Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | Wayfair Inc. | ||
Entity Central Index Key | 1,616,707 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 868.7 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Class A common stock | |||
Entity Common Stock, Shares Outstanding | 46,159,314 | ||
Class B common stock | |||
Entity Common Stock, Shares Outstanding | 38,221,410 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 334,176 | $ 355,859 |
Short-term investments | 51,895 | 60,000 |
Accounts receivable, net of allowance of $2,767 and $2,545 at December 31, 2015 and December 31, 2014, respectively | 9,906 | 5,949 |
Inventories | 19,900 | 19,798 |
Prepaid expenses and other current assets | 76,446 | 45,262 |
Total current assets | 492,323 | 486,868 |
Property and equipment, net | 112,325 | 60,639 |
Goodwill and intangible assets, net | 3,702 | 6,478 |
Long-term investments | 79,883 | 0 |
Other noncurrent assets | 6,348 | 1,538 |
Total assets | 694,581 | 555,523 |
Current liabilities | ||
Accounts payable | 270,913 | 147,873 |
Accrued expenses | 51,560 | 42,335 |
Deferred revenue | 50,884 | 26,784 |
Other current liabilities | 23,669 | 15,600 |
Total current liabilities | 397,026 | 232,592 |
Other liabilities | 55,010 | 17,392 |
Total liabilities | $ 452,036 | $ 249,984 |
Commitments and contingencies | ||
Convertible preferred stock, $0.001 par value per share: 10,000,000 shares authorized and none issued at December 31, 2015 and December 31, 2014 | $ 0 | $ 0 |
Stockholders’ equity: | ||
Additional paid-in capital | 378,162 | 363,944 |
Accumulated deficit | (135,565) | (58,122) |
Accumulated other comprehensive loss | (136) | (366) |
Total stockholders’ equity | 242,545 | 305,539 |
Total liabilities and stockholders’ equity | 694,581 | 555,523 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 46 | 37 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 38 | $ 46 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts receivable allowance | $ 2,767 | $ 2,545 |
Convertible redeemable preferred units, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible redeemable preferred units, shares authorized | 10,000,000 | 10,000,000 |
Convertible redeemable preferred units, shares issued | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 45,814,237 | 37,002,874 |
Common stock, shares outstanding | 45,814,237 | 37,002,874 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 164,000,000 | 164,000,000 |
Common stock, shares issued | 38,496,562 | 46,179,192 |
Common stock, shares outstanding | 38,496,562 | 46,179,192 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Net revenue | $ 2,249,885 | $ 1,318,951 | $ 915,843 |
Cost of goods sold | 1,709,161 | 1,007,853 | 691,602 |
Gross profit | 540,724 | 311,098 | 224,241 |
Operating expenses: | |||
Customer service and merchant fees | 81,230 | 55,804 | 35,500 |
Advertising | 278,224 | 191,284 | 108,469 |
Merchandising, marketing and sales | 106,149 | 80,113 | 33,506 |
Operations, technology, general and administrative | 155,580 | 130,701 | 62,246 |
Amortization of acquired intangible assets | 891 | 980 | 539 |
Total operating expenses | 622,074 | 458,882 | 240,260 |
Loss from operations | (81,350) | (147,784) | (16,019) |
Interest income, net | 1,284 | 350 | 245 |
Other income (expense), net | 2,718 | (489) | 294 |
Loss before income taxes | (77,348) | (147,923) | (15,480) |
Provision for income taxes | 95 | 175 | 46 |
Net loss | (77,443) | (148,098) | (15,526) |
Accretion of convertible redeemable preferred units | 0 | (2,071) | (25,388) |
Net loss attributable to common stockholders | $ (77,443) | $ (150,169) | $ (40,914) |
Net loss attributable to common stockholders per share, basic and diluted | $ (0.92) | $ (2.97) | $ (0.99) |
Weighted average number of common stock outstanding used in computing per share amounts, basic and diluted | 83,726 | 50,642 | 41,332 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (77,443) | $ (148,098) | $ (15,526) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | 532 | (38) | (390) |
Net unrealized loss on available-for-sale investments | (302) | 0 | 0 |
Comprehensive loss | $ (77,213) | $ (148,136) | $ (15,916) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Units | Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Series A Convertible Redeemable Preferred Units | Series B Convertible Redeemable Preferred Units |
Balance at Dec. 31, 2012 | $ 215,798 | |||||||
Balance (in units) at Dec. 31, 2012 | 21,552,000 | |||||||
Increase (Decrease) in Temporary Equity | ||||||||
Accretion of convertible redeemable preferred units | $ 25,388 | |||||||
Balance at Dec. 31, 2013 | $ 241,186 | |||||||
Balance (in units) at Dec. 31, 2013 | 21,552,000 | |||||||
Balance at Dec. 31, 2012 | $ (151,130) | $ (151,192) | $ 62 | |||||
Balance (in units) at Dec. 31, 2012 | 44,819,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net loss | (15,526) | (15,526) | ||||||
Cumulative translation adjustment | (390) | (390) | ||||||
Accretion of convertible redeemable preferred units | (25,388) | (25,388) | ||||||
Forfeiture of unvested units | (56,000) | |||||||
Return of equity held in escrow as part of acquisition | 1,194 | 1,194 | ||||||
Return of equity held in escrow as part of acquisition (in units) | (141,000) | |||||||
Equity compensation expense | 62 | 62 | ||||||
Balance at Dec. 31, 2013 | (191,178) | (190,850) | (328) | |||||
Balance (in units) at Dec. 31, 2013 | 44,904,000 | |||||||
Increase (Decrease) in Temporary Equity | ||||||||
Issuance of convertible redeemable preferred units, net of issuance costs | $ 154,774 | |||||||
Issuance of convertible redeemable preferred units, net of issuance costs (in units) | 5,995,000 | |||||||
Accretion of convertible redeemable preferred units | $ 14,417 | $ 2,455 | ||||||
Reduction of carrying value of convertible redeemable preferred stock | (14,801) | |||||||
Conversion of convertible redeemable preferred stock to common stock | $ (201,286) | $ (157,229) | ||||||
Conversion of convertible redeemable preferred stock to common stock (in units) | (21,552,000) | (5,995,000) | ||||||
Dividends paid to convertible redeemable preferred unitholders | $ (39,516) | |||||||
Balance at Dec. 31, 2014 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net loss | (148,098) | (148,098) | ||||||
Cumulative translation adjustment | (38) | (38) | ||||||
Accretion of convertible redeemable preferred units | (16,872) | (16,872) | ||||||
Reduction of carrying value of convertible redeemable preferred stock | 14,801 | 14,801 | ||||||
Conversion of convertible redeemable preferred stock to common stock | 358,515 | $ 28 | $ 358,487 | |||||
Conversion of convertible redeemable preferred stock to common stock (in shares) | 27,547,000 | |||||||
Conversion from LLC to Corporation | $ 44 | (306,229) | 306,185 | |||||
Conversion from LLC to Corporation (in shares) | (44,904,000) | (44,904,000) | ||||||
Issuance of Class A common stock - net of issuance costs | 282,893 | $ 10 | 282,883 | |||||
Issuance of Class A common stock - net of issuance costs (in shares) | 10,500,000 | |||||||
Forfeiture of unvested units | (104,000) | |||||||
Repurchase of vested common units (in units) | (203,000) | |||||||
Exercise of options to purchase common stock | 12 | 12 | ||||||
Exercise of options to purchase common stock (in shares) | 157,000 | |||||||
Issuance of common stock upon vesting of RSUs | 2 | $ 2 | ||||||
Issuance of common stock upon vesting of RSUs (in shares) | 2,199,000 | |||||||
Shares withheld related to net settlement of RSUs | (27,986) | $ (1) | (27,985) | |||||
Shares withheld related to net settlement of RSUs (in shares) | (918,000) | |||||||
Repurchase of common units | (23,500) | (23,500) | ||||||
Repurchase of common units (in units) | (896,000) | |||||||
Return of equity held in escrow as part of acquisition | (49) | (49) | ||||||
Return of equity held in escrow as part of acquisition (in units) | (4,000) | |||||||
Equity compensation expense | 57,037 | 56,776 | 261 | |||||
Balance at Dec. 31, 2014 | 305,539 | $ 83 | 363,944 | (58,122) | (366) | |||
Balance (in shares) at Dec. 31, 2014 | 83,182,000 | |||||||
Balance at Dec. 31, 2015 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net loss | (77,443) | (77,443) | ||||||
Other comprehensive income | 230 | 230 | ||||||
Cumulative translation adjustment | 532 | |||||||
Exercise of options to purchase common stock | 495 | 495 | ||||||
Exercise of options to purchase common stock (in shares) | 164,000 | |||||||
Issuance of common stock upon vesting of RSUs | 1 | $ 1 | ||||||
Issuance of common stock upon vesting of RSUs (in shares) | 1,515,000 | |||||||
Shares withheld related to net settlement of RSUs | (19,111) | (19,111) | ||||||
Shares withheld related to net settlement of RSUs (in shares) | (550,000) | |||||||
Equity compensation expense | 32,834 | 32,834 | ||||||
Balance at Dec. 31, 2015 | $ 242,545 | $ 84 | $ 378,162 | $ (135,565) | $ (136) | |||
Balance (in shares) at Dec. 31, 2015 | 84,311,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net loss | $ (77,443) | $ (148,098) | $ (15,526) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Depreciation and amortization | 32,446 | 22,003 | 13,091 |
Equity based compensation | 31,015 | 60,809 | 0 |
Gain on sale of a business | (2,997) | 0 | 0 |
Other non-cash adjustments | 3,027 | 570 | 121 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,033) | 1,741 | 8,112 |
Inventories | (131) | (4,835) | (6,630) |
Prepaid expenses and other current assets | (29,513) | (20,143) | (9,159) |
Accounts payable and accrued expenses | 135,855 | 59,521 | 40,853 |
Deferred revenue and other liabilities | 47,031 | 32,616 | 4,195 |
Other assets | (136) | (59) | (644) |
Net cash provided by operating activities | 135,121 | 4,125 | 34,413 |
Cash flows from investing activities | |||
Purchase of short-term and long-term investments | (207,303) | (135,000) | (93,000) |
Sale and maturities of short-term investments | 133,596 | 125,019 | 65,998 |
Purchase of property and equipment | (44,648) | (31,855) | (6,739) |
Site and software development costs | (17,536) | (14,130) | (9,040) |
Cash received from the sale of a business (net of cash sold) | 2,860 | 0 | 0 |
Cash paid for acquisition | 0 | 0 | (3,741) |
Other investing activities, net | (4,697) | 531 | (469) |
Net cash used in investing activities | (137,728) | (55,435) | (46,991) |
Cash flows from financing activities | |||
Taxes paid related to net share settlement of equity awards | (19,111) | (27,985) | 0 |
Net proceeds from exercise of stock options | 495 | 12 | 0 |
Repurchase of common units | 0 | (23,500) | 0 |
Dividends paid to Series A convertible redeemable preferred holders | 0 | (39,516) | 0 |
Repurchase of employee equity | 0 | (5,528) | 0 |
Proceeds from initial public offering, net of fees | 0 | 282,893 | 0 |
Net cash (used in) provided by financing activities | (18,616) | 341,150 | 0 |
Effect of exchange rate changes on cash and cash equivalents | (460) | 730 | 6 |
Net (decrease) increase in cash and cash equivalents | (21,683) | 290,570 | (12,572) |
Cash and cash equivalents | |||
Beginning of year | 355,859 | 65,289 | 77,861 |
End of year | 334,176 | 355,859 | 65,289 |
Supplemental disclosure of non-cash investing activities | |||
Purchase of property and equipment included in accounts payable and accrued expenses and in other liabilities | 5,258 | 7,567 | 0 |
Construction costs capitalized under finance lease obligations | 27,295 | 3,960 | 0 |
Issuance of common units in connection with acquisition | 0 | 0 | 1,194 |
Supplemental disclosure of non-cash financing activities | |||
Accretion of preferred unit dividends | 0 | 2,071 | 25,388 |
Series B Convertible Redeemable Preferred Units | |||
Cash flows from financing activities | |||
Net proceeds from issuance of Series B convertible redeemable preferred units | $ 0 | $ 154,774 | $ 0 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Wayfair Inc. (the “Company”) is an e-commerce business offering visually inspiring browsing, compelling merchandising, easy product discovery and attractive prices for over seven million products from over 7,000 suppliers across five distinct brands— Wayfair.com, Joss & Main, AllModern, DwellStudio, and Birch Lane. In addition to generating net revenue through Direct Retail sales, which includes all sales generated primarily through the Company’s websites, mobile optimized websites, and mobile applications (“sites”), net revenue is also generated through sites operated by third parties and through third party advertising distribution providers that pay the Company based on the number of advertisement related clicks, actions, or impressions for advertisements placed on the Company’s sites. The consolidated financial statements and other disclosures contained in this Annual Report on Form 10-K are those of the Company. The Company was incorporated as a Delaware corporation on August 8, 2014. Prior to the effectiveness of Wayfair Inc.'s registration statement on Form S-1 related to its initial public offering ("IPO") in October 2014, Wayfair LLC was the principal operating entity. In connection with the IPO of the Company, Wayfair LLC completed a corporate reorganization pursuant to which Wayfair LLC became a wholly-owned subsidiary of the Company, and the holders of equity interests in Wayfair LLC became stockholders of the Company. The Company accounted for this restructuring in accordance with the guidance provided for entities under common ownership because the holders of the equity interests in Wayfair LLC held the same ownership interests in Wayfair Inc. as they did in Wayfair LLC immediately prior to the corporate reorganization. SK Retail, Inc. was the only holder of equity interest in Wayfair LLC with operations. Accordingly, the historical financial statements of SK Retail, Inc. have been combined with the historical financial statements of Wayfair LLC for the periods presented. In addition, all of our outstanding common units of Wayfair LLC were exchanged for, and all of our incentive units converted into, shares of Class B common stock. In addition, all of outstanding preferred units were exchanged for shares of Series A and Series B convertible preferred stock. Immediately prior to the completion of the IPO, all of our outstanding shares of Series A and Series B convertible preferred stock converted into shares of Class B common stock. In connection with this the Company also reclassified members' deficit of $306.2 million , accumulated under Wayfair LLC, to additional paid in capital. The consolidated statements of operations, comprehensive loss, and cash flows for the year ended December 31, 2015 are not necessarily indicative of the results of operations and cash flows that may be expected for the year ending December 31, 2016, or for any other period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements of Wayfair Inc. include its wholly owned subsidiaries including the accounts of Wayfair LLC and its wholly owned subsidiaries (collectively the "Company" or "Wayfair"). All intercompany accounts and transactions have been eliminated. Below is a summary of the wholly-owned subsidiaries of the Company with operations: Subsidiary Location Wayfair LLC USA Wayfair Securities Corporation USA SK Retail, Inc. USA Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair GmbH Germany Wayfair (BVI) Ltd. British Virgin Islands Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. On an ongoing basis, management evaluates these estimates and judgments, including those related to revenue recognition, capitalization of site and software development costs, stock-based compensation, and inventory. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity (at the date of purchase) of three months or less to be the equivalent of cash for the purpose of consolidated balance sheets and statements of cash flows presentation. Cash equivalents, which consist primarily of money market accounts, are carried at cost, which approximates market value. Restricted Cash As of December 31, 2015 and 2014 , there was $5.0 million and $0.3 million , respectively, of cash that was restricted from withdrawal and held by banks to guarantee the Company's letters of credit issued principally for certain vendor arrangements and to secure certain property leases, respectively. Short-Term Investments Short-term investments consist of certificates of deposits and marketable securities with original maturities of greater than three months and mature in less than twelve months. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company estimates the allowance for doubtful accounts based on historical losses, existing economic conditions, and other information available at the consolidated balance sheets dates. Uncollectible amounts are written off against the allowance after all collection efforts have been exhausted. Marketable Securities The Company classifies its marketable securities as “available-for-sale” securities. Available-for-sale securities are classified as short term investments and long-term investments on the consolidated balance sheets and are carried at fair value. Unrealized gains and losses on available-for-sale securities that are considered temporary are recorded, net of taxes, in the “Accumulated other comprehensive loss” caption of the Company’s consolidated balance sheets. Unrealized losses, excluding losses related to the credit rating of the security (credit losses), on available-for-sale securities that are considered other-than-temporary but relate to securities that the Company (i) does not intend to sell and (ii) will not be required to sell below cost are also recorded, net of taxes, in “Accumulated other comprehensive loss.” Further, the Company does not believe it will be required to sell such securities below cost. Therefore, the only other-than-temporary losses the Company records in “Other income, net” in its consolidated statements of operations are related to credit losses. As of December 31, 2015 , the Company’s available-for-sale securities consisted of investment securities. The maturities of the Company’s long-term marketable securities generally range from one to three years. As of December 31, 2015 , the Company’s available-for-sale securities primarily consisted of corporate bonds and other government obligations that are priced at fair value. Fair Value of Financial Instruments The Company's financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The three levels of inputs used to measure fair value are as follows: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities • Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company measures its cash equivalents and short-term and long-term investments at fair value. The Company classifies its cash equivalents and restricted cash within Level 1 because the Company values these investments using quoted market prices. The fair value of the Company's Level 1 financial assets is based on quoted market prices of the identical underlying security. The Company classifies short-term and long-term investments within Level 2 because unadjusted quoted prices for identical or similar assets in markets are not active. The Company does not have any assets or liabilities classified as Level 3 financial assets. Refer to Note 3, Fair Value Measurements , for additional detail. Concentrations of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, short-term and long-term investments, and accounts receivable. The risk with respect to cash and cash equivalents and short-term and long-term investments is minimized by the Company's policy of investing in financial instruments (i.e., cash equivalents) with near-term maturities issued by highly rated financial institutions. At times, these balances may exceed federally insured limits; however, to date, the Company has not incurred any losses on these investments. As of December 31, 2015 and 2014 , the Company had $3.9 million and $2.1 million , respectively, in banks located outside the United States. The risk with respect to accounts receivable is managed by the Company through its policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. Leases The Company leases office space in several countries around the world under non-cancelable lease agreements. The Company generally leases its office facilities under operating lease agreements. Office facilities subject to an operating lease and the related lease payments are not recorded on the balance sheet. The terms of certain lease agreements provide for rental payments on a graduated basis, however, the Company recognizes rent expense on a straight-line basis over the lease period in accordance with authoritative accounting guidance. Any lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term begins on the date the Company becomes legally obligated for the rent payments or when it takes possession of the office space, whichever is earlier. The Company establishes assets and liabilities for the estimated construction costs incurred under lease arrangements where the Company is considered the owner for accounting purposes only, or build-to-suit leases, to the extent the Company is involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If the Company continues to be the deemed owner, the facilities are accounted for as financing leases. Foreign Currency Translation The functional currency of the Company is the United States dollar, while the functional currency of certain wholly-owned subsidiaries outside of the United States is as follows: Subsidiary Currency Wayfair Stores Limited Euro Wayfair (UK) Limited Pound sterling Wayfair GmbH Euro Wayfair (BVI) Ltd. Euro The financial statements of the Company are translated to United States dollars using year-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. The effects of foreign currency translation are included in other comprehensive loss in the consolidated statements of comprehensive loss. Transaction gains and losses are included in the Company's consolidated statements of operations. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss within total stockholders' equity. Inventories Inventories consisting of finished goods are stated at the lower of cost or market, determined by the first-in, first-out (FIFO) method, and consist of product for resale. Inventory costs consist of cost of product and inbound shipping and handling costs. Inventory costs also include direct and indirect labor costs, rents and depreciation expenses associated with the Company's fulfillment centers. Inventory valuation requires the Company to make judgments, based on currently-available information, about the likely method of disposition, such as through sales to individual customers, liquidations, and expected recoverable values of each disposition category. Goods In-Transit Goods in-transit directly from suppliers to customers are recorded in prepaid expenses and other current assets. Risk of loss and the transfer of title from the supplier to the Company occur at freight on board shipping point. As of December 31, 2015 and 2014 , goods in-transit amounted to $34.1 million , and $19.6 million , respectively. Property and Equipment Property and equipment are stated at cost, net of depreciation and amortization. Depreciation and amortization on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets as follows: Class Range of Life (In Years) Furniture and computer equipment 3 to 7 Site and software development costs 2 Leasehold improvements The lesser of useful life or lease term Site and Software Development Costs The Company capitalizes costs associated with the development of its sites and internal-use software products after the preliminary project stage is complete and until the software is ready for its intended use. The capitalized costs are amortized over a two-year period. Costs incurred in the preliminary stages of development, after the software is ready for its intended use and for maintenance of internal-use software are expensed as incurred. Upgrade and enhancements are capitalized to the extent they will result in added functionality. Total costs capitalized, net of accumulated amortization, totaled $18.1 million and $14.2 million as of December 31, 2015 and 2014 , respectively, and are included in property and equipment, net in the accompanying consolidated balance sheets. Amortization expense for the years ended December 31, 2015 , 2014 and 2013 were $15.3 million , $9.9 million , and $7.0 million , respectively. Capitalized site and software development costs are included in property and equipment within our consolidated balance sheets. Goodwill Goodwill represents the excess of cost over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is subject to an annual impairment test, or more frequently as impairment indicators arise. The Company tests goodwill for impairment at least annually. The Company reviews goodwill for impairment on the last day of its fiscal year and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value. The assessment is performed at the reporting unit level. The Company first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the two-step impairment test is not required. If the qualitative assessment requires the Company to perform the two-step goodwill impairment test to identify potential goodwill impairment, then the first step is to compare the fair value of the reporting unit to the book value including goodwill. If the fair value of the reporting unit exceeds the book value, goodwill is not impaired. If the book value exceeds the fair value, the second step of the process is performed to measure the amount of impairment. Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances, such as service discontinuance or technological obsolescence, indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset. For the years ended December 31, 2015 , 2014 and 2013 , no impairment of long-lived assets or identifiable intangibles had been indicated. Revenue Recognition The Company generates net revenue through product sales generated primarily through the sites of the Company's five distinct brands and through sites operated by third parties. The Company recognizes revenue only when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. The Company recognizes net revenue from sales of its products, upon delivery to the customer. The Company records product revenue at the gross amount as the Company is the primary obligor with the customer and provides the primary customer service for all products sold on its sites, has latitude in establishing price and selecting products sold on its sites, has discretion in selecting suppliers of products sold on its sites, maintains inventory risk from shipment through delivery date and upon accepting returns, and has credit risk. Net revenue includes shipping costs charged to the customer and is recorded net of taxes collected from customers, which are remitted to governmental authorities. Cash discounts, returns and rebates are deducted from gross revenue in determining net revenue. In addition, the Company defers revenue when cash is collected from its customer prior to the satisfaction of the revenue recognition criteria. The Company maintains a membership rewards program that allows enrolled customers to earn points which can be redeemed for future purchases. The Company defers a portion of its revenue associated with rewards that are ultimately expected to be redeemed prior to expiration. The Company also earns revenue through third-party advertisers that pay based on the number of advertisement related clicks, actions, or impressions for advertisements placed on the Company's sites. Revenue earned under these arrangements is included in net revenue and is recognized in the period in which the click, action, or impression occurs. Vendor Rebates The Company earns rebates under a volume incentive programs with its suppliers. These rebates are earned upon shipment of goods. Amounts earned and due from suppliers under these rebate programs are included in other current assets on the consolidated balance sheets and are reflected as a reduction of cost of goods sold on the consolidated statements of operations. Vendor allowances received by the Company reduce the carrying cost of inventory and are recognized in cost of goods sold when the related inventory is sold. Costs of Goods Sold Cost of goods sold consists of the cost of product sold to customers, shipping and handling costs and shipping supplies and fulfillment costs. Fulfillment costs include costs incurred in operating and staffing the fulfillment centers, such as costs attributed to receiving, inspecting, picking, packaging and preparing customer orders for shipment. Cost of goods sold also includes direct and indirect labor costs for fulfillment center oversight, including payroll and related benefit costs. Advertising Costs Expenditures for advertising are expensed in the period that the advertising first takes place. Advertising expense amounted to approximately $278.2 million , $191.3 million , and $108.5 million in the years ended December 31, 2015 , 2014 , and 2013 , respectively. Included in prepaid expenses at December 31, 2015 and 2014 are approximately $1.2 million and $0.6 million , respectively, of prepaid advertising costs. Merchant Processing Fees Merchant processing fees totaling $46.9 million , $27.6 million , and $19.4 million in the years ended December 31, 2015 , 2014 , and 2013 , respectively, are included in customer service and merchant fees expense in the accompanying consolidated statements of operations. These fees are charged by third parties that provide merchant processing services for credit cards and debit cards. Retail Partner Fees The Company sells its products through sites owned and operated by third-party online retailers, or retail partners. The Company pays a fee for sales generated through these sites and records them as merchant processing fees and advertising costs. Retail partner fees included in merchant processing fees are $3.5 million , $4.4 million , and $4.3 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. Retail partner fees included in advertising costs are $20.2 million , $24.3 million , and $25.2 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. Equity-Based Compensation The Company accounts for its equity-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ("ASC 718"). ASC 718 requires all equity-based payments to employees, to be recognized as expense in the statements of operations based on their grant date fair values. The Company has granted stock options, restricted shares and restricted stock units. Since April 2011, the Company has only granted restricted stock units and has not granted any stock options or restricted stock. Restricted stock unit values are determined based on the quoted market price of our Class A common stock on the date of grant. The Company accounts for equity awards to non-employees in accordance with FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees , which requires the fair value of an award to non-employees be remeasured at fair value as the award vests. The Company estimated the grant date fair value of each common stock option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model required management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. Until its IPO in October 2014, the fair value of restricted stock and restricted stock units on the date of grant was determined by the board. Since April 2011, the Company has only granted restricted stock units and has not granted any stock options or restricted stock. Since our IPO, restricted stock unit values are determined based on the quoted market price of our common stock on the date of grant. Prior to the IPO the Company periodically determined for financial reporting purposes the estimated fair value of our common stock at various dates using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, also known as the Practice Aid. The Company generally used the income and market approaches prescribed in the Practice Aid, in particular the income approach's discounted cash flow method, which was based on the Company's projections and estimated discount rate and the guideline public company, guideline transactions and precedent transaction methodologies, based on inputs from comparable public companies' equity valuations, comparable acquisition transactions and transactions in the Company's own equity securities, to estimate the enterprise value of the company. In connection with the preparation of the financial statements for the year ended December 31, 2013, the Company undertook a retrospective reassessment of the fair market value of its common stock for certain of its 2013 grants for financial reporting purposes. As part of that reassessment, the Company determined that the grant date fair values of its May, August and November 2013 grants to be $6.46 , $10.88 and $20.87 , respectively. The fair value previously determined at various valuation dates increased substantially in 2013 and there was no particular transaction or event that caused this increase. The grants made in May, August and November 2013 were between the dates when the Company performed its valuation. Accordingly, the Company calculated grant date fair value for these grants on a linear basis between each valuation date and believe it to be a reasonable method. Similarly, in connection with the preparation of the financial statements for the quarter ended September 30, 2014, the Company undertook a retrospective reassessment of the fair market value of our common stock for our grants made in September 2014 to be equal to our October 2, 2014 IPO price of $29.00 . Income Taxes Income taxes are accounted for under the asset and liability method. Under the asset and liability method, 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those 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. The Company records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. Prior to the IPO, the Company's main operating entity had not been subject to U.S. federal income taxes as it was organized as a limited liability company. As such, the taxable income or loss was passed through to and included in the tax returns of the members. The Company was subject to entity level taxation in certain states, and certain domestic and foreign subsidiaries were subject to entity level U.S. and foreign income taxes. As a result of the internal restructuring prior to the IPO, a portion of the Company's income will be subject to U.S. federal, state, local, and foreign income taxes and taxed at the prevailing corporate tax rates. Net Loss Attributable to Common Stockholders Per Share The Company follows the two-class method when computing net loss attributable to common stockholders per share as the Company had issued shares that meet the definition of participating securities which converted to common stock upon the IPO. Prior to the corporate reorganization, the Company's convertible redeemable preferred units contractually entitled the holders of such units to participate in dividends, but did not contractually require the holders of such units to participate in losses of the Company. Accordingly, in periods prior to 2014 in which the Company reports a net loss or a net loss attributable to common stockholders resulting from preferred stock dividends or accretion, net losses are not allocated to participating securities. After the IPO the Company has continued to follow the two-class method because it has issued two classes of common stock—Class A and Class B. Basic net income (loss) attributable to common stockholders per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding for the period. For periods in which the Company has reported net losses, diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common stockholders, since dilutive common stock are not assumed to have been issued if their effect is anti-dilutive. Subsequent Events The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2015 , but prior to the filing of the financial statements with the U.S. Securities and Exchange Commission, to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of these financial statements. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases" ("ASU 2016-02"). This ASU revises the accounting related to leases by requiring lessees to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions. This ASU is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The Company early adopted its provisions during fiscal year 2015 on a prospective basis. Accordingly, as permitted by ASU 2015-17, the current deferred taxes have been classified as noncurrent on the Balance Sheet. The prospective adoption of ASU 2015-17 does not require a restatement of prior year balances; as such, they have not been adjusted. In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements, Going Concern." ("ASU 2014-15"). ASU-2014-15 will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016 and earlier adoption is permitted. Management does not expect that the application of ASU 2014-15 will have an impact on the Company’s financial condition, results of operations or cash flows. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this ASU on January 1, 2017. Management is currently evaluating which transition approach to use and the impact of the adoption of this ASU on the Company’s financial condition, results of operations or cash flows. |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Marketable Securities and Fair Value Measurements | Marketable Securities and Fair Value Measurements Marketable Securities As of December 31, 2015 , all of the Company’s marketable securities were classified as available-for-sale and their estimated fair values were $96.8 million The Company did not hold any available-for-sale securities at December 31, 2014 . The following table presents details of the Company’s marketable securities as of December 31, 2015 (in thousands): December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term: Investment securities $ 16,908 $ — $ (13 ) $ 16,895 Long-term: Investment securities 80,172 2 (291 ) 79,883 Total $ 97,080 $ 2 $ (304 ) $ 96,778 Fair Value Measurements The following tables set forth the fair value of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2015 and 2014 based on the three-tier value hierarchy (in thousands): December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 267,300 $ — $ — $ 267,300 Short-term investments: Certificates of deposit 35,000 — — 35,000 Investment securities — 16,895 — 16,895 Restricted cash: Certificate of deposit 5,000 — — 5,000 Long-term: Investment securities — 79,883 — 79,883 Total $ 307,300 $ 96,778 $ — $ 404,078 December 31, 2014 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 302,595 $ — $ — $ 302,595 Short-term investments: Certificates of deposit 60,000 — — 60,000 Restricted cash: Money market funds 302 — — 302 Total $ 362,897 $ — $ — $ 362,897 |
Intangible assets and Goodwill
Intangible assets and Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets and Goodwill | Intangible assets and Goodwill The following table summarizes intangible assets as of December 31, 2015 and 2014 (in thousands): Weighted-Average December 31, 2015 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 1,900 $ (918 ) $ 982 Customer relationships 5 1,300 (628 ) 672 Non-compete agreements 3 - 5 100 (81 ) 19 Other intangibles 3 373 (270 ) 103 Domain names 5 2,687 (2,685 ) 2 Total $ 6,360 $ (4,582 ) $ 1,778 Weighted-Average December 31, 2014 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 2,001 $ (604 ) $ 1,397 Customer relationships 5 1,300 (368 ) 932 Non-compete agreements 3 - 5 108 (52 ) 56 Technology 5 718 (467 ) 251 Other intangibles 3 373 (158 ) 215 Domain names 5 2,687 (2,684 ) 3 Total $ 7,187 $ (4,333 ) $ 2,854 Amortization expense related to intangible assets was $0.9 million , $1.0 million , and $0.5 million for the years ended December 31, 2015 and 2014 , and 2013 , respectively. The estimated future amortization expense of purchased intangible assets as of December 31, 2015 , is as follows (in thousands): Total 2016 $ 765 2017 640 2018 373 Thereafter — Total $ 1,778 The following table presents the changes in goodwill during the years ended December 31, 2015 and 2014 , respectively (in thousands): Net Book Value Goodwill as of December 31, 2014 $ 3,624 Sale during the period (1,520 ) Foreign currency exchange rate effect (180 ) Goodwill as of December 31, 2015 $ 1,924 In July 2015, the Company sold its Australian business. At the time of the sale, the net carrying amounts of the goodwill and intangible assets of the Australian business were $1.5 million and $0.2 million , respectively. The proceeds from the sale exceeded the carrying value of the Australian business, resulting in a $3.0 million gain, recorded in "Other income (expense), net" in the unaudited consolidated statements of operations. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The following table summarizes property and equipment, net as of December 31, 2015 and 2014 (in thousands): December 31, 2015 2014 Furniture and computer equipment $ 68,416 $ 48,399 Site and software development costs 50,907 36,294 Leasehold improvements 29,315 14,290 Construction in progress 27,563 4,800 176,201 103,783 Less accumulated depreciation and amortization (63,876 ) (43,144 ) Property and equipment, net $ 112,325 $ 60,639 Property and equipment depreciation and amortization expense was $31.6 million , $20.8 million , and $12.5 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities | Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities The following table presents the components of selected balance sheet items as of December 31, 2015 and 2014 (in thousands): December 31, Prepaid expenses and other current assets: 2015 2014 Deferred costs in transit $ 34,102 $ 19,621 Supplier receivable 17,316 9,507 Supplier credits receivable 7,344 3,989 Other prepaid and other current assets 17,684 12,145 Total prepaid expenses and other current assets $ 76,446 $ 45,262 December 31, Accrued expenses: 2015 2014 Employee compensation and related benefits $ 24,928 $ 15,244 Advertising 6,695 9,561 Accrued property, plant and equipment 3,069 7,151 Credit card 6,621 3,560 Audit, legal and professional fees 2,326 898 Other accrued expenses 7,921 5,921 Total accrued expenses $ 51,560 $ 42,335 December 31, Other liabilities: 2015 2014 Deferred rent $ 24,669 $ 12,821 Construction costs capitalized under finance lease obligations 27,295 3,960 Other liabilities 3,046 611 Total other liabilities $ 55,010 $ 17,392 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company maintains its principal offices in Boston, Massachusetts and fulfillment center, customer service center and office space in various locations throughout the United States and abroad. Future minimum rental commitments under non-cancelable leases with initial or remaining terms in excess of one year at December 31, 2015 were as follows (in thousands): Amount 2016 $ 21,131 2017 27,871 2018 28,986 2019 27,497 2020 26,006 Thereafter 109,071 Total $ 240,562 Rent expense under operating leases was $16.3 million , $11.4 million , and $4.6 million in the years ended December 31, 2015 , 2014 and 2013 , respectively. The Company has issued letters of credit for approximately $5.9 million as security for these lease agreements as of December 31, 2015 . Future lease payments have not been reduced by minimum sublease rentals of $3.2 million due to the Company in the future under non-cancelable subleases through 2017. The Company has entered into additional leases throughout the United States subsequent to December 31, 2015 , where the future minimum rental commitments under non-cancelable leases with initial or remaining terms in excess of one year are $12.7 million in the aggregate. Restricted Cash The Company has deposited $5.0 million and $0.3 million with Bank of America as collateral for letters of credit and has classified these amounts as “Other noncurrent assets” on its consolidated balance sheets at December 31, 2015 and 2014 , respectively. Collection of Sales or Other Similar Taxes Based on the location of the Company’s current operations, it collects and remits sales tax in Kentucky, Massachusetts, New York, Utah, and California. The Company does not currently collect sales or other similar taxes for the sale of goods in states where no obligation to collect these taxes is required under applicable law. Several states have presented the Company with assessments, alleging that it is required to collect and remit sales or other similar taxes. The aggregate amount of claims from these states, not including taxes allegedly owed for periods subsequent to such assessments or interest and penalties after the date the Company last received such assessments, is approximately $12.9 million . The Company does not believe that it was obligated to collect and remit such taxes, and intends to vigorously defend its position. At this time, the Company believes a loss is not probable and therefore has not recorded a liability; however, no assurance can be given as to the outcome of these assessments. Legal Matters On September 2, 2015, a putative class action complaint was filed against the Company in the U.S. District Court for the Southern District of New York (Dingee v. Wayfair Inc., et al., Case No. 1:15-cv-06941) by an individual on behalf of himself and on behalf of all other similarly situated individuals, or collectively, the Dingee Plaintiffs, under sections 10(b) and 20(a) of the Exchange Act related to a drop in stock price that had followed a report issued by Citron Research. On September 3, 2015 a second putative class action complaint was filed, asserting nearly identical claims (Jenkins v. Wayfair Inc., et al., Case No. 1:15-cv-06985). On November 2, 2015, the plaintiff in the Dingee action moved to consolidate the two lawsuits, and to designate himself as lead plaintiff in the class action and his attorney as lead counsel for the class. On November 3, 2015 plaintiff in the Jenkins action voluntarily dismissed his complaint. As a result, only the Dingee action remains pending. On November 13, 2015, the Court appointed Dingee as lead plaintiff. On January 11, 2016, Dingee filed an amended complaint along with a second named plaintiff, Michael Lamp. The Dingee Plaintiff’s complaint seeks class certification, damages in an unspecified amount, and attorney’s fees and costs. The Company believes a loss is not probable and intends to defend the lawsuit vigorously. On February 2, 2016, a putative class action complaint was filed against the Company in the U.S. District Court for the Central District of California (Carson, et al., v. Wayfair Inc., Case No. 2:16-cv-00716) by two individuals on behalf of themselves and on behalf of all other similarly situated individuals (collectively, the "Carson Plaintiffs"). The complaint alleges that Wayfair engaged in a deceptive marketing campaign in which the Company advertised certain “original” or “regular” retail prices, which the Carson Plaintiffs allege were false. The Carson Plaintiffs’ complaint seeks injunctive relief, attorney’s fees, punitive damages and damages. The Company believes a loss is not probable and intends to defend the lawsuit vigorously. The Company is subject to legal proceedings and claims in the ordinary course of business. However, the Company is not currently aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position, results of operations or cash flows. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company has a defined-contribution, incentive savings plan pursuant to Section 401(k) of the Internal Revenue Code. The plan covers all full-time employees who have reached the age of 21 years. Employees may elect to defer compensation up to a dollar limit (as allowable by the Internal Revenue Code), of which up to 4% of an employee's salary will be matched by the Company. The amounts deferred by the employee and the matching amounts contributed by the Company both vest immediately. The amount expensed under the plan totaled approximately $3.3 million , $2.4 million , and $1.8 million in the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation In 2010, the Company established an equity incentive plan and, in 2011, the plan was amended and restated as the Wayfair LLC Amended and Restated 2010 Common Unit Plan (the “2010 Plan”). The 2010 Plan was administered by the board of directors of Wayfair LLC and provided for the issuance of common option units, restricted common units (all common units), and deferred units, which currently represent Class A or Class B common stock of the Company. In connection with the IPO, the board of directors of the Company adopted the 2014 Incentive Award Plan ("2014 Plan") to grant cash and equity incentive awards to eligible service providers in order to attract, motivate and retain the talent for which the Company competes. The 2014 Plan is administered by the board of directors of the Company with respect to awards to non-employee directors and by the compensation committee with respect to other participants and provides for the issuance of stock options, SARs, restricted stock, RSUs, performance shares, stock payments, cash payments, dividend awards and other incentives. The 2014 Plan authorizes up to 8,603,066 shares of Class A common stock to be issued, of which RSUs for 3,098,159 shares had been issued as of December 31, 2015 . Shares or RSUs forfeited, withheld for minimum statutory tax obligations, and unexercised stock option lapses from the 2010 and 2014 Plans are available for grants of awards under the 2014 Plan. All equity awards granted prior to the IPO were subject to two vesting triggers: a service period (typically five years) and a performance condition (a liquidity event in the form of either a change of control or an initial public offering, each as defined in the 2010 Plan). Employees were able to retain provisionally vested stock options and shares upon departure. The Company determined that a liquidity event was not probable until the closing of its IPO on October 7, 2014, and as such, no expense was recognized until that date. After the IPO awards for employees still providing service will continue to vest over the remaining service period. Any future grants of awards are expected to vest over the service period. In April 2014, the Company completed a tender offer to repurchase provisionally vested (defined as service period completed) stock options and restricted common stock from certain employees at a price of $26.23 per share. A total of 202,757 shares of restricted common stock and 9,028 stock options were tendered for an aggregate of approximately $5.5 million in net cash after adjusting for the exercise prices associated with the stock options. This tender offer was accounted for as a modification resulting in a $5.5 million compensation charge when accepted by the employee in 2014. A summary of the status and activity for awards of stock options for the year ended December 31, 2015 is as follows: Stock Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Outstanding at December 31, 2014 449,046 $ 2.98 6.5 Exercised (164,590 ) $ 2.96 Forfeited/cancelled (4,865 ) $ 3.19 Outstanding at December 31, 2015 279,591 $ 2.98 5.5 Exercisable at December 31, 2015 277,937 $ 2.98 5.5 Expected to vest as of December 31, 2015 1,022 $ 3.42 5.5 Intrinsic value of stock options exercised and repurchased was $5.2 million and $4.3 million for the years ended December 31, 2015 and 2014 , respectively. Aggregate intrinsic value of stock options outstanding and currently exercisable is $12.5 million and $12.4 million respectively. Unrecognized equity based compensation expense related to stock options expected to vest is less than $0.1 million with a weighted average remaining vesting term of 0.2 years as of December 31, 2015 . A summary of the status and activity for awards of restricted common stock for the year ended December 31, 2015 is as follows: Restricted Stock Weighted-Average Grant Date Fair Value Unvested at December 31, 2014 161,476 $ 4.75 Vested (159,483 ) $ 4.75 Unvested at December 31, 2015 1,993 $ 4.75 Expected to vest as of December 31, 2015 1,228 $ 4.75 The intrinsic value of restricted common stock vested and repurchased was $4.3 million and $101.5 million for the years ended December 31, 2015 and 2014 , respectively. Aggregate intrinsic value of restricted common stock unvested is $0.1 million as of December 31, 2015 . Unrecognized equity based compensation expense related to restricted common stock expected to vest is less than $0.1 million with a weighted average remaining vesting term of 0.1 years as of December 31, 2015 . A summary of the status and activity for awards of RSUs for the year ended December 31, 2015 is as follows: Restricted Stock Units Weighted-Average Grant Date Fair Value Unvested at December 31, 2014 4,542,231 $ 17.67 Granted 3,098,159 $ 36.91 Vested (1,514,576 ) $ 17.28 Forfeited/cancelled (517,947 ) $ 21.56 Unvested at December 31, 2015 5,607,867 $ 28.30 Expected to vest as of December 31, 2015 4,161,263 $ 28.82 The intrinsic value of RSU vested was $51.6 million and $69.0 million for the years ended December 31, 2015 and 2014 , respectively. Aggregate intrinsic value of RSUs unvested is $267.0 million as of December 31, 2015 . Unrecognized equity based compensation expense related to RSUs expected to vest is $91.0 million with a weighted average remaining vesting term of 1.7 years as of December 31, 2015 . |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders' Equity (Deficit) Series A and Series B Convertible Redeemable Preferred Units of Wayfair LLC In connection with the corporate reorganization, all of the outstanding Series A and Series B preferred units of Wayfair LLC were exchanged for shares of Series A and Series B convertible preferred stock of Wayfair Inc. Immediately prior to the completion of the IPO, all of the outstanding shares of Series A and Series B convertible preferred stock converted into 27,546,934 shares of Class B common stock of Wayfair Inc. The Company recognized changes in the redemption value of the convertible redeemable preferred stock immediately as they occurred by adjusting the carrying amount of the redeemable security to what would be the redemption amount assuming the security was redeemable at the balance sheet date. Accordingly, the Company recorded accretion of the Series A convertible preferred stock of $14.4 million credit, $25.4 million , and $12.2 million for the years ended December 31, 2014, 2013, and 2012, respectively. At the time of the conversion of Series A and Series B convertible preferred stock an adjustment of $14.8 million was recorded as a reduction of accretion expense when the carrying value of the convertible redeemable preferred units was reduced to its conversion value. The Company recorded accretion on the Series B redeemable convertible preferred stock of $2.5 million for the year ended December 31, 2014. Upon the issuance of Series B preferred units by Wayfair LLC in March 2014, the Company distributed $15.0 million in accrued dividends to Series A convertible preferred stock holders and upon the completion of the IPO in October 2014 distributed the remaining accrued dividends of $24.5 million to Series A convertible preferred stock holders. Preferred Stock Upon the closing of the IPO in October 2014, the Company authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value per share, for future issuance. As of December 31, 2015 , the Company had no shares of undesignated preferred stock issued or outstanding. Common Stock On October 7, 2014, the Company completed its IPO of 12,650,000 shares of its Class A common stock at a public offering price of $29.00 per share, of which 10,500,000 shares were sold by the Company and 2,150,000 shares were sold by its selling stockholders, including 1,650,000 shares pursuant to the underwriters' option to purchase additional shares, resulting in net proceeds to the Company of approximately $282.9 million , after deducting underwriting discounts and offering expenses. The Company did not receive any proceeds from the sale of shares by the selling stockholders. The Company authorized 500,000,000 shares of Class A common stock, $0.001 par value per share, and 164,000,000 shares of Class B common stock, $0.001 par value per share, of which 45,814,237 and 37,002,874 shares of Class A common stock and 38,496,562 and 46,179,192 shares of Class B common stock were outstanding as of December 31, 2015 and 2014 , respectively. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible into one share of Class A common stock. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate number of shares of the then outstanding Class A common stock and Class B common stock, or in the event of the affirmative vote or written consent of holders of at least 66 2/3% of the outstanding shares of Class B common stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to receive dividends out of funds legally available if the Board, in its discretion, determines to issue dividends and then only at the times and in the amounts that the Board may determine. Since the IPO through December 31, 2015 , 32,124,686 shares of Class B common stock were converted to Class A common stock. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As a result, the Company identified that it has one operating and reportable segment. The following table presents the activity related to the Company’s net revenue from Direct Retail sales derived through the Company’s sites and Other sales derived through sites operated by third parties and fees from third-party advertising distribution providers (in thousands): Year Ended December 31, 2015 2014 2013 Net revenue Direct Retail $ 2,040,238 $ 1,101,686 $ 673,446 Other 209,647 217,265 242,397 Net revenue $ 2,249,885 $ 1,318,951 $ 915,843 Revenue from external customers for each group of similar products and services are not reported to the CODM. Separate identification of this information for purposes of segment disclosure is impractical, as it is not readily available and the cost to develop it would be excessive. No individual country outside of the United States provided greater than 10% of total revenue. The following table presents revenue and long-lived assets by geographic area (in thousands): Year Ended December 31, 2015 2014 2013 Geographic net revenue: United States $ 2,135,492 $ 1,236,215 $ 857,001 International 114,393 82,736 58,842 Total $ 2,249,885 $ 1,318,951 $ 915,843 Year Ended December 31, 2015 2014 Geographic long-lived assets: United States $ 110,042 $ 59,013 International 2,283 1,626 Total $ 112,325 $ 60,639 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense (benefit) for the years ended December 31, 2015 , 2014 and 2013 attributable to income (loss) from operation is presented below (in thousands): Year ended December 31, 2015 Current Deferred Total Federal $ — $ 54 $ 54 State (202 ) 7 (195 ) Foreign 331 (95 ) 236 $ 129 $ (34 ) $ 95 Year ended December 31, 2014 Current Deferred Total Federal $ — $ 32 $ 32 State 1 4 5 Foreign 138 — 138 $ 139 $ 36 $ 175 Year ended December 31, 2013 Current Deferred Total Federal $ — $ — $ — State 1 — 1 Foreign 41 4 45 42 4 46 The actual income tax expense (benefit) differs from the expected income tax expense (benefit) computed by applying the United States Federal corporate income tax rate of 35% to income before tax expense (benefit) as follows (in thousands): Year Ended December 31, 2015 2014 2013 Computed expected tax expense (benefit) $ (27,072 ) $ (51,773 ) $ (5,417 ) Decrease in income taxes resulting from: Partnership losses not creating tax benefit — 21,369 3,920 Effect of conversion to C-corporation — (28,034 ) — State income tax expense, net of federal benefit (1,424 ) (2,517 ) (269 ) Foreign tax rate differential 9,278 2,826 619 Equity based compensation expense 1,415 5,555 — Change in valuation allowance 12,394 52,921 1,418 Impact of sale of Australian subsidiary 4,248 — — Other 1,256 (172 ) (225 ) Net income tax expense $ 95 $ 175 $ 46 The components of results of income before income tax expense (benefit) determined by tax jurisdiction, are as follows (in thousands): Year Ended December 31, 2015 2014 2013 United States $ (38,963 ) $ (128,505 ) $ (9,895 ) Foreign (38,385 ) (19,418 ) (5,585 ) Total $ (77,348 ) $ (147,923 ) $ (15,480 ) The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities for the periods presented are as follows (in thousands): December 31 2015 2014 Deferred tax asset: Accounts receivable $ 926 $ 1,009 Inventories 280 295 Operating loss carry-forwards 32,678 17,939 Equity based compensation expense 10,716 11,529 Intangibles 24,205 26,557 Accrued expenses 307 3,555 Charitable contributions 143 18 Deferred rent 21,219 7,161 Gross deferred tax asset 90,474 68,063 Less: Valuation allowance (70,614 ) (58,980 ) Net deferred tax asset 19,860 9,083 Deferred tax liability: Prepaid expenses (561 ) (783 ) Capitalized technology (6,444 ) (5,019 ) Property and equipment (12,646 ) (3,281 ) Goodwill (96 ) (36 ) Other (126 ) — Total deferred tax liabilities (19,873 ) (9,119 ) Net deferred tax assets (liabilities) (13 ) (36 ) Current net deferred tax asset — — Current net deferred tax liability — (55 ) Non-current net deferred tax asset — 19 Non-current net deferred tax liability (13 ) — (13 ) (36 ) As of December 31, 2015 , the Company had federal net operating loss carryforwards available to offset future federal taxable income of $141.7 million . Approximately $82.2 million of the federal net operating loss carryforward will result in an increase to additional paid-in capital if and when these carryforwards are used to reduce income taxes payable. In addition, the Company had state net operating loss carryforwards available in the amount of $130.0 million which are available to offset future state taxable income. Approximately $74.4 million of the state net operating loss carryforward will result in an increase to additional paid-in capital if and when these carryforwards are used to reduce income taxes payable. The federal net operating loss carryforwards begin to expire in the year ended December 31, 2034. The state net operating loss carryforwards begin to expire in the year ended December 31, 2029. The Company's ability to utilize these federal and state net operating loss carry-forwards may be limited in the future if the Company experiences an ownership change pursuant to Internal Revenue Code Section 382. An ownership change occurs when the ownership percentages of 5% or greater stockholders change by more than 50% over a three-year period. The Company also had foreign net operating loss carry-forwards available to offset future foreign income of $73.3 million . Approximately $0.8 million of the foreign net operating loss carryforward will result in an increase to additional paid-in-capital if and when these carryforwards are used to reduce income taxes payable. The foreign net operating loss carryforwards have no expiration. In assessing the realizability of its net deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2015 , based upon an evaluation of the positive and negative evidence, the Company concluded that an increase of $11.6 million of the deferred tax asset valuation allowance was appropriate, resulting in a valuation allowance of $70.6 million as of December 31, 2015 . The total expense from the net change in valuation allowance is $(12.4) million . As of December 31, 2015 , the Company has not provided for U.S. deferred income taxes on undistributed earnings of its foreign subsidiaries of approximately $1.5 million since these earnings are to be indefinitely reinvested. Upon distribution of those earnings in the form of dividends or otherwise, the Company will be subject to additional U.S. and state income taxes (less foreign tax credits), as well as withholding taxes in its foreign locations. The amount of taxes attributable to the undistributed earnings is not practicably determinable. The Company establishes reserves for uncertain tax positions based on management's assessment of exposure associated with tax deductions, permanent tax differences and tax credits. The tax reserves are analyzed periodically and adjustments are made as events occur to warrant adjustment to the reserve. The Company's policy is to recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company had gross unrecognized tax benefits of $0.2 million as of December 31, 2014 and 2013. In 2015 the Company recognized the tax benefit of $0.2 million upon the expiration of the applicable statute of limitations. Accordingly, the Company does not have any gross unrecognized tax benefit as of December 31, 2015 The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company did not accrue any penalties and interest during 2015 , 2014 , and 2013 , respectively, because it believes that such additional interest and penalties would be insignificant. The Company's tax jurisdictions include the United States, the UK, Germany, Ireland, Australia, and the British Virgin Islands. The statute of limitations with respect to the Company's United States federal income taxes has expired for years prior to 2012. The relevant state and foreign statutes vary. However, preceding years remain open to examination by United States federal and state and foreign taxing authorities to the extent of future utilization of net operating losses and research and development tax credits generated in each preceding year. |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement The Company has a credit agreement with Bank of America, which provides the Company with an unused line of credit and a credit card program with a maximum commitment of $35.0 million , $45.0 million and $35.0 million for the periods of July 31, 2015 through September 30, 2015, October 1, 2015 through February 28, 2016 and March 1, 2016 through July 31, 2016, respectively, with the committed amounts of $10.0 million to be used for a revolving line of credit and to support letters of credit and the remainder to be used to support the Company’s credit card program. The credit agreement is renewable on an annual basis and, if not renewed, will expire on July 31, 2016. The Company is required to maintain certain covenants, including tangible net worth and unencumbered liquid assets, with which the Company was compliant at December 31, 2015 and 2014 . The Company did not borrow any amounts under the credit agreement during the years ended December 31, 2015 , 2014 and 2013 . |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share Basic and diluted net (loss) income per share is presented using the two class method required for participating securities. Class A and Class B common stock are the only outstanding equity in the Company since our IPO in October 2014. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. The Class B common stock also has approval rights over certain corporate actions. Each share of Class B common stock may be converted into one share of Class A common stock at any time at the option of the stockholder, and will be automatically converted into one share of Class A common stock upon a sale or transfer, subject to certain limited exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate number of shares of the then outstanding Class A common stock and Class B common stock, or in the event of the affirmative vote or written consent of at least 66 2/3% of the outstanding shares of Class B common stock, all outstanding shares of Class B common stock will automatically convert into Class A common stock. Basic net income (loss) per share attributable to common stockholders is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share attributable to common stockholders is computed using the weighted-average number of shares of common stock and, if dilutive, common stock equivalents outstanding during the period. The Company's common stock equivalents consist of shares issuable upon the release of restricted stock units, and to a lesser extent, the incremental shares of common stock issuable upon the exercise of stock options and unvested restricted stock. The dilutive effect of these common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. The Company's basic and diluted net loss per share are the same because the Company has generated net loss to common stockholders and common stock equivalents are excluded from diluted net loss per share because they have an antidilutive impact. The Company allocates undistributed earnings between the classes on a one-to-one basis when computing net income (loss) per share. As a result, basic and diluted net income (loss) per Class A and Class B shares are equivalent. Even prior to the conversion of its Series A and Series B convertible preferred stock to common stock, effective October 7, 2014, the Company applied the two class method for calculating and presenting earnings per share. Under the two class method, net (loss) income attributable to common stockholders is determined by allocating undistributed earnings between common stock and participating securities. Undistributed earnings are calculated as net income (loss) less distributed earnings and accretion of Series A and Series B convertible preferred stock. As holders of Series A and Series B convertible preferred stock did not have a contractual obligation to share in the losses of the Company, the net loss attributable to common stockholders for each period prior to the IPO was not allocated between common stock and participating securities. Accordingly, Series A and Series B convertible preferred stock are excluded from the calculation of basic and diluted net loss per share. The Company's basic and diluted net loss per share are the same because the Company has generated net loss to common stockholders and common stock equivalents are excluded from diluted net loss per share because they have an antidilutive impact. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Year Ended December 31, 2015 2014 2013 Numerator: Net loss $ (77,443 ) $ (148,098 ) $ (15,526 ) Accretion of preferred units to redemption value — (2,071 ) (25,388 ) Net loss attributable to common stockholders per share—basic and diluted $ (77,443 ) $ (150,169 ) $ (40,914 ) Denominator: Weighted average shares used for basic and diluted net loss per share computation 83,726 50,642 41,332 Net loss per common share attributable to common stockholders: Basic and Diluted $ (0.92 ) $ (2.97 ) $ (0.99 ) The following have been excluded from the computation of basic and diluted net loss per share attributable to common stockholders as their effect would have been antidilutive: Year Ended December 31, 2015 2014 2013 Series A convertible redeemable preferred units — — 21,551,801 Stock options 279,591 449,046 664,232 Restricted stock 1,993 161,476 3,490,968 Restricted stock units 5,607,867 4,542,231 5,255,113 5,889,451 5,152,753 30,962,114 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying consolidated financial statements of Wayfair Inc. include its wholly owned subsidiaries including the accounts of Wayfair LLC and its wholly owned subsidiaries (collectively the "Company" or "Wayfair"). All intercompany accounts and transactions have been eliminated. Below is a summary of the wholly-owned subsidiaries of the Company with operations: Subsidiary Location Wayfair LLC USA Wayfair Securities Corporation USA SK Retail, Inc. USA Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair GmbH Germany Wayfair (BVI) Ltd. British Virgin Islands |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. On an ongoing basis, management evaluates these estimates and judgments, including those related to revenue recognition, capitalization of site and software development costs, stock-based compensation, and inventory. Actual results could differ from those estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid investments purchased with an original maturity (at the date of purchase) of three months or less to be the equivalent of cash for the purpose of consolidated balance sheets and statements of cash flows presentation. Cash equivalents, which consist primarily of money market accounts, are carried at cost, which approximates market value. |
Restricted Cash | As of December 31, 2015 and 2014 , there was $5.0 million and $0.3 million , respectively, of cash that was restricted from withdrawal and held by banks to guarantee the Company's letters of credit issued principally for certain vendor arrangements and to secure certain property leases, respectively. |
Short-Term Investments | Short-term investments consist of certificates of deposits and marketable securities with original maturities of greater than three months and mature in less than twelve months. |
Accounts Receivable | Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company estimates the allowance for doubtful accounts based on historical losses, existing economic conditions, and other information available at the consolidated balance sheets dates. Uncollectible amounts are written off against the allowance after all collection efforts have been exhausted. |
Marketable Securities | The Company classifies its marketable securities as “available-for-sale” securities. Available-for-sale securities are classified as short term investments and long-term investments on the consolidated balance sheets and are carried at fair value. Unrealized gains and losses on available-for-sale securities that are considered temporary are recorded, net of taxes, in the “Accumulated other comprehensive loss” caption of the Company’s consolidated balance sheets. Unrealized losses, excluding losses related to the credit rating of the security (credit losses), on available-for-sale securities that are considered other-than-temporary but relate to securities that the Company (i) does not intend to sell and (ii) will not be required to sell below cost are also recorded, net of taxes, in “Accumulated other comprehensive loss.” Further, the Company does not believe it will be required to sell such securities below cost. Therefore, the only other-than-temporary losses the Company records in “Other income, net” in its consolidated statements of operations are related to credit losses. As of December 31, 2015 , the Company’s available-for-sale securities consisted of investment securities. The maturities of the Company’s long-term marketable securities generally range from one to three years. |
Fair Value of Financial Instruments | The Company's financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The three levels of inputs used to measure fair value are as follows: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities • Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company measures its cash equivalents and short-term and long-term investments at fair value. The Company classifies its cash equivalents and restricted cash within Level 1 because the Company values these investments using quoted market prices. The fair value of the Company's Level 1 financial assets is based on quoted market prices of the identical underlying security. The Company classifies short-term and long-term investments within Level 2 because unadjusted quoted prices for identical or similar assets in markets are not active. The Company does not have any assets or liabilities classified as Level 3 financial assets. Refer to Note 3, Fair Value Measurements , for additional detail. |
Concentrations of Credit Risk | Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, short-term and long-term investments, and accounts receivable. The risk with respect to cash and cash equivalents and short-term and long-term investments is minimized by the Company's policy of investing in financial instruments (i.e., cash equivalents) with near-term maturities issued by highly rated financial institutions. At times, these balances may exceed federally insured limits; however, to date, the Company has not incurred any losses on these investments. As of December 31, 2015 and 2014 , the Company had $3.9 million and $2.1 million , respectively, in banks located outside the United States. The risk with respect to accounts receivable is managed by the Company through its policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. |
Leases | The Company leases office space in several countries around the world under non-cancelable lease agreements. The Company generally leases its office facilities under operating lease agreements. Office facilities subject to an operating lease and the related lease payments are not recorded on the balance sheet. The terms of certain lease agreements provide for rental payments on a graduated basis, however, the Company recognizes rent expense on a straight-line basis over the lease period in accordance with authoritative accounting guidance. Any lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term begins on the date the Company becomes legally obligated for the rent payments or when it takes possession of the office space, whichever is earlier. The Company establishes assets and liabilities for the estimated construction costs incurred under lease arrangements where the Company is considered the owner for accounting purposes only, or build-to-suit leases, to the extent the Company is involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If the Company continues to be the deemed owner, the facilities are accounted for as financing leases. |
Foreign Currency Translation | The financial statements of the Company are translated to United States dollars using year-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. The effects of foreign currency translation are included in other comprehensive loss in the consolidated statements of comprehensive loss. Transaction gains and losses are included in the Company's consolidated statements of operations. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss within total stockholders' equity. |
Inventories | Inventories consisting of finished goods are stated at the lower of cost or market, determined by the first-in, first-out (FIFO) method, and consist of product for resale. Inventory costs consist of cost of product and inbound shipping and handling costs. Inventory costs also include direct and indirect labor costs, rents and depreciation expenses associated with the Company's fulfillment centers. Inventory valuation requires the Company to make judgments, based on currently-available information, about the likely method of disposition, such as through sales to individual customers, liquidations, and expected recoverable values of each disposition category. |
Goods In-Transit | Goods in-transit directly from suppliers to customers are recorded in prepaid expenses and other current assets. Risk of loss and the transfer of title from the supplier to the Company occur at freight on board shipping point. |
Property and Equipment | Property and equipment are stated at cost, net of depreciation and amortization. Depreciation and amortization on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets as follows: Class Range of Life (In Years) Furniture and computer equipment 3 to 7 Site and software development costs 2 Leasehold improvements The lesser of useful life or lease term |
Site and Software Development Costs | The Company capitalizes costs associated with the development of its sites and internal-use software products after the preliminary project stage is complete and until the software is ready for its intended use. The capitalized costs are amortized over a two-year period. Costs incurred in the preliminary stages of development, after the software is ready for its intended use and for maintenance of internal-use software are expensed as incurred. Upgrade and enhancements are capitalized to the extent they will result in added functionality. |
Goodwill | Goodwill represents the excess of cost over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is subject to an annual impairment test, or more frequently as impairment indicators arise. The Company tests goodwill for impairment at least annually. The Company reviews goodwill for impairment on the last day of its fiscal year and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value. The assessment is performed at the reporting unit level. The Company first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the two-step impairment test is not required. If the qualitative assessment requires the Company to perform the two-step goodwill impairment test to identify potential goodwill impairment, then the first step is to compare the fair value of the reporting unit to the book value including goodwill. If the fair value of the reporting unit exceeds the book value, goodwill is not impaired. If the book value exceeds the fair value, the second step of the process is performed to measure the amount of impairment. |
Long-Lived Assets | The Company reviews long-lived assets for impairment whenever events or changes in circumstances, such as service discontinuance or technological obsolescence, indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset. |
Revenue Recognition | The Company generates net revenue through product sales generated primarily through the sites of the Company's five distinct brands and through sites operated by third parties. The Company recognizes revenue only when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. The Company recognizes net revenue from sales of its products, upon delivery to the customer. The Company records product revenue at the gross amount as the Company is the primary obligor with the customer and provides the primary customer service for all products sold on its sites, has latitude in establishing price and selecting products sold on its sites, has discretion in selecting suppliers of products sold on its sites, maintains inventory risk from shipment through delivery date and upon accepting returns, and has credit risk. Net revenue includes shipping costs charged to the customer and is recorded net of taxes collected from customers, which are remitted to governmental authorities. Cash discounts, returns and rebates are deducted from gross revenue in determining net revenue. In addition, the Company defers revenue when cash is collected from its customer prior to the satisfaction of the revenue recognition criteria. The Company maintains a membership rewards program that allows enrolled customers to earn points which can be redeemed for future purchases. The Company defers a portion of its revenue associated with rewards that are ultimately expected to be redeemed prior to expiration. The Company also earns revenue through third-party advertisers that pay based on the number of advertisement related clicks, actions, or impressions for advertisements placed on the Company's sites. Revenue earned under these arrangements is included in net revenue and is recognized in the period in which the click, action, or impression occurs. |
Vendor Rebates | The Company earns rebates under a volume incentive programs with its suppliers. These rebates are earned upon shipment of goods. Amounts earned and due from suppliers under these rebate programs are included in other current assets on the consolidated balance sheets and are reflected as a reduction of cost of goods sold on the consolidated statements of operations. Vendor allowances received by the Company reduce the carrying cost of inventory and are recognized in cost of goods sold when the related inventory is sold. |
Costs of Goods Sold | Cost of goods sold consists of the cost of product sold to customers, shipping and handling costs and shipping supplies and fulfillment costs. Fulfillment costs include costs incurred in operating and staffing the fulfillment centers, such as costs attributed to receiving, inspecting, picking, packaging and preparing customer orders for shipment. Cost of goods sold also includes direct and indirect labor costs for fulfillment center oversight, including payroll and related benefit costs. |
Advertising Costs | Expenditures for advertising are expensed in the period that the advertising first takes place. |
Merchant Processing Fees | Merchant processing fees totaling $46.9 million , $27.6 million , and $19.4 million in the years ended December 31, 2015 , 2014 , and 2013 , respectively, are included in customer service and merchant fees expense in the accompanying consolidated statements of operations. These fees are charged by third parties that provide merchant processing services for credit cards and debit cards. |
Retail Partner Fees | The Company sells its products through sites owned and operated by third-party online retailers, or retail partners. The Company pays a fee for sales generated through these sites and records them as merchant processing fees and advertising costs. |
Equity-Based Compensation | The Company accounts for its equity-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ("ASC 718"). ASC 718 requires all equity-based payments to employees, to be recognized as expense in the statements of operations based on their grant date fair values. The Company has granted stock options, restricted shares and restricted stock units. Since April 2011, the Company has only granted restricted stock units and has not granted any stock options or restricted stock. Restricted stock unit values are determined based on the quoted market price of our Class A common stock on the date of grant. The Company accounts for equity awards to non-employees in accordance with FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees , which requires the fair value of an award to non-employees be remeasured at fair value as the award vests. The Company estimated the grant date fair value of each common stock option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model required management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. Until its IPO in October 2014, the fair value of restricted stock and restricted stock units on the date of grant was determined by the board. Since April 2011, the Company has only granted restricted stock units and has not granted any stock options or restricted stock. Since our IPO, restricted stock unit values are determined based on the quoted market price of our common stock on the date of grant. Prior to the IPO the Company periodically determined for financial reporting purposes the estimated fair value of our common stock at various dates using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, also known as the Practice Aid. The Company generally used the income and market approaches prescribed in the Practice Aid, in particular the income approach's discounted cash flow method, which was based on the Company's projections and estimated discount rate and the guideline public company, guideline transactions and precedent transaction methodologies, based on inputs from comparable public companies' equity valuations, comparable acquisition transactions and transactions in the Company's own equity securities, to estimate the enterprise value of the company. |
Income Taxes | Income taxes are accounted for under the asset and liability method. Under the asset and liability method, 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those 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. The Company records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. Prior to the IPO, the Company's main operating entity had not been subject to U.S. federal income taxes as it was organized as a limited liability company. As such, the taxable income or loss was passed through to and included in the tax returns of the members. The Company was subject to entity level taxation in certain states, and certain domestic and foreign subsidiaries were subject to entity level U.S. and foreign income taxes. As a result of the internal restructuring prior to the IPO, a portion of the Company's income will be subject to U.S. federal, state, local, and foreign income taxes and taxed at the prevailing corporate tax rates. |
Net Loss Attributable to Common Stockholders Per Share | The Company follows the two-class method when computing net loss attributable to common stockholders per share as the Company had issued shares that meet the definition of participating securities which converted to common stock upon the IPO. Prior to the corporate reorganization, the Company's convertible redeemable preferred units contractually entitled the holders of such units to participate in dividends, but did not contractually require the holders of such units to participate in losses of the Company. Accordingly, in periods prior to 2014 in which the Company reports a net loss or a net loss attributable to common stockholders resulting from preferred stock dividends or accretion, net losses are not allocated to participating securities. After the IPO the Company has continued to follow the two-class method because it has issued two classes of common stock—Class A and Class B. Basic net income (loss) attributable to common stockholders per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding for the period. For periods in which the Company has reported net losses, diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common stockholders, since dilutive common stock are not assumed to have been issued if their effect is anti-dilutive. |
Subsequent Events | The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2015 , but prior to the filing of the financial statements with the U.S. Securities and Exchange Commission, to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of these financial statements. |
Recent Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases" ("ASU 2016-02"). This ASU revises the accounting related to leases by requiring lessees to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions. This ASU is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). The standard requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The Company early adopted its provisions during fiscal year 2015 on a prospective basis. Accordingly, as permitted by ASU 2015-17, the current deferred taxes have been classified as noncurrent on the Balance Sheet. The prospective adoption of ASU 2015-17 does not require a restatement of prior year balances; as such, they have not been adjusted. In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements, Going Concern." ("ASU 2014-15"). ASU-2014-15 will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016 and earlier adoption is permitted. Management does not expect that the application of ASU 2014-15 will have an impact on the Company’s financial condition, results of operations or cash flows. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this ASU on January 1, 2017. Management is currently evaluating which transition approach to use and the impact of the adoption of this ASU on the Company’s financial condition, results of operations or cash flows. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of the Wholly-Owned Subsidiaries of the Company | Below is a summary of the wholly-owned subsidiaries of the Company with operations: Subsidiary Location Wayfair LLC USA Wayfair Securities Corporation USA SK Retail, Inc. USA Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair GmbH Germany Wayfair (BVI) Ltd. British Virgin Islands |
Summary of Subsidiaries' Functional Currencies | The functional currency of the Company is the United States dollar, while the functional currency of certain wholly-owned subsidiaries outside of the United States is as follows: Subsidiary Currency Wayfair Stores Limited Euro Wayfair (UK) Limited Pound sterling Wayfair GmbH Euro Wayfair (BVI) Ltd. Euro |
Schedule of Estimated Useful Lives of Plant, Property and Equipment | Depreciation and amortization on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets as follows: Class Range of Life (In Years) Furniture and computer equipment 3 to 7 Site and software development costs 2 Leasehold improvements The lesser of useful life or lease term |
Marketable Securities and Fai24
Marketable Securities and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | The following table presents details of the Company’s marketable securities as of December 31, 2015 (in thousands): December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term: Investment securities $ 16,908 $ — $ (13 ) $ 16,895 Long-term: Investment securities 80,172 2 (291 ) 79,883 Total $ 97,080 $ 2 $ (304 ) $ 96,778 |
Schedule of the Fair Value of the Company's Financial Assets Measured at Fair Value on a Recurring Basis Based on the Three-tier Value Hierarchy | The following tables set forth the fair value of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2015 and 2014 based on the three-tier value hierarchy (in thousands): December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 267,300 $ — $ — $ 267,300 Short-term investments: Certificates of deposit 35,000 — — 35,000 Investment securities — 16,895 — 16,895 Restricted cash: Certificate of deposit 5,000 — — 5,000 Long-term: Investment securities — 79,883 — 79,883 Total $ 307,300 $ 96,778 $ — $ 404,078 December 31, 2014 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 302,595 $ — $ — $ 302,595 Short-term investments: Certificates of deposit 60,000 — — 60,000 Restricted cash: Money market funds 302 — — 302 Total $ 362,897 $ — $ — $ 362,897 |
Intangible assets and Goodwill
Intangible assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table summarizes intangible assets as of December 31, 2015 and 2014 (in thousands): Weighted-Average December 31, 2015 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 1,900 $ (918 ) $ 982 Customer relationships 5 1,300 (628 ) 672 Non-compete agreements 3 - 5 100 (81 ) 19 Other intangibles 3 373 (270 ) 103 Domain names 5 2,687 (2,685 ) 2 Total $ 6,360 $ (4,582 ) $ 1,778 Weighted-Average December 31, 2014 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 2,001 $ (604 ) $ 1,397 Customer relationships 5 1,300 (368 ) 932 Non-compete agreements 3 - 5 108 (52 ) 56 Technology 5 718 (467 ) 251 Other intangibles 3 373 (158 ) 215 Domain names 5 2,687 (2,684 ) 3 Total $ 7,187 $ (4,333 ) $ 2,854 |
Summary of the Estimated Aggregate Expense in Future Years | The estimated future amortization expense of purchased intangible assets as of December 31, 2015 , is as follows (in thousands): Total 2016 $ 765 2017 640 2018 373 Thereafter — Total $ 1,778 |
Schedule of Goodwill | The following table presents the changes in goodwill during the years ended December 31, 2015 and 2014 , respectively (in thousands): Net Book Value Goodwill as of December 31, 2014 $ 3,624 Sale during the period (1,520 ) Foreign currency exchange rate effect (180 ) Goodwill as of December 31, 2015 $ 1,924 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | The following table summarizes property and equipment, net as of December 31, 2015 and 2014 (in thousands): December 31, 2015 2014 Furniture and computer equipment $ 68,416 $ 48,399 Site and software development costs 50,907 36,294 Leasehold improvements 29,315 14,290 Construction in progress 27,563 4,800 176,201 103,783 Less accumulated depreciation and amortization (63,876 ) (43,144 ) Property and equipment, net $ 112,325 $ 60,639 |
Prepaid Expenses and Other Cu27
Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Components of Prepaid Expenses and Other Current Assets | The following table presents the components of selected balance sheet items as of December 31, 2015 and 2014 (in thousands): December 31, Prepaid expenses and other current assets: 2015 2014 Deferred costs in transit $ 34,102 $ 19,621 Supplier receivable 17,316 9,507 Supplier credits receivable 7,344 3,989 Other prepaid and other current assets 17,684 12,145 Total prepaid expenses and other current assets $ 76,446 $ 45,262 |
Schedule of Accrued Expenses | December 31, Accrued expenses: 2015 2014 Employee compensation and related benefits $ 24,928 $ 15,244 Advertising 6,695 9,561 Accrued property, plant and equipment 3,069 7,151 Credit card 6,621 3,560 Audit, legal and professional fees 2,326 898 Other accrued expenses 7,921 5,921 Total accrued expenses $ 51,560 $ 42,335 |
Components of Other Liabilities | December 31, Other liabilities: 2015 2014 Deferred rent $ 24,669 $ 12,821 Construction costs capitalized under finance lease obligations 27,295 3,960 Other liabilities 3,046 611 Total other liabilities $ 55,010 $ 17,392 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Lease Payments Under Non-cancelable Operating Leases | Future minimum rental commitments under non-cancelable leases with initial or remaining terms in excess of one year at December 31, 2015 were as follows (in thousands): Amount 2016 $ 21,131 2017 27,871 2018 28,986 2019 27,497 2020 26,006 Thereafter 109,071 Total $ 240,562 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity based compensation | |
Summary of Status and Activity for Awards of Stock Options | A summary of the status and activity for awards of stock options for the year ended December 31, 2015 is as follows: Stock Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Outstanding at December 31, 2014 449,046 $ 2.98 6.5 Exercised (164,590 ) $ 2.96 Forfeited/cancelled (4,865 ) $ 3.19 Outstanding at December 31, 2015 279,591 $ 2.98 5.5 Exercisable at December 31, 2015 277,937 $ 2.98 5.5 Expected to vest as of December 31, 2015 1,022 $ 3.42 5.5 |
Restricted stock | |
Equity based compensation | |
Summary of Status and Activity for Awards of Stock Options | A summary of the status and activity for awards of restricted common stock for the year ended December 31, 2015 is as follows: Restricted Stock Weighted-Average Grant Date Fair Value Unvested at December 31, 2014 161,476 $ 4.75 Vested (159,483 ) $ 4.75 Unvested at December 31, 2015 1,993 $ 4.75 Expected to vest as of December 31, 2015 1,228 $ 4.75 |
Restricted stock units | |
Equity based compensation | |
Summary of Status and Activity for Awards of Restricted Stock Units | A summary of the status and activity for awards of RSUs for the year ended December 31, 2015 is as follows: Restricted Stock Units Weighted-Average Grant Date Fair Value Unvested at December 31, 2014 4,542,231 $ 17.67 Granted 3,098,159 $ 36.91 Vested (1,514,576 ) $ 17.28 Forfeited/cancelled (517,947 ) $ 21.56 Unvested at December 31, 2015 5,607,867 $ 28.30 Expected to vest as of December 31, 2015 4,161,263 $ 28.82 |
Segment and Geographic Inform30
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Operating Information by Segment | The following table presents the activity related to the Company’s net revenue from Direct Retail sales derived through the Company’s sites and Other sales derived through sites operated by third parties and fees from third-party advertising distribution providers (in thousands): Year Ended December 31, 2015 2014 2013 Net revenue Direct Retail $ 2,040,238 $ 1,101,686 $ 673,446 Other 209,647 217,265 242,397 Net revenue $ 2,249,885 $ 1,318,951 $ 915,843 |
Schedule of Revenue and Long-lived Assets by Geographic Area | The following table presents revenue and long-lived assets by geographic area (in thousands): Year Ended December 31, 2015 2014 2013 Geographic net revenue: United States $ 2,135,492 $ 1,236,215 $ 857,001 International 114,393 82,736 58,842 Total $ 2,249,885 $ 1,318,951 $ 915,843 Year Ended December 31, 2015 2014 Geographic long-lived assets: United States $ 110,042 $ 59,013 International 2,283 1,626 Total $ 112,325 $ 60,639 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) Attributable to Income (Loss) From Operation | Income tax expense (benefit) for the years ended December 31, 2015 , 2014 and 2013 attributable to income (loss) from operation is presented below (in thousands): Year ended December 31, 2015 Current Deferred Total Federal $ — $ 54 $ 54 State (202 ) 7 (195 ) Foreign 331 (95 ) 236 $ 129 $ (34 ) $ 95 Year ended December 31, 2014 Current Deferred Total Federal $ — $ 32 $ 32 State 1 4 5 Foreign 138 — 138 $ 139 $ 36 $ 175 Year ended December 31, 2013 Current Deferred Total Federal $ — $ — $ — State 1 — 1 Foreign 41 4 45 42 4 46 |
Schedule of Difference in the Company's Expected Tax Expense (Benefit) as Computed by Applying the U.S. Federal Corporate Rate to Income Before Tax Expense (Benefit), and Actual Tax is Reconciled | The actual income tax expense (benefit) differs from the expected income tax expense (benefit) computed by applying the United States Federal corporate income tax rate of 35% to income before tax expense (benefit) as follows (in thousands): Year Ended December 31, 2015 2014 2013 Computed expected tax expense (benefit) $ (27,072 ) $ (51,773 ) $ (5,417 ) Decrease in income taxes resulting from: Partnership losses not creating tax benefit — 21,369 3,920 Effect of conversion to C-corporation — (28,034 ) — State income tax expense, net of federal benefit (1,424 ) (2,517 ) (269 ) Foreign tax rate differential 9,278 2,826 619 Equity based compensation expense 1,415 5,555 — Change in valuation allowance 12,394 52,921 1,418 Impact of sale of Australian subsidiary 4,248 — — Other 1,256 (172 ) (225 ) Net income tax expense $ 95 $ 175 $ 46 |
Schedule of Components of Income Tax Expense (Benefit) Determined by Tax Jurisdiction | The components of results of income before income tax expense (benefit) determined by tax jurisdiction, are as follows (in thousands): Year Ended December 31, 2015 2014 2013 United States $ (38,963 ) $ (128,505 ) $ (9,895 ) Foreign (38,385 ) (19,418 ) (5,585 ) Total $ (77,348 ) $ (147,923 ) $ (15,480 ) |
Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities for the periods presented are as follows (in thousands): December 31 2015 2014 Deferred tax asset: Accounts receivable $ 926 $ 1,009 Inventories 280 295 Operating loss carry-forwards 32,678 17,939 Equity based compensation expense 10,716 11,529 Intangibles 24,205 26,557 Accrued expenses 307 3,555 Charitable contributions 143 18 Deferred rent 21,219 7,161 Gross deferred tax asset 90,474 68,063 Less: Valuation allowance (70,614 ) (58,980 ) Net deferred tax asset 19,860 9,083 Deferred tax liability: Prepaid expenses (561 ) (783 ) Capitalized technology (6,444 ) (5,019 ) Property and equipment (12,646 ) (3,281 ) Goodwill (96 ) (36 ) Other (126 ) — Total deferred tax liabilities (19,873 ) (9,119 ) Net deferred tax assets (liabilities) (13 ) (36 ) Current net deferred tax asset — — Current net deferred tax liability — (55 ) Non-current net deferred tax asset — 19 Non-current net deferred tax liability (13 ) — (13 ) (36 ) |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Year Ended December 31, 2015 2014 2013 Numerator: Net loss $ (77,443 ) $ (148,098 ) $ (15,526 ) Accretion of preferred units to redemption value — (2,071 ) (25,388 ) Net loss attributable to common stockholders per share—basic and diluted $ (77,443 ) $ (150,169 ) $ (40,914 ) Denominator: Weighted average shares used for basic and diluted net loss per share computation 83,726 50,642 41,332 Net loss per common share attributable to common stockholders: Basic and Diluted $ (0.92 ) $ (2.97 ) $ (0.99 ) |
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common stockholders as their Effect Would Have Been Antidilutive | The following have been excluded from the computation of basic and diluted net loss per share attributable to common stockholders as their effect would have been antidilutive: Year Ended December 31, 2015 2014 2013 Series A convertible redeemable preferred units — — 21,551,801 Stock options 279,591 449,046 664,232 Restricted stock 1,993 161,476 3,490,968 Restricted stock units 5,607,867 4,542,231 5,255,113 5,889,451 5,152,753 30,962,114 |
Basis of Presentation (Details)
Basis of Presentation (Details) supplier in Thousands, $ in Thousands, product in Millions | 12 Months Ended | |
Dec. 31, 2015brandproductsupplier | Dec. 31, 2014USD ($) | |
Subsidiary or Equity Method Investee [Line Items] | ||
Minimum number of products offered | product | 7 | |
Minimum number of suppliers providing products offered | supplier | 7 | |
Number of distinct brands | brand | 5 | |
Additional Paid-In Capital | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Reclassification from members' deficit to additional paid in capital | $ | $ 306,229 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014$ / shares | Dec. 31, 2015USD ($)common_stock_classbrand | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)$ / shares | |
Concentrations of Credit Risk | ||||
Cash and cash equivalents and short-term investments held in banks located outside the U.S. | $ 3,900,000 | $ 2,100,000 | ||
Goods In-Transit | ||||
Goods in-transit | 34,100,000 | 19,600,000 | ||
Property, plant and equipment | ||||
Property and equipment, net | 112,325,000 | 60,639,000 | ||
Long-Lived Assets | ||||
Impairment of long-lived assets or identifiable intangibles | $ 0 | 0 | $ 0 | |
Revenue Recognition | ||||
Number of distinct brands | brand | 5 | |||
Advertising Costs | ||||
Advertising expense | $ 278,224,000 | 191,284,000 | 108,469,000 | |
Prepaid advertising costs | 1,200,000 | 600,000 | ||
Merchant Processing Fees | ||||
Merchant processing fees | 46,900,000 | 27,600,000 | 19,400,000 | |
Retail Partner Fees | ||||
Retail partner fees included in merchant processing fees | 3,500,000 | 4,400,000 | 4,300,000 | |
Retail partner fees included in advertising costs | $ 20,200,000 | 24,300,000 | $ 25,200,000 | |
Earnings Per Share | ||||
Number of classes of common stock | common_stock_class | 2 | |||
May 2,013 | ||||
Equity Based Compensation | ||||
Grant-date fair value | $ / shares | $ 6.46 | |||
August 2,013 | ||||
Equity Based Compensation | ||||
Grant-date fair value | $ / shares | 10.88 | |||
November 2,013 | ||||
Equity Based Compensation | ||||
Grant-date fair value | $ / shares | $ 20.87 | |||
September 2,014 | ||||
Equity Based Compensation | ||||
Grant-date fair value | $ / shares | $ 29 | |||
Furniture and computer equipment | Minimum | ||||
Property, plant and equipment | ||||
Estimated useful lives | 3 years | |||
Furniture and computer equipment | Maximum | ||||
Property, plant and equipment | ||||
Estimated useful lives | 7 years | |||
Site and software development costs | ||||
Property, plant and equipment | ||||
Estimated useful lives | 2 years | |||
Property and equipment, net | $ 18,100,000 | 14,200,000 | ||
Amortization expense | 15,300,000 | 9,900,000 | $ 7,000,000 | |
Other Noncurrent Assets | ||||
Restricted Cash | ||||
Restricted cash | $ 5,000,000 | $ 300,000 |
Marketable Securities and Fai35
Marketable Securities and Fair Value Measurements (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Fair value measurements | |
Amortized Cost | $ 97,080 |
Gross Unrealized Gains | 2 |
Gross Unrealized Losses | (304) |
Estimated Fair Value | 96,778 |
Short-term investments | |
Fair value measurements | |
Amortized Cost | 16,908 |
Gross Unrealized Gains | 0 |
Gross Unrealized Losses | (13) |
Estimated Fair Value | 16,895 |
Long-term investments | |
Fair value measurements | |
Amortized Cost | 80,172 |
Gross Unrealized Gains | 2 |
Gross Unrealized Losses | (291) |
Estimated Fair Value | $ 79,883 |
Marketable Securities and Fai36
Marketable Securities and Fair Value Measurements (Details 2) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value measurements | ||
Total assets | $ 404,078 | $ 362,897 |
Cash equivalents | ||
Fair value measurements | ||
Money market funds | 267,300 | 302,595 |
Short-term investments | ||
Fair value measurements | ||
Certificates of deposit | 35,000 | 60,000 |
Investment securities | 16,895 | |
Restricted cash | ||
Fair value measurements | ||
Money market funds | 302 | |
Certificates of deposit | 5,000 | |
Long-term investments | ||
Fair value measurements | ||
Investment securities | 79,883 | |
Level 1 | ||
Fair value measurements | ||
Total assets | 307,300 | 362,897 |
Level 1 | Cash equivalents | ||
Fair value measurements | ||
Money market funds | 267,300 | 302,595 |
Level 1 | Short-term investments | ||
Fair value measurements | ||
Certificates of deposit | 35,000 | 60,000 |
Level 1 | Restricted cash | ||
Fair value measurements | ||
Money market funds | $ 302 | |
Certificates of deposit | 5,000 | |
Level 2 | ||
Fair value measurements | ||
Total assets | 96,778 | |
Level 2 | Short-term investments | ||
Fair value measurements | ||
Investment securities | 16,895 | |
Level 2 | Long-term investments | ||
Fair value measurements | ||
Investment securities | $ 79,883 |
Intangible assets and Goodwil37
Intangible assets and Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible assets | |||
Gross Carrying Amount | $ 6,360 | $ 7,187 | |
Accumulated Amortization | (4,582) | (4,333) | |
Net Book Value | 1,778 | 2,854 | |
Amortization expense related to intangible assets | $ 891 | $ 980 | $ 539 |
Trademarks | |||
Intangible assets | |||
Weighted-Average Amortization Period | 5 years | 5 years | |
Gross Carrying Amount | $ 1,900 | $ 2,001 | |
Accumulated Amortization | (918) | (604) | |
Net Book Value | $ 982 | $ 1,397 | |
Customer relationships | |||
Intangible assets | |||
Weighted-Average Amortization Period | 5 years | 5 years | |
Gross Carrying Amount | $ 1,300 | $ 1,300 | |
Accumulated Amortization | (628) | (368) | |
Net Book Value | 672 | 932 | |
Non-compete agreements | |||
Intangible assets | |||
Gross Carrying Amount | 100 | 108 | |
Accumulated Amortization | (81) | (52) | |
Net Book Value | $ 19 | $ 56 | |
Non-compete agreements | Minimum | |||
Intangible assets | |||
Weighted-Average Amortization Period | 3 years | 3 years | |
Non-compete agreements | Maximum | |||
Intangible assets | |||
Weighted-Average Amortization Period | 5 years | 5 years | |
Technology | |||
Intangible assets | |||
Weighted-Average Amortization Period | 5 years | ||
Gross Carrying Amount | $ 718 | ||
Accumulated Amortization | (467) | ||
Net Book Value | $ 251 | ||
Other intangibles | |||
Intangible assets | |||
Weighted-Average Amortization Period | 3 years | 3 years | |
Gross Carrying Amount | $ 373 | $ 373 | |
Accumulated Amortization | (270) | (158) | |
Net Book Value | $ 103 | $ 215 | |
Domain names | |||
Intangible assets | |||
Weighted-Average Amortization Period | 5 years | 5 years | |
Gross Carrying Amount | $ 2,687 | $ 2,687 | |
Accumulated Amortization | (2,685) | (2,684) | |
Net Book Value | $ 2 | $ 3 |
Intangible assets and Goodwil38
Intangible assets and Goodwill (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,016 | $ 765 | |
2,017 | 640 | |
2,018 | 373 | |
Thereafter | 0 | |
Net Book Value | $ 1,778 | $ 2,854 |
Intangible assets and Goodwil39
Intangible assets and Goodwill (Details 3) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill | ||||
Goodwill as of December 31, 2014 | $ 3,624 | |||
Sale during the period | (1,520) | |||
Foreign currency exchange rate effect | (180) | |||
Goodwill as of December 31, 2015 | 1,924 | $ 3,624 | ||
Gain on sale of a business | $ 2,997 | $ 0 | $ 0 | |
Australian business | ||||
Goodwill | ||||
Goodwill as of December 31, 2015 | $ 1,500 | |||
Net carrying amount of intangible assets | 200 | |||
Other income (expense), net | Australian business | ||||
Goodwill | ||||
Gain on sale of a business | $ 3,000 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and equipment, net | |||
Property and equipment, gross | $ 176,201 | $ 103,783 | |
Less accumulated depreciation and amortization | (63,876) | (43,144) | |
Property and equipment, net | 112,325 | 60,639 | |
Depreciation and amortization | 31,600 | 20,800 | $ 12,500 |
Furniture and computer equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 68,416 | 48,399 | |
Site and software development costs | |||
Property and equipment, net | |||
Property and equipment, gross | 50,907 | 36,294 | |
Property and equipment, net | 18,100 | 14,200 | |
Leasehold improvements | |||
Property and equipment, net | |||
Property and equipment, gross | 29,315 | 14,290 | |
Construction in progress | |||
Property and equipment, net | |||
Property and equipment, gross | $ 27,563 | $ 4,800 |
Prepaid Expenses and Other Cu41
Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid expenses and other current assets: | ||
Deferred costs in transit | $ 34,102 | $ 19,621 |
Supplier receivable | 17,316 | 9,507 |
Supplier credits receivable | 7,344 | 3,989 |
Other prepaid and other current assets | 17,684 | 12,145 |
Total prepaid expenses and other current assets | $ 76,446 | $ 45,262 |
Prepaid Expenses and Other Cu42
Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued expenses: | ||
Employee compensation and related benefits | $ 24,928 | $ 15,244 |
Advertising | 6,695 | 9,561 |
Accrued property, plant and equipment | 3,069 | 7,151 |
Credit card | 6,621 | 3,560 |
Audit, legal and professional fees | 2,326 | 898 |
Other accrued expenses | 7,921 | 5,921 |
Total accrued expenses | $ 51,560 | $ 42,335 |
Prepaid Expenses and Other Cu43
Prepaid Expenses and Other Current Assets, Accrued Expenses and Other Liabilities (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other liabilities: | ||
Deferred rent | $ 24,669 | $ 12,821 |
Construction costs capitalized under finance lease obligations | 27,295 | 3,960 |
Other liabilities | 3,046 | 611 |
Total other liabilities | $ 55,010 | $ 17,392 |
Commitments and Contingencies44
Commitments and Contingencies (Details) $ in Thousands | Feb. 02, 2016plaintiff | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Feb. 29, 2016USD ($) |
Future minimum lease payments under non cancelable operating leases | |||||
2,016 | $ 21,131 | ||||
2,017 | 27,871 | ||||
2,018 | 28,986 | ||||
2,019 | 27,497 | ||||
2,020 | 26,006 | ||||
Thereafter | 109,071 | ||||
Total | 240,562 | ||||
Rental expense under operating leases | 16,300 | $ 11,400 | $ 4,600 | ||
Letter of credit issued as security for lease agreements | 5,900 | ||||
Minimum sublease rentals | 3,200 | ||||
Other Noncurrent Assets | |||||
Future minimum lease payments under non cancelable operating leases | |||||
Restricted cash | 5,000 | $ 300 | |||
Sales and other similar tax assessments | |||||
Future minimum lease payments under non cancelable operating leases | |||||
Loss contingency, estimate of possible loss | $ 12,900 | ||||
Subsequent Event | |||||
Future minimum lease payments under non cancelable operating leases | |||||
Minimum sublease rentals | $ 12,700 | ||||
Carson vs. Wayfair | Subsequent Event | |||||
Future minimum lease payments under non cancelable operating leases | |||||
Loss contingency, number of plaintiffs | plaintiff | 2 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit Plans | |||
Age of the full-time employees qualified to participate in the defined contribution plan | 21 years | ||
Expense related to savings plan recognized | $ 3.3 | $ 2.4 | $ 1.8 |
Maximum | |||
Employee Benefit Plans | |||
Matching contribution by employer as a percentage of employee's considered compensation | 4.00% |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) | Oct. 07, 2014USD ($) | Apr. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($)vesting_triggershares | Dec. 31, 2014USD ($) |
Equity based compensation | |||||
Number of vesting triggers | vesting_trigger | 2 | ||||
Service period | 5 years | ||||
Share-based compensation expense | $ 0 | ||||
2014 Plan | |||||
Equity based compensation | |||||
Number of shares authorized | shares | 8,603,066 | ||||
Restricted stock units | |||||
Equity based compensation | |||||
Shares issued under plan | shares | 3,098,159 | ||||
Restricted stock units | 2014 Plan | |||||
Equity based compensation | |||||
Shares issued under plan | shares | 3,098,159 | ||||
Restricted stock | |||||
Equity based compensation | |||||
Shares repurchased | shares | 202,757 | ||||
Stock options | |||||
Equity based compensation | |||||
Shares repurchased | shares | 9,028 | ||||
Aggregate intrinsic value of stock options exercised | $ 5,200,000 | $ 4,300,000 | |||
Aggregate intrinsic value of stock options outstanding and repurchased | 12,500,000 | ||||
Aggregate intrinsic value of stock options exercisable | $ 12,400,000 | ||||
Weighted average remaining vesting term for options expected to vest | 2 months 12 days | ||||
Stock options | Maximum | |||||
Equity based compensation | |||||
Unrecognized share-based compensation | $ 100,000 | ||||
Common stock options and restricted common stocks | |||||
Equity based compensation | |||||
Repurchase tender offer price per share | $ / shares | $ 26.23 | ||||
Payments of repurchase of stock | $ 5,500,000 | ||||
Compensation charge | $ 5,500,000 |
Equity-Based Compensation (De47
Equity-Based Compensation (Details 2) - Stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options | ||
Outstanding at the beginning of the period (in shares) | 449,046 | |
Exercised (in shares) | (164,590) | |
Forfeited/cancelled (in shares) | (4,865) | |
Outstanding at the end of the period (in shares) | 279,591 | 449,046 |
Exercisable at the end of the period (in shares) | 277,937 | |
Expected to vest at the end of the period (in shares) | 1,022 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 2.98 | |
Exercised (in dollars per share) | 2.96 | |
Forfeited/canceled (in dollars per share) | 3.19 | |
Outstanding at the end of the period (in dollars per share) | 2.98 | $ 2.98 |
Exercisable at the end of the period (in dollars per share) | 2.98 | |
Expected to vest at the end of the period (in dollars per share) | $ 3.42 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding | 5 years 6 months | 6 years 6 months |
Exercisable at the end of the period | 5 years 6 months | |
Expected to vest at the end of the period | 5 years 6 months |
Equity-Based Compensation (De48
Equity-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted stock | |||
Restricted stock and units | |||
Unvested at the beginning of the period (in shares) | 161,476 | ||
Vested (in shares) | (159,483) | ||
Repurchased (in shares) | (202,757) | ||
Unvested at the end of the period (in shares) | 1,993 | 161,476 | |
Expected to vest at the end of the period (in shares) | 1,228 | ||
Weighted-Average Grant-Date Fair Value | |||
Unvested at the beginning of the period (in dollars per share) | $ 4.75 | ||
Vested (in dollars per share) | 4.75 | ||
Unvested at the end of the period (in dollars per share) | 4.75 | $ 4.75 | |
Expected to vest at the end of the period (in dollars per share) | $ 4.75 | ||
Additional information | |||
Intrinsic value of stock vested and repurchased | $ 4.3 | $ 101.5 | |
Aggregate intrinsic value of nonvested restricted common stock | $ 0.1 | ||
Weighted average remaining vesting term for options expected to vest | 1 month 6 days | ||
Restricted stock | Maximum | |||
Additional information | |||
Unrecognized share-based compensation (less than) | $ 0.1 | ||
Restricted stock units | |||
Restricted stock and units | |||
Unvested at the beginning of the period (in shares) | 4,542,231 | ||
Granted (in shares) | 3,098,159 | ||
Vested (in shares) | (1,514,576) | ||
Forfeited/cancelled (in shares) | (517,947) | ||
Unvested at the end of the period (in shares) | 5,607,867 | 4,542,231 | |
Expected to vest at the end of the period (in shares) | 4,161,263 | ||
Weighted-Average Grant-Date Fair Value | |||
Unvested at the beginning of the period (in dollars per share) | $ 17.67 | ||
Granted (in dollars per share) | 36.91 | ||
Vested (in dollars per share) | 17.28 | ||
Forfeited/cancelled (in dollars per share) | 21.56 | ||
Unvested at the end of the period (in dollars per share) | 28.30 | $ 17.67 | |
Expected to vest at the end of the period (in dollars per share) | $ 28.82 | ||
Additional information | |||
Aggregate intrinsic value of nonvested RSUs | $ 267 | ||
Unrecognized share-based compensation (less than) | 91 | ||
Intrinsic value of stock vested | $ 51.6 | $ 69 | |
Weighted average remaining vesting term for options expected to vest | 1 year 8 months 12 days |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Details) $ / shares in Units, $ in Thousands | Oct. 07, 2014USD ($)$ / sharesshares | Oct. 31, 2014USD ($)$ / sharesshares | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)vote$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2015$ / sharesshares |
Members' deficit | ||||||||
Preferred stock, shares authorized | 10,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Preferred stock, shares issued | 0 | 0 | ||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||
Common stock | ||||||||
Net proceeds from initial public offering | $ | $ 0 | $ 282,893 | $ 0 | |||||
Class A common stock | ||||||||
Common stock | ||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Common stock, shares outstanding | 45,814,237 | 37,002,874 | 45,814,237 | |||||
Number of votes each holder is entitled | vote | 1 | |||||||
Class A common stock | Initial Public Offering | ||||||||
Common stock | ||||||||
Initial public offering, aggregate number of shares of common stock sold | 12,650,000 | |||||||
Share issue price (in dollars per share) | $ / shares | $ 29 | |||||||
Number of shares of common stock sold | 10,500,000 | |||||||
Number of shares of stock sold by the selling shareholders | 2,150,000 | |||||||
Number of shares of sold by the selling shareholders pursuant to an option granted to the underwriters to purchase additional shares | 1,650,000 | |||||||
Net proceeds from initial public offering | $ | $ 282,900 | |||||||
Class B common stock | ||||||||
Common stock | ||||||||
Common stock, shares authorized | 164,000,000 | 164,000,000 | 164,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Common stock, shares outstanding | 38,496,562 | 46,179,192 | 38,496,562 | |||||
Number of votes each holder is entitled | vote | 10 | |||||||
Conversion ratio following the completion of the offering | 1 | |||||||
Conversion ratio | 1 | |||||||
Conversion ratio upon transfer | 1 | |||||||
Number of shares converted into Class A shares | 32,124,686 | |||||||
Class B common stock | Minimum | ||||||||
Common stock | ||||||||
Percentage of outstanding shares of Class B common stock that shall convert automatically in the event of the affirmative vote or written consent of holders | 66.67% | |||||||
Class B common stock | Maximum | ||||||||
Common stock | ||||||||
Aggregate number of shares outstanding Class A common stock and Class B common stock that shall convert automatically (less than) | 10.00% | |||||||
Series A Convertible Redeemable Preferred Units | ||||||||
Members' deficit | ||||||||
Accretion of convertible redeemable preferred units | $ | $ 14,417 | $ 25,388 | $ 12,200 | |||||
Accrued dividend distribution | $ | $ 24,500 | $ 15,000 | ||||||
Series A and Series B convertible redeemable preferred units | ||||||||
Members' deficit | ||||||||
Reduction of accretion expenses | $ | $ 14,800 | |||||||
Series A and Series B convertible redeemable preferred units | Class B common stock | ||||||||
Members' deficit | ||||||||
Conversion of units to common stock (in shares) | 27,546,934 | |||||||
Series B Convertible Redeemable Preferred Units | ||||||||
Members' deficit | ||||||||
Accretion of convertible redeemable preferred units | $ | $ 2,455 |
Segment and Geographic Inform50
Segment and Geographic Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segment | segment | 1 | ||
Number of reportable segment | segment | 1 | ||
Net revenue | |||
Direct Retail | $ 2,040,238 | $ 1,101,686 | $ 673,446 |
Other | 209,647 | 217,265 | 242,397 |
Net revenue | $ 2,249,885 | $ 1,318,951 | $ 915,843 |
Segment and Geographic Inform51
Segment and Geographic Information (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Geographic analysis, revenue and long-lived assets | |||
Geographic net revenue | $ 2,249,885 | $ 1,318,951 | $ 915,843 |
Geographic long-lived assets | 112,325 | 60,639 | |
United States | |||
Geographic analysis, revenue and long-lived assets | |||
Geographic net revenue | 2,135,492 | 1,236,215 | 857,001 |
Geographic long-lived assets | 110,042 | 59,013 | |
International | |||
Geographic analysis, revenue and long-lived assets | |||
Geographic net revenue | 114,393 | 82,736 | $ 58,842 |
Geographic long-lived assets | $ 2,283 | $ 1,626 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current income tax expense (benefit) | |||
Current federal tax expense (benefit) | $ 0 | $ 0 | $ 0 |
Current state income tax expense (benefit) | (202) | 1 | 1 |
Current foreign income tax expense (benefit) | 331 | 138 | 41 |
Current income tax expense (benefit) | 129 | 139 | 42 |
Deferred income tax expense (benefit) | |||
Deferred federal income tax expense (benefit) | 54 | 32 | 0 |
Deferred state income tax expense (benefit) | 7 | 4 | 0 |
Deferred foreign income tax expense (benefit) | (95) | 0 | 4 |
Deferred income tax expense (benefit) | (34) | 36 | 4 |
Income tax expense (benefit) | |||
Federal income tax expense (benefit), Total | 54 | 32 | 0 |
State income tax expense (benefit), Total | (195) | 5 | 1 |
Foreign income tax expense (benefit), Total | 236 | 138 | 45 |
Provision for income taxes | $ 95 | $ 175 | $ 46 |
Reconciliation of the U.S. federal corporate rate to to income before tax expense (benefit), and actual tax | |||
U.S. federal corporate rate | 35.00% | 35.00% | 35.00% |
Computed expected tax expense (benefit) | $ (27,072) | $ (51,773) | $ (5,417) |
Decrease in income taxes resulting from: | |||
Partnership losses not creating tax benefit | 0 | 21,369 | 3,920 |
Effect of conversion to C-corporation | 0 | (28,034) | 0 |
State income tax expense, net of federal benefit | (1,424) | (2,517) | (269) |
Foreign tax rate differential | 9,278 | 2,826 | 619 |
Equity based compensation expense | 1,415 | 5,555 | 0 |
Change in valuation allowance | 12,394 | 52,921 | 1,418 |
Impact of sale of Australian subsidiary | 4,248 | 0 | 0 |
Other | 1,256 | (172) | (225) |
Provision for income taxes | 95 | 175 | 46 |
Income (loss) from continuing operations: | |||
United States | (38,963) | (128,505) | (9,895) |
Foreign | (38,385) | (19,418) | (5,585) |
Loss before income taxes | (77,348) | (147,923) | (15,480) |
Deferred tax asset: | |||
Accounts receivable | 926 | 1,009 | |
Inventories | 280 | 295 | |
Operating loss carry-forwards | 32,678 | 17,939 | |
Equity based compensation expense | 10,716 | 11,529 | |
Intangibles | 24,205 | 26,557 | |
Accrued expenses | 307 | 3,555 | |
Charitable contributions | 143 | 18 | |
Deferred rent | 21,219 | 7,161 | |
Gross deferred tax asset | 90,474 | 68,063 | |
Less: Valuation allowance | (70,614) | (58,980) | |
Net deferred tax asset | 19,860 | 9,083 | |
Deferred tax liability: | |||
Prepaid expenses | (561) | (783) | |
Capitalized technology | (6,444) | (5,019) | |
Property and equipment | (12,646) | (3,281) | |
Goodwill | (96) | (36) | |
Other | (126) | 0 | |
Total deferred tax liabilities | (19,873) | (9,119) | |
Current net deferred tax asset | 0 | 0 | |
Current net deferred tax liability | 0 | (55) | |
Non-current net deferred tax asset | 0 | 19 | |
Non-current net deferred tax liability | (13) | 0 | |
Deferred tax liabilities | (13) | (36) | |
Federal net operating loss carryforwards | 141,700 | ||
Federal net operating loss carryforward that will result in increase to additional paid-in capital | 82,200 | ||
State net operating loss carryforwards | 130,000 | ||
State net operating loss carryforward that will result in increase to additional paid-in capital | 74,400 | ||
Foreign operating loss carryforwards | 73,300 | ||
Operating loss carryforwards, change in additional paid in capital | 800 | ||
Increase in valuation allowance | 11,600 | ||
Undistributed earnings of the entity's foreign subsidiaries | 1,500 | ||
Gross unrecognized tax benefits | $ 200 | $ 200 | |
Tax benefit recognized upon expiration of applicable statute of limitations | $ 200 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Credit agreement | |||
Credit agreement amount outstanding | $ 0 | $ 0 | $ 0 |
Revolving line of credit | |||
Credit agreement | |||
Maximum borrowing capacity | 10,000,000 | ||
Wayfair | Period From July 31, 2015 Through September 30, 2015 | Line of credit | |||
Credit agreement | |||
Maximum borrowing capacity | 35,000,000 | ||
Wayfair | Period From October1, 2015 Through February28, 2016 | Line of credit | |||
Credit agreement | |||
Maximum borrowing capacity | 45,000,000 | ||
Wayfair | Period From March 1, 2016 Through July 31, 2016 | Line of credit | |||
Credit agreement | |||
Maximum borrowing capacity | $ 35,000,000 |
Net Loss per Share (Details)
Net Loss per Share (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)vote$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | |
Anti-dilutive securities | |||
Common stockholders outstanding that were excluded from the computation of diluted net loss per share | 5,889,451 | 5,152,753 | 30,962,114 |
Numerator: | |||
Net loss | $ | $ (77,443) | $ (148,098) | $ (15,526) |
Accretion of preferred units to redemption value | $ | 0 | (2,071) | (25,388) |
Net loss attributable to common stockholders | $ | $ (77,443) | $ (150,169) | $ (40,914) |
Denominator: | |||
Weighted average units used for basic and diluted net loss per unit computation (in units) | 83,726,000 | 50,642,000 | 41,332,000 |
Net loss per common unit attributable to common unit holders: | |||
Basic and Diluted (in dollars per unit) | $ / shares | $ (0.92) | $ (2.97) | $ (0.99) |
Series A Convertible Redeemable Preferred Units | |||
Anti-dilutive securities | |||
Common stockholders outstanding that were excluded from the computation of diluted net loss per share | 0 | 0 | 21,551,801 |
Stock options | |||
Anti-dilutive securities | |||
Common stockholders outstanding that were excluded from the computation of diluted net loss per share | 279,591 | 449,046 | 664,232 |
Restricted stock | |||
Anti-dilutive securities | |||
Common stockholders outstanding that were excluded from the computation of diluted net loss per share | 1,993 | 161,476 | 3,490,968 |
Restricted stock units | |||
Anti-dilutive securities | |||
Common stockholders outstanding that were excluded from the computation of diluted net loss per share | 5,607,867 | 4,542,231 | 5,255,113 |
Class A common stock | |||
Anti-dilutive securities | |||
Number of votes each holder is entitled | vote | 1 | ||
Class B common stock | |||
Anti-dilutive securities | |||
Number of votes each holder is entitled | vote | 10 | ||
Written consent percentage required of Class B outstanding shares for conversion to Class A | 66.66% | ||
Conversion ratio to Class A | 1 |