Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Entity Registrant Name | Blue Apron Holdings, Inc. |
Entity Central Index Key | 1,701,114 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q3 |
Class A | |
Entity Common Stock, Shares Outstanding | 30,042,687 |
Class B | |
Entity Common Stock, Shares Outstanding | 160,097,378 |
Class C | |
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 266,294 | $ 81,468 |
Accounts receivable | 822 | 485 |
Inventories, net | 43,519 | 42,887 |
Prepaid expenses and other current assets | 11,087 | 8,267 |
Other receivables | 1,304 | 4,991 |
Total current assets | 323,026 | 138,098 |
Restricted cash | 2,371 | 3,966 |
Property and equipment, net | 239,002 | 130,961 |
Other noncurrent assets | 399 | 382 |
TOTAL ASSETS | 564,798 | 273,407 |
CURRENT LIABILITIES: | ||
Accounts payable | 41,203 | 49,549 |
Accrued expenses and other current liabilities | 41,496 | 40,911 |
Deferred revenue | 19,762 | 24,278 |
Total current liabilities | 102,461 | 114,738 |
Long-term debt | 124,640 | 44,533 |
Facility financing obligation | 69,663 | 49,809 |
Other noncurrent liabilities | 7,837 | 2,858 |
TOTAL LIABILITIES | 304,601 | 211,938 |
Convertible preferred stock, par value of $0.0001 per share — 10,000,000 and 17,371,402 shares authorized as of September 30, 2017 and December 31, 2016, respectively; 0 issued and outstanding as of September 30, 2017 and 14,500,938 issued and outstanding as of December 31, 2016; aggregate liquidation preference of $0 as of September 30, 2017 and $195,317 as of December 31, 2016 | 194,869 | |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Additional paid-in capital | 569,755 | 5,147 |
Accumulated deficit | (309,577) | (138,554) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 260,197 | (133,400) |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | 564,798 | 273,407 |
Class A | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Common Stock | 3 | |
Class B | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Common Stock | $ 16 | $ 7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, authorized (in shares) | 10,000,000 | 17,371,402 |
Convertible preferred stock, issued (in shares) | 0 | 14,500,938 |
Convertible preferred stock, outstanding (in shares) | 0 | 14,500,938 |
Convertible preferred stock, liquidation value | $ 0 | $ 195,317 |
Class A | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 1,500,000,000 | 177,000,000 |
Common stock, issued (in shares) | 30,042,687 | 0 |
Common stock, outstanding (in shares) | 30,042,687 | 0 |
Class B | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, issued (in shares) | 160,097,378 | 67,095,128 |
Common stock, outstanding (in shares) | 160,097,378 | 67,095,128 |
Class C | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 500,000,000 | 2,000,000 |
Common stock, issued (in shares) | 0 | 0 |
Common stock, outstanding (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Operations | ||||
Net revenue | $ 210,638 | $ 205,452 | $ 693,538 | $ 579,474 |
Operating expenses: | ||||
Cost of goods sold, excluding depreciation and amortization | 164,444 | 145,644 | 496,495 | 385,489 |
Marketing | 34,244 | 49,618 | 129,368 | 107,062 |
Product, technology, general, and administrative | 65,744 | 45,589 | 194,627 | 110,586 |
Depreciation and amortization | 8,774 | 1,992 | 18,337 | 5,251 |
Other operating expenses | 5,934 | 5,934 | ||
Total operating expenses | 279,140 | 242,843 | 844,761 | 608,388 |
Income (loss) from operations | (68,502) | (37,391) | (151,223) | (28,914) |
Interest income (expense), net | (1,281) | 59 | (4,803) | 187 |
Other income (expense), net | (17,551) | (14,984) | ||
Income (loss) before income taxes | (87,334) | (37,332) | (171,010) | (28,727) |
Benefit (provision) for income taxes | 133 | (27) | (13) | (82) |
Net income (loss) | $ (87,201) | $ (37,359) | $ (171,023) | $ (28,809) |
Net income (loss) per share attributable to Class A, Class B and Class C common stockholders: | ||||
Basic (in dollars per share) | $ (0.47) | $ (0.56) | $ (1.60) | $ (0.44) |
Diluted (in dollars per share) | $ (0.47) | $ (0.56) | $ (1.60) | $ (0.44) |
Weighted-average shares used to compute net income (loss) per share attributable to Class A, Class B and Class C common stockholders: | ||||
Basic (in shares) | 184,737,720 | 66,841,895 | 106,836,062 | 64,894,388 |
Diluted (in shares) | 184,737,720 | 66,841,895 | 106,836,062 | 64,894,388 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ (87,201) | $ (37,359) | $ (171,023) | $ (28,809) |
Other comprehensive loss: | ||||
Comprehensive income (loss) | $ (87,201) | $ (37,359) | $ (171,023) | $ (28,809) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Temporary equity beginning balance at Dec. 31, 2015 | $ 194,869 | |||
Temporary equity beginning balance (in shares) at Dec. 31, 2015 | 14,500,938 | |||
Temporary equity ending balance at Dec. 31, 2016 | $ 194,869 | |||
Temporary equity ending balance (in shares) at Dec. 31, 2016 | 14,500,938 | |||
Beginning balance at Dec. 31, 2015 | $ 7 | $ 1,727 | $ (83,668) | $ (81,934) |
Beginning balance (in shares) at Dec. 31, 2015 | 66,565,002 | |||
Convertible Preferred Stock | ||||
Issuance of common stock upon exercise of stock options | 402 | 402 | ||
Issuance of common stock upon exercise of stock options (in shares) | 530,126 | |||
Share-based compensation | 3,018 | 3,018 | ||
Net income (loss) | (54,886) | (54,886) | ||
Ending balance at Dec. 31, 2016 | $ 7 | 5,147 | (138,554) | (133,400) |
Ending balance (in shares) at Dec. 31, 2016 | 67,095,128 | |||
Convertible Preferred Stock | ||||
Redemption of common stock upon conversion | $ (194,869) | |||
Redemption of common stock upon conversion (in shares) | (14,500,938) | |||
Temporary equity ending balance (in shares) at Sep. 30, 2017 | 0 | |||
Convertible Preferred Stock | ||||
Issuance of common stock upon exercise of stock options | 816 | $ 816 | ||
Issuance of common stock upon exercise of stock options (in shares) | 788,498 | |||
Issuance of common stock upon acquisition | 373 | 373 | ||
Issuance of common stock upon acquisition (in shares) | 42,687 | |||
Issuance of convertible notes | 19,567 | 19,567 | ||
Issuance of common stock upon initial public offering, net of offering costs | $ 3 | 278,007 | 278,010 | |
Issuance of common stock (in shares) | 30,000,000 | |||
Issuance of common stock upon conversion of convertible notes | $ 1 | 62,084 | 62,085 | |
Issuance of common stock upon conversion of convertible notes (in shares) | 7,023,201 | |||
Issuance of common stock upon conversion of Series A, B, C, and D convertible preferred stock | $ 8 | 194,861 | 194,869 | |
Issuance of common stock upon conversion of Series A, B, C, and D convertible preferred stock (in shares) | 85,190,551 | |||
Share-based compensation | 8,900 | 8,900 | ||
Net income (loss) | (171,023) | (171,023) | ||
Ending balance at Sep. 30, 2017 | $ 19 | $ 569,755 | $ (309,577) | $ 260,197 |
Ending balance (in shares) at Sep. 30, 2017 | 190,140,065 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (171,023) | $ (28,809) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization of property and equipment | 18,337 | 5,251 |
Loss (gain) on disposal of property and equipment | (30) | |
Loss on impairment | 5,934 | |
Changes in reserves and allowances | 1,364 | 1,165 |
Share-based compensation | 8,752 | 2,062 |
Noncash interest expense | 2,459 | 18 |
Loss on convertible notes | 14,984 | |
Changes in operating assets and liabilities: | ||
Receivables | (3,972) | 288 |
Inventories | 55 | (14,097) |
Prepaid expenses and other current assets | (3,101) | (1,819) |
Accounts payable | 2,814 | 10,929 |
Accrued expenses and other current liabilities | 216 | 32,861 |
Deferred revenue | (4,516) | 6,849 |
Other noncurrent assets and liabilities | 4,962 | 638 |
Net cash from (used in) operating activities | (122,765) | 15,336 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Decrease (increase) in restricted cash | 1,595 | (3,768) |
Cash paid for acquisition | (1,177) | |
Purchases of property and equipment | (116,094) | (24,108) |
Net cash from (used in) investing activities | (115,676) | (27,876) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from debt issuance | 144,349 | 4,471 |
Proceeds from exercise of stock options | 816 | 299 |
Principal payments on capital lease obligations | (145) | (210) |
Proceeds from public offering | 283,500 | |
Payments of public offering costs | (5,253) | |
Net cash from (used in) financing activities | 423,267 | 4,560 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 184,826 | (7,980) |
CASH AND CASH EQUIVALENTS - Beginning of period | 81,468 | 126,860 |
CASH AND CASH EQUIVALENTS - End of period | 266,294 | 118,880 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes, net of refunds | 190 | 370 |
Cash paid for interest, net of amounts capitalized | 2,342 | 32 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | ||
Acquisition (disposal) of property and equipment financed under capital lease obligations | (66) | 257 |
Non-cash addition to property and equipment related to build-to-suit lease | 19,823 | 41,661 |
Purchases of property and equipment included in Accounts payable and Accrued expenses and other current liabilities | $ 4,709 | $ 12,693 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business When used in these notes, Blue Apron Holdings, Inc. and its subsidiaries are collectively referred to as the “Company.” The Company creates original recipes, which are sent along with fresh, high-quality, seasonal ingredients, directly to customers for them to prepare, cook, and enjoy. The Company creates these cooking experiences around original recipes every week based on what’s in-season with farming partners and other suppliers. Customers can choose which recipes they would like to receive in a given week, and the Company delivers those recipes to their doorsteps along with the pre-portioned ingredients required to cook those recipes. In addition to meals, the Company sells wine through Blue Apron Wine, a direct-to-consumer wine delivery service launched in September 2015. The Company also sells a curated selection of cooking tools, utensils, and pantry items through Blue Apron Market, an e-commerce marketplace launched in November 2014. In addition, in February 2017, the Company acquired BN Ranch, a premium supplier of sustainable beef, poultry and lamb. In connection with the Corporate Reorganization as discussed in Note 10, Blue Apron Holdings, Inc. was incorporated in Delaware in December 2016, and Blue Apron, Inc., the parent company prior to the Corporate Reorganization, converted into Blue Apron, LLC and became a direct, wholly-owned subsidiary of Blue Apron Holdings, Inc. The Company’s headquarters are in New York, New York. On July 5, 2017, the Company completed an initial public offering (“IPO”), in which the Company issued and sold 30,000,000 shares of its Class A common stock at a public offering price of $10.00 per share. The Company received approximately $278. 0 million in net proceeds after deducting $16.5 million of underwriting discounts and commissions and approximately $5. 5 million in offering costs. Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 85,190,551 shares of Class B common stock at the applicable conversion rates then in effect. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. Upon the closing of the IPO, the aggregate principal amount of $64.6 million and all accrued and unpaid interest outstanding on the convertible notes discussed in Note 8 automatically converted into 7,023,201 shares of Class B common stock at the conversion rate then in effect. Subsequent to the closing of the IPO, there were no convertible notes outstanding. The Consolidated Financial Statements as of September 30, 2017, including share and per share amounts, give effect to the IPO, conversion of the convertible notes, and the conversion of the convertible preferred stock, as the IPO and such conversions were completed on July 5, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The unaudited interim Consolidated Financial Statements have been prepared on the same basis as the audited Consolidated Financial Statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2017 and December 31, 2016, results of operations for the three months and nine months ended September 30, 2017 and 2016, and cash flows for the nine months ended September 30, 2017 and 2016 . These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2016 included in the Company’s final prospectus related to the IPO, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on June 29, 2017 (the “Prospectus”). There have been no material changes in the Company's significant accounting policies from those that were disclosed in the Prospectus. The accompanying Consolidated Financial Statements include the accounts of Blue Apron Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Consolidated Financial Statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”). Use of Estimates In preparing its Consolidated Financial Statements in accordance with GAAP, the Company is required to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs, and expenses, and disclosure of contingent assets and liabilities which are reported in the Consolidated Financial Statements and accompanying disclosures. The accounting estimates that require the most difficult and subjective judgments include revenue recognition, inventory valuation, leases, recoverability of long-lived assets, the fair value of share-based awards, recoverability of net deferred tax assets and related valuation allowance, and the recognition and measurement of income tax uncertainties and other contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from the Company’s estimates and assumptions. Emerging Growth Company Status The Company is an "emerging growth company," as defined in the Jumpstart Our Business Startups (JOBS) Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." The Company may take advantage of these exemptions until the Company is no longer an "emerging growth company." Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that it is no longer an emerging growth company. The Company would cease to be an emerging growth company if it has more than $1.07 billion in annual revenue, has more than $700.0 million in market value of its stock held by non-affiliates (and it has been a public company for at least 12 months, and has filed one annual report on Form 10-K), or it issues more than $1.0 billion of non-convertible debt securities over a three-year period. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 affects any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The new standard also includes enhanced disclosures which are significantly more comprehensive than those in existing revenue standards. In March 2016, the FASB issued ASU No. 2016-08, R evenue from Contracts with Customers (Principal versus Agent Considerations) , to clarify the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Identifying Performance Obligations and Licensing) , to clarify the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Narrow-Scope Improvements and Practical Expedients) , to clarify the implementation guidance on assessing collectibility, presentation of sales taxes, noncash consideration and completed contracts, and contract modifications at transition. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, (Revenue from Contracts with Customers) , to clarify the guidance or to correct unintended application of guidance . In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments , to add SEC paragraphs pursuant to an SEC Staff Announcement made at the July 20, 2017 Emerging Issues Task Force (EITF) meeting. For the Company, the guidance is effective for annual periods beginning after December 15, 2018. Non-public entities are permitted to adopt the standard as early as annual reporting periods beginning after December 15, 2016 and interim periods therein. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. In February 2016, the FASB issued its final standard on lease accounting, Accounting Standards Update No. 2016-02, Leases (Topic 842) , which supersedes Topic 840, Leases. The new accounting standard requires the recognition of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The new standard also provides additional guidance on the measurement of the right-of-use assets and lease liabilities and will require enhanced disclosures about the Company’s leasing arrangements. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments , to add SEC paragraphs pursuant to an SEC Staff Announcement made at the July 20, 2017 Emerging Issues Task Force (EITF) meeting. For the Company, the new standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (“ASU 2016-09”), Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas of simplification apply only to non-public entities. For the Company, the amendments in ASU 2016-09 are effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18 (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . The standard is intended to eliminate diversity in practice in the treatment of restricted cash in the statement of cash flows and requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. For the Company, the amendments in ASU 2016-18 are effective for annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued Accounting Standards Update No. 2017-09 (“ASU 2017-09”), Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting . The standard is intended to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. For the Company, the amendments in ASU 2017-09 are effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. |
Inventories, Net
Inventories, Net | 9 Months Ended |
Sep. 30, 2017 | |
Inventories, Net | |
Inventories, Net | 3. Inventories, Net Inventories, net consist of the following: September 30, December 31, 2017 2016 (In thousands) Fulfillment $ 7,868 $ 5,758 Product 35,651 37,129 Inventories, net $ 43,519 $ 42,887 Product inventory primarily consists of bulk and prepped food, containers, and products available for resale. Fulfillment inventory consists of packaging used for shipping and handling. Product and fulfillment inventories are recognized as components of Cost of goods sold, excluding depreciation and amortization in the accompanying Consolidated Statements of Operations when sold. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | 4. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: September 30, December 31, 2017 2016 (In thousands) Deposits $ 2,644 $ 1,122 Prepaid marketing 3,505 3,940 Prepaid rent 1,623 1,430 Other current assets 3,315 1,775 Prepaid expenses and other current assets $ 11,087 $ 8,267 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consists of the following: September 30, December 31, 2017 2016 (In thousands) Computer equipment $ 11,279 $ 6,468 Capitalized software 8,781 5,448 Fulfillment equipment 41,815 12,525 Furniture and fixtures 4,268 1,491 Leasehold improvements 42,023 23,660 Building (1) 114,877 — Construction in process (1) (2) 42,255 93,092 Property and equipment, gross 265,298 142,684 Less: accumulated depreciation and amortization (26,296) (11,723) Property and equipment, net $ 239,002 $ 130,961 (1) Included in Buildings and Construction in process are buildings related to build-to-suit lease arrangements where the Company is considered the owner for accounting purposes, of which, as of September 30, 2017 and December 31, 2016, the fair value was $63.7 million and $45.0 million, respectively. Costs incurred directly by the Company relating to these arrangements were $82.0 million and $37.6 million as of September 30, 2017 and December 31, 2016, respectively. (2) Construction in process includes all costs capitalized related to projects that have not yet been placed in service. Included in construction in process are buildings related to build-to-suit lease arrangements where the Company is considered the owner for accounting purposes. In July 2017, the Company approved a plan to transition all of its Jersey City, New Jersey fulfillment center operations to its new fulfillment center in Linden, New Jersey. The Company concluded that this change in operations represents a triggering event with respect to its long-lived assets at the Jersey City facility and therefore performed an impairment test in accordance with ASC 360, Property, Plant, and Equipment . The carrying amount of the Company’s long-lived assets at the Jersey City facility was $11.5 million and the fair value was $7.1 million as of the impairment date, resulting in an impairment of $4.4 million, primarily consisting of leasehold improvements and equipment. The fair value was primarily determined based on estimated market prices of the assets and represented a Level 3 valuation in the fair value hierarchy . Upon completion of the transition to the new Linden fulfillment center, the Company expects its long-lived assets at the Jersey City facility to be primarily sold or relocated to the Company’s other fulfillment centers in the fourth quarter of 2017. In addition, the Company has future non-cancelable minimum lease payments of approximately $6.2 million through 2025 relating to its Jersey City facility. The Company is pursuing a sublease for the facility, which is not expected to have a material impact on the Company’s Consolidated Financial Statements. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: September 30, December 31, 2017 2016 (In thousands) Accrued compensation $ 14,584 $ 11,069 Accrued credits and refunds reserve 1,766 1,235 Accrued marketing expenses 5,891 5,424 Accrued product expenses 920 10,965 Accrued shipping expenses 12,052 4,930 Other current liabilities 6,283 7,288 Accrued expenses and other current liabilities $ 41,496 $ 40,911 |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue | |
Deferred Revenue | 7. Deferred Revenue Deferred revenue consists of the following: September 30, December 31, 2017 2016 (In thousands) Cash received prior to fulfillment $ 9,934 $ 10,107 Gift cards, prepaid orders, and other 9,828 14,171 Deferred revenue $ 19,762 $ 24,278 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Debt | 8. Debt Revolving Credit Facility In August 2016, the Company entered into a revolving credit and guaranty agreement (the “revolving credit facility”). The revolving credit facility matures in August 2019 and advances under it are secured by certain of the Company’s tangible and intangible assets. Absent any default, the revolving credit facility can be terminated at the Company’s discretion. The maximum amount available to borrow under the revolving credit facility was $150.0 million. In May 2017 and June 2017, the Company executed amendments to the agreement that each increased the total commitment by $25.0 million, resulting in a total commitment of $200.0 million. As of September 30, 2017 and December 31, 2016, the Company had $125.0 million and $45.0 million, respectively, in outstanding borrowings and $1.4 million and $0.3 million, respectively, in issued letters of credit under the revolving credit facility. The remaining amount available to borrow as of September 30, 2017 and December 31, 2016 was $73.6 million and $104.7 million, respectively. The Company incurred and capitalized $0.5 million in deferred financing costs in long-term debt in connection with the revolving credit facility. As of September 30, 2017 and December 31, 2016, the total unamortized deferred financing costs in long-term debt was $0.4 million and $0.5 million, respectively. As of September 30, 2017 and December 31, 2016, outstanding borrowings in long-term debt consisted of the following: September 30, December 31, Maturity Date 2017 2016 (In thousands) Revolving credit facility 2019 $ 125,000 $ 45,000 Weighted average interest rate 3.39 % 2.84 % Borrowings under the revolving credit facility bear interest, at the Company’s option, at (1) a base rate based on the highest of prime rate, the federal funds rate plus 0.50% and an adjusted LIBOR rate for a one month interest period plus 1.00%, plus in each case a margin ranging from 0.50% to 1.00% (the “base rate”) or (2) an adjusted LIBOR rate plus a margin ranging from 1.50% to 2.00%, based on the Company’s total leverage ratio for the preceding four fiscal quarters and the Company’s status as a public or non-public company (the “adjusted LIBOR rate”). As of September 30, 2017 and December 31, 2016, the Company had outstanding borrowings of $120.0 million and $40.0 million, respectively, under the revolving credit facility utilizing the adjusted LIBOR rate. As of September 30, 2017 and December 31, 2016, the Company had outstanding borrowings of $5.0 million utilizing the base rate. The Company is also obligated under the revolving credit facility to pay customary fees, including an unused commitment fee on undrawn amounts of 0.15%. The Company incurred unused commitment fees related to the revolving credit facility of $0.0 million and $0.0 million during the three months ended September 30, 2017 and 2016, respectively. The Company incurred unused commitment fees related to the revolving credit facility of $0.1 million and $0.0 million for the nine months ended September 30, 2017 and 2016, respectively. The obligations under the revolving credit facility are guaranteed by each of the guarantors as defined in the credit agreement. The revolving credit facility contains certain restrictive covenants, including limitations on the incurrence of indebtedness and liens, restrictions on affiliate transactions, restrictions on the sale or other disposition of collateral, and limitations on dividends and stock repurchases. As of September 30, 2017 and December 31, 2016, the Company was in compliance with all of the covenants under the revolving credit facility. Convertible Notes In May 2017 and June 2017, the Company issued and sold $63.5 million and $1.1 million, respectively, in aggregate principal amount of convertible promissory notes (the “convertible notes”). The total net proceeds from the convertible notes, after deducting initial debt issuance costs of $0.2 million, was approximately $64.4 million. The convertible notes were unsecured general obligations and were subordinated to all of the Company’s current or future senior debt, including indebtedness under the revolving credit facility. The convertible notes were set to mature on May 3, 2019 and bore interest at a rate of 3.5% per annum, compounded annually . At the issuance date, in accordance with accounting guidance on beneficial conversion features, the Company recorded the portion of the debt proceeds equal to the intrinsic value of the optional conversion feature upon maturity, and recorded $19.6 million as a beneficial conversion feature in stockholders’ equity. The Company also fair valued and bifurcated the automatic conversion features from the respective host debt instrument, and recorded a debt derivative of $15.4 million at date of issuance which has been classified in Accrued expenses and other current liabilities. The derivative liability was revalued at each reporting date with changes in fair value recorded as a component of Other income and expense. The resulting debt discount from the derivative liability and beneficial conversion feature was amortized to interest expense using the effective interest rate method. On July 5, 2017, upon the closing of the IPO, the outstanding principal amount and all accrued and unpaid interest on the convertible notes were automatically converted into 7,023,201 shares of Class B common stock. Upon the conversion and settlement of the convertible notes, the outstanding principal, derivative, accrued interest, and discount resulted in a net loss on extinguishment of $(17.6) million recorded in Other income (expense), net. The fair value of the shares issued upon conversion is recorded in stockholder’s equity (deficit). During the three and nine months ended September 30, 2017, the Company incurred $0.1 million and $2.3 million, respectively, of interest expense related to amortization of debt discount and initial debt issuance costs prior to the note conversion. Facility Financing Obligation As of September 30, 2017 and December 31, 2016, the Company has recorded a facility financing obligation of $69.7 million and $49.8 million, respectively, related to leased fulfillment centers in New Jersey and California under the build-to-suit accounting guidance. See Note 9 for further discussion. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Contingencies and Commitments | |
Commitments and Contingencies | 9. Commitments and Contingencies Lease and Other Commitments The Company leases fulfillment centers and office space under non-cancelable operating lease arrangements that expire on various dates through 2028. These arrangements require the Company to pay certain operating expenses, such as taxes, repairs, and insurance, and contain renewal and escalation clauses. The Company recognizes rent expense under these arrangements on a straight-line basis over the term of the lease. The Company leases certain equipment under capital lease arrangements that expire at various dates through 2020. The current portion of the Company’s capital lease obligations is a component of other current liabilities on the Consolidated Balance Sheets and the noncurrent portion of the Company’s capital lease obligations is a component of Other noncurrent liabilities on the Consolidated Balance Sheets. In March 2016, the Company signed a lease for a new fulfillment center in New Jersey and in August 2016 the Company signed a lease for a new fulfillment center in California, which expire in 2026 and 2028, respectively. The total non-cancelable minimum lease payments for these leases are $40.8 million and $38.5 million, respectively. As a result of the nature of the Company’s involvement in the construction of these leased fulfillment centers, the Company is considered to be the owner for accounting purposes. The Company follows build-to-suit accounting for these arrangements and capitalizes the fair value of the buildings and direct construction costs incurred along with a corresponding facility financing liability. If upon completion of construction, the arrangement does not meet the sale-leaseback criteria, the Company will continue to be considered the owner of the buildings for accounting purposes. Upon substantial completion of the construction phase of the build out of the new fulfillment center in New Jersey in June 2017, the Company performed a sale-leaseback analysis pursuant to Accounting Standards Codification (“ASC”) 840 – Leases , to determine the appropriateness of removing the previously capitalized assets from the Consolidated Balance Sheets. The Company concluded that components of “continuing involvement" were evident as a result of this analysis, thereby failing the sale-leaseback test which precludes the derecognition of the related assets from the Consolidated Balance Sheets. In conjunction with the lease, the Company also recorded a facility financing obligation equal to the fair market value of the assets received from the landlord. At the end of the lease term, including exercise of any renewal options, the difference between the remaining facility financing obligation and the net carrying value of the fixed asset will be recognized as a non-cash gain or loss on sale of the property. The Company does not report rent expense for the lease. Rather, rental payments under the lease are recognized as a reduction of the financing obligation and interest expense and the associated asset capitalized throughout the construction project is depreciated over its determined useful life. In May 2017, the Company commenced a non-cancelable purchase commitment with a food supplier. Based on projected minimum purchase volumes and expected pricing, the Company’s minimum purchase obligation is estimated to be approximately $42.5 million in the aggregate through 2020. Total purchases under the contract may be higher than the minimum non-cancelable commitment. In addition, in May 2017, the Company amended the lease for one of the offices in New York, New York to extend the term through October 2019 and leased additional office space at the location. The amendment resulted in an increase of $7.6 million in the minimum lease payments required over the remaining term of the lease arrangement. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2017 | |
Common Stock. | |
Common Stock | 10. Common Stock Blue Apron Holdings, Inc., was incorporated in Delaware in December 2016 to enable Blue Apron, Inc. to implement a holding company organizational structure, effected by a merger conducted pursuant to Section 251(g) of the General Corporation Law of the State of Delaware, as described below. The Company refers to this transaction as its “Corporate Reorganization.” Immediately prior to the Corporate Reorganization, Blue Apron Holdings, Inc. was a direct, wholly-owned subsidiary of Blue Apron, Inc., and Blue Apron Merger Sub, Inc., a Delaware corporation, which is referred to as “Merger Sub”, was a direct, wholly-owned subsidiary of Blue Apron Holdings, Inc. Both Blue Apron Holdings, Inc. and Merger Sub were organized for the sole purpose of implementing the Corporate Reorganization. In December 2016, Merger Sub merged with and into Blue Apron, Inc., with Blue Apron, Inc. continuing as the surviving corporation. Each issued and outstanding share of common stock of Blue Apron, Inc. was converted into one share of common stock of Blue Apron Holdings, Inc. and each issued and outstanding share of preferred stock of Blue Apron, Inc. was converted into one share of preferred stock of Blue Apron Holdings, Inc. The separate corporate existence of Merger Sub ceased and all of the issued and outstanding shares of Blue Apron Holdings, Inc. owned by Blue Apron, Inc. were automatically canceled and retired. As a result of the Corporate Reorganization, each stockholder of Blue Apron, Inc. became a stockholder of Blue Apron Holdings, Inc., holding the same proportional equity interests as immediately prior to the Corporate Reorganization, and Blue Apron, Inc. became a direct, wholly-owned subsidiary of Blue Apron Holdings, Inc. The certificate of incorporation and bylaws of Blue Apron Holdings, Inc. were amended and restated in order to be identical to those of Blue Apron, Inc. prior to the Corporate Reorganization, and the initial directors and executive officers of Blue Apron Holdings, Inc. were the same individuals who were directors and executive officers of Blue Apron, Inc. immediately prior to the Corporate Reorganization. In December 2016, immediately after the merger, Blue Apron, Inc. converted into Blue Apron, LLC, a Delaware limited liability company. In connection with the Corporate Reorganization, Blue Apron Holdings, Inc. assumed the Restated Blue Apron, Inc. 2012 Equity Incentive Plan, as previously amended, and then amended and restated the plan in its entirety. The Company refers to the Restated Blue Apron, Inc. 2012 Equity Incentive Plan, as so amended and restated, as the Blue Apron Holdings, Inc. 2012 Equity Incentive Plan, or the 2012 Equity Incentive Plan. Blue Apron Holdings, Inc. also assumed Blue Apron, LLC’s obligations under the various investor agreements that had been entered into in connection with the Series D preferred stock financing of Blue Apron, Inc. in May 2015. The other liabilities of Blue Apron, LLC, including under its revolving credit facility, were not assumed by Blue Apron Holdings, Inc. in the Corporate Reorganization and therefore continue to be obligations of Blue Apron, LLC, and the assets of Blue Apron, LLC were not transferred to Blue Apron Holdings, Inc. and continue to be assets of Blue Apron, LLC. In connection with the Corporate Reorganization, the Company also implemented a tri-class capital structure consisting of two classes of voting common stock, Class A common stock and Class B common stock, and one class of non-voting stock, Class C capital stock (“Class C common stock”). To implement the tri-class capital structure, all then-outstanding shares of common stock, having one vote per share, were reclassified into shares of Class B common stock, having ten votes per share, and all then-outstanding securities convertible or exercisable for common stock became convertible or exercisable for Class B common stock. Class A common stock is entitled to one vote per share. Each outstanding share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value and whether voluntary or involuntary or by operation of law, except for certain exceptions and permitted transfers, or other events as described in the Company’s restated certificate of incorporation. In May 2017, the Company issued 42,687 shares of Class A common stock in exchange for an equal number of shares of outstanding Class C common stock and agreed to hold back an additional 10,285 shares of Class A common stock as security for potential claims for indemnification related to its acquisition of certain assets of BN Ranch, LLC, rather than an equal number of shares of Class C common stock. In connection with the IPO, the Company’s board of directors adopted the 2017 Equity Incentive Plan as discussed in Note 12. Additionally, in connection with the IPO, on July 5, 2017, the Company issued 30,000,000 shares of Class A common stock and all outstanding shares of convertible preferred stock converted into Class B common stock, as discussed in Note 11. |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 11. Convertible Preferred Stock In connection with the IPO, on July 5, 2017, all outstanding shares of convertible preferred stock converted into Class B common stock. As of September 30, 2017, the Company has 10,000,000 shares of preferred stock, $0.0001 par value per share, authorized for issuance, with none issued or outstanding. The following table summarizes the Company’s authorized, issued and outstanding convertible preferred stock as of December 31, 2016: December 31, 2016 Shares Issued Aggregate Shares and Liquidation Liquidation Conversion Convertible Preferred Stock: Authorized Outstanding Net Proceeds Price Per Share Preference Price Per Share (In thousands, except share and per-share data) Series A 742,409 742,409 $ 2,974 $ 4.0751 $ 3,025 $ 0.0815 Series B 455,220 455,220 4,939 10.9837 5,000 0.2197 Series C 3,001,448 3,001,448 49,824 16.6586 50,000 3.3317 Series D 13,172,325 10,301,861 137,132 13.3269 137,292 13.3269 Convertible preferred stock 17,371,402 14,500,938 $ 194,869 $ 195,317 The Company recorded the convertible preferred stock at fair value on the dates of issuance, net of issuance costs. The Company classifies its convertible preferred stock outside of stockholders’ equity (deficit) because, in the event certain circumstances were to occur in connection with certain liquidation events, the shares would become redeemable at the option of the holders. The Company did not adjust the carrying values of the convertible preferred stock to the deemed liquidation values of such shares since a liquidation event was not probable at the balance sheet dates. Subsequent adjustments to increase or decrease the carrying values to the ultimate liquidation values will be made if and when it becomes probable that such a liquidation event will occur. |
Share_based Compensation
Share‑based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation | |
Share-based Compensation | 12. Share-based Compensation The Company recognized share-based compensation for share-based awards of $5.8 million and $0.8 million during the three months ended September 30, 2017 and 2016, respectively. The Company recognized share-based compensation for share-based awards of $8.8 million and $2.1 million during the nine months ended September 30, 2017 and 2016, respectively. For the three months ended September 30, 2017, the Company recognized $5.4 million in product, technology, general, and administrative expenses and $0.4 million in cost of goods sold, excluding depreciation and amortization. For the nine months ended September 30, 2017, the Company recognized $8.4 million in product, technology, general, and administrative expenses and $0.4 million in cost of goods sold, excluding depreciation and amortization. In 2016, share-based compensation was included in product, technology, general, and administrative expenses. Equity Incentive Plan In connection with the IPO, the Company’s board of directors adopted the 2017 Equity Incentive Plan for the purpose of granting incentive stock options, non-qualified stock options, restricted stock, restricted stock units, and other share-based awards to employees, directors, and consultants. Options may be granted at a price per share not less than 100% of the fair market value at the date of grant. If, at the time the Company grants an incentive stock option, the optionee owns stock that holds more than 10% of the total combined voting power of all classes of the Company’s stock (“10% stockholder”), the exercise price must be at least 110% of the fair value of the common stock on the grant date. Options granted are exercisable over a maximum term of ten years from the date of grant, or five years from the date of grant for a 10% stockholder and generally vest over a period of four years. In August 2012, the Company’s board of directors adopted the 2012 Equity Incentive Plan for the purpose of granting incentive stock options, non-qualified stock options, restricted stock, and restricted stock units to employees, directors, and consultants. Options may be granted at a price per share not less than 100% of the fair market value at the date of grant. If, at the time the Company grants an incentive stock option, the optionee owns stock that holds more than 10% of the total combined voting power of all classes of the Company’s stock (“10% stockholder”), the exercise price must be at least 110% of the fair value of the common stock on the grant date. Options granted are exercisable over a maximum term of ten years from the date of grant, or five years from the date of grant for a 10% stockholder and generally vest over a period of four years. In connection with the Corporate Reorganization as discussed in Note 10, Blue Apron Holdings, Inc. assumed Blue Apron, Inc.’s Restated 2012 Equity Incentive Plan, as previously amended, and then amended and restated the plan in its entirety. Following the assumption of the 2012 Equity Incentive Plan, outstanding options to purchase Blue Apron, Inc.’s common stock were automatically converted into options to purchase an equal number of shares of Class B common stock of Blue Apron Holdings, Inc. with no change in the applicable exercise price, vesting schedule, or term. Equity Awards to Hourly Fulfillment Center Employees In July 2017, upon the closing of the IPO, the Company granted approximately 1.1 million Class A restricted stock units under the 2017 Equity Incentive Plan to substantially all of the Company’s hourly fulfillment center employees. These grants vest on the second anniversary of their issuance. Restricted Stock Unit Awards In July 2017, upon the closing of the IPO, the Company granted approximately 2.2 million Class A restricted stock units under the 2017 Equity Incentive Plan to certain other employees, including the Company’s executive officers. These restricted stock units will vest as follows: 10% on the first anniversary of issuance, 20% on the second anniversary of issuance, 30% on the third anniversary of issuance, and 40% on the fourth anniversary of issuance. In August 2017, the Company amended the vesting schedule for substantially all of the restricted stock units granted in July 2017 to vest as follows: 25% on the first anniversary of the date of grant, 25% on the second anniversary of the date of grant, 25% on the third anniversary of the date of grant, and 25% on the fourth anniversary of the date of grant. This amendment represents a Type 1 accounting modification as the vesting of the award is considered probable both before and after the modification. Accordingly, the Company will continue to record stock-based compensation expense based on the original grant date fair value prior to the modification. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings per Share | |
Earnings per Share | 13. Earnings per Share For the three and nine months ended September 30, 2016, the Company followed the two-class method when computing net income (loss) per share as the Company had issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s convertible preferred stock did not contractually require the holders of such shares to participate in losses of the Company. Accordingly, the two-class method did not apply for periods in which the Company had reported a net loss. Upon the closing of the Company’s IPO on July 5, 2017, all of the outstanding shares of convertible preferred stock automatically converted into 85,190,551 shares of Class B common stock at the applicable conversion rates then in effect. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. Accordingly, the two-class method is not applicable for the three and nine months ended September 30, 2017 as the participating securities were converted into Class B common stock. For the three and nine months ended September 30, 2016, the Company did not have any outstanding shares of Class A or Class C common stock. The rights, including the liquidation and dividend rights, of the Class A, Class B, and Class C common stock are substantially the same, other than voting rights. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares, including potential dilutive common shares assuming the dilutive effect of outstanding common stock options and convertible preferred stock. For periods in which the Company has reported net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Class A Class B Class B Class A Class B Class C Class B (in thousands, except share and per-share data) Numerator: Net income (loss) $ (13,565) $ (73,636) $ (37,359) $ (15,513) $ (155,489) $ (21) $ (28,809) Undistributed earnings reallocated to convertible preferred stock — — Net income (loss) attributable to common stockholders $ (13,565) $ (73,636) $ (37,359) $ (15,513) $ (155,489) $ (21) $ (28,809) Denominator: Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic 28,738,339 155,999,381 66,841,895 9,690,657 97,132,114 13,291 64,894,388 Effect of dilutive securities: — — — — — — — Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted 28,738,339 155,999,381 66,841,895 9,690,657 97,132,114 13,291 64,894,388 Net income (loss) per share attributable to common stockholders—basic (1) $ (0.47) $ (0.47) $ (0.56) $ (1.60) $ (1.60) $ (1.60) $ (0.44) Net income (loss) per share attributable to common stockholders—diluted (1) $ (0.47) $ (0.47) $ (0.56) $ (1.60) $ (1.60) $ (1.60) $ (0.44) (1) Net income (loss) per share attributable to common stockholders — basic and net income (loss) per share attributable to common stockholders — diluted may not recalculate due to rounding. The following have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders as their effect would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Class A Class B Class B Class A Class B Class B Stock options — 10,729,269 7,715,559 — 10,600,725 7,147,685 Restricted stock awards — 34,973 60,000 — 38,686 1,882,482 Restricted stock units 5,288,963 — 1,782,363 — Convertible preferred stock 85,190,551 85,190,551 Total anti-dilutive securities 5,288,963 10,764,242 92,966,110 1,782,363 10,639,411 94,220,718 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 14. Fair Value of Financial Instruments The fair value of financial instruments is determined based on assumptions that market participants would use when pricing an asset or liability at the balance sheet date. Certain assets are categorized based on the following fair value hierarchy of market participant assumptions: Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value of the asset or liability and supported by little or no market activity. The Company uses observable market data when available, and minimizes the use of unobservable inputs when determining fair value. The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3): September 30, 2017 Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Money market accounts $ 227,502 $ — $ — $ 227,502 Total financial assets $ 227,502 $ — $ — $ 227,502 December 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Money market accounts $ 58,320 $ — $ — $ 58,320 Total financial assets $ 58,320 $ — $ — $ 58,320 As of September 30, 2017 and December 31, 2016, the Company had $227.5 million and $58.3 million, respectively, in financial assets held in money market accounts, all of which were classified as Level 1 in the fair value hierarchy. The Company measured the money market accounts at fair value. The Company classified its money market accounts as Level 1 because the values of these assets are determined using unadjusted quoted prices in active markets for identical assets. During the three and nine month ended September 30, 2017 , the Company did not have net realized gains or losses related to its financial assets. As of September 30, 2017 and December 31, 2016, the Company did not have any assets or liabilities classified as Level 2 or Level 3 in the fair value hierarchy. In May 2017 and June 2017, the Company issued and sold $63.5 million and $1.1 million, respectively, in aggregate principal amount of convertible promissory notes (the “convertible notes”). At date of issuance, the Company fair valued and bifurcated the automatic conversion features from the respective host debt instrument, and recorded a level 3 debt derivative of $15.4 million. As of June 30, 2017, the Company remeasured the fair value of the derivative liability to $12.9 million, resulting in a gain of $2.6 million recorded to Other income (expense), net during the three months ended of June 30, 2017. To remeasure the fair value of the embedded derivative, the Company estimated the fair value of the convertible notes with and without the embedded derivative using a discounted cash flow approach. The difference between the “with” and “without” convertible note prices determined the fair value of the embedded derivative. On July 5, 2017, upon the closing of the IPO, the outstanding principal amount and all accrued and unpaid interest on the convertible notes were automatically converted into 7,023,201 shares of Class B common stock. Immediately prior to the conversion, the embedded derivative was remeasured to $9.4 million, resulting in a gain of $3.5 million recorded to Other income (expense), net during the three months ended September 30, 2017. Upon conversion and the settlement of the convertible notes, the derivative liability was reduced to $0.0 million. The loss recognized from the settlement of the convertible notes was $ 21.0 million, resulting in a total net loss of $17.6 million on the extinguishment of the convertible notes during the three months ended September 30, 2017. The following table represents a rollforward of the fair value of Level 3 instruments: Level 3 (In thousands) Financial Liabilities Balance at beginning of period — December 31, 2016 $ — Issuance of convertible notes derivative — Balance — March 31, 2017 — Issuance of convertible notes derivative 15,429 Change in fair value of derivative (2,567) Balance — June 30, 2017 12,862 Change in fair value of derivative at settlement (3,453) Settlement of convertible notes (9,409) Balance at end of period — September 30, 2017 $ — |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2017 | |
Acquisition (unaudited) | |
Acquisition | 15. Acquisition In February 2017, the Company acquired certain assets of BN Ranch, LLC, a premium supplier of sustainable poultry, beef and lamb. The transaction has been accounted for as a purchase of a business. The purchase price was allocated to the tangible assets acquired and liabilities assumed in the Company's Consolidated Financial Statements. This acquisition did not have a material impact on the Company's Consolidated Financial Statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events On October 18, 2017, the Company implemented a company-wide realignment of personnel to support its strategic priorities. This realignment resulted in a reduction of approximately 6% of the Company’s total workforce across both the Company’s corporate offices and fulfillment centers. As a result of the realignment, the Company expects to incur approximately $3.5 million in employee-related expenses, primarily consisting of severance payments, substantially all of which will result in cash expenditures. The Company expects to incur such expenses during the fourth quarter of 2017. As an additional step in the realignment, the Company performed a review of its real estate needs, including its previous plans to build-out a new facility in Fairfield, California primarily to support its future west coast fulfillment operations. Based on this review, in October 2017, the Company decided to no longer pursue its planned build-out of the Fairfield facility. As a result, the Company is continuing to evaluate potential alternatives for the leased Fairfield property, which the Company expects to take possession of in November 2017, upon completion of the building structure by the landlord. The Company concluded this change in intention represents a triggering event with respect to its long-lived assets at the Fairfield property and therefore is performing an impairment test in accordance with ASC 360-10-35. The carrying amount of the Company’s long-lived assets in Fairfield, subject to a potential impairment charge, were $34.9 million as of September 30, 2017, primarily consisting of the building structure, which also has a corresponding facility financing obligation of $33.6 million under build-to-suit accounting. In addition, the Company has future non-cancelable minimum lease payments of $38.5 million through 2028. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | The unaudited interim Consolidated Financial Statements have been prepared on the same basis as the audited Consolidated Financial Statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2017 and December 31, 2016, results of operations for the three months and nine months ended September 30, 2017 and 2016, and cash flows for the nine months ended September 30, 2017 and 2016 . These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2016 included in the Company’s final prospectus related to the IPO, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on June 29, 2017 (the “Prospectus”). There have been no material changes in the Company's significant accounting policies from those that were disclosed in the Prospectus. The accompanying Consolidated Financial Statements include the accounts of Blue Apron Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Consolidated Financial Statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”). |
Use of Estimates | In preparing its Consolidated Financial Statements in accordance with GAAP, the Company is required to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs, and expenses, and disclosure of contingent assets and liabilities which are reported in the Consolidated Financial Statements and accompanying disclosures. The accounting estimates that require the most difficult and subjective judgments include revenue recognition, inventory valuation, leases, recoverability of long-lived assets, the fair value of share-based awards, recoverability of net deferred tax assets and related valuation allowance, and the recognition and measurement of income tax uncertainties and other contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from the Company’s estimates and assumptions. |
Emerging Growth Company Status | The Company is an "emerging growth company," as defined in the Jumpstart Our Business Startups (JOBS) Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." The Company may take advantage of these exemptions until the Company is no longer an "emerging growth company." Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that it is no longer an emerging growth company. The Company would cease to be an emerging growth company if it has more than $1.07 billion in annual revenue, has more than $700.0 million in market value of its stock held by non-affiliates (and it has been a public company for at least 12 months, and has filed one annual report on Form 10-K), or it issues more than $1.0 billion of non-convertible debt securities over a three-year period. |
Recently Issued Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 affects any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The new standard also includes enhanced disclosures which are significantly more comprehensive than those in existing revenue standards. In March 2016, the FASB issued ASU No. 2016-08, R evenue from Contracts with Customers (Principal versus Agent Considerations) , to clarify the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Identifying Performance Obligations and Licensing) , to clarify the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Narrow-Scope Improvements and Practical Expedients) , to clarify the implementation guidance on assessing collectibility, presentation of sales taxes, noncash consideration and completed contracts, and contract modifications at transition. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, (Revenue from Contracts with Customers) , to clarify the guidance or to correct unintended application of guidance . In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments , to add SEC paragraphs pursuant to an SEC Staff Announcement made at the July 20, 2017 Emerging Issues Task Force (EITF) meeting. For the Company, the guidance is effective for annual periods beginning after December 15, 2018. Non-public entities are permitted to adopt the standard as early as annual reporting periods beginning after December 15, 2016 and interim periods therein. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. In February 2016, the FASB issued its final standard on lease accounting, Accounting Standards Update No. 2016-02, Leases (Topic 842) , which supersedes Topic 840, Leases. The new accounting standard requires the recognition of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The new standard also provides additional guidance on the measurement of the right-of-use assets and lease liabilities and will require enhanced disclosures about the Company’s leasing arrangements. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments , to add SEC paragraphs pursuant to an SEC Staff Announcement made at the July 20, 2017 Emerging Issues Task Force (EITF) meeting. For the Company, the new standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (“ASU 2016-09”), Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas of simplification apply only to non-public entities. For the Company, the amendments in ASU 2016-09 are effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18 (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . The standard is intended to eliminate diversity in practice in the treatment of restricted cash in the statement of cash flows and requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. For the Company, the amendments in ASU 2016-18 are effective for annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued Accounting Standards Update No. 2017-09 (“ASU 2017-09”), Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting . The standard is intended to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. For the Company, the amendments in ASU 2017-09 are effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories, Net | |
Summary of inventories, net | September 30, December 31, 2017 2016 (In thousands) Fulfillment $ 7,868 $ 5,758 Product 35,651 37,129 Inventories, net $ 43,519 $ 42,887 |
Prepaid Expenses and Other Cu26
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expenses and Other Current Assets | |
Summary of prepaid expenses and other current assets | September 30, December 31, 2017 2016 (In thousands) Deposits $ 2,644 $ 1,122 Prepaid marketing 3,505 3,940 Prepaid rent 1,623 1,430 Other current assets 3,315 1,775 Prepaid expenses and other current assets $ 11,087 $ 8,267 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment, Net | |
Summary of property and equipment | September 30, December 31, 2017 2016 (In thousands) Computer equipment $ 11,279 $ 6,468 Capitalized software 8,781 5,448 Fulfillment equipment 41,815 12,525 Furniture and fixtures 4,268 1,491 Leasehold improvements 42,023 23,660 Building (1) 114,877 — Construction in process (1) (2) 42,255 93,092 Property and equipment, gross 265,298 142,684 Less: accumulated depreciation and amortization (26,296) (11,723) Property and equipment, net $ 239,002 $ 130,961 (1) Included in Buildings and Construction in process are buildings related to build-to-suit lease arrangements where the Company is considered the owner for accounting purposes, of which, as of September 30, 2017 and December 31, 2016, the fair value was $63.7 million and $45.0 million, respectively. Costs incurred directly by the Company relating to these arrangements were $82.0 million and $37.6 million as of September 30, 2017 and December 31, 2016, respectively. (2) Construction in process includes all costs capitalized related to projects that have not yet been placed in service. Included in construction in process are buildings related to build-to-suit lease arrangements where the Company is considered the owner for accounting purposes. |
Accrued Expenses and Other Cu28
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses and Other Current Liabilities | |
Summary of accrued expenses and other current liabilities | September 30, December 31, 2017 2016 (In thousands) Accrued compensation $ 14,584 $ 11,069 Accrued credits and refunds reserve 1,766 1,235 Accrued marketing expenses 5,891 5,424 Accrued product expenses 920 10,965 Accrued shipping expenses 12,052 4,930 Other current liabilities 6,283 7,288 Accrued expenses and other current liabilities $ 41,496 $ 40,911 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue | |
Summary of deferred revenue | September 30, December 31, 2017 2016 (In thousands) Cash received prior to fulfillment $ 9,934 $ 10,107 Gift cards, prepaid orders, and other 9,828 14,171 Deferred revenue $ 19,762 $ 24,278 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Summary of outstanding borrowings in long term debt | September 30, December 31, Maturity Date 2017 2016 (In thousands) Revolving credit facility 2019 $ 125,000 $ 45,000 Weighted average interest rate 3.39 % 2.84 % |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Preferred Stock | |
Summary of Company’s authorized, issued and outstanding convertible preferred stock | December 31, 2016 Shares Issued Aggregate Shares and Liquidation Liquidation Conversion Convertible Preferred Stock: Authorized Outstanding Net Proceeds Price Per Share Preference Price Per Share (In thousands, except share and per-share data) Series A 742,409 742,409 $ 2,974 $ 4.0751 $ 3,025 $ 0.0815 Series B 455,220 455,220 4,939 10.9837 5,000 0.2197 Series C 3,001,448 3,001,448 49,824 16.6586 50,000 3.3317 Series D 13,172,325 10,301,861 137,132 13.3269 137,292 13.3269 Convertible preferred stock 17,371,402 14,500,938 $ 194,869 $ 195,317 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings per Share | |
Schedule of earnings per share | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Class A Class B Class B Class A Class B Class C Class B (in thousands, except share and per-share data) Numerator: Net income (loss) $ (13,565) $ (73,636) $ (37,359) $ (15,513) $ (155,489) $ (21) $ (28,809) Undistributed earnings reallocated to convertible preferred stock — — Net income (loss) attributable to common stockholders $ (13,565) $ (73,636) $ (37,359) $ (15,513) $ (155,489) $ (21) $ (28,809) Denominator: Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic 28,738,339 155,999,381 66,841,895 9,690,657 97,132,114 13,291 64,894,388 Effect of dilutive securities: — — — — — — — Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted 28,738,339 155,999,381 66,841,895 9,690,657 97,132,114 13,291 64,894,388 Net income (loss) per share attributable to common stockholders—basic (1) $ (0.47) $ (0.47) $ (0.56) $ (1.60) $ (1.60) $ (1.60) $ (0.44) Net income (loss) per share attributable to common stockholders—diluted (1) $ (0.47) $ (0.47) $ (0.56) $ (1.60) $ (1.60) $ (1.60) $ (0.44) (1) Net income (loss) per share attributable to common stockholders — basic and net income (loss) per share attributable to common stockholders — diluted may not recalculate due to rounding. |
Summary of shares that are excluded from the computation of diluted net income (loss) per share attributable to common stockholders as their effect would have been antidilutive | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Class A Class B Class B Class A Class B Class B Stock options — 10,729,269 7,715,559 — 10,600,725 7,147,685 Restricted stock awards — 34,973 60,000 — 38,686 1,882,482 Restricted stock units 5,288,963 — 1,782,363 — Convertible preferred stock 85,190,551 85,190,551 Total anti-dilutive securities 5,288,963 10,764,242 92,966,110 1,782,363 10,639,411 94,220,718 |
Fair Value of Financial Instr33
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Financial Instruments | |
Schedule of major categories of assets and liabilities measured at fair value on a recurring basis | September 30, 2017 Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Money market accounts $ 227,502 $ — $ — $ 227,502 Total financial assets $ 227,502 $ — $ — $ 227,502 December 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Money market accounts $ 58,320 $ — $ — $ 58,320 Total financial assets $ 58,320 $ — $ — $ 58,320 |
Rollforward of fair value of Level 3 instruments | Level 3 (In thousands) Financial Liabilities Balance at beginning of period — December 31, 2016 $ — Issuance of convertible notes derivative — Balance — March 31, 2017 — Issuance of convertible notes derivative 15,429 Change in fair value of derivative (2,567) Balance — June 30, 2017 12,862 Change in fair value of derivative at settlement (3,453) Settlement of convertible notes (9,409) Balance at end of period — September 30, 2017 $ — |
Organization and Description 34
Organization and Description of Business (Details) - USD ($) | Jul. 05, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Subsidiary, Sale of Stock [Line Items] | |||
Net proceeds | $ 283,500,000 | ||
Offering costs | $ 5,253,000 | ||
Preferred stock outstanding | 0 | ||
Gross debt related to convertible notes | $ 64,600,000 | ||
Convertible notes outstanding | $ 0 | ||
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued and sold | 30,000,000 | ||
Public offering price | $ 10 | ||
Net proceeds | $ 278,000,000 | ||
Underwriting discounts and commissions | 16,500,000 | ||
Offering costs | $ 5,500,000 | ||
Class B | |||
Subsidiary, Sale of Stock [Line Items] | |||
Issuance of common stock upon conversion of Series A, B, C, and D convertible preferred stock (in shares) | 85,190,551 | ||
Conversion of convertible notes into common stock | 7,023,201 | ||
Authorized common stock | 175,000,000 | 175,000,000 | |
Common stock par value | $ 0.0001 | $ 0.0001 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventories, Net | ||
Fulfillment | $ 7,868 | $ 5,758 |
Product | 35,651 | 37,129 |
Inventories, net | $ 43,519 | $ 42,887 |
Prepaid Expenses and Other Cu36
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other Current Assets | ||
Deposits | $ 2,644 | $ 1,122 |
Prepaid marketing | 3,505 | 3,940 |
Prepaid rent | 1,623 | 1,430 |
Other current assets | 3,315 | 1,775 |
Prepaid expenses and other current assets | $ 11,087 | $ 8,267 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Oct. 31, 2017 | |
Property and equipment, net | ||||
Computer equipment | $ 11,279 | $ 6,468 | ||
Capitalized software | 8,781 | 5,448 | ||
Fulfillment equipment | 41,815 | 12,525 | ||
Furniture and fixtures | 4,268 | 1,491 | ||
Leasehold improvements | 42,023 | 23,660 | ||
Buildings | 114,877 | |||
Construction in progress | 42,255 | 93,092 | ||
Property, Plant and Equipment, Gross, Total | 265,298 | 142,684 | ||
Less: accumulated depreciation and amortization | (26,296) | (11,723) | ||
Property and equipment, net | 239,002 | 130,961 | ||
Fair value of buildings under construction | 63,700 | 45,000 | ||
Construction costs incurred | $ 82,000 | $ 37,600 | ||
Jersey City, New Jersey [Member] | ||||
Property and equipment, net | ||||
Property and equipment, net | $ 11,500 | |||
Fair value of long-lived assets | 7,100 | |||
Impairment of long-lived assets | $ 4,400 | |||
Total non-cancelable minimum lease payments | $ 6,200 |
Accrued Expenses and Other Cu38
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jul. 05, 2017 | Jul. 04, 2017 | Jun. 30, 2017 | May 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other current liabilities | ||||||
Accrued compensation | $ 14,584 | $ 11,069 | ||||
Accrued credits and refunds reserve | 1,766 | 1,235 | ||||
Accrued marketing expenses | 5,891 | 5,424 | ||||
Accrued product expenses | 920 | 10,965 | ||||
Accrued shipping expenses | 12,052 | 4,930 | ||||
Derivative liability related to convertible notes | $ 0 | $ 9,400 | $ 12,900 | $ 15,400 | ||
Other current liabilities | 6,283 | 7,288 | ||||
Accrued expenses and other current liabilities | $ 41,496 | $ 40,911 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred Revenue | ||
Cash received prior to fulfillment | $ 9,934 | $ 10,107 |
Gift cards, prepaid orders, and other | 9,828 | 14,171 |
Deferred revenue | $ 19,762 | $ 24,278 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) - USD ($) $ in Millions | Aug. 31, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | May 31, 2017 | Apr. 30, 2017 | Dec. 31, 2016 |
Revolving credit facility | ||||||
Debt instruments | ||||||
Maximum borrowing capacity | $ 200 | $ 150 | ||||
Additional borrowing capacity | $ 25 | $ 25 | ||||
Amount outstanding | 125 | $ 45 | ||||
Remaining amount available to borrow | 73.6 | 104.7 | ||||
Unamortized deferred financing costs | 0.4 | 0.5 | ||||
Incurred and capitalized deferred financing costs | $ 0.5 | |||||
Letter of credit | ||||||
Debt instruments | ||||||
Amount outstanding | $ 1.4 | $ 0.3 |
Debt - Borrowings in Long-Term
Debt - Borrowings in Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt instruments | ||
Weighted average interest rate | 3.39% | 2.84% |
Revolving credit facility | ||
Debt instruments | ||
Outstanding borrowings in long term debt | $ 125,000 | $ 45,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | Jul. 05, 2017 | Jun. 30, 2017 | May 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 04, 2017 | Dec. 31, 2016 |
Debt instruments | ||||||||||
Unused commitment fee incurred | $ 0 | $ 0 | $ 100 | $ 0 | ||||||
Convertible notes | ||||||||||
Issued and sold aggregate principal amount of convertible promissory notes | $ 1,100 | $ 63,500 | ||||||||
Discount related to convertible notes | 200 | $ 200 | ||||||||
Net debt related to convertible notes | 64,400 | 64,400 | ||||||||
Interest rate (as a percent) | 3.50% | |||||||||
Beneficial conversion feature | 19,567 | |||||||||
Derivative liability related to convertible notes | $ 0 | $ 12,900 | $ 15,400 | 12,900 | $ 9,400 | |||||
Change in fair value of derivative liability | 3,500 | $ 2,600 | ||||||||
Gain (loss) from convertible notes | $ (17,600) | (17,600) | ||||||||
Amortization related to convertible notes | 100 | 2,300 | ||||||||
Facility Financing Obligation | ||||||||||
Facility financing obligation | 69,663 | 69,663 | $ 49,809 | |||||||
Class B | ||||||||||
Convertible notes | ||||||||||
Conversion of convertible notes into common stock | 7,023,201 | |||||||||
Base rate | ||||||||||
Debt instruments | ||||||||||
Amount outstanding | 5,000 | 5,000 | 5,000 | |||||||
Revolving credit facility | ||||||||||
Debt instruments | ||||||||||
Amount outstanding | 125,000 | $ 125,000 | 45,000 | |||||||
Unused commitment fee on undrawn amounts (as a percent) | 0.15% | |||||||||
Revolving credit facility | Federal funds rate | ||||||||||
Debt instruments | ||||||||||
Margin added to variable rate (as a percent) | 0.50% | |||||||||
Revolving credit facility | LIBOR | ||||||||||
Debt instruments | ||||||||||
Margin added to variable rate (as a percent) | 1.00% | |||||||||
Revolving credit facility | Base rate | Minimum | ||||||||||
Debt instruments | ||||||||||
Margin added to variable rate (as a percent) | 0.50% | |||||||||
Revolving credit facility | Base rate | Maximum | ||||||||||
Debt instruments | ||||||||||
Margin added to variable rate (as a percent) | 1.00% | |||||||||
Revolving credit facility | Adjusted LIBOR | ||||||||||
Debt instruments | ||||||||||
Leverage ratio period | 1 year | |||||||||
Amount outstanding | $ 120,000 | $ 120,000 | $ 40,000 | |||||||
Revolving credit facility | Adjusted LIBOR | Minimum | ||||||||||
Debt instruments | ||||||||||
Margin added to variable rate (as a percent) | 1.50% | |||||||||
Revolving credit facility | Adjusted LIBOR | Maximum | ||||||||||
Debt instruments | ||||||||||
Margin added to variable rate (as a percent) | 2.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | ||
May 31, 2017 | Aug. 31, 2016 | Mar. 31, 2016 | |
Commitments and Contingencies | |||
Aggregate non-cancellable purchase obligation | $ 42.5 | ||
Increase in minimum lease payments due to extension | $ 7.6 | ||
CALIFORNIA | |||
Commitments and Contingencies | |||
Total non-cancelable minimum lease payments | $ 38.5 | ||
NEW JERSEY | |||
Commitments and Contingencies | |||
Total non-cancelable minimum lease payments | $ 40.8 |
Common Stock (Details)
Common Stock (Details) | 1 Months Ended | 9 Months Ended |
Dec. 31, 2016item | Sep. 30, 2017itemVote | |
Class of Stock [Line Items] | ||
Number of common stock of reorganization company converted into number of share of common stock of reorganized company | 1 | |
Number of preferred stock of reorganization company converted into number of share of preferred stock of reorganized company | 1 | |
Number of classes of voting common stock | 2 | |
Number of classes of non-voting common stock | 1 | |
Number of shares of Class A common stock will be automatically converted by each outstanding share of Class B common stock | 1 | |
Class A | ||
Class of Stock [Line Items] | ||
Number of vote per share for outstanding shares of common stock | Vote | 1 | |
Class B | ||
Class of Stock [Line Items] | ||
Number of vote per share for outstanding shares of common stock | Vote | 10 |
Common Stock - Acquisition (Det
Common Stock - Acquisition (Details) - Class A - shares | Jul. 05, 2017 | May 31, 2017 |
Class of Stock [Line Items] | ||
Issuance of common stock (in shares) | 30,000,000 | |
BN Ranch, LLC | ||
Class of Stock [Line Items] | ||
Shares issued | 42,687 | |
Shares held by the entity as security for potential claims for indemnification | 10,285 |
Convertible Preferred Stock - I
Convertible Preferred Stock - Issued and Outstanding of convertible perferred stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Summarize the Company’s authorized, issued and outstanding convertible preferred stock | |||
Convertible preferred stock, authorized (in shares) | 10,000,000 | 17,371,402 | |
Convertible preferred stock, issued (in shares) | 0 | 14,500,938 | 14,500,938 |
Convertible preferred stock, outstanding (in shares) | 0 | 14,500,938 | |
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible preferred stock, liquidation value | $ 0 | $ 195,317 | |
Series A convertible preferred stock | |||
Summarize the Company’s authorized, issued and outstanding convertible preferred stock | |||
Convertible preferred stock, authorized (in shares) | 742,409 | ||
Convertible preferred stock, outstanding (in shares) | 742,409 | ||
Net proceeds to date | $ 2,974 | ||
Liquidation price (in dollars per share) | $ 4.0751 | ||
Convertible preferred stock, liquidation value | $ 3,025 | ||
Conversion Price (in dollars per share) | $ 0.0815 | ||
Series B convertible preferred stock | |||
Summarize the Company’s authorized, issued and outstanding convertible preferred stock | |||
Convertible preferred stock, authorized (in shares) | 455,220 | ||
Convertible preferred stock, outstanding (in shares) | 455,220 | ||
Net proceeds to date | $ 4,939 | ||
Liquidation price (in dollars per share) | $ 10.9837 | ||
Convertible preferred stock, liquidation value | $ 5,000 | ||
Conversion Price (in dollars per share) | $ 0.2197 | ||
Series C convertible preferred stock | |||
Summarize the Company’s authorized, issued and outstanding convertible preferred stock | |||
Convertible preferred stock, authorized (in shares) | 3,001,448 | ||
Convertible preferred stock, outstanding (in shares) | 3,001,448 | ||
Net proceeds to date | $ 49,824 | ||
Liquidation price (in dollars per share) | $ 16.6586 | ||
Convertible preferred stock, liquidation value | $ 50,000 | ||
Conversion Price (in dollars per share) | $ 3.3317 | ||
Series D convertible preferred stock | |||
Summarize the Company’s authorized, issued and outstanding convertible preferred stock | |||
Convertible preferred stock, authorized (in shares) | 13,172,325 | ||
Convertible preferred stock, outstanding (in shares) | 10,301,861 | ||
Net proceeds to date | $ 137,132 | ||
Liquidation price (in dollars per share) | $ 13.3269 | ||
Convertible preferred stock, liquidation value | $ 137,292 | ||
Conversion Price (in dollars per share) | $ 13.3269 | ||
Convertible preferred stock, | |||
Summarize the Company’s authorized, issued and outstanding convertible preferred stock | |||
Convertible preferred stock, authorized (in shares) | 17,371,402 | ||
Convertible preferred stock, outstanding (in shares) | 14,500,938 | ||
Net proceeds to date | $ 194,869 | ||
Convertible preferred stock, liquidation value | $ 195,317 |
Share_based Compensation (Detai
Share‑based Compensation (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2017 | Jul. 31, 2017 | Aug. 31, 2012 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation recognized | $ 5.8 | $ 8.8 | |||||
Product, technology, general and administrative | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation recognized | 5.4 | $ 0.8 | 8.4 | $ 2.1 | |||
Cost of goods sold | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation recognized | $ 0.4 | $ 0.4 | |||||
Restricted stock units | Share-based Compensation Award, Tranche One [Member] | |||||||
Assumptions: | |||||||
Percentage vesting | 25.00% | 10.00% | |||||
Restricted stock units | Share-based Compensation Award, Tranche Two [Member] | |||||||
Assumptions: | |||||||
Percentage vesting | 25.00% | 20.00% | |||||
Restricted stock units | Share-based Compensation Award, Tranche Three [Member] | |||||||
Assumptions: | |||||||
Percentage vesting | 25.00% | 30.00% | |||||
Restricted stock units | Share-Based Compensation Award Tranche Four [Member] | |||||||
Assumptions: | |||||||
Percentage vesting | 25.00% | 40.00% | |||||
Fulfillment Center Employees [Member] | Restricted stock units | |||||||
Assumptions: | |||||||
Awards granted | 1.1 | ||||||
Certain Other Employees [Member] | Restricted stock units | |||||||
Assumptions: | |||||||
Awards granted | 2.2 | ||||||
2012 Equity Incentive Plan | |||||||
Assumptions: | |||||||
Exercise period (in years) | 10 years | ||||||
Vesting period | 4 years | ||||||
2012 Equity Incentive Plan | Minimum | |||||||
Assumptions: | |||||||
Percentage of fair market value at date of grant | 100.00% | ||||||
2012 Equity Incentive Plan | Ten Percent Stockholder [Member] | |||||||
Assumptions: | |||||||
Exercise period (in years) | 5 years | ||||||
2012 Equity Incentive Plan | Ten Percent Stockholder [Member] | Minimum | |||||||
Assumptions: | |||||||
Percentage of fair market value at date of grant | 110.00% | ||||||
Percentage of total combined voting power of common stock | 10.00% | 10.00% | |||||
2017 Equity Incentive Plan | |||||||
Assumptions: | |||||||
Exercise period (in years) | 10 years | ||||||
Percentage of fair market value at date of grant | 100.00% | ||||||
Vesting period | 4 years | ||||||
2017 Equity Incentive Plan | Ten Percent Stockholder [Member] | |||||||
Assumptions: | |||||||
Exercise period (in years) | 5 years | ||||||
Percentage of fair market value at date of grant | 110.00% | ||||||
2017 Equity Incentive Plan | Ten Percent Stockholder [Member] | Minimum | |||||||
Assumptions: | |||||||
Percentage of total combined voting power of common stock | 10.00% |
Earnings per Share - Dilutive C
Earnings per Share - Dilutive Common Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 05, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||
Convertible preferred stock, outstanding (in shares) | 0 | 0 | 14,500,938 | |||
Numerator: | ||||||
Net income (loss) | $ (87,201) | $ (37,359) | $ (171,023) | $ (28,809) | $ (54,886) | |
Denominator: | ||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 184,737,720 | 66,841,895 | 106,836,062 | 64,894,388 | ||
Weighted average diluted shares outstanding (in shares) | 184,737,720 | 66,841,895 | 106,836,062 | 64,894,388 | ||
Net income (loss) per share attributable to common stockholders—basic | $ (0.47) | $ (0.56) | $ (1.60) | $ (0.44) | ||
Net income (loss) per share attributable to common stockholders—diluted | $ (0.47) | $ (0.56) | $ (1.60) | $ (0.44) | ||
Class A | ||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||
Common stock, outstanding (in shares) | 30,042,687 | 0 | 30,042,687 | 0 | 0 | |
Numerator: | ||||||
Net income (loss) | $ (13,565) | $ (15,513) | ||||
Net income (loss) attributable to common stockholders | $ (13,565) | $ (15,513) | ||||
Denominator: | ||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 28,738,339 | 9,690,657 | ||||
Weighted average diluted shares outstanding (in shares) | 28,738,339 | 9,690,657 | ||||
Net income (loss) per share attributable to common stockholders—basic | $ (0.47) | $ (1.60) | ||||
Net income (loss) per share attributable to common stockholders—diluted | $ (0.47) | $ (1.60) | ||||
Class B | ||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||
Issuance of common stock upon conversion of convertible notes (in shares) | 85,190,551 | |||||
Common stock, outstanding (in shares) | 160,097,378 | 160,097,378 | 67,095,128 | |||
Numerator: | ||||||
Net income (loss) | $ (73,636) | $ (37,359) | $ (155,489) | $ (28,809) | ||
Net income (loss) attributable to common stockholders | $ (73,636) | $ (37,359) | $ (155,489) | $ (28,809) | ||
Denominator: | ||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 155,999,381 | 66,841,895 | 97,132,114 | 64,894,388 | ||
Weighted average diluted shares outstanding (in shares) | 155,999,381 | 66,841,895 | 97,132,114 | 64,894,388 | ||
Net income (loss) per share attributable to common stockholders—basic | $ (0.47) | $ (0.56) | $ (1.60) | $ (0.44) | ||
Net income (loss) per share attributable to common stockholders—diluted | $ (0.47) | $ (0.56) | $ (1.60) | $ (0.44) | ||
Class C | ||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||
Common stock, outstanding (in shares) | 0 | 0 | 0 | 0 | 0 | |
Numerator: | ||||||
Net income (loss) | $ (21) | |||||
Net income (loss) attributable to common stockholders | $ (21) | |||||
Denominator: | ||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 13,291 | |||||
Weighted average diluted shares outstanding (in shares) | 13,291 | |||||
Net income (loss) per share attributable to common stockholders—basic | $ (1.60) | |||||
Net income (loss) per share attributable to common stockholders—diluted | $ (1.60) |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Common Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Class A | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders | 5,288,963 | 1,782,363 | ||
Class A | Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders | 5,288,963 | 1,782,363 | ||
Class B | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders | 10,764,242 | 92,966,110 | 10,639,411 | 94,220,718 |
Class B | Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders | 10,729,269 | 7,715,559 | 10,600,725 | 7,147,685 |
Class B | Restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders | 34,973 | 60,000 | 38,686 | 1,882,482 |
Class B | Convertible preferred stock, | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders | 85,190,551 | 85,190,551 |
Fair Value of Financial Instr50
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jul. 05, 2017 | Jun. 30, 2017 | May 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Jul. 04, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Net realized gains or losses related to its financial assets | $ 0 | |||||||
Convertible notes | ||||||||
Issued and sold aggregate principal amount of convertible promissory notes | $ 1,100 | $ 63,500 | ||||||
Derivative liability related to convertible notes | $ 0 | 12,900 | $ 15,400 | $ 12,900 | $ 9,400 | |||
Change in fair value of derivative liability | $ 3,500 | 2,600 | ||||||
Loss on conversion | 21,000 | |||||||
Total net loss from convertible notes | $ 17,600 | 17,600 | ||||||
Level 3 | ||||||||
Rollforward of the fair value of Level 3 instruments | ||||||||
Balance at beginning of period | 12,862 | |||||||
Issuance of convertible notes derivative | 15,429 | |||||||
Change in fair value of derivative at settlement | (3,453) | (2,567) | ||||||
Settlement of convertible notes | (9,409) | |||||||
Balance at end of period | $ 12,862 | $ 12,862 | ||||||
Fair Value, Measurements, Recurring | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Money market accounts | 227,502 | 227,502 | $ 58,320 | |||||
Assets, Fair Value Disclosure, Total | 227,502 | 227,502 | 58,320 | |||||
Fair Value, Measurements, Recurring | Level 1 | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Money market accounts | 227,502 | 227,502 | 58,320 | |||||
Assets, Fair Value Disclosure, Total | $ 227,502 | $ 227,502 | $ 58,320 | |||||
Class B | ||||||||
Convertible notes | ||||||||
Conversion of convertible notes into common stock | 7,023,201 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Oct. 18, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Subsequent Event [Line Items] | |||
Construction in progress | $ 42,255 | $ 93,092 | |
Facility financing obligation | 69,663 | $ 49,809 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Workforce reduction, as a percent of total workforce | 6 | ||
Expected restructuring cost | $ 3,500 | ||
Fairfield, California [Member] | |||
Subsequent Event [Line Items] | |||
Construction in progress | 34,900 | ||
Facility financing obligation | 33,600 | ||
Total non-cancelable minimum lease payments | $ 38,500 |