ (36,127) $ (62,664) |
Components of Provision for Income Taxes | The components of the provision for income taxes are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ 114 $ (4) $ (1,192) State 930 752 739 Foreign 3,099 2,224 1,987 Total current provision for income taxes 4,143 2,972 1,534 Deferred: Federal (777) (404) (1,169) State (399) 35 57 Foreign (200) (277) (273) Total deferred provision for income taxes (1,376) (646) (1,385) Total provision for income taxes $ 2,767 $ 2,326 $ 149 |
Reconciliation of Statutory Federal Income Tax Rate to Company's Effective Tax Rate | The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate: Balance at December 31, 2019 2018 2017 Tax at federal statutory rate 21.0 % 21.0 % 34.0 % State taxes, net of federal benefit 0.1 (1.1) (0.4) Foreign rate differential 1.4 (14.7) (14.9) Non-deductible meals 0.3 (3.4) (0.3) Other non-deductible expenses 1.5 (1.7) (0.7) Credits (13.9) 164.8 41.5 Other items (0.5) 2.3 (1.2) Change in valuation allowance 34.9 (718.5) (119.5) Impact of U.S. tax reform — — (209.1) Share-based compensation (45.8) 549.0 243.5 Change in uncertain tax positions 0.5 (4.1) (2.4) Termination of warrant — — 29.3 Sale of Caviar business line 1.2 — — Total 0.7 % (6.4) % (0.2) % |
Tax Effects of Temporary Differences and Related Deferred Tax Assets and Liabilities | The tax effects of temporary differences and related deferred tax assets and liabilities are as follows (in thousands): Balance at December 31, 2019 2018 2017 Deferred tax assets: Capitalized costs $ 23,708 $ 30,131 $ 35,608 Accrued expenses 33,044 31,494 23,553 Net operating loss carryforwards 575,245 485,562 244,197 Tax credit carryforwards 183,977 133,275 60,567 Property, equipment and intangible assets — — 7,390 Share-based compensation 38,427 38,265 35,728 Deferred Interest 4,072 8,290 — Other 3,424 105 2,519 Operating Lease, net 5,761 — — Total deferred tax assets 867,658 727,122 409,562 Valuation allowance (859,564) (719,040) (409,043) Total deferred tax assets, net of valuation allowance 8,094 8,082 519 Deferred tax liabilities: Property, equipment and intangible assets (6,862) (7,361) — Indefinite-lived intangibles (253) (275) (644) Total deferred tax liabilities (7,115) (7,636) (644) Net deferred tax assets (liabilities) $ 979 $ 446 $ (125) |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit is presented below (in thousands): Year Ended December 31, 2019 2018 2017 Balance at the beginning of the year $ 198,540 $ 70,799 $ 92,134 Gross increases and decreases related to prior period tax positions (11,571) 513 — Gross increases and decreases related to current period tax positions 30,676 119,261 4,193 Reductions related to lapse of statute of limitations (149) (142) (91) Gross increases and decreases related to U.S. tax reform — — (25,437) Gross increases and decreases related to acquisition 78 8,109 — Balance at the end of the year $ 217,574 $ 198,540 $ 70,799 |
STOCKHOLDER'S EQUITY (Tables)
STOCKHOLDER'S EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the year ended December 31, 2019 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Balance at December 31, 2018 33,152,881 $ 9.52 5.45 $ 1,543,793 Granted 1,184,657 72.15 Exercised (10,176,170) 8.09 Forfeited (541,564) 39.88 Balance at December 31, 2019 23,619,804 $ 12.66 4.89 $ 1,191,746 Options exercisable as of December 31, 2019 22,107,017 $ 9.77 4.63 $ 1,168,770 |
Summary of RSU Activity | Activity related to RSAs and RSUs during the year ended December 31, 2019 is set forth below: Number of Weighted Unvested as of December 31, 2018 17,934,728 $ 31.34 Granted 7,028,055 70.61 Vested (8,023,399) 30.19 Forfeited (3,021,923) 40.25 Unvested as of December 31, 2019 13,917,461 $ 49.90 |
Schedule of Fair Value Assumptions for Options | The fair value of stock options granted was estimated using the following weighted-average assumptions: Year Ended December 31, 2019 2018 2017 Dividend yield — % — % — % Risk-free interest rate 2.37 % 2.92 % 1.88 % Expected volatility 40.48 % 30.87 % 32.22 % Expected term (years) 6.02 6.19 6.02 |
Summary of the Effect of Share-Based Compensation on the Consolidated Statements of Operations | The following table summarizes the effects of share-based compensation on the Company's consolidated statements of operations (in thousands): Year Ended December 31, 2019 2018 2017 Cost of revenue $ 155 $ 97 $ 77 Product development 210,840 144,601 98,310 Sales and marketing 26,720 22,797 17,568 General and administrative 60,148 49,386 39,881 Total $ 297,863 $ 216,881 $ 155,836 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share | The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Net income (loss) $ 375,446 $ (38,453) $ (62,813) Basic shares: Weighted-average common shares outstanding 425,728 406,313 380,921 Weighted-average unvested shares (729) (582) (1,577) Weighted-average shares used to compute basic net income (loss) per share 424,999 405,731 379,344 Diluted shares: Stock options and restricted stock units 30,602 — — Convertible senior notes — — — Common stock warrants 10,432 — — Employee stock purchase plan 43 — — Weighted-average shares used to compute diluted net income (loss) per share $ 466,076 $ 405,731 $ 379,344 Net income (loss) per share: Basic $ 0.88 $ (0.09) $ (0.17) Diluted $ 0.81 $ (0.09) $ (0.17) |
Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Year Ended December 31, 2019 2018 2017 Stock options and restricted stock units 13,867 60,589 68,588 Common stock warrants 19,820 25,798 19,173 Convertible senior notes 20,305 23,820 — Unvested shares 728 582 1,300 Employee stock purchase plan 165 140 157 Total anti-dilutive securities 54,885 110,929 89,218 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Expense Components and Other Information Related to Leases | The components of lease expense for the year ended December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Fixed operating lease costs $ 29,422 Variable operating lease costs 5,737 Short term lease costs 2,512 Sublease income (3,381) Finance lease costs Amortization of finance right-of-use assets 5,029 Interest on finance lease liabilities — Total lease costs $ 39,319 Other information related to leases was as follows: December 31, Weighted Average Remaining Lease Term: Operating leases 4.5 years Finance leases 0.7 years Weighted Average Discount Rate: Operating leases 4 % Finance leases — % Cash flows related to leases were as follows (in thousands): Year Ended December 31, 2019 Cash flows from operating activities: Payments for operating lease liabilities $ 33,340 Cash flows from financing activities: Principal payments on finance lease obligation $ 5,029 Supplemental Cash Flow Data: Right-of-use assets obtained in exchange for operating lease obligations $ 40,555 |
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 December 31, 2019 are as follows (in thousands): Finance Operating Year: 2020 $ 2,446 $ 42,173 2021 — 65,503 2022 — 68,106 2023 — 62,847 2024 — 43,058 Thereafter — 253,091 Total $ 2,446 $ 534,778 Less: amount representing interest — 13,494 Less: leases executed but not yet commenced — 383,669 Less: lease incentives and transfer to held for sale — 1,510 Total $ 2,446 $ 136,105 |
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 December 31, 2019 are as follows (in thousands): Finance Operating Year: 2020 $ 2,446 $ 42,173 2021 — 65,503 2022 — 68,106 2023 — 62,847 2024 — 43,058 Thereafter — 253,091 Total $ 2,446 $ 534,778 Less: amount representing interest — 13,494 Less: leases executed but not yet commenced — 383,669 Less: lease incentives and transfer to held for sale — 1,510 Total $ 2,446 $ 136,105 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue by Geographic Area | Revenue by geography is based on the billing addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands): Year Ended December 31, 2019 2018 2017 Revenue United States $ 4,472,473 $ 3,138,859 $ 2,120,088 International 241,027 159,318 94,165 Total net revenue $ 4,713,500 $ 3,298,177 $ 2,214,253 |
Long-Lived Assets by Geographic Area | The following table sets forth long-lived assets by geographic area (in thousands): December 31, 2019 2018 Long-lived assets United States $ 586,702 $ 471,970 International 11,064 9,239 Total long-lived assets $ 597,766 $ 481,209 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flow Information | The supplemental disclosures of cash flow information consist of the following (in thousands): Year Ended December 31, 2019 2018 2017 Supplemental Cash Flow Data: Cash paid for interest $ 5,677 $ 4,125 $ 1,374 Cash paid for income taxes 2,744 1,622 1,254 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 40,555 — — Change in purchases of property and equipment in accounts payable and accrued expenses (419) 15,067 143 Unpaid business combination purchase price 8,411 3,995 2,115 Non-cash proceeds from sale of asset group 100,000 — — Fair value of common stock issued related to business combination — (140,107) — Recovery of common stock in connection with indemnification settlement agreement 789 2,745 — Fair value of common stock issued to settle the conversion of senior notes, due 2022 — (571,408) — Fair value of shares received to settle senior note hedges, due 2022 — 544,276 — |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)segmentthird_party_processorcustomer | Dec. 31, 2018USD ($)third_party_processorcustomer | Dec. 31, 2017USD ($)customer | Jan. 01, 2019USD ($) | |
Concentration Risk [Line Items] | ||||
Advertising costs | $ 142,700 | $ 101,900 | $ 81,900 | |
Restricted cash, current | 38,873 | 33,838 | ||
Restricted cash, noncurrent | 12,715 | 15,836 | ||
Carrying value of bitcoin held by the Company | 1,000 | 200 | ||
Capitalized internally developed software during the period | 22,500 | 24,000 | 9,800 | |
Amortization expense related to capitalized internally developed software | 18,900 | 10,600 | $ 6,600 | |
Operating lease right-of-use assets | 113,148 | |||
Operating lease liabilities | 136,105 | |||
Derecognition of build-to-suit lease asset | 0 | (149,000) | ||
Derecognition of build-to-suit lease liability | 0 | (149,000) | ||
Asset retirement obligation | 3,600 | |||
Asset retirement obligation, associated asset net of depreciation | $ 149,194 | $ 142,402 | ||
Measurement period for business combinations | 1 year | |||
Number of reporting units | segment | 1 | |||
Settlement period for customers payable | 1 day | |||
Leasehold Improvements Under Asset Retirement Obligation | ||||
Concentration Risk [Line Items] | ||||
Asset retirement obligation, associated asset net of depreciation | $ 1,600 | |||
Customer Concentration Risk | Net Revenue | ||||
Concentration Risk [Line Items] | ||||
Number of customers | customer | 0 | 0 | 0 | |
Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Number of third party processors | third_party_processor | 3 | 3 | ||
Third Party Processor One | Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (less than) | 48.00% | 45.00% | ||
Third Party Processor Two | Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (less than) | 29.00% | 33.00% | ||
Third Party Processor Three | Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (less than) | 9.00% | 9.00% | ||
Accounting Standards Update 2016-02 | ||||
Concentration Risk [Line Items] | ||||
Operating lease right-of-use assets | $ 112,000 | |||
Operating lease liabilities | 135,600 | |||
Derecognition of build-to-suit lease asset | 149,000 | |||
Derecognition of build-to-suit lease liability | $ 149,000 | |||
Subscription and services-based revenue | ||||
Concentration Risk [Line Items] | ||||
Description of timing | The Company considers that it satisfies its performance obligations over time and as such recognizes revenue ratably over the term of the relevant arrangements, which vary from one month to twenty four months for website hosting, and one year to ten years for domain name registration. | |||
Contract with customer, term | 1 month | |||
Hardware revenue | ||||
Concentration Risk [Line Items] | ||||
Description of timing | The Company offers hardware installment sales to customers with terms ranging from three to twenty four months. |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Capitalized software | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 18 months |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 7 years |
Minimum | Computer and data center equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 2 years |
Maximum | Computer and data center equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 10 years |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2019 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Reduction to retained earnings | $ 885,774 | $ 510,328 | |
Effect of change | ASU 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Reduction to retained earnings | $ 4,600 | ||
Increase in revenue due to ASC 606 | $ 6,400 |
REVENUE - Schedule of Disaggreg
REVENUE - Schedule of Disaggregation of Revenue by Revenue Source (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Transaction-based revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 3,081,074 | $ 2,471,451 | $ 1,920,174 |
Subscription and services-based revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 883,922 | 499,010 | 185,485 |
Revenue from other sources | 147,534 | 92,696 | 67,179 |
Hardware revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 84,505 | 68,503 | 41,415 |
Bitcoin revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 516,465 | $ 166,517 | $ 0 |
REVENUE - Deferred Revenue (Det
REVENUE - Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue, beginning of the period | $ 36,451 | $ 1,590 |
Deferred revenue, end of the period | 44,331 | 36,451 |
Deferred revenue arising from business combination | 0 | 22,800 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | 31,510 | 1,590 |
Balances without adoption of ASC 606 | ||
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue, beginning of the period | 5,893 | |
ASU 2014-09 | Effect of change | ||
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue, beginning of the period | $ 0 | (4,303) |
Deferred revenue, end of the period | $ 0 |
INVESTMENTS IN DEBT SECURITIE_2
INVESTMENTS IN DEBT SECURITIES - Short-term and Long-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,024,152 | |
Fair Value | 1,029,759 | |
Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 490,299 | $ 541,684 |
Gross Unrealized Gains | 2,229 | 329 |
Gross Unrealized Losses | (72) | (1,022) |
Fair Value | 492,456 | 540,991 |
Short-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 131,124 | 80,160 |
Gross Unrealized Gains | 409 | 32 |
Gross Unrealized Losses | (11) | (70) |
Fair Value | 131,522 | 80,122 |
Short-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 67,169 | 109,807 |
Gross Unrealized Gains | 580 | 80 |
Gross Unrealized Losses | (28) | (368) |
Fair Value | 67,721 | 109,519 |
Short-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,667 | 27,839 |
Gross Unrealized Gains | 109 | 52 |
Gross Unrealized Losses | 0 | (59) |
Fair Value | 6,776 | 27,832 |
Short-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 264,069 | 292,615 |
Gross Unrealized Gains | 1,083 | 161 |
Gross Unrealized Losses | (17) | (509) |
Fair Value | 265,135 | 292,267 |
Short-term debt securities | Foreign securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21,270 | 31,263 |
Gross Unrealized Gains | 48 | 4 |
Gross Unrealized Losses | (16) | (16) |
Fair Value | 21,302 | 31,251 |
Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 533,853 | 464,545 |
Gross Unrealized Gains | 3,968 | 1,361 |
Gross Unrealized Losses | (518) | (1,226) |
Fair Value | 537,303 | 464,680 |
Long-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 63,645 | 114,444 |
Gross Unrealized Gains | 612 | 194 |
Gross Unrealized Losses | (189) | (78) |
Fair Value | 64,068 | 114,560 |
Long-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 141,307 | 159,783 |
Gross Unrealized Gains | 1,832 | 419 |
Gross Unrealized Losses | (61) | (950) |
Fair Value | 143,078 | 159,252 |
Long-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,594 | 28,453 |
Gross Unrealized Gains | 151 | 167 |
Gross Unrealized Losses | (39) | (26) |
Fair Value | 9,706 | 28,594 |
Long-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 294,682 | 153,743 |
Gross Unrealized Gains | 1,287 | 553 |
Gross Unrealized Losses | (190) | (172) |
Fair Value | 295,779 | 154,124 |
Long-term debt securities | Foreign securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 24,625 | 8,122 |
Gross Unrealized Gains | 86 | 28 |
Gross Unrealized Losses | (39) | 0 |
Fair Value | $ 24,672 | $ 8,150 |
INVESTMENTS IN DEBT SECURITIE_3
INVESTMENTS IN DEBT SECURITIES - Short-term and Long-term Investments Classified by Contractual Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Amortized Cost | |
Due in one year or less | $ 490,299 |
Due in one to five years | 533,853 |
Amortized Cost | 1,024,152 |
Fair Value | |
Due in one year or less | 492,456 |
Due in one to five years | 537,303 |
Fair Value | $ 1,029,759 |
INVESTMENTS IN DEBT SECURITIE_4
INVESTMENTS IN DEBT SECURITIES - Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | $ 65,387 | $ 386,696 |
Less than 12 Months, Gross Unrealized Losses | (60) | (296) |
Greater than 12 months, Fair Value | 22,482 | 126,525 |
Greater than 12 months, Gross Unrealized Losses | (12) | (726) |
Total, Fair Value | 87,869 | 513,221 |
Total, Gross Unrealized Losses | (72) | (1,022) |
Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 93,046 | 176,388 |
Less than 12 Months, Gross Unrealized Losses | (490) | (899) |
Greater than 12 months, Fair Value | 58,275 | |
Greater than 12 months, Gross Unrealized Losses | (28) | (327) |
Total, Fair Value | 93,046 | 234,663 |
Total, Gross Unrealized Losses | (518) | (1,226) |
U.S. agency securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 23,896 | 78,134 |
Less than 12 Months, Gross Unrealized Losses | (9) | (70) |
Greater than 12 months, Fair Value | 4,996 | 0 |
Greater than 12 months, Gross Unrealized Losses | (2) | 0 |
Total, Fair Value | 28,892 | 78,134 |
Total, Gross Unrealized Losses | (11) | (70) |
U.S. agency securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 16,740 | 20,504 |
Less than 12 Months, Gross Unrealized Losses | (189) | (29) |
Greater than 12 months, Fair Value | 0 | 10,133 |
Greater than 12 months, Gross Unrealized Losses | 0 | (49) |
Total, Fair Value | 16,740 | 30,637 |
Total, Gross Unrealized Losses | (189) | (78) |
Corporate bonds | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 5,507 | 38,052 |
Less than 12 Months, Gross Unrealized Losses | (27) | (61) |
Greater than 12 months, Fair Value | 2,502 | 62,479 |
Greater than 12 months, Gross Unrealized Losses | (1) | (307) |
Total, Fair Value | 8,009 | 100,531 |
Total, Gross Unrealized Losses | (28) | (368) |
Corporate bonds | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 16,708 | 119,333 |
Less than 12 Months, Gross Unrealized Losses | (61) | (824) |
Greater than 12 months, Fair Value | 0 | 20,306 |
Greater than 12 months, Gross Unrealized Losses | 0 | (126) |
Total, Fair Value | 16,708 | 139,639 |
Total, Gross Unrealized Losses | (61) | (950) |
Municipal securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 1,004 | 2,251 |
Less than 12 Months, Gross Unrealized Losses | 0 | (1) |
Greater than 12 months, Fair Value | 0 | 22,915 |
Greater than 12 months, Gross Unrealized Losses | 0 | (58) |
Total, Fair Value | 1,004 | 25,166 |
Total, Gross Unrealized Losses | 0 | (59) |
Municipal securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 1,005 | 9,701 |
Less than 12 Months, Gross Unrealized Losses | (39) | (14) |
Greater than 12 months, Fair Value | 0 | 3,260 |
Greater than 12 months, Gross Unrealized Losses | 0 | (12) |
Total, Fair Value | 1,005 | 12,961 |
Total, Gross Unrealized Losses | (39) | (26) |
U.S. government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 21,481 | 240,979 |
Less than 12 Months, Gross Unrealized Losses | (8) | (148) |
Greater than 12 months, Fair Value | 14,984 | 41,131 |
Greater than 12 months, Gross Unrealized Losses | (9) | (361) |
Total, Fair Value | 36,465 | 282,110 |
Total, Gross Unrealized Losses | (17) | (509) |
U.S. government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 42,210 | 25,850 |
Less than 12 Months, Gross Unrealized Losses | (162) | (32) |
Greater than 12 months, Fair Value | 0 | 24,576 |
Greater than 12 months, Gross Unrealized Losses | (28) | (140) |
Total, Fair Value | 42,210 | 50,426 |
Total, Gross Unrealized Losses | (190) | (172) |
Foreign securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 13,499 | 27,280 |
Less than 12 Months, Gross Unrealized Losses | (16) | (16) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 13,499 | 27,280 |
Total, Gross Unrealized Losses | (16) | (16) |
Foreign securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 16,383 | 1,000 |
Less than 12 Months, Gross Unrealized Losses | (39) | 0 |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 16,383 | 1,000 |
Total, Gross Unrealized Losses | $ (39) | $ 0 |
CUSTOMER FUNDS - Assets Underly
CUSTOMER FUNDS - Assets Underlying Customer Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 676,292 | $ 334,017 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 0 | 27,291 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 238,031 | 72,671 |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 422,459 | 158,697 |
Cash Equivalents | Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 233 | 18 |
Cash Equivalents | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 8,585 | 39,991 |
Cash Equivalents | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 6,984 | $ 35,349 |
CUSTOMER FUNDS - Investments wi
CUSTOMER FUNDS - Investments within Customer Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,024,152 | |
Fair Value | 1,029,759 | |
Customer funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 237,909 | $ 99,955 |
Gross Unrealized Gains | 144 | 14 |
Gross Unrealized Losses | (22) | (7) |
Fair Value | 238,031 | 99,962 |
Customer funds | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 27,293 | |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (4) | |
Fair Value | 27,291 | |
Customer funds | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 237,909 | 72,662 |
Gross Unrealized Gains | 144 | 12 |
Gross Unrealized Losses | (22) | (3) |
Fair Value | $ 238,031 | $ 72,671 |
CUSTOMER FUNDS - Debt Securitie
CUSTOMER FUNDS - Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value (Details) - Customer funds - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | $ 56,984 | $ 46,661 |
Less than 12 Months, Gross Unrealized Losses | (22) | (7) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 56,984 | 46,661 |
Total, Gross Unrealized Losses | (22) | (7) |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 56,984 | 34,818 |
Less than 12 Months, Gross Unrealized Losses | (22) | (3) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 56,984 | 34,818 |
Total, Gross Unrealized Losses | $ (22) | (3) |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Fair Value | 11,843 | |
Less than 12 Months, Gross Unrealized Losses | (4) | |
Greater than 12 months, Fair Value | 0 | |
Greater than 12 months, Gross Unrealized Losses | 0 | |
Total, Fair Value | 11,843 | |
Total, Gross Unrealized Losses | $ (4) |
CUSTOMER FUNDS - Investments _2
CUSTOMER FUNDS - Investments within Customer Funds Classified by Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less | $ 490,299 | |
Due in one to five years | 533,853 | |
Amortized Cost | 1,024,152 | |
Fair Value | ||
Due in one year or less | 492,456 | |
Due in one to five years | 537,303 | |
Fair Value | 1,029,759 | |
Customer funds | ||
Amortized Cost | ||
Due in one year or less | 237,909 | |
Due in one to five years | 0 | |
Amortized Cost | 237,909 | $ 99,955 |
Fair Value | ||
Due in one year or less | 238,031 | |
Due in one to five years | 0 | |
Fair Value | $ 238,031 | $ 99,962 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | $ 676,292 | $ 334,017 |
Short-term debt securities | 492,456 | 540,991 |
Long-term debt securities | 537,303 | 464,680 |
Marketable equity investment | 0 | 45,342 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity investment | 0 | 45,342 |
Total | 1,066,652 | 904,119 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity investment | 0 | 0 |
Total | 497,406 | 696,966 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity investment | 0 | 0 |
Total | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 213,576 | 218,109 |
Customer Funds | 233 | 18 |
Money market funds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Customer Funds | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Customer Funds | 0 | 0 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 27,291 |
U.S. agency securities | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
U.S. agency securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 19,976 | 46,423 |
Customer Funds | 8,585 | 67,282 |
Short-term debt securities | 131,522 | 80,122 |
Long-term debt securities | 64,068 | 114,560 |
U.S. agency securities | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
Corporate bonds | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
Corporate bonds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 67,721 | 109,519 |
Long-term debt securities | 143,078 | 159,252 |
Corporate bonds | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
Commercial paper | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Municipal securities | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
Municipal securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 6,776 | 27,832 |
Long-term debt securities | 9,706 | 28,594 |
Municipal securities | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 238,031 | 72,671 |
U.S. government securities | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 46,914 | 86,239 |
Customer Funds | 245,015 | 108,020 |
Short-term debt securities | 265,135 | 292,267 |
Long-term debt securities | 295,779 | 154,124 |
U.S. government securities | Fair Value, Measurements, Recurring | Level 2 | ||
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 |
U.S. government securities | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
Foreign securities | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
Foreign securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 23,981 |
Short-term debt securities | 21,302 | 31,251 |
Long-term debt securities | 24,672 | 8,150 |
Foreign securities | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value and Carrying Value of Convertible Senior Notes (Details) - Fair Value, Measurements, Recurring - Level 2 - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 938,832 | $ 899,695 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,541,333 | 1,417,161 |
2023 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 748,564 | 718,522 |
2023 Notes | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 962,516 | 901,468 |
2022 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 190,268 | 181,173 |
2022 Notes | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 578,817 | $ 515,693 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value and Carrying Value of Loans Held for Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Carrying Value | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for sale | $ 164,834 | $ 89,974 | |
Fair Value | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans held for sale | 173,360 | 93,064 | |
Loans held for sale | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Excess amortized cost over fair value of loans charge | $ 23,200 | $ 13,200 | $ 8,000 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 327,723 | $ 267,311 |
Less: Accumulated depreciation and amortization | (178,529) | (124,909) |
Property and equipment, net | 149,194 | 142,402 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 111,942 | 107,611 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 106,469 | 80,093 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 81,984 | 58,908 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 27,328 | $ 20,699 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense on property and equipment | $ 60.6 | $ 46.8 | $ 29.7 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | May 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Purchase price adjustments to current assets | $ 2,300 | |||
Consideration, net of cash acquired | 20,372 | $ 112,399 | $ 1,915 | |
Weebly, Inc | ||||
Business Acquisition [Line Items] | ||||
Percent acquired of outstanding shares | 100.00% | |||
Cash consideration | $ 132,432 | |||
Equity consideration (in shares) | 2,418,271 | |||
Equity consideration fair value | $ 140,107 | |||
Amount paid to pay outstanding and unvested options | 17,700 | |||
Post combination compensation expense | $ 2,600 | |||
Purchase price adjustment to goodwill | 3,700 | |||
Purchase price adjustment to liabilities assumed | 4,700 | |||
Cash withheld as security for indemnification obligations | $ 500 | |||
Shares of the total share consideration remaining withheld for indemnification purposes (in shares) | 8,873 | |||
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Consideration, net of cash acquired | $ 20,400 | $ 9,900 | $ 1,900 |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | May 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 266,345 | $ 261,705 | $ 58,327 | |
Weebly, Inc | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 132,432 | |||
Stock (2,418,271 shares of Class A common stock) | $ 140,107 | |||
Equity consideration (in shares) | 2,418,271 | |||
Consideration | $ 272,539 | |||
Current assets (inclusive of cash acquired of $25,758) | 46,978 | |||
Cash acquired | 25,758 | |||
Total liabilities assumed (including deferred revenue of $22,800) | (37,509) | |||
Deferred revenue | 22,800 | |||
Total identifiable net assets acquired | 79,330 | |||
Goodwill | 193,209 | |||
Total | 272,539 | |||
Intangible customer assets | Weebly, Inc | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 42,700 | |||
Intangible technology assets | Weebly, Inc | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 14,900 | |||
Intangible trade name | Weebly, Inc | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 11,300 | |||
Intangible other assets | Weebly, Inc | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 961 |
SALE OF ASSET GROUP - Narrative
SALE OF ASSET GROUP - Narrative (Details) $ in Thousands | Oct. 31, 2019USD ($) |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Caviar Business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total gross proceeds received from sale of asset group | $ 410,000 |
Cash received from sale of asset group | 310,000 |
Value of preferred stock received from sale of asset group | $ 100,000 |
Assets, Total | Caviar Business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Concentration risk (less than) | 5.00% |
SALE OF ASSET GROUP - Calculati
SALE OF ASSET GROUP - Calculation of the Gain on the Sale (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Net assets sold: | ||||
Gain on sale of asset group | $ 373,445 | $ 0 | $ 0 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Caviar Business | ||||
Consideration received: | ||||
Cash | $ 310,000 | |||
Preferred Stock | 100,000 | |||
Total gross proceeds received from sale of asset group | 410,000 | |||
Net assets sold: | ||||
Intangible and other assets, net | 8,659 | |||
Goodwill | 4,221 | |||
Disposal costs and other adjustments | 23,675 | |||
Total net assets sold | 36,555 | |||
Gain on sale of asset group | $ 373,445 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 261,705,000 | $ 58,327,000 |
Acquisitions completed during the year | 10,832,000 | 203,378,000 |
Sale of asset group | (4,221,000) | |
Other adjustments | (1,971,000) | |
Ending balance | 266,345,000 | $ 261,705,000 |
Impairment of goodwill | $ 0 |
ACQUIRED INTANGIBLE ASSETS - Sc
ACQUIRED INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 114,499 | $ 116,633 | ||
Accumulated Amortization | (45,420) | (39,531) | ||
Net | 69,079 | 77,102 | $ 14,334 | $ 19,292 |
Intangible technology assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 53,900 | 45,978 | ||
Accumulated Amortization | (31,873) | (28,420) | ||
Net | 22,027 | 17,558 | ||
Intangible customer assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 44,000 | 57,109 | ||
Accumulated Amortization | (6,934) | (8,068) | ||
Net | 37,066 | 49,041 | ||
Intangible trade name | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 11,300 | 11,300 | ||
Accumulated Amortization | (4,473) | (1,648) | ||
Net | 6,827 | 9,652 | ||
Intangible other assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 5,299 | 2,246 | ||
Accumulated Amortization | (2,140) | (1,395) | ||
Net | $ 3,159 | $ 851 |
ACQUIRED INTANGIBLE ASSETS - Na
ACQUIRED INTANGIBLE ASSETS - Narrative (Details) - Weighted Average | 12 Months Ended |
Dec. 31, 2019 | |
Intangible technology assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortization periods | 5 years |
Intangible customer assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortization periods | 12 years |
Intangible trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortization periods | 4 years |
Acquired Intangible Assets - Ch
Acquired Intangible Assets - Change in Carrying Value of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ 77,102 | $ 14,334 | $ 19,292 |
Acquisitions | 14,559 | 75,871 | 2,657 |
Amortization of Acquired Intangible Assets | (15,000) | (13,103) | (7,615) |
Sale of asset group | (7,582) | 0 | 0 |
Ending balance | $ 69,079 | $ 77,102 | $ 14,334 |
ACQUIRED INTANGIBLE ASSETS - Fu
ACQUIRED INTANGIBLE ASSETS - Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
2020 | $ 12,800 | |||
2021 | 11,829 | |||
2022 | 10,134 | |||
2023 | 8,917 | |||
2024 | 5,940 | |||
Thereafter | 19,459 | |||
Net | $ 69,079 | $ 77,102 | $ 14,334 | $ 19,292 |
OTHER CONSOLIDATED BALANCE SH_5
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Inventory, net | $ 47,683 | $ 28,627 |
Restricted cash | 38,873 | 33,838 |
Processing costs receivable | 67,281 | 46,102 |
Prepaid expenses | 22,758 | 21,782 |
Accounts receivable, net | 33,863 | 22,393 |
Other | 39,951 | 46,062 |
Total | $ 250,409 | $ 198,804 |
OTHER CONSOLIDATED BALANCE SH_6
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued expenses | $ 128,387 | $ 82,354 |
Accrued transaction losses | 34,771 | 33,682 |
Accounts payable | 42,116 | 36,416 |
Deferred revenue, current | 38,104 | 31,474 |
Square Payroll payable | 27,969 | 7,534 |
Other | 26,494 | 23,729 |
Total | $ 297,841 | $ 215,189 |
OTHER CONSOLIDATED BALANCE SH_7
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Schedule of Reserve for Transaction Losses (Details) - Transaction Losses - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loss Contingency Accrual [Roll Forward] | ||
Accrued transaction losses, beginning of the year | $ 33,682 | $ 26,893 |
Provision for transaction losses | 79,414 | 64,981 |
Charge-offs to accrued transaction losses | (78,325) | (58,192) |
Accrued transaction losses, end of the year | $ 34,771 | $ 33,682 |
OTHER CONSOLIDATED BALANCE SH_8
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment in non-marketable equity securities | $ 110,000 | $ 0 |
Investment in marketable equity securities | 0 | 45,342 |
Non-current lease prepayments | 45,738 | 0 |
Restricted cash | 12,715 | 15,836 |
Other | 27,935 | 13,051 |
Total | $ 196,388 | $ 74,229 |
OTHER CONSOLIDATED BALANCE SH_9
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Statutory liabilities | $ 54,762 | $ 54,748 |
Deferred rent, non-current | 0 | 23,003 |
Deferred revenue, non-current | 6,227 | 4,977 |
Other | 33,472 | 10,558 |
Total | $ 94,461 | $ 93,286 |
INDEBTEDNESS - Revolving Credit
INDEBTEDNESS - Revolving Credit Facility, Narrative (Details) - Revolving Secured Credit Facility - Revolving Secured Credit Facility - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2015 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 375,000,000 | ||
Annual administrative agent fee | $ 100,000 | ||
Unused commitment fee, percent | 0.15% | ||
Remaining borrowing capacity | $ 375,000,000 | ||
Unused commitment fees | $ 600,000 | $ 600,000 | |
Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
One-Month LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.00% | ||
One-Month LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.00% |
INDEBTEDNESS - Convertible Seni
INDEBTEDNESS - Convertible Senior Notes, Narrative (Details) $ / shares in Units, shares in Millions | May 25, 2018USD ($)day$ / shares | Mar. 06, 2017USD ($)day$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Principal payment on conversion of senior notes | $ 0 | $ 219,384,000 | $ 0 | ||
Loss on extinguishment of long-term debt | 0 | 5,047,000 | $ 0 | ||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Carrying amount of equity component | 194,392,000 | 194,392,000 | |||
Issuance costs attributable to the liability component | $ 5,564,000 | 8,040,000 | |||
2023 Notes | Convertible Debt | |||||
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 | $ 77.85 | |||
Carrying amount of equity component | $ 155,300,000 | $ 154,019,000 | 154,019,000 | ||
Effective interest rate of the liability component | 4.69% | 4.69% | |||
Discounts and commissions payable | $ 6,000,000 | ||||
Third party offering costs | 800,000 | ||||
Issuance costs attributable to the liability component | $ 5,600,000 | $ 3,418,000 | 5,054,000 | ||
2023 Notes | Debt Instrument, Conversion Term One | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
2023 Notes | Debt Instrument, Conversion Term Two | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 5 | ||||
Threshold consecutive trading days | day | 5 | ||||
Threshold percentage of stock price trigger | 98.00% | ||||
2022 Notes | Convertible Debt | |||||
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 | ||||
Converted principal amount | $ 228,300,000 | ||||
Principal payment on conversion of senior notes | 219,400,000 | ||||
Shares issued in connection with conversion (in shares) | shares | 7.3 | ||||
Carrying amount of equity component | $ 86,200,000 | $ 40,373,000 | $ 40,373,000 | ||
Effective interest rate of the liability component | 5.34% | 5.34% | |||
Discounts and commissions payable | $ 11,000,000 | ||||
Third party offering costs | 800,000 | ||||
Issuance costs attributable to the liability component | $ 9,400,000 | $ 2,146,000 | 2,986,000 | ||
Loss on extinguishment of long-term debt | 5,000,000 | ||||
Reduction to additional paid-in-capital | $ 21,000,000 | ||||
2022 Notes | Debt Instrument, Conversion Term One | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
2022 Notes | Debt Instrument, Conversion Term Two | Convertible Debt | |||||
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 | Dec. 31, 2019 | Dec. 31, 2018 | May 25, 2018 | Mar. 06, 2017 |
Debt Instrument [Line Items] | ||||
Principal outstanding | $ 1,074,226 | $ 1,074,228 | ||
Unamortized debt discount | (129,830) | (166,493) | ||
Unamortized debt issuance costs | (5,564) | (8,040) | ||
Net carrying value | 938,832 | 899,695 | ||
2023 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 862,500 | 862,500 | ||
Unamortized debt discount | (110,518) | (138,924) | ||
Unamortized debt issuance costs | (3,418) | (5,054) | $ (5,600) | |
Net carrying value | 748,564 | 718,522 | ||
2022 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 211,726 | 211,728 | ||
Unamortized debt discount | (19,312) | (27,569) | ||
Unamortized debt issuance costs | (2,146) | (2,986) | $ (9,400) | |
Net carrying value | $ 190,268 | $ 181,173 |
INDEBTEDNESS - Carrying Amount
INDEBTEDNESS - Carrying Amount of Equity Component of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | May 25, 2018 | Mar. 06, 2017 |
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | $ 196,731 | $ 196,731 | ||
Less: allocated issuance costs | (2,339) | (2,339) | ||
Equity component, net | 194,392 | 194,392 | ||
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 | 41,481 | 41,481 | ||
Less: allocated issuance costs | (1,108) | (1,108) | ||
Equity component, net | $ 40,373 | $ 40,373 | $ 86,200 |
INDEBTEDNESS - Interest Expense
INDEBTEDNESS - Interest Expense (Details) - Convertible Debt - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 25, 2018 | Mar. 06, 2017 | |
Debt Instrument [Line Items] | |||||
Contractual interest expense | $ 5,108 | $ 4,023 | $ 1,351 | ||
Amortization of debt discount and issuance costs | 39,139 | 32,855 | 14,223 | ||
Total | $ 44,247 | $ 36,878 | $ 15,574 | ||
2023 Notes | |||||
Debt Instrument [Line Items] | |||||
Effective interest rate of the liability component | 4.69% | 4.69% | |||
2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Effective interest rate of the liability component | 5.34% | 5.34% |
INDEBTEDNESS - Convertible Bond
INDEBTEDNESS - Convertible Bond Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Mar. 06, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 25, 2018 |
Debt Instrument [Line Items] | |||||
Proceeds from issuance of warrants | $ 0 | $ 112,125 | $ 57,244 | ||
Convertible Debt | 2023 Notes | |||||
Debt Instrument [Line Items] | |||||
Conversion price of convertible debt (in USD per share) | $ 77.85 | $ 77.85 | |||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | $ 109.26 | ||||
Convertible Debt | 2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Conversion price of convertible debt (in USD per share) | $ 22.95 | ||||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | $ 31.18 | ||||
Common Stock Warrants | |||||
Debt Instrument [Line Items] | |||||
Warrants to purchase aggregate shares of capital stock (in shares) | 19.2 | 11.1 | |||
Warrants, weighted average exercise price (in USD per share) | $ 31.18 | $ 109.26 | |||
Proceeds from issuance of warrants | $ 57,200 | $ 112,100 | |||
Shares received upon exercise of convertible notes (in shares) | 7.2 | ||||
Common Stock Warrants | 2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Shares received upon exercise of convertible notes (in shares) | 0.3 | 6.9 | |||
Options | |||||
Debt Instrument [Line Items] | |||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11.1 | ||||
Convertible note hedge, option to purchase common stock, price (in USD per share) | $ 22.95 | $ 77.85 | |||
Cost of convertible note hedge | $ 92,100 | $ 172,600 |
INCOME TAXES - Domestic and For
INCOME TAXES - Domestic and Foreign Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 456,335 | $ 44,538 | $ (10,900) |
Foreign | (78,122) | (80,665) | (51,764) |
Income (loss) before income tax | $ 378,213 | $ (36,127) | $ (62,664) |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 114 | $ (4) | $ (1,192) |
State | 930 | 752 | 739 |
Foreign | 3,099 | 2,224 | 1,987 |
Total current provision for income taxes | 4,143 | 2,972 | 1,534 |
Deferred: | |||
Federal | (777) | (404) | (1,169) |
State | (399) | 35 | 57 |
Foreign | (200) | (277) | (273) |
Total deferred provision for income taxes | (1,376) | (646) | (1,385) |
Total provision for income taxes | $ 2,767 | $ 2,326 | $ 149 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Statutory Federal Income Tax Rate to Company's Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | 21.00% | 21.00% | 34.00% |
State taxes, net of federal benefit | 0.10% | (1.10%) | (0.40%) |
Foreign rate differential | 1.40% | (14.70%) | (14.90%) |
Non-deductible meals | 0.30% | (3.40%) | (0.30%) |
Other non-deductible expenses | 1.50% | (1.70%) | (0.70%) |
Credits | (13.90%) | 164.80% | 41.50% |
Other items | (0.50%) | 2.30% | (1.20%) |
Change in valuation allowance | 34.90% | (718.50%) | (119.50%) |
Impact of U.S. tax reform | 0 | 0 | (2.091) |
Share-based compensation | (45.80%) | 549.00% | 243.50% |
Change in uncertain tax positions | 0.50% | (4.10%) | (2.40%) |
Termination of warrant | 0.00% | 0.00% | 29.30% |
Sale of Caviar business line | 1.20% | 0.00% | 0.00% |
Total | 0.70% | (6.40%) | (0.20%) |
INCOME TAXES - Tax Effects of T
INCOME TAXES - Tax Effects of Temporary Differences and Related Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | |||
Capitalized costs | $ 23,708 | $ 30,131 | $ 35,608 |
Accrued expenses | 33,044 | 31,494 | 23,553 |
Net operating loss carryforwards | 575,245 | 485,562 | 244,197 |
Tax credit carryforwards | 183,977 | 133,275 | 60,567 |
Property, equipment and intangible assets | 0 | 0 | 7,390 |
Share-based compensation | 38,427 | 38,265 | 35,728 |
Deferred Interest | 4,072 | 8,290 | 0 |
Other | 3,424 | 105 | 2,519 |
Operating Lease, net | 5,761 | 0 | 0 |
Total deferred tax assets | 867,658 | 727,122 | 409,562 |
Valuation allowance | (859,564) | (719,040) | (409,043) |
Total deferred tax assets, net of valuation allowance | 8,094 | 8,082 | 519 |
Deferred tax liabilities: | |||
Property, equipment and intangible assets | (6,862) | (7,361) | 0 |
Indefinite-lived intangibles | (253) | (275) | (644) |
Total deferred tax liabilities | (7,115) | (7,636) | (644) |
Net deferred tax asset | $ 979 | $ 446 | |
Net deferred tax liabilities | $ (125) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||
Increase in valuation allowance | $ 140,500,000 | $ 310,000,000 | $ 154,100,000 | |
Unrecognized tax benefits | 217,574,000 | $ 198,540,000 | $ 70,799,000 | $ 92,134,000 |
Unrecognized tax benefit that would impact annual effective tax rate | 7,600,000 | |||
Significant accrued interest and penalties related to uncertain tax positions | 0 | |||
Undistributed earnings of non-U.S. subsidiaries | 5,800,000 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 2,012,800,000 | |||
Federal | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 141,700,000 | |||
Federal | AMT Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 1,400,000 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 2,311,300,000 | |||
State | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 88,200,000 | |||
State | California Enterprise Zone Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 3,400,000 | |||
Foreign | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 300,100,000 | |||
Foreign | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 4,100,000 | |||
Maximum | Tax examinations or lapse of applicable statute of limitations | ||||
Operating Loss Carryforwards [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits | $ 5,700,000 |
INCOME TAXES Income Taxes - Rec
INCOME TAXES Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at the beginning of the year | $ 198,540 | $ 70,799 | $ 92,134 |
Gross decrease related to prior period tax positions | (11,571) | ||
Gross increases and decrease related to current period tax positions | 513 | 0 | |
Gross increases related to current period tax positions | 30,676 | 119,261 | 4,193 |
Reductions related to lapse of statute of limitations | (149) | (142) | (91) |
Gross increases and decreases related to U.S. tax reform | 0 | 0 | (25,437) |
Gross increases and decreases related to acquisition | 78 | 8,109 | 0 |
Balance at the end of the year | $ 217,574 | $ 198,540 | $ 70,799 |
STOCKHOLDER'S EQUITY - Narrativ
STOCKHOLDER'S EQUITY - Narrative (Details) $ / shares in Units, $ in Thousands | Feb. 24, 2017USD ($)shares | Dec. 31, 2019USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | May 25, 2018$ / sharesshares | Mar. 06, 2017$ / sharesshares |
Class of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||
Consideration paid for termination of warrants | $ | $ 54,800 | $ 0 | $ 0 | $ 54,808 | ||
Warrants to purchase shares of common, canceled (in shares) | 9,500,000 | |||||
Recovery of common stock in connection with indemnification settlement agreement (in shares) | 20,793 | 469,894 | ||||
Common Stock Warrant, 2022 Notes | ||||||
Class of Stock [Line Items] | ||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 19,200,000 | |||||
Exercise price of warrants (in USD per share) | $ / shares | $ 31.18 | |||||
Number of warrants exercised (in shares) | 0 | |||||
Common Stock Warrant, 2023 Notes | ||||||
Class of Stock [Line Items] | ||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 11,100,000 | |||||
Exercise price of warrants (in USD per share) | $ / shares | $ 109.26 | |||||
Number of warrants exercised (in shares) | 0 | |||||
Common Stock Warrants | ||||||
Class of Stock [Line Items] | ||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 11,100,000 | 19,200,000 | ||||
Exercise price of warrants (in USD per share) | $ / shares | $ 109.26 | $ 31.18 | ||||
Shares received upon exercise of convertible notes (in shares) | 7,200,000 | |||||
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of votes per share | vote | 1 | |||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | ||||
Common stock, shares outstanding (in shares) | 352,386,562 | 323,546,864 | ||||
Class B Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of votes per share | vote | 10 | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | ||||
Common stock, shares outstanding (in shares) | 80,410,158 | 93,501,142 | ||||
2022 Notes | Common Stock Warrants | ||||||
Class of Stock [Line Items] | ||||||
Shares received upon exercise of convertible notes (in shares) | 300,000 | 6,900,000 | ||||
Convertible Debt | 2022 Notes | ||||||
Class of Stock [Line Items] | ||||||
Shares received upon exercise of convertible notes (in shares) | 7,300,000 |
STOCKHOLDER'S EQUITY - Stock Pl
STOCKHOLDER'S EQUITY - Stock Plans, Narrative (Details) $ / shares in Units, $ in Thousands | Nov. 02, 2019 | Nov. 17, 2015payment_planshares | Dec. 31, 2019USD ($)plan$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2019USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share-based compensation plans | plan | 2 | |||||
Aggregate intrinsic value for options exercised | $ | $ 616,300 | $ 720,100 | $ 464,100 | |||
Weighted average grant-date fair value of options granted (in USD per share) | $ / shares | $ 30.58 | $ 16.25 | $ 5.97 | |||
Share-based compensation expense | $ | $ 297,863 | $ 216,881 | $ 155,836 | |||
Share-based compensation expense related to capitalized software | $ | 8,200 | 9,300 | 3,700 | |||
Unrecognized compensation cost related to outstanding stock options and restricted stock awards | $ | $ 687,300 | $ 687,300 | ||||
Unrecognized compensation cost related to outstanding stock options and restricted stock awards, recognition period | 2 years 8 months 23 days | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ | $ 18,900 | $ 9,000 | $ 6,000 | |||
2015 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for future issuance (in shares) | 84,133,011 | 84,133,011 | ||||
Number of shares reserved (in shares) | 30,000,000 | |||||
Shares reserved for issuance, percent | 5.00% | |||||
2015 Equity Incentive Plan | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Annual increase of number of shares reserved (in shares) | 40,000,000 | 40,000,000 | ||||
2015 Equity Incentive Plan | Options and RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options and RSU outstanding (in shares) | 19,340,627 | 19,340,627 | ||||
2009 Stock Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for future issuance (in shares) | 0 | 0 | ||||
2009 Stock Option Plan | Options and RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options and RSU outstanding (in shares) | 18,196,638 | 18,196,638 | ||||
2009 Stock Option Plan | Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting term | 4 years | |||||
Expiration period | 10 years | |||||
2009 Stock Option Plan | Options | Vesting Year One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Annual vesting rate | 25.00% | |||||
2015 Employee Stock Purchase Plan | Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for future issuance (in shares) | 14,294,425 | 14,294,425 | ||||
Shares reserved for issuance, percent | 1.00% | |||||
Discount through payroll deductions as a percentage of eligible compensation | 25.00% | 15.00% | ||||
Offering period | 12 months | |||||
Number of purchase periods | payment_plan | 2 | |||||
Purchase price of common stock as a percentage of fair market value | 85.00% | |||||
Shares purchased under the plan (in shares) | 5,022,962 | |||||
2015 Employee Stock Purchase Plan | Employee Stock Purchase Plan | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Annual increase of number of shares reserved (in shares) | 8,400,000 |
STOCKHOLDER'S EQUITY - Summary
STOCKHOLDER'S EQUITY - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Stock Options Outstanding | ||
Beginning balance (in shares) | 33,152,881 | |
Granted (in shares) | 1,184,657 | |
Exercised (in shares) | (10,176,170) | |
Forfeited and canceled (in shares) | (541,564) | |
Ending balance (in shares) | 23,619,804 | 33,152,881 |
Weighted Average Exercise Price | ||
Beginning balance (in USD per share) | $ 9.52 | |
Granted (in USD per share) | 72.15 | |
Exercised (in USD per share) | 8.09 | |
Forfeited and canceled (in USD per share) | 39.88 | |
Ending balance (in USD per share) | $ 12.66 | $ 9.52 |
Additional Disclosures | ||
Weighted Average Remaining Contractual Term (in years) | 4 years 10 months 20 days | 5 years 5 months 12 days |
Aggregate Intrinsic Value | $ 1,191,746 | $ 1,543,793 |
Options exercisable, number of stock options outstanding (in shares) | 22,107,017 | |
Options exercisable, weighted average exercise price (in USD per share) | $ 9.77 | |
Options exercisable, weighted average remaining contractual term (in years) | 4 years 7 months 17 days | |
Options exercisable, aggregate intrinsic value | $ 1,168,770 |
STOCKHOLDER'S EQUITY - Restrict
STOCKHOLDER'S EQUITY - Restricted Stock Activity (Details) - Restricted Stock Awards (RSAs) and Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting term | 4 years |
Number of shares | |
Beginning balance (in shares) | shares | 17,934,728 |
Granted (in shares) | shares | 7,028,055 |
Vested (in shares) | shares | (8,023,399) |
Forfeited (in shares) | shares | (3,021,923) |
Ending balance (in shares) | shares | 13,917,461 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 31.34 |
Granted (in USD per share) | $ / shares | 70.61 |
Vested (in USD per share) | $ / shares | 30.19 |
Forfeited (in USD per share) | $ / shares | 40.25 |
Ending balance (in USD per share) | $ / shares | $ 49.90 |
STOCKHOLDER'S EQUITY - Stock Op
STOCKHOLDER'S EQUITY - Stock Options Fair Value Assumptions (Details) - Options | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.37% | 2.92% | 1.88% |
Expected volatility | 40.48% | 30.87% | 32.22% |
Expected term (years) | 6 years 7 days | 6 years 2 months 8 days | 6 years 7 days |
STOCKHOLDER'S EQUITY - Effects
STOCKHOLDER'S EQUITY - Effects of Share-Based Compensation on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 297,863 | $ 216,881 | $ 155,836 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 155 | 97 | 77 |
Product development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 210,840 | 144,601 | 98,310 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 26,720 | 22,797 | 17,568 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 60,148 | $ 49,386 | $ 39,881 |
NET INCOME (LOSS) PER SHARE - C
NET INCOME (LOSS) PER SHARE - Calculation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net income (loss) | $ 375,446 | $ (38,453) | $ (62,813) |
Basic shares: | |||
Weighted-average common shares outstanding (in shares) | 425,728 | 406,313 | 380,921 |
Weighted-average unvested shares (in shares) | (729) | (582) | (1,577) |
Weighted-average shares used to compute basic net income (loss) per share (in shares) | 424,999 | 405,731 | 379,344 |
Diluted shares: | |||
Stock options and restricted stock units (in shares) | 30,602 | 0 | 0 |
Convertible senior notes (in shares) | 0 | 0 | 0 |
Common stock warrants (in shares) | 10,432 | 0 | 0 |
Employee stock purchase plan (in shares) | 43 | 0 | 0 |
Weighted-average shares used to compute diluted net loss per share (in shares) | 466,076 | 405,731 | 379,344 |
Net income (loss) per share: | |||
Basic (in USD per share) | $ 0.88 | $ (0.09) | $ (0.17) |
Diluted (in USD per share) | $ 0.81 | $ (0.09) | $ (0.17) |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Antidilutive Securities Excluded from Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 54,885 | 110,929 | 89,218 |
Stock options and restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 13,867 | 60,589 | 68,588 |
Common stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 19,820 | 25,798 | 19,173 |
Convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 20,305 | 23,820 | 0 |
Unvested shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 728 | 582 | 1,300 |
Employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 165 | 140 | 157 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 31, 2019 |
Related Party Transaction [Line Items] | ||
Lease executed but not yet commenced, term | 15 years 6 months | |
Less: leases executed but not yet commenced | $ 383,669 | $ 42,700 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Lease executed but not yet commenced, term | 15 years 6 months | |
Less: leases executed but not yet commenced | $ 42,700 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2019USD ($)ft²renewal_option | Dec. 31, 2018USD ($)ft²renewal_option | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Operating lease renewal term | 5 years | ||||
Operating lease option to terminate term | 1 year | ||||
Total lease payments over term | $ 534,778 | ||||
Leased area of office space executed but not yet commenced (in sq ft) | ft² | 226,258 | ||||
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 | 383,669 | |||
Total rental expenses for operating leases | 39,319 | ||||
Total rental expenses for operating leases | $ 32,500 | $ 23,300 | $ 12,900 | ||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease term | 1 year | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease 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 | 2 years | ||||
Oakland, California | Building | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease term | 12 years | 12 years | |||
Operating lease renewal term | 5 years | 5 years | |||
Leased area of office space (in sq ft) | ft² | 355,762 | ||||
Operating lease, number of renewal options | renewal_option | 2 | ||||
Total lease payments over term | $ 276,000 | $ 276,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Lease Expense Components (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Fixed operating lease costs | $ 29,422 |
Variable operating lease costs | 5,737 |
Short term lease costs | 2,512 |
Sublease income | (3,381) |
Finance lease costs | |
Amortization of finance right-of-use assets | 5,029 |
Interest on finance lease liabilities | 0 |
Total lease costs | $ 39,319 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Other Information Related to Leases (Details) | Dec. 31, 2019 |
Weighted Average Remaining Lease Term: | |
Operating leases | 4 years 6 months |
Finance leases | 8 months 12 days |
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) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash flows from operating activities: | |
Payments for operating lease liabilities | $ 33,340 |
Cash flows from financing activities: | |
Principal payments on finance lease obligation | 5,029 |
Supplemental Cash Flow Data: | |
Right-of-use assets obtained in exchange for operating lease obligations | $ 40,555 |
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 | Dec. 31, 2019 | Jul. 31, 2019 |
Finance | ||
2020 | $ 2,446 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total | 2,446 | |
Less: amount representing interest | 0 | |
Less: leases executed but not yet commenced | 0 | |
Less: lease incentives and transfer to held for sale | 0 | |
Total | 2,446 | |
Operating | ||
2020 | 42,173 | |
2021 | 65,503 | |
2022 | 68,106 | |
2023 | 62,847 | |
2024 | 43,058 | |
Thereafter | 253,091 | |
Total | 534,778 | |
Less: amount representing interest | 13,494 | |
Less: leases executed but not yet commenced | 383,669 | $ 42,700 |
Less: lease incentives and transfer to held for sale | 1,510 | |
Total | $ 136,105 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Litigation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2018 | |
Income Tax Examination [Line Items] | ||
Gross receipts tax and payroll expense tax paid | $ 8,400,000 | $ 1,300,000 |
Minimum | ||
Income Tax Examination [Line Items] | ||
Estimate of possible liability for additional taxes, interest and penalties | 0 | |
Maximum | ||
Income Tax Examination [Line Items] | ||
Estimate of possible liability for additional taxes, interest and penalties | $ 63,000,000 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 4,713,500 | $ 3,298,177 | $ 2,214,253 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 4,472,473 | 3,138,859 | 2,120,088 |
International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 241,027 | $ 159,318 | $ 94,165 |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 597,766 | $ 481,209 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 586,702 | 471,970 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 11,064 | $ 9,239 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Data: | |||
Cash paid for interest | $ 5,677 | $ 4,125 | $ 1,374 |
Cash paid for income taxes | 2,744 | 1,622 | 1,254 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Right-of-use assets obtained in exchange for operating lease obligations | 40,555 | ||
Change in purchases of property and equipment in accounts payable and accrued expenses | (419) | 15,067 | 143 |
Unpaid business combination purchase price | 8,411 | 3,995 | 2,115 |
Non-cash proceeds from sale of asset group | 100,000 | 0 | 0 |
Fair value of common stock issued related to business combination | 0 | (140,107) | 0 |
Recovery of common stock in connection with indemnification settlement agreement | 789 | 2,745 | 0 |
Fair value of common stock issued to settle the conversion of senior notes, due 2022 | 0 | (571,408) | 0 |
Fair value of shares received to settle senior note hedges, due 2022 | $ 0 | $ 544,276 | $ 0 |
Uncategorized Items - sq-201912
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,586,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 683,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (683,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,586,000) |