Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Wayfair Inc. | |
Entity Central Index Key | 1,616,707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 61,804,108 | |
Entity Common Stock, Shares Outstanding Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 28,539,198 |
CONSOLIDATED AND CONDENSED BALA
CONSOLIDATED AND CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 488,636 | $ 558,960 |
Short-term investments | 30,056 | 61,032 |
Accounts receivable, net of allowance of $7,462 and $7,000 at September 30, 2018 and December 31, 2017, respectively | 41,013 | 37,948 |
Inventories | 35,723 | 28,042 |
Prepaid expenses and other current assets | 167,754 | 130,838 |
Total current assets | 763,182 | 816,820 |
Property and equipment, net | 509,661 | 361,141 |
Goodwill and intangible assets, net | 2,724 | 3,105 |
Long-term investments | 6,521 | 21,561 |
Other noncurrent assets | 17,550 | 10,776 |
Total assets | 1,299,638 | 1,213,403 |
Current liabilities | ||
Accounts payable | 591,931 | 440,366 |
Accrued expenses | 167,745 | 120,247 |
Deferred revenue | 133,423 | 94,116 |
Other current liabilities | 109,212 | 85,026 |
Total current liabilities | 1,002,311 | 739,755 |
Lease financing obligation, net of current portion | 184,055 | 82,580 |
Long-term debt | 346,641 | 332,905 |
Other liabilities | 78,852 | 106,492 |
Total liabilities | 1,611,859 | 1,261,732 |
Commitments and contingencies (Note 6) | ||
Convertible preferred stock, $0.001 par value per share: 10,000,000 shares authorized and none issued at September 30, 2018 and December 31, 2017 | 0 | 0 |
Additional paid-in capital | 628,600 | 537,212 |
Accumulated deficit | (938,844) | (583,266) |
Accumulated other comprehensive (loss) | (2,067) | (2,363) |
Total stockholders’ equity | (312,221) | (48,329) |
Total liabilities and stockholders’ equity | 1,299,638 | 1,213,403 |
Class A common stock | ||
Common stock | 61 | 57 |
Class B common stock | ||
Common stock | $ 29 | $ 31 |
CONSOLIDATED AND CONDENSED BA_2
CONSOLIDATED AND CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance | $ 7,462 | $ 7,000 |
Convertible redeemable preferred units, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible redeemable preferred units, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Convertible redeemable preferred units, shares issued (in shares) | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares outstanding (in shares) | 61,400,416 | 57,398,983 |
Common stock, shares issued (in shares) | 61,400,416 | 57,398,983 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 164,000,000 | 164,000,000 |
Common stock, shares outstanding (in shares) | 28,726,124 | 30,809,627 |
Common stock, shares issued (in shares) | 28,726,124 | 30,809,627 |
CONSOLIDATED AND CONDENSED STAT
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net revenue | $ 1,705,645 | $ 1,198,198 | $ 4,765,170 | $ 3,281,879 |
Cost of goods sold | 1,312,875 | 917,889 | 3,663,569 | 2,495,221 |
Gross profit | 392,770 | 280,309 | 1,101,601 | 786,658 |
Operating expenses: | ||||
Customer service and merchant fees | 66,664 | 42,949 | 182,340 | 117,132 |
Advertising | 202,587 | 141,714 | 541,815 | 384,220 |
Selling, operations, technology, general and administrative | 268,785 | 169,603 | 721,120 | 453,021 |
Total operating expenses | 538,036 | 354,266 | 1,445,275 | 954,373 |
Loss from operations | (145,266) | (73,957) | (343,674) | (167,715) |
Interest expense, net | (7,066) | (2,008) | (18,269) | (3,857) |
Other income (expense), net | 1,054 | (227) | 2,661 | 400 |
Loss before income taxes | (151,278) | (76,192) | (359,282) | (171,172) |
Provision for income taxes | 448 | 237 | 953 | 671 |
Net loss | $ (151,726) | $ (76,429) | $ (360,235) | $ (171,843) |
Net loss per share, basic and diluted (in dollars per share) | $ (1.69) | $ (0.88) | $ (4.04) | $ (1.98) |
Weighted average number of common stock outstanding used in computing per share amounts, basic and diluted (in shares) | 89,792 | 87,283 | 89,144 | 86,679 |
CONSOLIDATED AND CONDENSED ST_2
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (151,726) | $ (76,429) | $ (360,235) | $ (171,843) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (243) | (856) | 249 | (1,959) |
Net unrealized gain (loss) on available-for-sale investments | 85 | (40) | 47 | 3 |
Comprehensive loss | $ (151,884) | $ (77,325) | $ (359,939) | $ (173,799) |
CONSOLIDATED AND CONDENSED ST_3
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (360,235) | $ (171,843) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 87,426 | 62,588 |
Equity based compensation | 88,148 | 46,740 |
Amortization of discount and issuance costs on convertible notes | 13,699 | 874 |
Other non-cash adjustments | 177 | 913 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,157) | (8,697) |
Inventories | (7,757) | (38) |
Prepaid expenses and other current assets | (37,376) | (27,776) |
Accounts payable and accrued expenses | 187,733 | 44,692 |
Deferred revenue and other liabilities | 80,509 | 50,450 |
Other assets | (6,836) | (1,148) |
Net cash provided by (used in) operating activities | 42,331 | (3,245) |
Cash flows from investing activities | ||
Purchase of short-term and long-term investments | 0 | (47,639) |
Sale and maturities of short-term investments | 45,955 | 60,540 |
Purchase of property and equipment | (110,504) | (76,528) |
Site and software development costs | (45,769) | (34,885) |
Other investing activities | (399) | 0 |
Net cash used in investing activities | (110,717) | (98,512) |
Cash flows from financing activities | ||
Proceeds from issuance of convertible notes, net of issuance costs | 0 | 420,449 |
Premiums paid for capped call confirmations | 0 | (44,160) |
Taxes paid related to net share settlement of equity awards | (1,097) | (1,277) |
Net proceeds from exercise of stock options | 104 | 213 |
Net cash provided by (used in) financing activities | (993) | 375,225 |
Effect of exchange rate changes on cash and cash equivalents | (945) | 413 |
Net decrease in cash and cash equivalents | (70,324) | 273,881 |
Cash and cash equivalents | ||
Beginning of period | 558,960 | 279,840 |
End of period | 488,636 | 553,721 |
Supplemental Cash Flow Information | ||
Cash paid for interest on long-term debt | 1,554 | 0 |
Purchase of property and equipment included in accounts payable and accrued expenses and in other liabilities | 10,520 | 9,255 |
Construction costs capitalized under finance lease obligation and other leases | $ 64,408 | $ 16,153 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Wayfair Inc. (the "Company") is one of the world's largest online destinations for the home. Through its e-commerce business model, the Company offers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over ten million products from over 10,000 suppliers. The consolidated and condensed financial statements and other disclosures contained in this Quarterly Report on Form 10-Q are those of the Company. Prior period expenses recorded in "Merchandising, marketing and sales" and "Operations, technology, general and administrative" have been combined into "Selling, operations, technology, general and administrative" on the consolidated statements of operations to conform with current presentation. The consolidated and condensed balance sheet data as of December 31, 2017 was derived from audited financial statements. The accompanying consolidated and condensed balance sheet as of September 30, 2018 , the consolidated and condensed statements of operations, consolidated and condensed statements of comprehensive loss, and consolidated and condensed statements of cash flows for the periods ended September 30, 2018 and 2017 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2018 and statements of operations, comprehensive loss, and cash flows for the periods ended September 30, 2018 and 2017 . The financial data and the other information disclosed in these notes to the consolidated and condensed financial statements related to these periods are unaudited. The consolidated and condensed statements of operations, comprehensive loss, and cash flows for the period ended September 30, 2018 are not necessarily indicative of the results of operations and cash flows that may be expected for the year ending December 31, 2018 , or for any other period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company has identified the significant accounting policies that are critical to understanding its business and results of operations. Revenue Recognition The Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09") as of January 1, 2018. The Company primarily generates net revenue through product sales on its five distinct sites ("Direct Retail" net revenue) and through (i) product sales on websites operated by third parties and (ii) fees earned for media solutions (collectively, "Other" net revenue). The Company recognizes net revenue on product sales through the Company's five distinct sites and third party operated websites using the gross method when the Company has concluded it controls the product before it is transferred to the customer. The Company controls products when it is the entity responsible for fulfilling the promise to the customer and takes responsibility for the acceptability of the goods, assumes inventory risk from shipment through the delivery date, has discretion in establishing prices, and selects the suppliers of products sold. The Company recognizes net revenue from sales of its products upon delivery to the customer. As the Company ships a large volume of packages through multiple carriers, actual delivery dates may not always be available and as such the Company estimates delivery dates based on historical data. Net revenue from product sales includes shipping costs charged to the customer and is recorded net of taxes collected from customers, which are remitted to governmental authorities. Cash discounts and rebates earned by customers at the time of purchase are deducted from gross revenue in determining net revenue. Allowances for sales returns are estimated and recorded based on prior returns history, recent trends, and projections for returns on sales in the current period. 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. Net revenue from contracts with customers is disaggregated by Direct Retail and Other net revenue and by geographic region because this manner of disaggregation best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 8, Segment and Geographic Information , for additional detail. The Company has three types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are initially recorded in " Deferred revenue ," and are recognized as net revenue when the products are delivered, (ii) unredeemed gift cards and site credits, which are initially recorded in " Deferred revenue ," and are recognized in the period they are redeemed. Subject to requirements to remit balances to governmental agencies, certain gift cards and site credits not expected to be redeemed, also known as "breakage," are recognized as net revenue based on the historical redemption pattern, which is substantially within twenty-four months from the date of issuance, and (iii) membership rewards redeemable for future purchases, which are earned by customers on purchases made with the Company's Wayfair branded, private label credit card, and are initially recorded in " Other current liabilities ," and are recognized as net revenue when redeemed. Contractual liabilities included in " Deferred revenue " and " Other current liabilities " in the consolidated and condensed balance sheets were $133.4 million and $2.7 million at September 30, 2018 and $94.1 million and $2.6 million at December 31, 2017 , respectively. During the nine months ended September 30, 2018 , the Company recognized $76.6 million and $2.2 million of net revenue included in " Deferred revenue " and " Other current liabilities ," respectively, at December 31, 2017 . The Company adopted ASU 2014-09 using a modified retrospective approach and recognized a $4.7 million cumulative-effect adjustment to reduce " Accumulated deficit " as of January 1, 2018. The cumulative-effect adjustment to " Accumulated deficit " was due to breakage of gift cards and site credits, to the extent there is no requirement for remitting balances to governmental agencies. Prior period balances were not retrospectively adjusted. The Company believes that other than the implementation of ASU 2014-09, there have been no significant changes during the nine months ended September 30, 2018 to the items disclosed in Note 2, Summary of Significant Accounting Policies , included in Part II, Item 8, Financial Statements and Supplementary Data , of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Marketable Securities and Fair Value Measurements | Marketable Securities and Fair Value Measurements Marketable Securities As of September 30, 2018 and December 31, 2017 , all of the Company’s marketable securities were classified as available-for-sale and their estimated fair values were $36.6 million and $82.6 million , respectively. The Company periodically reviews its available-for-sale securities for other-than-temporary impairment. The Company considers factors such as the duration, severity and the reason for the decline in value, the potential recovery period, and its intent to sell. As of September 30, 2018 , the Company’s available-for-sale securities primarily consisted of corporate bonds and other government obligations that are priced at fair value. During the three and nine months ended September 30, 2018 and 2017 , the Company did not recognize any other-than-temporary impairment losses. The maturities of the Company’s long-term marketable securities generally range from one to two years. The cost basis of a marketable security sold is determined by the Company using the specific identification method. During the three and nine months ended September 30, 2018 and 2017 , the Company did not have any realized gains or losses. The following tables present details of the Company’s marketable securities as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term: Investment securities $ 30,142 $ — $ (86 ) $ 30,056 Long-term: Investment securities 6,619 — (98 ) 6,521 Total $ 36,761 $ — $ (184 ) $ 36,577 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term: Investment securities $ 61,129 $ — $ (97 ) $ 61,032 Long-term: Investment securities 21,695 — (134 ) 21,561 Total $ 82,824 $ — $ (231 ) $ 82,593 Fair Value Measurements 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. The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 based on the three-tier value hierarchy (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds and other funds $ 412,083 $ — $ — $ 412,083 Short-term investments: Investment securities — 30,056 — 30,056 Other non-current assets: Certificate of deposit 5,000 — — 5,000 Long-term: Investment securities — 6,521 — 6,521 Total $ 417,083 $ 36,577 $ — $ 453,660 December 31, 2017 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 488,029 $ — $ — $ 488,029 Short-term investments: Investment securities — 61,032 — 61,032 Other non-current assets: Certificate of deposit 5,000 — — 5,000 Long-term: Investment securities — 21,561 — 21,561 Total $ 493,029 $ 82,593 $ — $ 575,622 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The following table summarizes intangible assets as of September 30, 2018 and December 31, 2017 (in thousands): Weighted - Average Amortization Period (Years) September 30, 2018 Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 1,900 $ (1,900 ) $ — Technology 3 1,678 (1,053 ) 625 Customer relationships 5 1,300 (1,300 ) — Total $ 4,878 $ (4,253 ) $ 625 Weighted - Average Amortization Period (Years) December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 1,900 $ (1,678 ) $ 222 Technology 3 1,453 (646 ) 807 Customer relationships 5 1,300 (1,148 ) 152 Total $ 4,653 $ (3,472 ) $ 1,181 Amortization expense related to intangible assets was $0.2 million and $0.3 million for the three months ended September 30, 2018 and 2017 , respectively, and $0.8 million for the nine months ended September 30, 2018 and 2017 . Goodwill was $2.1 million and $1.9 million as of September 30, 2018 and December 31, 2017 , respectively. |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The following table summarizes property and equipment, net as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Furniture and computer equipment $ 305,913 $ 213,790 Site and software development costs 157,717 118,356 Leasehold improvements 102,871 82,614 Construction in progress 16,832 46,826 Buildings (leased - Note 6) 184,694 83,681 768,027 545,267 Less accumulated depreciation and amortization (258,366 ) (184,126 ) Property and equipment, net $ 509,661 $ 361,141 Property and equipment depreciation and amortization expense was $32.4 million and $22.6 million for the three months ended September 30, 2018 and 2017 , respectively, and $86.6 million and $61.7 million for the nine months ended September 30, 2018 and 2017 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company leases office and warehouse spaces under non-cancelable leases. These leases expire at various dates through 2031 and include discounted rental periods and fixed escalation clauses, which are amortized straight-line over the terms of the lease. Rent expense under operating leases was $16.9 million and $10.6 million in the three months ended September 30, 2018 and 2017 , respectively, and $45.8 million and $33.3 million in the nine months ended September 30, 2018 and 2017 , respectively. The Company has issued letters of credit for approximately $26.9 million and $15.3 million as security for these lease agreements as of September 30, 2018 and December 31, 2017 , respectively. As of December 31, 2017 , the future minimum rental commitments under non-cancelable leases with initial or remaining terms in excess of one year totaled $783.7 million . Subsequent to December 31, 2017 , the Company entered into additional non-cancelable leases in the United States ("U.S.") with initial or remaining terms in excess of one year with total future minimum lease commitments of $231.8 million . Future lease payments have not been reduced by minimum sublease rentals of $5.3 million due to the Company in the future under non-cancelable subleases through 2020 . 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 takes 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. The construction of one warehouse lease arrangement was completed in the three months ended June 30, 2018, and because the Company had a letter of credit of $2.5 million , the Company did not meet the sale-leaseback criteria for derecognition of the building asset and liability. The construction of a second and third warehouse lease arrangement was completed in the three months ended September 30, 2018 and because in both lease arrangements the Company provided non-recourse financing to the lessor, the Company did not meet the sale-leaseback criteria for derecognition of the building asset and liability. Accordingly, these leases were accounted for as financing obligations and $101.0 million was recorded in " Lease financing obligation, net of current portion " and " Property and equipment, net " in the Company’s unaudited consolidated and condensed balance sheet as of September 30, 2018. The monthly rent payments made to the lessor under the lease agreement are recorded in the Company’s financial statements as land lease expense and principal and interest on the financing obligation. Interest expense on the lease financing obligation reflects the portion of the Company's monthly lease payments that is allocated to interest expense. For the three and nine months ended September 30, 2018 , land lease expense was $0.7 million and $2.1 million , respectively, and interest expense on lease financing obligations was $3.5 million and $8.0 million , respectively. As of September 30, 2018 , future minimum commitments related to the financing obligations were $20.2 million and $76.2 million for principal and interest, respectively, through September 30, 2023. Collection of Sales or Other Similar Taxes The Company has historically collected and remitted sales tax based on the locations of its physical operations. On June 21, 2018, the U.S. Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair Inc., 17-494. Among other things, the Court held that a state may require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state, overturning existing court precedent. Several states and other taxing jurisdictions have presented, or indicated that they may present, the Company with sales tax assessments. The aggregate assessments received as of September 30, 2018 are not material to the Company's business and the Company does not expect the Court's decision to have a significant impact on its business. Legal Matters On June 21, 2018, the U.S. Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair Inc., 17-494. Among other things, the Court held that a state may require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state, overturning existing court precedent. See Collection of Sales or Other Similar Taxes above. From time to time the Company is involved in claims that arise during the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently believe that the outcome of any of these other legal matters will have a material adverse effect on the Company's results of operation or financial condition. Regardless of the outcome, litigation can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting the Company's overall operations. In addition, the Company may also find itself at greater risk to outside party claims as it increases its operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable, or unclear. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation The board of directors of the Company (the "Board") adopted the 2014 Incentive Award Plan ("2014 Plan") to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The 2014 Plan is administered by the Board with respect to awards to non-employee directors and by the compensation committee of the Board with respect to other participants and provides for the issuance of stock options, SARs, restricted stock, restricted stock units ("RSUs"), performance shares, stock payments, cash payments, dividend awards and other incentives. Prior to the adoption of the 2014 Plan, Wayfair LLC issued certain equity awards pursuant to the Wayfair LLC Amended and Restated Common Unit Plan (the "2010 Plan"), which was administered by the board of directors of Wayfair LLC. Awards issued under the 2010 Plan that remain outstanding currently represent Class A or Class B common stock of the Company. 8,603,066 shares of Class A common stock were initially available for issuance under awards granted pursuant to the 2014 Plan. The 2014 Plan also contains an evergreen provision whereby the shares available for future grant are increased on the first day of each calendar year beginning January 1, 2016 and ending on and including January 1, 2024. As of January 1, 2018, 8,016,850 shares of Class A common stock were available for future grant under the 2014 Plan. Shares or RSUs forfeited, withheld for minimum statutory tax obligations, and unexercised stock option lapses from the 2010 and 2014 Plans are available for future grant under the 2014 Plan. The following table presents activity relating to stock options for the nine months ended September 30, 2018 : Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Outstanding at December 31, 2017 126,383 $ 3.02 3.5 Options exercised (34,981 ) $ 2.97 Outstanding and exercisable at September 30, 2018 91,402 $ 3.04 2.7 Intrinsic value of stock options exercised was $3.2 million for the nine months ended September 30, 2018 . Aggregate intrinsic value of stock options outstanding and currently exercisable is $13.2 million . All stock options were fully vested at September 30, 2018 . The following table presents activity relating to restricted common stock for the nine months ended September 30, 2018 : Shares Weighted- Average Grant Date Fair Value Unvested at December 31, 2017 40,000 $ 44.34 Unvested and expected to vest in the future as of September 30, 2018 40,000 $ 44.34 Aggregate intrinsic value of unvested restricted common stock is $5.9 million as of September 30, 2018 . Unrecognized equity based compensation expense related to unvested restricted common stock is $3.7 million with a weighted average remaining vesting term of 0.8 years as of September 30, 2018 . The following table presents activity relating to RSUs for the nine months ended September 30, 2018 : Shares Weighted- Average Grant Date Fair Value Outstanding at December 31, 2017 6,853,606 $ 46.28 RSUs granted 3,209,887 $ 89.87 RSUs vested (1,911,629 ) $ 44.84 RSUs forfeited/canceled (935,196 ) $ 53.19 Outstanding and expected to vest in the future as of September 30, 2018 7,216,668 $ 65.30 The intrinsic value of RSUs vested was $189.7 million for the nine mon ths ended September 30, 2018 . Aggregate intrinsic value of RSUs unvested is $1,065.7 million as of September 30, 2018 . Unrecognized equity based compensation expense related to outstanding RSUs is $433.4 million with a weighted average remaining ve sting term of 1.6 years at September 30, 2018 . |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2018 | |
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 Company's operating and reportable segments are U.S. and International. These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA. Adjusted EBITDA is defined as loss before depreciation and amortization, equity-based compensation and related taxes, interest and other income and expense, provision for income taxes, and non-recurring items. These charges are excluded from evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis. The Company allocates certain operating expenses to the operating and reportable segments, including "Customer service and merchant fees" and "Selling, operations, technology, general and administrative" based on the usage and relative contribution provided to the segments. It excludes from the allocations certain operating expense lines, including "Depreciation and amortization, " Equity based compensation and related taxes ," " Interest expense, net ," " Other (income) expense, net ," and " Provision for income taxes ." There are no revenue transactions between the Company's reportable segments. U.S. The U.S. segment primarily consists of amounts earned through product sales through the Company's five distinct sites in the U.S. and through websites operated by third parties in the U.S. International The International segment primarily consists of amounts earned through product sales through the Company's international sites. 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 U.S. provided greater than 10% of total revenue. The following tables present Direct Retail and Other net revenues and Adjusted EBITDA attributable to the Company's reportable segments for the periods presented (in thousands): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 U.S. Direct Retail $ 1,460,056 $ 1,033,669 $ 4,043,270 $ 2,847,898 U.S. Other 13,189 16,975 42,903 57,843 U.S. segment net revenue 1,473,245 1,050,644 4,086,173 2,905,741 International Direct Retail 232,400 147,554 678,997 376,138 International segment net revenue 232,400 147,554 678,997 376,138 Total net revenue $ 1,705,645 $ 1,198,198 $ 4,765,170 $ 3,281,879 Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Adjusted EBITDA: U.S. $ (26,036 ) $ 4,531 $ (26,774 ) $ 28,684 International (50,369 ) (27,203 ) (134,400 ) (74,498 ) Total reportable segments Adjusted EBITDA (76,405 ) (22,672 ) (161,174 ) (45,814 ) Less: reconciling items (1) (75,321 ) (53,757 ) (199,061 ) (126,029 ) Net loss $ (151,726 ) $ (76,429 ) $ (360,235 ) $ (171,843 ) (1) Adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net loss including the following (in thousands): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Depreciation and amortization (1) $ 32,544 $ 22,913 $ 87,426 $ 62,588 Equity based compensation and related taxes 36,317 19,598 95,074 50,539 Interest expense, net 7,066 2,008 18,269 3,857 Other (income) expense, net (1,054 ) 227 (2,661 ) (400 ) Provision for income taxes 448 237 953 671 Other (1) — 8,774 — 8,774 Total reconciling items $ 75,321 $ 53,757 $ 199,061 $ 126,029 (1) The Company recorded $9.6 million of one-time charges in the three and nine months ended September 30, 2017 in " Selling, operations, technology, general and administrative " in the unaudited consolidated and condensed statements of operations related to a warehouse the Company vacated in July 2017. Of the $9.6 million charges, $8.8 million was included in "Other" and related primarily to the excess of the Company's estimated future remaining lease commitments through 2023 over its expected sublease income over the same period, and $0.8 million was included in "Depreciation and amortization" related to accelerated depreciation of leasehold improvements in the warehouse. 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 websites operated by third parties and fees from our media solutions business (in thousands): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Net revenue Direct Retail $ 1,692,456 $ 1,181,223 $ 4,722,267 $ 3,224,036 Other 13,189 16,975 42,903 57,843 Net revenue $ 1,705,645 $ 1,198,198 $ 4,765,170 $ 3,281,879 The following table presents long-lived assets by segment (in thousands): September 30, December 31, Geographic long-lived assets U.S. $ 494,713 $ 353,414 International 14,948 7,727 Total $ 509,661 $ 361,141 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense was $0.4 million and $0.2 million for the three months ended September 30, 2018 and 2017 , respectively, and $1.0 million and $0.7 million for the nine months ended September 30, 2018 and 2017 , respectively. The income tax expense recorded in the three and nine months ended September 30, 2018 and 2017 is primarily related to income earned in certain foreign jurisdictions and U.S. state income taxes. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The Company has deferred tax assets related to its net operating loss carryforwards accumulated since the fourth quarter of 2014 and related to net operating loss carryforwards of certain of its foreign subsidiaries. A valuation allowance against net deferred tax assets is required if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reassesses the valuation allowance on a quarterly basis and has provided a valuation allowance on substantially all of its worldwide net deferred tax assets. The Company had no material unrecognized tax benefits as of September 30, 2018 and December 31, 2017 . The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders’ Equity Preferred Stock The Company authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value per share, for future issuance. As of September 30, 2018 , the Company had no shares of undesignated preferred stock issued or outstanding. Common Stock 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 61,400,416 and 57,398,983 shares of Class A common stock and 28,726,124 and 30,809,627 shares of Class B common stock were outstanding as of September 30, 2018 and December 31, 2017 , 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 and each share of Class B common stock is entitled to ten votes per share. 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 Company's initial public offering through September 30, 2018 , 51,192,113 shares of Class B common stock were converted to Class A common stock. |
Credit Agreement
Credit Agreement | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement On February 22, 2017, the Company entered into a $40 million credit card program and a credit agreement consisting of a $100 million secured revolving credit facility (the "Revolver") with Citibank, N.A. ("Citibank"). The Citibank credit facility replaced the Company's existing credit facility with Bank of America, N.A., which was terminated on February 22, 2017. On September 11, 2017, the Citibank credit agreement was amended with a new letter of credit sublimit and to make clarifying edits to the mandatory prepayment provisions of the credit agreement. On April 12, 2018, the Citibank credit agreement was amended further, including, among other changes: (i) to increase the letter of credit sublimit to $65 million and (ii) to modify certain baskets in the exceptions to the negative covenants, including, without limitation, the restricted payments, investments and indebtedness covenants. As amended, the Revolver has a $65 million letter of credit sublimit and a $10 million swing line sublimit, and a final maturity date of February 21, 2020. Wayfair LLC is the borrower (the "Borrower") under the Citibank credit agreement. Subject to certain conditions, the Borrower has the right to increase the Revolver by $25 million . Borrowings under the Revolver will bear interest through maturity at a variable rate based upon, at the Borrower’s option, either the Eurodollar rate or the base rate (which is the highest of (x) Citibank's prime rate, (y) one-half of 1.00% in excess of the federal funds effective rate, and (z) 1.00% in excess of the one-month Eurodollar rate), plus, in each case an applicable margin. From closing until September 30, 2019, the applicable margin for Eurodollar rate loans is 1.75% per annum and the applicable margin for base rate loans is 0.75% per annum. After September 30, 2019, the applicable margin is subject to specified changes depending on the applicable consolidated leverage ratio. Any amounts outstanding under the Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the credit agreement, the Borrower is required to make certain mandatory prepayments prior to maturity. The Citibank credit agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, will limit or restrict the ability of the Company and its subsidiaries, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of their businesses. In addition, the Citibank credit agreement requires the Company to maintain certain financial ratios. As of September 30, 2018 , the Company was in compliance with its covenants under the Revolver. The Company did not borrow any amounts under the Revolver during the nine months ended September 30, 2018 and the year ended December 31, 2017 . Convertible Debt On September 15, 2017, the Company issued $431.25 million aggregate principal amount of 0.375% Convertible Senior Notes due 2022 (the "Notes"), which includes the exercise in full of the $56.25 million over-allotment option, to Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC as the initial purchasers of the Notes (the "Initial Purchasers"). The net proceeds from the sale of the Notes were approximately $420.4 million , after deducting the Initial Purchasers’ discounts and the estimated offering expenses payable by the Company. The Company used approximately $44.2 million of the net proceeds from the offering to pay the cost of the capped call transactions, as further described below, with three financial institutions (the "Option Counterparties"). The Company intends to use the remainder of the net proceeds for working capital and general corporate purposes. The Notes were issued pursuant to an indenture, dated September 15, 2017 (the "Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the Notes semiannually in arrears at a rate of 0.375% per annum on March 1 and September 1 of each year commencing on March 1, 2018. The Notes are convertible based upon an initial conversion rate of 9.61 shares of the Company’s Class A common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $104.06 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The Notes will mature on September 1, 2022, unless earlier purchased, redeemed or converted. Prior to June 1, 2022, holders may convert all or a portion of their Notes only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 business day period after any 10 consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after June 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. The Company may not redeem the Notes prior to September 8, 2020. On or after September 8, 2020, the Company may redeem for cash all or part of the Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to repurchase all or a portion of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. Holders of Notes who convert their Notes in connection with a notice of redemption or a make-whole fundamental change (each as defined in the Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the Notes. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of all the Notes plus accrued interest, if any, to be immediately due and payable. The Notes are general unsecured obligations of the Company. The Notes rank senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; are effectively subordinated in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the consolidated and condensed balance sheet and amortized to interest expense using the effective interest method over the term of the Notes. The equity component of the Notes of approximately $95.8 million is included in additional paid-in capital in the consolidated and condensed balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Notes using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the consolidated and condensed balance sheet and amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ equity. Interest expense related to the Notes was $5.2 million and $0.9 million for the three months ended September 30, 2018 and 2017, respectively, and $15.3 million and $0.9 million for the nine months ended September 30, 2018 and 2017, respectively. Interest expense is comprised of the amortization of debt discount and debt issuance costs and the contractual coupon interest. The estimated fair value of the Notes was $646.1 million as of September 30, 2018 . The estimated fair value of the Notes was determined through consideration of quoted market prices. The fair value is classified as Level 2, as defined in Note 3, Marketable Securities and Fair Value Measurements . On September 11, 2017, the Company entered into privately negotiated capped call transactions (the "Base Capped Call Transactions") with the Option Counterparties and, in connection with the exercise in full of the over-allotment option by the Initial Purchasers, on September 14, 2017 entered into additional capped call transactions (such additional capped call transactions, the "Additional Capped Call Transactions" and, together with the Base Capped Call Transactions, the "Capped Call Transactions") with the Option Counterparties. The Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the Notes upon conversion of the Notes in the event that the market price per share of the Company’s Class A common stock is greater than the strike price of the Capped Call Transactions (which initially corresponds to the initial conversion price of the Notes and is subject to certain adjustments under the terms of the Capped Call Transactions), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Transactions. The Capped Call Transactions have an initial cap price of $154.16 per share of the Company’s Class A common stock, which represents a premium of 100% over the last reported sale price of the Company’s Class A common stock on September 11, 2017, and is subject to certain adjustments under the terms of the Capped Call Transactions. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Notes. The Capped Call Transactions are separate transactions, in each case, entered into by the Company with the Option Counterparties, and are not part of the terms of the Notes and will not affect any holder’s rights under the Notes. Holders of the Notes will not have any rights with respect to the Capped Call Transactions. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock. The premiums paid for the Capped Call Transactions have been included as a net reduction to additional paid-in capital within shareholders’ equity. |
Convertible Debt
Convertible Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt | Credit Agreement On February 22, 2017, the Company entered into a $40 million credit card program and a credit agreement consisting of a $100 million secured revolving credit facility (the "Revolver") with Citibank, N.A. ("Citibank"). The Citibank credit facility replaced the Company's existing credit facility with Bank of America, N.A., which was terminated on February 22, 2017. On September 11, 2017, the Citibank credit agreement was amended with a new letter of credit sublimit and to make clarifying edits to the mandatory prepayment provisions of the credit agreement. On April 12, 2018, the Citibank credit agreement was amended further, including, among other changes: (i) to increase the letter of credit sublimit to $65 million and (ii) to modify certain baskets in the exceptions to the negative covenants, including, without limitation, the restricted payments, investments and indebtedness covenants. As amended, the Revolver has a $65 million letter of credit sublimit and a $10 million swing line sublimit, and a final maturity date of February 21, 2020. Wayfair LLC is the borrower (the "Borrower") under the Citibank credit agreement. Subject to certain conditions, the Borrower has the right to increase the Revolver by $25 million . Borrowings under the Revolver will bear interest through maturity at a variable rate based upon, at the Borrower’s option, either the Eurodollar rate or the base rate (which is the highest of (x) Citibank's prime rate, (y) one-half of 1.00% in excess of the federal funds effective rate, and (z) 1.00% in excess of the one-month Eurodollar rate), plus, in each case an applicable margin. From closing until September 30, 2019, the applicable margin for Eurodollar rate loans is 1.75% per annum and the applicable margin for base rate loans is 0.75% per annum. After September 30, 2019, the applicable margin is subject to specified changes depending on the applicable consolidated leverage ratio. Any amounts outstanding under the Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the credit agreement, the Borrower is required to make certain mandatory prepayments prior to maturity. The Citibank credit agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, will limit or restrict the ability of the Company and its subsidiaries, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of their businesses. In addition, the Citibank credit agreement requires the Company to maintain certain financial ratios. As of September 30, 2018 , the Company was in compliance with its covenants under the Revolver. The Company did not borrow any amounts under the Revolver during the nine months ended September 30, 2018 and the year ended December 31, 2017 . Convertible Debt On September 15, 2017, the Company issued $431.25 million aggregate principal amount of 0.375% Convertible Senior Notes due 2022 (the "Notes"), which includes the exercise in full of the $56.25 million over-allotment option, to Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC as the initial purchasers of the Notes (the "Initial Purchasers"). The net proceeds from the sale of the Notes were approximately $420.4 million , after deducting the Initial Purchasers’ discounts and the estimated offering expenses payable by the Company. The Company used approximately $44.2 million of the net proceeds from the offering to pay the cost of the capped call transactions, as further described below, with three financial institutions (the "Option Counterparties"). The Company intends to use the remainder of the net proceeds for working capital and general corporate purposes. The Notes were issued pursuant to an indenture, dated September 15, 2017 (the "Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the Notes semiannually in arrears at a rate of 0.375% per annum on March 1 and September 1 of each year commencing on March 1, 2018. The Notes are convertible based upon an initial conversion rate of 9.61 shares of the Company’s Class A common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $104.06 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The Notes will mature on September 1, 2022, unless earlier purchased, redeemed or converted. Prior to June 1, 2022, holders may convert all or a portion of their Notes only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 business day period after any 10 consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after June 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. The Company may not redeem the Notes prior to September 8, 2020. On or after September 8, 2020, the Company may redeem for cash all or part of the Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to repurchase all or a portion of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. Holders of Notes who convert their Notes in connection with a notice of redemption or a make-whole fundamental change (each as defined in the Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the Notes. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of all the Notes plus accrued interest, if any, to be immediately due and payable. The Notes are general unsecured obligations of the Company. The Notes rank senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; are effectively subordinated in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the consolidated and condensed balance sheet and amortized to interest expense using the effective interest method over the term of the Notes. The equity component of the Notes of approximately $95.8 million is included in additional paid-in capital in the consolidated and condensed balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Notes using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the consolidated and condensed balance sheet and amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ equity. Interest expense related to the Notes was $5.2 million and $0.9 million for the three months ended September 30, 2018 and 2017, respectively, and $15.3 million and $0.9 million for the nine months ended September 30, 2018 and 2017, respectively. Interest expense is comprised of the amortization of debt discount and debt issuance costs and the contractual coupon interest. The estimated fair value of the Notes was $646.1 million as of September 30, 2018 . The estimated fair value of the Notes was determined through consideration of quoted market prices. The fair value is classified as Level 2, as defined in Note 3, Marketable Securities and Fair Value Measurements . On September 11, 2017, the Company entered into privately negotiated capped call transactions (the "Base Capped Call Transactions") with the Option Counterparties and, in connection with the exercise in full of the over-allotment option by the Initial Purchasers, on September 14, 2017 entered into additional capped call transactions (such additional capped call transactions, the "Additional Capped Call Transactions" and, together with the Base Capped Call Transactions, the "Capped Call Transactions") with the Option Counterparties. The Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the Notes upon conversion of the Notes in the event that the market price per share of the Company’s Class A common stock is greater than the strike price of the Capped Call Transactions (which initially corresponds to the initial conversion price of the Notes and is subject to certain adjustments under the terms of the Capped Call Transactions), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Transactions. The Capped Call Transactions have an initial cap price of $154.16 per share of the Company’s Class A common stock, which represents a premium of 100% over the last reported sale price of the Company’s Class A common stock on September 11, 2017, and is subject to certain adjustments under the terms of the Capped Call Transactions. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Notes. The Capped Call Transactions are separate transactions, in each case, entered into by the Company with the Option Counterparties, and are not part of the terms of the Notes and will not affect any holder’s rights under the Notes. Holders of the Notes will not have any rights with respect to the Capped Call Transactions. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock. The premiums paid for the Capped Call Transactions have been included as a net reduction to additional paid-in capital within shareholders’ equity. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share Basic and diluted net loss per share is presented using the two-class method required for participating securities: Class A and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. For more information on the rights of Class A and Class B common stockholders, see Note 10, Stockholders' Equity (Deficit) . Basic net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share 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 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 loss per share. As a result, basic and diluted net loss per Class A and Class B shares are equivalent. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Net loss $ (151,726 ) $ (76,429 ) $ (360,235 ) $ (171,843 ) Weighted average common shares used for basic and diluted net loss per share computation 89,792 87,283 89,144 86,679 Net loss per common share: Basic and Diluted $ (1.69 ) $ (0.88 ) $ (4.04 ) $ (1.98 ) Dilutive common stock equivalents, representing potentially dilutive common stock options, restricted stock and restricted stock units, of 7.3 million and 6.6 million for the three and nine months ended September 30, 2018 and 2017 , respectively, were excluded from diluted earnings per share calculations for these periods because of their anti-dilutive effect. Furthermore, the shares of Class A common stock that would be issuable if the Company elects to settle the Notes in shares were excluded from the diluted earnings per share calculation (using the if-converted method) for the nine month period ended September 30, 2018 because their effect would have been anti-dilutive. The Company may settle the conversions of the Notes in cash, shares of the Company's Class A common stock or any combination thereof at its election. The number of shares of the Company's Class A common stock issuable at the conversion price of $104.06 per share is expected to be 4.1 million shares, however the Capped Call Transactions are expected generally to reduce the potential dilution of the Company's Class A common stock upon any conversion of Notes and/or offset the cash payments the Company is required to make in excess of the principal amount of the Notes. Under the Capped Call Transactions, the number of shares of Class A common stock issuable at the conversion price of $154.16 is expected to be 2.8 million shares. For more information on the Notes and the Capped Call Transactions, see Note 12, Convertible Debt . |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases In February 2016, the FASB issued 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 virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital 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. In July 2018, the FASB issued ASU No. 2018-11, “Leases” , Targeted Improvements , which creates an optional transition expedient that allows an entity to apply the transition provisions of the new standard, including its disclosure requirements, at its adoption date instead of at the beginning of the earliest comparative period presented as originally required by FASB ASU No. 2016-02. The Company will adopt the new lease standard as of January 1, 2019 using the modified retrospective approach, applying the transition provisions of the new standard as of the adoption date. In connection with the adoption of the new lease standard, the Company has completed scoping reviews and continues to make progress in its updating business processes, systems, accounting policies and internal controls. Management is currently evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements, and expects it will have a material impact on its consolidated financial statements, primarily the consolidated balance sheets and related disclosures. At this time, the Company is unable to reasonably estimate the expected increase in assets and liabilities on the consolidated balance sheets and related disclosures upon adoption. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09") as of January 1, 2018. The Company primarily generates net revenue through product sales on its five distinct sites ("Direct Retail" net revenue) and through (i) product sales on websites operated by third parties and (ii) fees earned for media solutions (collectively, "Other" net revenue). The Company recognizes net revenue on product sales through the Company's five distinct sites and third party operated websites using the gross method when the Company has concluded it controls the product before it is transferred to the customer. The Company controls products when it is the entity responsible for fulfilling the promise to the customer and takes responsibility for the acceptability of the goods, assumes inventory risk from shipment through the delivery date, has discretion in establishing prices, and selects the suppliers of products sold. The Company recognizes net revenue from sales of its products upon delivery to the customer. As the Company ships a large volume of packages through multiple carriers, actual delivery dates may not always be available and as such the Company estimates delivery dates based on historical data. Net revenue from product sales includes shipping costs charged to the customer and is recorded net of taxes collected from customers, which are remitted to governmental authorities. Cash discounts and rebates earned by customers at the time of purchase are deducted from gross revenue in determining net revenue. Allowances for sales returns are estimated and recorded based on prior returns history, recent trends, and projections for returns on sales in the current period. 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. Net revenue from contracts with customers is disaggregated by Direct Retail and Other net revenue and by geographic region because this manner of disaggregation best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 8, Segment and Geographic Information , for additional detail. The Company has three types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are initially recorded in " Deferred revenue ," and are recognized as net revenue when the products are delivered, (ii) unredeemed gift cards and site credits, which are initially recorded in " Deferred revenue ," and are recognized in the period they are redeemed. Subject to requirements to remit balances to governmental agencies, certain gift cards and site credits not expected to be redeemed, also known as "breakage," are recognized as net revenue based on the historical redemption pattern, which is substantially within twenty-four months from the date of issuance, and (iii) membership rewards redeemable for future purchases, which are earned by customers on purchases made with the Company's Wayfair branded, private label credit card, and are initially recorded in " Other current liabilities ," and are recognized as net revenue when redeemed. Contractual liabilities included in " Deferred revenue " and " Other current liabilities " in the consolidated and condensed balance sheets were $133.4 million and $2.7 million at September 30, 2018 and $94.1 million and $2.6 million at December 31, 2017 , respectively. During the nine months ended September 30, 2018 , the Company recognized $76.6 million and $2.2 million of net revenue included in " Deferred revenue " and " Other current liabilities ," respectively, at December 31, 2017 . The Company adopted ASU 2014-09 using a modified retrospective approach and recognized a $4.7 million cumulative-effect adjustment to reduce " Accumulated deficit " as of January 1, 2018. The cumulative-effect adjustment to " Accumulated deficit " was due to breakage of gift cards and site credits, to the extent there is no requirement for remitting balances to governmental agencies. Prior period balances were not retrospectively adjusted. The Company believes that other than the implementation of ASU 2014-09, there have been no significant changes during the nine months ended September 30, 2018 to the items disclosed in Note 2, Summary of Significant Accounting Policies , included in Part II, Item 8, Financial Statements and Supplementary Data , of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . |
New Accounting Pronouncements | Recent Accounting Pronouncements Leases In February 2016, the FASB issued 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 virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital 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. In July 2018, the FASB issued ASU No. 2018-11, “Leases” , Targeted Improvements , which creates an optional transition expedient that allows an entity to apply the transition provisions of the new standard, including its disclosure requirements, at its adoption date instead of at the beginning of the earliest comparative period presented as originally required by FASB ASU No. 2016-02. The Company will adopt the new lease standard as of January 1, 2019 using the modified retrospective approach, applying the transition provisions of the new standard as of the adoption date. In connection with the adoption of the new lease standard, the Company has completed scoping reviews and continues to make progress in its updating business processes, systems, accounting policies and internal controls. Management is currently evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements, and expects it will have a material impact on its consolidated financial statements, primarily the consolidated balance sheets and related disclosures. At this time, the Company is unable to reasonably estimate the expected increase in assets and liabilities on the consolidated balance sheets and related disclosures upon adoption. |
Marketable Securities and Fai_2
Marketable Securities and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | The following tables present details of the Company’s marketable securities as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term: Investment securities $ 30,142 $ — $ (86 ) $ 30,056 Long-term: Investment securities 6,619 — (98 ) 6,521 Total $ 36,761 $ — $ (184 ) $ 36,577 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term: Investment securities $ 61,129 $ — $ (97 ) $ 61,032 Long-term: Investment securities 21,695 — (134 ) 21,561 Total $ 82,824 $ — $ (231 ) $ 82,593 |
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 September 30, 2018 and December 31, 2017 based on the three-tier value hierarchy (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds and other funds $ 412,083 $ — $ — $ 412,083 Short-term investments: Investment securities — 30,056 — 30,056 Other non-current assets: Certificate of deposit 5,000 — — 5,000 Long-term: Investment securities — 6,521 — 6,521 Total $ 417,083 $ 36,577 $ — $ 453,660 December 31, 2017 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 488,029 $ — $ — $ 488,029 Short-term investments: Investment securities — 61,032 — 61,032 Other non-current assets: Certificate of deposit 5,000 — — 5,000 Long-term: Investment securities — 21,561 — 21,561 Total $ 493,029 $ 82,593 $ — $ 575,622 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table summarizes intangible assets as of September 30, 2018 and December 31, 2017 (in thousands): Weighted - Average Amortization Period (Years) September 30, 2018 Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 1,900 $ (1,900 ) $ — Technology 3 1,678 (1,053 ) 625 Customer relationships 5 1,300 (1,300 ) — Total $ 4,878 $ (4,253 ) $ 625 Weighted - Average Amortization Period (Years) December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Book Value Trademarks 5 $ 1,900 $ (1,678 ) $ 222 Technology 3 1,453 (646 ) 807 Customer relationships 5 1,300 (1,148 ) 152 Total $ 4,653 $ (3,472 ) $ 1,181 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, net | The following table summarizes property and equipment, net as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Furniture and computer equipment $ 305,913 $ 213,790 Site and software development costs 157,717 118,356 Leasehold improvements 102,871 82,614 Construction in progress 16,832 46,826 Buildings (leased - Note 6) 184,694 83,681 768,027 545,267 Less accumulated depreciation and amortization (258,366 ) (184,126 ) Property and equipment, net $ 509,661 $ 361,141 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Activity Relating to Stock Options | The following table presents activity relating to stock options for the nine months ended September 30, 2018 : Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Outstanding at December 31, 2017 126,383 $ 3.02 3.5 Options exercised (34,981 ) $ 2.97 Outstanding and exercisable at September 30, 2018 91,402 $ 3.04 2.7 |
Summary of Activity Relating to Restricted Stock | The following table presents activity relating to restricted common stock for the nine months ended September 30, 2018 : Shares Weighted- Average Grant Date Fair Value Unvested at December 31, 2017 40,000 $ 44.34 Unvested and expected to vest in the future as of September 30, 2018 40,000 $ 44.34 The following table presents activity relating to RSUs for the nine months ended September 30, 2018 : Shares Weighted- Average Grant Date Fair Value Outstanding at December 31, 2017 6,853,606 $ 46.28 RSUs granted 3,209,887 $ 89.87 RSUs vested (1,911,629 ) $ 44.84 RSUs forfeited/canceled (935,196 ) $ 53.19 Outstanding and expected to vest in the future as of September 30, 2018 7,216,668 $ 65.30 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Activity Related to Net Revenue, Adjusted EBITDA and Long-Lived Assets by Segment | The following tables present Direct Retail and Other net revenues and Adjusted EBITDA attributable to the Company's reportable segments for the periods presented (in thousands): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 U.S. Direct Retail $ 1,460,056 $ 1,033,669 $ 4,043,270 $ 2,847,898 U.S. Other 13,189 16,975 42,903 57,843 U.S. segment net revenue 1,473,245 1,050,644 4,086,173 2,905,741 International Direct Retail 232,400 147,554 678,997 376,138 International segment net revenue 232,400 147,554 678,997 376,138 Total net revenue $ 1,705,645 $ 1,198,198 $ 4,765,170 $ 3,281,879 Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Adjusted EBITDA: U.S. $ (26,036 ) $ 4,531 $ (26,774 ) $ 28,684 International (50,369 ) (27,203 ) (134,400 ) (74,498 ) Total reportable segments Adjusted EBITDA (76,405 ) (22,672 ) (161,174 ) (45,814 ) Less: reconciling items (1) (75,321 ) (53,757 ) (199,061 ) (126,029 ) Net loss $ (151,726 ) $ (76,429 ) $ (360,235 ) $ (171,843 ) (1) Adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net loss including the following (in thousands): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Depreciation and amortization (1) $ 32,544 $ 22,913 $ 87,426 $ 62,588 Equity based compensation and related taxes 36,317 19,598 95,074 50,539 Interest expense, net 7,066 2,008 18,269 3,857 Other (income) expense, net (1,054 ) 227 (2,661 ) (400 ) Provision for income taxes 448 237 953 671 Other (1) — 8,774 — 8,774 Total reconciling items $ 75,321 $ 53,757 $ 199,061 $ 126,029 (1) The Company recorded $9.6 million of one-time charges in the three and nine months ended September 30, 2017 in " Selling, operations, technology, general and administrative " in the unaudited consolidated and condensed statements of operations related to a warehouse the Company vacated in July 2017. Of the $9.6 million charges, $8.8 million was included in "Other" and related primarily to the excess of the Company's estimated future remaining lease commitments through 2023 over its expected sublease income over the same period, and $0.8 million was included in "Depreciation and amortization" related to accelerated depreciation of leasehold improvements in the warehouse. 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 websites operated by third parties and fees from our media solutions business (in thousands): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Net revenue Direct Retail $ 1,692,456 $ 1,181,223 $ 4,722,267 $ 3,224,036 Other 13,189 16,975 42,903 57,843 Net revenue $ 1,705,645 $ 1,198,198 $ 4,765,170 $ 3,281,879 The following table presents long-lived assets by segment (in thousands): September 30, December 31, Geographic long-lived assets U.S. $ 494,713 $ 353,414 International 14,948 7,727 Total $ 509,661 $ 361,141 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Net loss $ (151,726 ) $ (76,429 ) $ (360,235 ) $ (171,843 ) Weighted average common shares used for basic and diluted net loss per share computation 89,792 87,283 89,144 86,679 Net loss per common share: Basic and Diluted $ (1.69 ) $ (0.88 ) $ (4.04 ) $ (1.98 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) supplier in Thousands, product in Millions | 9 Months Ended |
Sep. 30, 2018productsupplier | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of products offered | product | 10 |
Number of suppliers providing products offered | supplier | 10 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment that increased retained earnings | $ 938,844 | $ 583,266 |
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment that increased retained earnings | 4,700 | |
Deferred Revenue | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Contract liability | 133,400 | 94,100 |
Revenue recognized that was included in deferred revenue | 76,600 | |
Other Current Liabilities | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Contract liability | 2,700 | $ 2,600 |
Revenue recognized that was included in deferred revenue | $ 2,200 |
Marketable Securities and Fai_3
Marketable Securities and Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||||
Estimated fair values | $ 36,577,000 | $ 36,577,000 | $ 82,593,000 | ||
Other-than-temporary impairment loss | 0 | $ 0 | 0 | $ 0 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Marketable securities, realized gains and losses | 0 | $ 0 | 0 | $ 0 | |
Long-term marketable securities | |||||
Fair Value Disclosures [Abstract] | |||||
Estimated fair values | $ 6,521,000 | $ 6,521,000 | $ 21,561,000 | ||
Long-term marketable securities | Minimum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Marketable securities term | 1 year | ||||
Long-term marketable securities | Maximum | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Marketable securities term | 2 years |
Marketable Securities and Fai_4
Marketable Securities and Fair Value Measurements - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Marketable securities and fair value measurements | ||
Amortized Cost | $ 36,761 | $ 82,824 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (184) | (231) |
Estimated Fair Value | 36,577 | 82,593 |
Investment securities | ||
Marketable securities and fair value measurements | ||
Amortized Cost | 30,142 | 61,129 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (86) | (97) |
Estimated Fair Value | 30,056 | 61,032 |
Investment securities | ||
Marketable securities and fair value measurements | ||
Amortized Cost | 6,619 | 21,695 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (98) | (134) |
Estimated Fair Value | $ 6,521 | $ 21,561 |
Marketable Securities and Fai_5
Marketable Securities and Fair Value Measurements - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Marketable securities and fair value measurements | ||
Total | $ 453,660 | $ 575,622 |
Cash equivalents | ||
Marketable securities and fair value measurements | ||
Money market funds and other funds | 412,083 | 488,029 |
Short-term investments | ||
Marketable securities and fair value measurements | ||
Investment securities | 30,056 | 61,032 |
Other non-current assets: | ||
Marketable securities and fair value measurements | ||
Certificate of deposit | 5,000 | 5,000 |
Long-term marketable securities | ||
Marketable securities and fair value measurements | ||
Investment securities | 6,521 | 21,561 |
Level 1 | ||
Marketable securities and fair value measurements | ||
Total | 417,083 | 493,029 |
Level 1 | Cash equivalents | ||
Marketable securities and fair value measurements | ||
Money market funds and other funds | 412,083 | 488,029 |
Level 1 | Short-term investments | ||
Marketable securities and fair value measurements | ||
Investment securities | 0 | 0 |
Level 1 | Other non-current assets: | ||
Marketable securities and fair value measurements | ||
Certificate of deposit | 5,000 | 5,000 |
Level 1 | Long-term marketable securities | ||
Marketable securities and fair value measurements | ||
Investment securities | 0 | 0 |
Level 2 | ||
Marketable securities and fair value measurements | ||
Total | 36,577 | 82,593 |
Level 2 | Cash equivalents | ||
Marketable securities and fair value measurements | ||
Money market funds and other funds | 0 | 0 |
Level 2 | Short-term investments | ||
Marketable securities and fair value measurements | ||
Investment securities | 30,056 | 61,032 |
Level 2 | Other non-current assets: | ||
Marketable securities and fair value measurements | ||
Certificate of deposit | 0 | 0 |
Level 2 | Long-term marketable securities | ||
Marketable securities and fair value measurements | ||
Investment securities | 6,521 | 21,561 |
Level 3 | ||
Marketable securities and fair value measurements | ||
Total | 0 | 0 |
Level 3 | Cash equivalents | ||
Marketable securities and fair value measurements | ||
Money market funds and other funds | 0 | 0 |
Level 3 | Short-term investments | ||
Marketable securities and fair value measurements | ||
Investment securities | 0 | 0 |
Level 3 | Other non-current assets: | ||
Marketable securities and fair value measurements | ||
Certificate of deposit | 0 | 0 |
Level 3 | Long-term marketable securities | ||
Marketable securities and fair value measurements | ||
Investment securities | $ 0 | $ 0 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 4,878 | $ 4,878 | $ 4,653 | ||
Accumulated Amortization | (4,253) | (4,253) | (3,472) | ||
Net Book Value | 625 | 625 | 1,181 | ||
Amortization expense related to intangibles | 200 | $ 300 | 800 | $ 800 | |
Goodwill | 2,100 | $ 2,100 | $ 1,900 | ||
Trademarks | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted - Average Amortization Period (Years) | 5 years | 5 years | |||
Gross Carrying Amount | 1,900 | $ 1,900 | $ 1,900 | ||
Accumulated Amortization | (1,900) | (1,900) | (1,678) | ||
Net Book Value | 0 | $ 0 | $ 222 | ||
Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted - Average Amortization Period (Years) | 3 years | 3 years | |||
Gross Carrying Amount | 1,678 | $ 1,678 | $ 1,453 | ||
Accumulated Amortization | (1,053) | (1,053) | (646) | ||
Net Book Value | 625 | $ 625 | $ 807 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted - Average Amortization Period (Years) | 5 years | 5 years | |||
Gross Carrying Amount | 1,300 | $ 1,300 | $ 1,300 | ||
Accumulated Amortization | (1,300) | (1,300) | (1,148) | ||
Net Book Value | $ 0 | $ 0 | $ 152 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property and equipment, net | |||||
Property and equipment, gross | $ 768,027 | $ 768,027 | $ 545,267 | ||
Less accumulated depreciation and amortization | (258,366) | (258,366) | (184,126) | ||
Property and equipment, net | 509,661 | 509,661 | 361,141 | ||
Depreciation and amortization | 32,400 | $ 22,600 | 86,600 | $ 61,700 | |
Furniture and computer equipment | |||||
Property and equipment, net | |||||
Property and equipment, gross | 305,913 | 305,913 | 213,790 | ||
Site and software development costs | |||||
Property and equipment, net | |||||
Property and equipment, gross | 157,717 | 157,717 | 118,356 | ||
Leasehold improvements | |||||
Property and equipment, net | |||||
Property and equipment, gross | 102,871 | 102,871 | 82,614 | ||
Construction in progress | |||||
Property and equipment, net | |||||
Property and equipment, gross | 16,832 | 16,832 | 46,826 | ||
Buildings | |||||
Property and equipment, net | |||||
Property and equipment, gross | $ 184,694 | $ 184,694 | $ 83,681 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($)wharehouse | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Rental expense under operating leases | $ 16,900 | $ 10,600 | $ 45,800 | $ 33,300 | ||
Letter of credit issued as security for lease agreements | 26,900 | 26,900 | $ 15,300 | |||
Future minimum lease payments for non-cancelable lease | 783,700 | |||||
Additional non-cancelable leases with initial or remaining terms in excess of one year | 231,800 | |||||
Minimum sublease rentals | 5,300 | 5,300 | ||||
Lease financing obligation, net of current portion | 184,055 | 184,055 | $ 82,580 | |||
Land lease expense | 700 | 2,100 | ||||
Interest expense | 3,500 | 8,000 | ||||
Future minimum commitments related to financing obligation, principal | 20,200 | 20,200 | ||||
Future minimum commitments related to financing obligation, interest | 76,200 | 76,200 | ||||
Warehouse Lease Arrangement | Warehouse Lease Arrangement, June 30, 2018 | ||||||
Operating Leased Assets [Line Items] | ||||||
Letter of credit issued as security for lease agreements | $ 2,500 | |||||
Warehouse lease arrangements | wharehouse | 1 | |||||
Warehouse Lease Arrangement | Warehouse Lease Arrangement, Second And Third, September, 2018 | ||||||
Operating Leased Assets [Line Items] | ||||||
Lease financing obligation, net of current portion | $ 101,000 | $ 101,000 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Jan. 01, 2018 | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Intrinsic value of stock options exercised | $ 3.2 | |
Aggregate intrinsic value of stock options outstanding | 13.2 | |
Aggregate intrinsic value of stock options exercisable | 13.2 | |
Restricted common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate Intrinsic value of stock unvested | 5.9 | |
Unrecognized equity based compensation | $ 3.7 | |
Weighted average remaining vesting term | 280 days | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate Intrinsic value of stock unvested | $ 1,065.7 | |
Unrecognized equity based compensation | $ 433.4 | |
Weighted average remaining vesting term | 1 year 220 days | |
Intrinsic value of stock vested | $ 189.7 | |
2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 8,603,066 | |
Number of shares available for future grant (in shares) | 8,016,850 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Activity Relating to Stock Options (Details) - Stock options - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Options | ||
Outstanding at the beginning of the period (in shares) | 126,383 | |
Options exercised (in shares) | (34,981) | |
Outstanding and exercisable at the end of the period (in shares) | 91,402 | 126,383 |
Weighted- Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 3.02 | |
Options exercised (in dollars per share) | 2.97 | |
Outstanding and exercisable at the end of the period (in dollars per share) | $ 3.04 | $ 3.02 |
Weighted- Average Remaining Contractual Term (Years) | ||
Outstanding | 2 years 265 days | 3 years 6 months |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Activity Relating to Restricted Stock (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Restricted stock | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 40,000 |
Outstanding at the end of the period (in shares) | shares | 40,000 |
Weighted- Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 44.34 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 44.34 |
RSUs | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 6,853,606 |
RSUs granted (in shares) | shares | 3,209,887 |
RSUs vested (in shares) | shares | (1,911,629) |
RSUs forfeited/canceled (in shares) | shares | (935,196) |
Outstanding at the end of the period (in shares) | shares | 7,216,668 |
Weighted- Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 46.28 |
RSUs granted (in dollars per share) | $ / shares | 89.87 |
RSUs vested (in dollars per share) | $ / shares | 44.84 |
RSUs forfeited/canceled (in dollars per share) | $ / shares | 53.19 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 65.30 |
Segment and Geographic Inform_3
Segment and Geographic Information Narrative (Details) | 9 Months Ended |
Sep. 30, 2018site | |
U.S. | |
Segment Reporting Information [Line Items] | |
Distinct sites | 5 |
Segment and Geographic Inform_4
Segment and Geographic Information - Activity Related to Net Revenue and Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 1,705,645 | $ 1,198,198 | $ 4,765,170 | $ 3,281,879 |
Adjusted EBITDA: | (76,405) | (22,672) | (161,174) | (45,814) |
Less: reconciling items | 75,321 | 53,757 | 199,061 | 126,029 |
Net loss | (151,726) | (76,429) | (360,235) | (171,843) |
Depreciation and amortization | 32,544 | 22,913 | 87,426 | 62,588 |
Equity based compensation and related taxes | 36,317 | 19,598 | 95,074 | 50,539 |
Interest expense, net | 7,066 | 2,008 | 18,269 | 3,857 |
Other (income) expense, net | (1,054) | 227 | (2,661) | (400) |
Provision for income taxes | 448 | 237 | 953 | 671 |
Other | 0 | 8,774 | 0 | 8,774 |
Selling, operations, technology, general and administrative | 268,785 | 169,603 | 721,120 | 453,021 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 1,473,245 | 1,050,644 | 4,086,173 | 2,905,741 |
Adjusted EBITDA: | (26,036) | 4,531 | (26,774) | 28,684 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 232,400 | 147,554 | 678,997 | 376,138 |
Adjusted EBITDA: | (50,369) | (27,203) | (134,400) | (74,498) |
Direct Retail | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 1,692,456 | 1,181,223 | 4,722,267 | 3,224,036 |
Direct Retail | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 1,460,056 | 1,033,669 | 4,043,270 | 2,847,898 |
Direct Retail | International | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 232,400 | 147,554 | 678,997 | 376,138 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 13,189 | 16,975 | 42,903 | 57,843 |
Other | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 13,189 | 16,975 | $ 42,903 | 57,843 |
Facility Closing | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 800 | 800 | ||
Other | 8,800 | 8,800 | ||
Selling, operations, technology, general and administrative | $ 9,600 | $ 9,600 |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of Long-Lived Assets by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Geographic revenue and long-lived assets | |||||
Net revenue | $ 1,705,645 | $ 1,198,198 | $ 4,765,170 | $ 3,281,879 | |
Geographic long-lived assets | 509,661 | 509,661 | $ 361,141 | ||
U.S. | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | 1,473,245 | 1,050,644 | 4,086,173 | 2,905,741 | |
Geographic long-lived assets | 494,713 | 494,713 | 353,414 | ||
International | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | 232,400 | 147,554 | 678,997 | 376,138 | |
Geographic long-lived assets | 14,948 | 14,948 | $ 7,727 | ||
Direct Retail | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | 1,692,456 | 1,181,223 | 4,722,267 | 3,224,036 | |
Direct Retail | U.S. | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | 1,460,056 | 1,033,669 | 4,043,270 | 2,847,898 | |
Direct Retail | International | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | 232,400 | 147,554 | 678,997 | 376,138 | |
Other | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | 13,189 | 16,975 | 42,903 | 57,843 | |
Other | U.S. | |||||
Geographic revenue and long-lived assets | |||||
Net revenue | $ 13,189 | $ 16,975 | $ 42,903 | $ 57,843 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 448,000 | $ 237,000 | $ 953,000 | $ 671,000 | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 9 Months Ended | 48 Months Ended | |
Sep. 30, 2018vote$ / sharesshares | Sep. 30, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Stockholders' Equity | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Class A common stock | |||
Stockholders' Equity | |||
Common stock, shares authorized (in shares) | 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 (in shares) | 61,400,416 | 61,400,416 | 57,398,983 |
Number of votes each holder is entitled | vote | 1 | ||
Class B common stock | |||
Stockholders' Equity | |||
Common stock, shares authorized (in shares) | 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 (in shares) | 28,726,124 | 28,726,124 | 30,809,627 |
Number of votes each holder is entitled | vote | 10 | ||
Conversion ratio following the completion of the offering | 1 | ||
Conversion ratio upon transfer | 1 | ||
Number of shares converted into Class A common stock (in shares) | 51,192,113 | ||
Class B common stock | Maximum | |||
Stockholders' Equity | |||
Aggregate number of shares outstanding Class A common stock and Class B common stock that shall convert automatically (less than) | 10.00% | ||
Class B common stock | Minimum | |||
Stockholders' Equity | |||
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% |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) | Feb. 22, 2017 | Sep. 30, 2018 | Apr. 12, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||||
Borrowings under Revolver credit agreement | $ 0 | $ 0 | ||
Credit Card Program | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 40,000,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 100,000,000 | |||
Right to increase | $ 25,000,000 | |||
Revolving Credit Facility | Federal Funds Effective Swap Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread | 0.50% | |||
Revolving Credit Facility | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread | 1.00% | |||
Applicable margin | 0.0175 | |||
Revolving Credit Facility | Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Applicable margin | 0.0075 | |||
Revolving Credit Facility | Letter of Credit Sublimit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 65,000,000 | |||
Revolving Credit Facility | Swing Line Sublimit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000,000 |
Convertible Debt (Details)
Convertible Debt (Details) | Sep. 15, 2017USD ($)dayinstitution$ / shares | Sep. 11, 2017$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Proceeds from sale of Notes, net of discounts and offering expenses | $ 0 | $ 420,449,000 | ||||
Capped call transaction costs paid from net proceeds | 0 | 44,160,000 | ||||
Convertible Debt | Three Point Seven Five Percent Senior Note due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt, face amount | $ 431,250,000 | |||||
Interest rate, stated percentage | 0.375% | |||||
Proceeds from sale of Notes, net of discounts and offering expenses | $ 420,400,000 | |||||
Capped call transaction costs paid from net proceeds | $ 44,200,000 | |||||
Financial institutions | institution | 3 | |||||
Initial conversion rate | 0.00961 | |||||
Conversion price (in usd per share) | $ / shares | $ 104.06 | |||||
Number of trading days (whether or not consecutive) | day | 20 | |||||
Number of trading days (consecutive) | day | 30 | |||||
Percentage of conversion stock price | 130.00% | |||||
During number of business day period | 5 days | |||||
Consecutive trading day period (after any) | 10 days | |||||
Principal amount of Notes | $ 1,000 | |||||
Measurement period, percentage (less than) | 98.00% | |||||
Minimum trading days immediately preceding date notice of redemption provided | day | 1 | |||||
Trading days immediately preceding date notice of redemption provided | day | 5 | |||||
Redemption price, percentage of principal amount to be redeemed | 100.00% | |||||
Default percentage of aggregate principal amount of notes outstanding (not less than) | 25.00% | |||||
Equity component of Notes | $ 95,800,000 | |||||
Interest expense | $ 5,200,000 | $ 900,000 | 15,300,000 | $ 900,000 | ||
Debt, fair value | $ 646,100,000 | $ 646,100,000 | ||||
Convertible Debt | Three Point Seven Five Percent Senior Note due 2022 | Class A common stock | ||||||
Debt Instrument [Line Items] | ||||||
Cap price, per share (in usd per share) | $ / shares | $ 154.16 | |||||
Premium over last reported sale price, percentage | 100.00% | |||||
Convertible Debt | Three Point Seven Five Percent Senior Note due 2022 | Over-Allotment Option | ||||||
Debt Instrument [Line Items] | ||||||
Over-allotment option included in issuance of notes | $ 56,250,000 |
Net Loss per Share (Details)
Net Loss per Share (Details) shares in Millions | Sep. 15, 2017$ / sharesshares | Sep. 11, 2017$ / sharesshares | Sep. 30, 2018shares | Sep. 30, 2017shares | Sep. 30, 2018shares | Sep. 30, 2017shares |
Class of Stock [Line Items] | ||||||
Allocation of undistributed earnings between stock classes, conversion ratio | 1 | |||||
Three Point Seven Five Percent Senior Note due 2022 | Convertible Debt | ||||||
Class of Stock [Line Items] | ||||||
Conversion price (in usd per share) | $ / shares | $ 104.06 | |||||
Three Point Seven Five Percent Senior Note due 2022 | Convertible Debt | Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of stock, shares issued (in shares) | 4.1 | |||||
Cap price, per share (in usd per share) | $ / shares | $ 154.16 | |||||
Capped call transaction, shares issued (in shares) | 2.8 | |||||
Common Stock Options, Restricted Stock Options And Restricted Stock Units | ||||||
Class of Stock [Line Items] | ||||||
Antidilutive securities excluded from diluted earnings per share calculation (in shares) | 7.3 | 6.6 | 7.3 | 6.6 |
Net Loss per Share - Calculatio
Net Loss per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (151,726) | $ (76,429) | $ (360,235) | $ (171,843) |
Weighted average common shares used for basic and diluted net loss per share computation (in shares) | 89,792 | 87,283 | 89,144 | 86,679 |
Net loss per common share: | ||||
Basic and Diluted (in usd per share) | $ (1.69) | $ (0.88) | $ (4.04) | $ (1.98) |