Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | Blue Apron Holdings, Inc. | ||
Entity Central Index Key | 1,701,114 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Share Price | $ 9.34 | ||
Entity Public Float | $ 429.9 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Class A | |||
Entity Common Stock, Shares Outstanding | 39,693,154 | ||
Class B | |||
Entity Common Stock, Shares Outstanding | 151,694,847 | ||
Class C | |||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 228,514 | $ 81,468 |
Accounts receivable | 1,945 | 485 |
Inventories, net | 41,927 | 42,887 |
Prepaid expenses and other current assets | 7,824 | 8,267 |
Other receivables | 2,539 | 4,991 |
Total current assets | 282,749 | 138,098 |
Restricted cash | 2,371 | 3,966 |
Property and equipment, net | 230,828 | 130,961 |
Other noncurrent assets | 1,761 | 382 |
TOTAL ASSETS | 517,709 | 273,407 |
CURRENT LIABILITIES: | ||
Accounts payable | 30,448 | 49,549 |
Accrued expenses and other current liabilities | 32,615 | 40,911 |
Deferred revenue | 27,646 | 24,278 |
Total current liabilities | 90,709 | 114,738 |
Long-term debt | 124,687 | 44,533 |
Facility financing obligation | 70,347 | 49,809 |
Other noncurrent liabilities | 8,116 | 2,858 |
TOTAL LIABILITIES | 293,859 | 211,938 |
Commitments and contingencies (Note 9) | ||
Convertible preferred stock, par value of $0.0001 per share — 10,000,000 and 17,371,402 shares authorized as of December 31, 2017 and December 31, 2016, respectively; 0 issued and outstanding as of December 31, 2017 and 14,500,938 issued and outstanding as of December 31, 2016; aggregate liquidation preference of $0 as of December 31, 2017 and $195,317 as of December 31, 2016 | 194,869 | |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Additional paid-in capital | 572,528 | 5,147 |
Accumulated deficit | (348,697) | (138,554) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 223,850 | (133,400) |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | 517,709 | 273,407 |
Class A | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Common Stock | 4 | |
Class B | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Common Stock | 15 | 7 |
Class C | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Common Stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 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) | 37,657,649 | 0 |
Common stock, outstanding (in shares) | 37,657,649 | 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) | 153,727,228 | 67,095,128 |
Common stock, outstanding (in shares) | 153,727,228 | 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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Operations | |||
Net revenue | $ 881,191 | $ 795,416 | $ 340,803 |
Operating expenses: | |||
Cost of goods sold, excluding depreciation and amortization | 627,964 | 532,682 | 263,271 |
Marketing | 154,529 | 144,141 | 51,362 |
Product, technology, general, and administrative | 247,907 | 165,179 | 70,151 |
Depreciation and amortization | 26,838 | 8,217 | 2,917 |
Other operating expenses | 12,713 | ||
Total operating expenses | 1,069,951 | 850,219 | 387,701 |
Income (loss) from operations | (188,760) | (54,803) | (46,898) |
Interest income (expense), net | (6,384) | 25 | (6) |
Other income (expense), net | (14,984) | ||
Income (loss) before income taxes | (210,128) | (54,778) | (46,904) |
Benefit (provision) for income taxes | (15) | (108) | (61) |
Net income (loss) | $ (210,143) | $ (54,886) | $ (46,965) |
Net income (loss) per share attributable to Class A, Class B and Class C common stockholders: | |||
Basic (in dollars per share) | $ (1.64) | $ (0.84) | $ (0.92) |
Diluted (in dollars per share) | $ (1.64) | $ (0.84) | $ (0.92) |
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) | 128,057,330 | 65,425,609 | 51,137,406 |
Diluted (in shares) | 128,057,330 | 65,425,609 | 51,137,406 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net income (loss) | $ (210,143) | $ (54,886) | $ (46,965) |
Other comprehensive income (loss): | |||
Reclassification of losses included in net income (loss) | 10 | ||
Comprehensive income (loss) | $ (210,143) | $ (54,886) | $ (46,955) |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Reclassification of losses included in net income (loss), tax | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Common StockClass A | Common StockClass B | Common StockClass C | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Class A | Class B | Class C | Total |
Temporary equity beginning balance at Dec. 31, 2014 | $ 57,737 | ||||||||||
Temporary equity beginning balance (in shares) at Dec. 31, 2014 | 4,199,077 | ||||||||||
Convertible Preferred Stock | |||||||||||
Issuance of Series D convertible preferred stock, net of issuance costs of $0.1 million | $ 137,132 | ||||||||||
Issuance of Series D convertible preferred stock (in shares) | 10,301,861 | ||||||||||
Temporary equity ending balance at Dec. 31, 2015 | $ 194,869 | ||||||||||
Temporary equity ending balance (in shares) at Dec. 31, 2015 | 14,500,938 | ||||||||||
Beginning balance at Dec. 31, 2014 | $ 7 | $ 568 | $ (1,900) | $ (10) | $ (34,803) | $ (36,138) | |||||
Beginning balance (in shares) at Dec. 31, 2014 | 66,133,825 | ||||||||||
Convertible Preferred Stock | |||||||||||
Issuance of common stock upon exercise of stock options | 54 | 54 | |||||||||
Issuance of common stock upon exercise of stock options (in shares) | 371,177 | ||||||||||
Issuance of restricted common stock (in shares) | 60,000 | ||||||||||
Reclassification of losses included in net income (loss) | $ 10 | 10 | |||||||||
Retirement of treasury shares | $ 1,900 | (1,900) | |||||||||
Share-based compensation | 1,105 | 1,105 | |||||||||
Net income (loss) | (46,965) | $ (46,965) | (46,965) | ||||||||
Ending balance at Dec. 31, 2015 | $ 7 | 1,727 | (83,668) | (81,934) | |||||||
Ending balance (in shares) at Dec. 31, 2015 | 66,565,002 | ||||||||||
Temporary equity ending balance at Dec. 31, 2016 | $ 194,869 | ||||||||||
Temporary equity ending balance (in shares) at Dec. 31, 2016 | 14,500,938 | ||||||||||
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) | (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 | |||||||||||
Issuance of common stock upon conversion of Series A, B, C, and D convertible preferred stock | $ (194,869) | ||||||||||
Issuance of common stock upon conversion of Series A, B, C, and D convertible preferred stock (in shares) | (14,500,938) | ||||||||||
Temporary equity ending balance (in shares) at Dec. 31, 2017 | 0 | ||||||||||
Convertible Preferred Stock | |||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 1,770,703 | ||||||||||
Issuance of common stock upon exercise of stock options and vesting of restricted stoclk | 1,008 | $ 1,008 | |||||||||
Issuance of common stock upon exercise of stock options and vesting of restricted stock (in shares) | 262,607 | 1,770,703 | |||||||||
Issuance of common stock upon acquisition | 373 | 373 | |||||||||
Conversion from Class B to Class A | $ 1 | $ (1) | |||||||||
Conversion from Class B to Class A (in shares) | 7,352,355 | (7,352,355) | |||||||||
Exchange from Class C to Class A common stock (in shares) | 42,687 | (42,687) | |||||||||
Issuance of common stock upon acquisition (in shares) | 42,687 | ||||||||||
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 | ||||||||||
Issuance of common stock upon initial public offering, net of offering costs | $ 3 | 278,007 | 278,010 | ||||||||
Issuance of stock (in shares) | 30,000,000 | ||||||||||
Issuance of convertible notes | 19,567 | 19,567 | |||||||||
Share-based compensation | 11,481 | 11,481 | |||||||||
Net income (loss) | (210,143) | $ (25,675) | $ (184,452) | $ (16) | (210,143) | ||||||
Ending balance at Dec. 31, 2017 | $ 4 | $ 15 | $ 572,528 | $ (348,697) | $ 223,850 | ||||||
Ending balance (in shares) at Dec. 31, 2017 | 37,657,649 | 153,727,228 |
Consolidated Statements of Con8
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Series D convertible preferred stock | |
Offering costs | $ 100 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ (210,143) | $ (54,886) | $ (46,965) |
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities: | |||
Depreciation and amortization of property and equipment | 26,838 | 8,217 | 2,917 |
Loss (gain) on disposal of property and equipment | (25) | 3 | 17 |
Loss on impairment | 9,456 | ||
Changes in reserves and allowances | 1,870 | 151 | 1,650 |
Share-based compensation | 11,270 | 2,965 | 1,105 |
Investment premium amortization | 69 | ||
Non-cash interest expense | 2,719 | 62 | |
Loss from convertible notes | 14,984 | ||
Changes in operating assets and liabilities: | |||
Receivables | (123) | (449) | (285) |
Inventories | 451 | (25,686) | (16,224) |
Prepaid expenses and other current assets | (125) | (3,598) | (3,355) |
Accounts payable | (4,770) | 3,713 | 18,946 |
Accrued expenses and other current liabilities | (7,923) | 26,821 | 10,965 |
Deferred revenue | 3,368 | 18,026 | 3,967 |
Other noncurrent assets and liabilities | (289) | 1,116 | 797 |
Net cash from (used in) operating activities | (152,442) | (23,545) | (26,396) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cash paid for acquisition | (1,177) | ||
Decrease (increase) in restricted cash | 1,595 | (3,629) | |
Purchases of property and equipment | (124,242) | (62,827) | (11,941) |
Proceeds from sale of property and equipment | 137 | 5 | |
Proceeds from maturities of investments | 6,000 | ||
Net cash from (used in) investing activities | (123,687) | (66,456) | (5,936) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net proceeds from issuance of convertible preferred stock | 137,132 | ||
Net proceeds from debt issuance | 144,349 | 44,471 | |
Proceeds from the exercise of stock options | 1,010 | 402 | 54 |
Principal payments on capital lease obligations | (194) | (264) | (140) |
Net proceeds from public offering | 283,500 | ||
Payments of public offering costs | (5,490) | ||
Net cash from (used in) financing activities | 423,175 | 44,609 | 137,046 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 147,046 | (45,392) | 104,714 |
CASH AND CASH EQUIVALENTS - Beginning of period | 81,468 | 126,860 | 22,146 |
CASH AND CASH EQUIVALENTS - End of period | 228,514 | 81,468 | 126,860 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for income taxes, net of refunds | 70 | 355 | |
Cash paid for interest, net of amounts capitalized | 4,675 | 96 | 33 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||
Acquisition (disposal) of property and equipment financed under capital lease obligations | 39 | 256 | 582 |
Non-cash addition to property and equipment related to build-to-suit lease | 20,458 | 46,085 | |
Purchases of property and equipment included in Accounts payable and Accrued expenses and other current liabilities | $ 1,950 | $ 15,713 | $ 432 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 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 meal 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 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 December 31, 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 | 12 Months Ended |
Dec. 31, 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 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”). Certain reclassifications were made to prior year amounts to conform to current year presentation. 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, subjective, or complex 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. Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. Cash and cash equivalents are stated at cost plus accrued interest and consist of cash on hand, money market accounts, and amounts held by third‑party financial institutions for credit and debit card transactions. Cash as of December 31, 2017 and 2016 was $55.1 million and $13.2 million, respectively. Cash equivalents as of December 31, 2017 and 2016 was $173.4 million and $68.3 million, respectively, and consist of qualifying money market accounts and amounts due from third‑party institutions. Amounts due from third‑party institutions generally settle within three business days and were $10.4 million and $9.9 million as of December 31, 2017 and 2016, respectively. Accounts Receivable Accounts receivable primarily represent amounts due from third parties that market the Company’s products and other trade receivables. Accounts receivable are recorded at invoiced amounts, net of allowances for doubtful accounts if applicable, are unsecured, and do not bear interest. The allowance for doubtful accounts was zero at December 31, 2017 and 2016. Other Receivables Other receivables primarily include amounts due from the sale of fixed assets and miscellaneous receivables other than trade accounts receivable. Other receivables are recorded at their carrying amounts, are unsecured, and do not bear interest. Certain Risks and Concentrations Financial instruments that subject the Company to significant concentrations of credit risk consist of cash, cash equivalents, and restricted cash. All of the Company’s cash, cash equivalents, and restricted cash are held at financial institutions in the United States that management believes to be of high credit quality. Deposits held in the United States with these financial institutions exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy addresses the level of credit exposure by limiting the concentration in any one corporate issuer or sector and establishing a minimum allowable credit rating. No individual customer accounted for 10% or more of the Company’s total Net revenue for the years ended December 31, 2017, 2016, and 2015. There are no significant concentration risks within the Company’s Accounts receivable as of December 31, 2017 and 2016. For the year ended December 31, 2017, an individual shipping carrier accounted for 10.2% of the Company’s total Cost of goods sold, excluding depreciation and amortization. No individual supplier accounted for 10% or more of the Company’s total Cost of goods sold, excluding depreciation and amortization for the years ended December 31, 2016 or 2015. No individual supplier accounted for 10% or more of total Accounts payable as of December 31, 2017 or December 31, 2016. Inventories, Net Inventories, net consist primarily of bulk and prepped food, products available for resale, packaging, and containers which are stated at the lower of cost or net realizable value. Inventory costs consist of product costs, inbound shipping and handling costs, and applicable direct labor costs. Inventories are valued on a first in, first out cost basis. The Company records an inventory valuation reserve when applicable based on currently available information about the likely method of disposition, such as through sales to individual customers, donations, or liquidations and expected recoverable values of each inventory category. Leases The Company categorizes lease agreements at their inception as either operating or capital leases. For operating leases, the Company recognizes rent expense on a straight‑line basis over the term of the lease. For capital leases, the Company records a leased asset with a corresponding liability. Payments are recorded as reductions to the liability with an interest charge recorded based on the remaining liability. Sublease payments received by the Company are recorded as income against the associated rent expense. The Company reviews leases for which it is involved in construction to determine if it is considered to be the owner for accounting purposes during the construction period. If the Company is determined to be the owner for accounting purposes, the Company follows build‑to‑suit accounting and capitalizes the fair value of the building and direct construction costs incurred along with a corresponding facility financing liability. At the end of the construction period, the Company assesses whether these arrangements qualify for sales recognition under sale‑leaseback accounting guidance. 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 building for accounting purposes. Property and Equipment, Net Property and equipment, net, including leasehold improvements, are stated at cost and are depreciated using a straight‑line method over the estimated useful lives of the related assets. The estimated useful lives are as follows: Computer equipment 2 - 3 years Capitalized software 2 years Fulfillment equipment 5 - 7 years Furniture and fixtures 5 years Leasehold improvements Shorter of expected useful life or lease term Buildings 30 years Capitalized Software Development Costs The Company capitalizes qualifying internally‑developed software development costs that are incurred during the application development stage so long as management with the relevant authority authorizes the project, it is probable the project will be completed, and the software will be used to perform the function intended. Capitalized costs are amortized on a straight‑line basis over their expected useful lives which is approximately two years. Costs incurred for enhancements that are expected to result in additional significant functionality are capitalized and amortized over the estimated useful life of the enhancement. Costs related to preliminary project activities and post‑implementation operation activities, including training and maintenance, are expensed as incurred. Capitalized software development costs net of accumulated amortization are included as a component of Property and equipment, net in the accompanying Consolidated Balance Sheets. Recoverability of Long‑Lived Assets Long‑lived assets consist of the Company’s property, equipment, and capitalized software development costs. The Company periodically evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long‑lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. Recoverability is measured by comparing the carrying amount of an asset group to future undiscounted net cash flows expected to be generated. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value. For the year ended December 31, 2017, the Company recorded impairment charges of $9.5 million on long-lived assets primarily related to the Jersey City and Fairfield facilities recognized in Other operating expense. For the years ended December 31, 2016 and 2015, no impairment of long‑lived assets was indicated. Fair Value Estimates The fair value of financial instruments and non-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. Cash and cash equivalents, restricted cash, receivables, accounts payable, and accrued liabilities are stated at carrying amounts as reported in the Consolidated Financial Statements, which approximates fair value due to their short‑term nature. The fair value of the long‑term debt approximates its carrying value based on the variable nature of interest rates and current market rates available to the Company. Revenue Recognition The Company recognizes revenue when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectibility is reasonably assured. Revenue, net of promotional discounts, is deferred at the time cash is collected and recognized at the time risk of ownership transfers to the customer. The Company also defers revenue from the sale of gift cards and prepaid orders until all criteria for revenue recognition are met. Net revenue is reduced for actual and estimated customer credits and refunds expected to be issued. For the years ended December 31, 2017, 2016 and 2015 credits and refunds represented 3.5%, 3.3%, and 4.4% of Net revenue, respectively. The Company periodically enters into agreements with third parties to market the Company’s products. The Company records revenue from such arrangements at the gross amount as the Company is the primary obligor with the customer, provides primary customer service for such products sold on its website, has latitude in establishing price and selecting such products sold on its website, and maintains inventory risk. Payments received in advance under these agreements are recorded as deferred revenue until all criteria for revenue recognition are met. Cost of Goods Sold, Excluding Depreciation and Amortization Cost of goods sold, excluding depreciation and amortization consists of product and fulfillment costs. Product costs include the cost of food, packaging for food that is portioned prior to delivery to customers, labor and related personnel costs incurred to portion food for the Company’s meals, inbound shipping costs, and cost of products sold through Blue Apron Wine, Blue Apron Market, and BN Ranch. Fulfillment costs consist of costs incurred in the shipping and handling of inventory including the shipping costs to the Company’s customers, labor and related personnel costs related to receiving, inspecting, warehousing, picking inventory, and preparing customer orders for shipment, and the cost of packaging materials and shipping supplies. Advertising Costs Advertising costs are charged to Marketing expense in the accompanying Consolidated Statements of Operations. Advertising costs were $115.7 million, $103.4 million, $31.1 million for the years ended December 31, 2017, 2016, and 2015, respectively. The Company recognizes advertising costs the first time the advertising takes place. Deferred advertising, marketing, and promotional costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were $1.6 million and $3.9 million as of December 31, 2017 and 2016, respectively, and are recorded within prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. Product, Technology, General, and Administrative Product, technology, general, and administrative expenses consist of costs related to the development of the Company’s products and technology, general and administrative expenses, and overhead expenses, which include: payroll and related expenses for employees involved in the application, production, and maintenance of the Company’s platform and other technology infrastructure costs; payroll and related expenses for employees performing corporate and other managerial functions; facilities costs such as occupancy and rent costs for the Company’s corporate offices and fulfillment centers; and payment processing fees, professional fees, and other general corporate and administrative costs. Share‑Based Compensation The Company recognizes share‑based compensation for share‑based awards, including stock options, based on the estimated fair value of the awards, net of estimated forfeitures. The Company estimates the fair value of stock options on the grant date generally using the Black‑Scholes option‑pricing model and recognizes the related share‑based compensation on a straight‑line basis over the period in which the employee is required to provide services, generally up to four years. For stock repurchases, the Company recognizes any excess of the repurchase price over the fair value of the instruments repurchased as additional share‑based compensation. Other Operating Expense Other operating expense consists primarily of impairment losses relating to long-lived assets in the Company’s fulfillment centers and employee-related charges relating to the personnel realignment implemented in October 2017. Interest Income (Expense), Net Interest income and expense consists primarily of interest expense associated with the revolving credit facility, capital lease financings, and build-to-suit lease financing offset by interest income on cash and cash equivalents. Other Income (Expense), Net Other income and expense consists of the mark-to-market loss on the debt derivative related to the convertible notes, as well as the loss upon the automatic conversion and settlement of the convertible notes. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management makes an assessment of the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In evaluating the ability to recover deferred tax assets in the jurisdiction from which they arise, the Company considers all available positive and negative evidence. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). Based on the Company’s historical operating losses, the Company has recorded a full valuation allowance against its federal and state net operating loss carryforwards and other deferred tax assets. The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit in accordance with ASC 740, Income Taxes . An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which judgment occurs. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of provision for income taxes. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. 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 an offering 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 adoption of this guidance is not expected to have a material impact on the Company’s 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 adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. Recently Adopted Accounting Pronouncements In July 2015, the FASB issued Accounting Standards Update No. 2015-11 ("ASU 2015-11"), Inventory (Topic 330): Simplifying the Measurement of Inventory . ASU 2015-11 requires inventory to be measured at the lower of cost and net realizable value, and defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For non-public entities, the amendments in ASU 2015-11 are effective for annual periods beginning after December 15, 2016, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2017 | |
Inventories, Net | |
Inventories, Net | 3. Inventories, Net Inventories, net consist of the following: December 31, 2017 2016 (In thousands) Fulfillment $ 7,358 $ 5,758 Product 34,569 37,129 Inventories, net $ 41,927 $ 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 | 12 Months Ended |
Dec. 31, 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: December 31, 2017 2016 (In thousands) Deposits $ 2,346 $ 1,122 Prepaid marketing 1,604 3,940 Prepaid rent 1,348 1,430 Other current assets 2,526 1,775 Prepaid expenses and other current assets $ 7,824 $ 8,267 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consists of the following: December 31, 2017 2016 (In thousands) Computer equipment $ 10,883 $ 6,468 Capitalized software 10,427 5,448 Fulfillment equipment 45,581 12,525 Furniture and fixtures 4,188 1,491 Leasehold improvements 40,173 23,660 Buildings (1) 148,507 — Construction in process (1) (2) 4,563 93,092 Property and equipment, gross 264,322 142,684 Less: accumulated depreciation and amortization (33,494) (11,723) Property and equipment, net $ 230,828 $ 130,961 (1) Includes build-to-suit lease arrangements where the Company is considered the owner for accounting purposes, of which $62.1 million was included in Buildings as of December 31, 2017 and $45.0 million was included in Construction in process as of December 31, 2016. Costs incurred directly by the Company relating to these arrangements were $82.3 million and $37.6 million as of December 31, 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. Depreciation and amortization related to the Company’s Property and equipment, net for the years ended December 31, 2017, 2016, and 2015 was $26.8 million, $8.2 million, $2.9 million, respectively. The Company capitalizes the cost of interest for construction projects related to build-to-suit lease arrangements based on the applicable capitalization rate for the project. Capitalized interest was $4.2 million and $1.9 million as of December 31, 2017 and 2016, respectively. As of December 31, 2017 and 2016 total equipment financed under capital leases was $1.0 million and $1.2 million, respectively, with related accumulated depreciation of $0.4 million and $0.4 million, respectively. For the years ended December 31, 2017, 2016, and 2015 depreciation expense related to property and equipment under capital leases was $0.2 million, $0.3 million, $0.1 million, respectively. For the years ended December 31, 2017, 2016, and 2015 the Company capitalized software development costs of $5.8 million, $3.2 million, $1.6 million including share‑based compensation of $0.2 million, $0.1 million, $0.0 million, respectively. As of December 31, 2017 and 2016, the net book value of capitalized software development costs was $5.3 million and $3.3 million, respectively. Amortization expense for capitalized software development costs recognized in Depreciation and amortization in the accompanying Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015 was $3.1 million, $1.4 million and $0.6 million, respectively. 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 represented 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. In October 2017, upon completion of the transition to the new Linden fulfillment center, the Company’s long-lived assets at the Jersey City facility have primarily been sold or relocated to the Company’s other fulfillment centers. As an additional step in the company-wide realignment discussed in Note 17, 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 took possession of in December 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 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 Fairfield facility was $37.1 million and the fair value was $33.9 million as of the impairment date, resulting in an impairment of $3.2 million, primarily consisting of the building, leasehold improvements, and equipment. The fair value was primarily determined based on a third-party appraisal for real property using the Income Capitalization Approach. Other methodologies were also considered by the Company in the valuation, including the Cost Approach and the Sales Approach. The valuation represented a Level 3 valuation in the fair value hierarchy. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 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: December 31, 2017 2016 (In thousands) Accrued compensation $ 13,009 $ 11,069 Accrued credits and refunds reserve 1,079 1,235 Accrued marketing expenses 5,739 5,424 Accrued product expenses — 10,965 Accrued shipping expenses 5,319 4,930 Other current liabilities 7,469 7,288 Accrued expenses and other current liabilities $ 32,615 $ 40,911 |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue | |
Deferred Revenue | 7. Deferred Revenue Deferred revenue consists of the following: December 31, 2017 2016 (In thousands) Cash received prior to fulfillment $ 10,635 $ 10,107 Gift cards, prepaid orders, and other 17,011 14,171 Deferred revenue $ 27,646 $ 24,278 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt | |
Long-term Debt | 8. Long‑term 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 December 31, 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 December 31, 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 December 31, 2017 and December 31, 2016, the total unamortized deferred financing costs in long-term debt was $0.3 million and $0.5 million, respectively. As of December 31, 2017 and December 31, 2016, outstanding borrowings in long-term debt consisted of the following: December 31, December 31, Maturity Date 2017 2016 (In thousands) Revolving credit facility 2019 $ 125,000 $ 45,000 Weighted average interest rate 3.47 % 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”). During the years ended December 31, 2017 and 2016, the Company borrowed $120.0 million and $40.0 million, respectively, under the revolving credit facility utilizing the adjusted LIBOR rate and $5.0 million and $5.0 million, respectively, 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 unused commitment fees were $0.1 million and $0.1 million for the years ended December 31, 2017 and 2016, respectively. The obligations under the revolving credit facility are guaranteed by the guarantor as defined in the credit agreement, Blue Apron Holdings, Inc. The revolving credit facility is collateralized by substantially all of the assets of the Company and certain of its subsidiaries. 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 December 31, 2017 and 2016 the Company was in compliance with all of the covenants under the revolving credit facility. Convertible Note 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. 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. During the year ended December 31, 2017, the Company incurred $2.3 million of interest expense related to amortization of debt discount and initial debt issuance costs prior to the note conversion. 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. The conversion and settlement of the convertible notes, the outstanding principal, derivative, accrued interest, and discount resulted in a net loss of $(15.0) million recorded in Other income (expense), net for the year ended December 31, 2017. The fair value of the shares issued upon conversion is recorded in stockholders’ equity (deficit). Facility Financing Obligation As of December 31, 2017 and 2016, the Company has recorded a facility financing obligation of $70.3 million and $49.8 million, respectively, related to leased facilities in Linden and Fairfield under the build‑to‑suit accounting guidance. See Note 9 for further discussion. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 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. As of December 31, 2017 and 2016 deferred rent amounted to $7.6 million and $2.4 million, respectively, and is included in Other noncurrent liabilities in the accompanying Consolidated Balance Sheets. In addition, the Company leases certain equipment under capital lease arrangements that expire at various dates through 2020. In March 2016, the Company signed a lease for a new fulfillment center in Linden and in August 2016 the Company signed a lease for a new fulfillment center in Fairfield, which expire in 2026 and 2028, 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 during the construction period for accounting purposes. The Company follows build‑to‑suit accounting for these arrangements and capitalized the fair value of the buildings and direct construction costs incurred along with a corresponding facility financing liability. At the end of the construction period, the Company assessed whether these arrangements qualify for sales recognition under sale‑leaseback accounting guidance. Upon substantial completion of the construction phase of the new facilities in New Jersey and California in June 2017 and December 2017, respectively, 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 tests which precludes the derecognition of the related assets from the Consolidated Balance Sheets. In conjunction with the leases, the Company also recorded a facility financing obligation equal to the fair market value of the assets received from the landlords. At the end of the lease terms, including exercise of any renewal options, the difference between the remaining facility financing obligation and the net carrying value of the fixed assets will be recognized as a non-cash gain or loss on sale of the properties. The Company does not report rent expense for the leases. Rather, rental payments under the leases are recognized as a reduction of the financing obligation and interest expense and the associated assets capitalized throughout the construction projects are depreciated over the determined useful life. In July 2017, the Company approved a plan to transition all of its Jersey City fulfillment center operations to its new fulfillment center in Linden. The Company’s Jersey City facility was occupied pursuant to a sublease expiring in 2018 and a lease expiring in 2025. In October 2017, the Company terminated its sublease expiring in 2018 with no material termination costs. Additionally, in November 2017, the Company entered into an agreement to sublease the remainder of its Jersey City facility. The sublease continues through the duration of the Company’s existing lease for the facility and entitles the Company to future minimum sublease payments of approximately $5.7 million as of December 31, 2017. The Company has non-cancelable future minimum lease payments of approximately $5.2 million to the original lessor of the facility as of December 31, 2017. As an additional step in the company-wide realignment discussed in Note 17, the Company performed a review of its real estate needs, including its previous plans to build-out a new facility in Fairfield 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 facility. As a result, the Company is continuing to evaluate potential alternatives for the leased property, which the Company took possession of in December 2017 upon completion of the building structure by the landlord. The Company has future non-cancelable minimum lease payments of $38.7 million through 2028 . As of December 31, 2017, the aggregate future non‑cancelable minimum lease payments consist of the following: Capital Build-to-Suit Operating Years Ended December 31: Leases Leases Leases (In thousands) 2018 $ 263 $ 3,608 $ 13,258 2019 190 4,798 10,888 2020 123 4,918 5,873 2021 13 5,041 5,806 2022 — 5,167 5,366 Thereafter — 25,208 15,963 $ 589 $ 48,740 $ 57,154 Less: amount representing interest and taxes (45) Lease obligations net of interest and taxes 544 Less: current portion of capital lease obligations (229) Noncurrent portion of capital lease obligations $ 315 Rent expense was $14.0 million, $10.0 million and $3.8 million for the years ended December 31, 2017, 2016 and 2015, respectively, and is recognized in Product, technology, general, and administrative expenses in the accompanying Consolidated Statements of Operations. As of December 31, 2017, 2016 and 2015, the current portion of the Company’s capital lease obligations is a component of Other current liabilities on the Consolidated Balance Sheet and the noncurrent portion of the Company’s capital lease obligations is a component of Other noncurrent liabilities on the Consolidated Balance Sheets. Purchase Obligations As of December 31, 2017, the Company had an estimated minimum purchase obligation with a food supplier of approximately $36.7 million through 2020 based on minimum purchase quantities and expected pricing. Total purchases under the contract may be lower than the minimum non‑cancelable commitment due to supplier production levels or supplier’s failure to deliver product that meets our specifications. The Company is not obligated to pay the minimum purchase obligation should the supplier not produce the committed level or deliver product that meets our specifications. Further, at the Company’s discretion, the total purchases under the contract may be higher than the minimum non‑cancelable commitment. Letters of Credit As of December 31, 2017 and 2016, the Company had $4.1 million and $4.4 million, respectively, in letters of credit issued. The letters of credit serve as security primarily for fulfillment centers and office space leases entered into by the Company. As of December 31, 2017 and 2016 the letters of credit were collateralized by current restricted cash of $0.0 million and $0.1 million, and by noncurrent restricted cash of $2.4 million and $4.0 million, respectively. As of December 31, 2017 and 2016 the beneficiaries of the letters of credit had not drawn upon any of the letters of credit. Legal Proceedings The Company records accruals for loss contingencies associated with legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. If the Company determines that a loss is reasonably possible, the Company discloses the matter, and, if estimable, the amount or range of the possible loss in the notes to the Consolidated Financial Statements The Company is subject to a consolidated putative class action lawsuit in the U.S. District Court for the Eastern District of New York alleging federal securities law violations in connection with the Company’s June 2017 initial public offering, or the IPO. This purported class action was filed in August 2017 against the Company, certain current and former officers and directors, and certain underwriters of the Company’s IPO. The complaint alleges that the defendants made material misstatements or omissions in the Company’s registration statement that caused the stock price to drop. On December 15, 2017, the court issued an order appointing lead plaintiffs. Pursuant to a stipulation entered by the parties, lead plaintiffs have until February 27, 2018 to file an amended complaint. The Company is in the preliminary stages of reviewing the allegations made in the complaint and, as a result, is unable to provide any assurances as to the ultimate outcome of this lawsuit or that an adverse resolution of this lawsuit would not have a material adverse effect on the Company’s consolidated financial position or results of operations. The Company is subject to a shareholder derivative action filed in the Delaware Court of Chancery. Plaintiff seeks a declaratory judgment challenging the validity of a provision of the Company’s Certification of Incorporation that requires shareholders to bring claims under the Securities Act of 1933 solely in federal court. Defendants have not responded to the complaint and the court has not entered a schedule. The Company is in the preliminary stages of reviewing the allegations made in the complaint and, as a result, is unable to provide any assurances as to the ultimate outcome of this lawsuit or that an adverse resolution of this lawsuit would not have a material adverse effect on the Company’s consolidated financial position or results of operations. The Company is party to a lawsuit filed in California Superior Court under the Private Attorneys General Act on behalf of certain non-exempt employees in the Company’s Richmond, California fulfillment center. The complaint was filed on October 16, 2017, and alleges that the Company failed to pay wages and overtime, provide required meal and rest breaks, provide suitable resting facilities and provide accurate wage statements, to non-exempt employees in violation of California law. The Company is in the preliminary stages of reviewing the allegations made in the complaint and, as a result, is unable to provide any assurances as to the ultimate outcome of this lawsuit or that an adverse resolution of this lawsuit would not have a material adverse effect on the Company’s consolidated financial position or results of operations. Although the Company believes that it is reasonably possible that it may incur losses in these cases, the Company is currently unable to estimate the amount of such losses due to the early stages of the litigation, among other factors. In addition, from time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of such litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business, operating results, financial condition or cash flows. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 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 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 will be 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 | 12 Months Ended |
Dec. 31, 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 December 31, 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 Authorized Outstanding Net Proceeds Price Per Share Preference Price Per Share Convertible Preferred Stock: (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. The holders of the Company’s preferred stock had various rights, preferences, and privileges as follows: Conversion Rights Each share of the Company’s Series A convertible preferred stock (“Series A”), Series B convertible preferred stock (“Series B”), Series C convertible preferred stock (“Series C”), and Series D convertible preferred stock (“Series D”) is convertible, at the option of the holder, at any time and without the payment of additional consideration, into Class B common stock determined by dividing the original issue price by the applicable conversion price, as described below. The original issue price per share is $4.0751 for the Series A, $10.9837 for the Series B, $16.6586 for the Series C, and $13.3269 for the Series D (in each case, as adjusted for certain recapitalizations, splits, combinations, common stock dividends, or similar events). At December 31, 2016, the conversion prices per share are $0.0815 for the Series A, $0.2197 for the Series B, $3.3317 for the Series C, and $13.3269 for the Series D. As of December 31, 2016, at the current conversion ratio, the Series A will convert on a 50-for-1 basis into Class B common stock, the Series B will convert on a 50-for-1 basis into Class B common stock, the Series C will convert on a 5-for-1 basis into Class B common stock, and the Series D will convert on a 1-for-1 basis into Class B common stock. The conversion price per share for the preferred stock shall be adjusted for certain recapitalizations, splits, combinations, dividends, or similar events, as discussed below. All of the Company’s shares of convertible preferred stock will automatically convert into Class B common stock at the respective conversion price effective immediately prior to the earlier of: (a) the closing of an underwritten initial public offering of the Company’s common stock resulting in at least $50.0 million of gross proceeds to the Company and the listing of its common stock on an internationally recognized stock exchange, and (b) a date specified by vote or written consent of the holders of the majority of the Company’s then outstanding shares of convertible preferred stock (voting together as a single class on an as-converted to common stock basis), provided, however, that the conversion of the Series C and Series D shall also require the consent of the holders of a majority of the shares of the Series C and Series D, respectively. Conversion Price Adjustments The conversion price per share of the Series A, Series B, Series C, and Series D will be reduced if the Company issues additional stock or rights to acquire stock (subject to certain limitations) without consideration or for consideration per share less than the Series A, Series B, Series C, and Series D conversion price in effect for that series. Voting Rights Each share of Class B common stock is entitled to ten votes. Each holder of preferred stock is entitled to ten votes for each whole share of Class B common stock into which the shares of preferred stock held by such holder are convertible. The holders of the Series B, voting exclusively and as a separate class, have the right to elect one director. The holders of the Series C, voting exclusively and as a separate class, have the right to elect one director. The holders of the Class B common stock, voting exclusively and as a separate class, have the right to elect four directors. The board of directors, by majority vote, has the right to elect the one remaining director. Liquidation Rights In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, including a Deemed Liquidation Event (as defined below), the holders of the Series D then outstanding shall be entitled to be paid out of the assets available for distribution to the Company’s stockholders, before any payment shall be made to the holders of Series A, Series B, Series C, or common stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the Series D original issue price, plus any dividend declared but unpaid thereon, and (ii) such amount per share as would have been payable had all shares of Series D been converted into Class B common stock immediately prior to such liquidation, dissolution or winding-up (or such Deemed Liquidation Event). After the payment of the liquidation amount to be paid to the holders of Series D, the holders of the Series A, Series B, and Series C then outstanding shall be entitled to be paid on a pari passu basis out of the remaining assets available for distribution to the Company’s stockholders, before any payment shall be made to the holders of common stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the applicable original issue price, plus any dividend declared but unpaid thereon, and (ii) such amount per share as would have been payable had all shares of the applicable series of Series A, Series B, and Series C had been converted into Class B common stock immediately prior to such liquidation, dissolution or winding-up (or Deemed Liquidation Event). As of December 31, 2016, the liquidation amount was $4.0751 per share for the Series A, $10.9837 per share for the Series B, $16.6586 per share for the Series C, and $13.3269 per share for the Series D. After the payment of the liquidation amounts to be paid to the holders of the Series A, Series B, and Series C, the remaining assets available for distribution to the Company’s stockholders shall be distributed among the holders of the common stock, pro rata based on the number of shares held by each such holder. A “Deemed Liquidation Event” is in general defined for this purpose as any acquisition of the Company by means of merger or other form of corporate reorganization in which the Company’s outstanding shares are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring corporation or its subsidiary (other than a reincorporation transaction) or a sale of all or substantially all of the Company’s assets. Dividend Rights The convertible preferred stockholders are entitled to receive dividends at a rate of $0.326 per annum for each share of Series A, $0.879 per annum for each share of Series B, $1.333 per annum for each share of Series C, and $1.06615 per annum for each share of Series D (in each case, as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations, or the like). Such dividends are payable out of assets legally available therefore, are payable only when, as, and if declared by the board of directors and are not cumulative. No dividends may be paid on the Series A, Series B, Series C, or common stock until the Series D has received its dividend preference. After payment of the foregoing dividends to the holders of the Series D, no dividends may be paid on the common stock until the Series A, Series B, and Series C have received their dividend preference which is distributed in proportion to the number of shares of Class B common stock that would be held by each stockholder if all shares of preferred stock were converted to Class B common stock. After the payment of the foregoing dividends to the holders of convertible preferred stock, any additional dividends declared by the board of directors out of funds legally available shall be shared equally among all outstanding shares on an as-converted basis. No dividends have been declared to date. Redemption Rights The Company’s convertible preferred stock does not contain any fixed or determinable redemption features, except in connection with a Deemed Liquidation Event. |
Share_based Compensation
Share‑based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation | |
Share-based Compensation | 12. Share‑based Compensation The Company recognized share-based compensation for share-based awards of $11.3 million, $3.0 million, and $1.1 million during the years ended December 31, 2017, 2016, and 2015, respectively. For the year ended December 31, 2017, the Company recognized $10.6 million in Product, technology, general, and administrative expenses and $ 0.7 million in cost of goods sold, excluding Depreciation and amortization. For the years ended 2016 and 2015, share-based compensation was primarily included in Product, technology, general, and administrative expenses. Determination of Fair Value The fair value of each stock option grant granted under the 2012 Equity Incentive Plan, except the Market Grant as discussed below, was estimated on the date of grant using the Black‑Scholes option‑pricing model with the following assumptions: Year Ended December 31, 2017 2016 2015 Expected term (in years) - - - Risk-free interest rate - % - % - % Expected volatility - % - % - % Dividend rate — — — The Company determined the assumptions for the Black‑Scholes option‑pricing model as discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. Expected Term — The expected term represents the period that the share‑based awards are expected to be outstanding. The expected term of stock options granted has been determined using the simplified method, which uses the midpoint between the vesting date and the contractual term. Risk‑Free Interest Rate — The risk‑free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero‑coupon U.S. Treasury constant maturity notes with terms approximately equal to the share‑based awards’ expected term. Expected Volatility — Since the Company does not have a trading history of its common stock, the expected volatility was derived from the average historical stock volatilities of several public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the share‑based awards. Dividend Rate — The expected dividend is zero as the Company has not paid and does not anticipate paying any dividends in the foreseeable future. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and the Company will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from any forfeiture rate adjustment would be recognized in full in the period of adjustment and if the actual number of future forfeitures differs from the Company’s estimates, the Company might be required to record adjustments to share‑based compensation in future periods. Market Grant In February 2016, the Company granted an option to purchase 481,123 shares of its Class B common stock with an exercise price of $62.35 to one of its executive officers (the “Market Grant”). In addition to the typical vesting requirements of the 2012 Equity Incentive Plan, this grant allows for acceleration of vesting including full and immediate vesting upon certain termination events. As this grant was determined to include a market condition, the Company utilized the Monte Carlo simulation valuation model to value the grant. The total grant date fair value of the Market Grant was $0.5 million and is recognized as expense over the derived service period of 5.7 years. 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 August 2016, the Company’s stockholders approved an increase of 4,200,000 Class B common stock shares available in the Plan. 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. Upon completion of the Corporate Reorganization and adoption of the 2017 Equity Incentive Plan , 47,656,712 shares of Class A and Class B common stock were reserved for issuance. As of December 31, 2017, 20,612,395 shares of Class A common stock remained available for future grants under the 2017 Equity Incentive Plan. As of December 31, 2016, 2,689,682 Class B common stock shares remained available for future grants under the 2012 Equity Incentive Plan. Stock Options The following table summarizes outstanding options, which were granted under the 2012 Equity Incentive Plan: Weighted- Aggregate Weighted- Average Intrinsic Number Average Remaining Value of of Exercise Contractual Outstanding Options Price Term Options (Years) (In thousands) Outstanding — December 31, 2016 9,599,015 $ 6.05 8.73 $ 36,156 Granted 2,633,962 9.69 Exercised (1,770,703) 0.57 Forfeited / canceled (2,270,705) 5.59 Outstanding — December 31, 2017 8,191,569 $ 8.53 8.28 $ 5,253 Exercisable — December 31, 2017 3,548,342 $ 6.95 7.81 $ 4,150 Outstanding vested and expected to vest — December 31, 2017 7,504,786 $ 8.66 8.23 $ 5,156 The weighted‑average grant date fair value of options granted for the years ended December 31, 2017, 2016, and 2015 was $4.84, $2.29, $1.81, respectively. The total intrinsic value of options exercised was $14.4 million, $2.0 million and $0.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. The total grant date fair value of options vested for the years ended December 31, 2017, 2016, and 2015 was $ 11.2 million, $3.2 million and $1.0 million, respectively. For the years ended December 31, 2017, 2016, and 2015 the Company received $1.0 million, $0.4 million, and $0.1 million, respectively, from the exercise of share options granted under share‑based payment arrangements. There was no tax benefit realized from stock options exercised during these periods. As of December 31, 2017, 2016, and 2015, total unrecognized share‑based compensation related to unvested options was $11.1 million, $10.5 million, and $4.3 million, respectively, net of estimated forfeitures. As of December 31, 2017, 2016, and 2015, these costs are expected to be recognized over a weighted‑average period of 2.75 years, 3.17 years, and 3.10 years, respectively. Restricted Stock Units The following table summarizes outstanding restricted stock units, which were granted under the 2017 Equity Incentive Plan: Number Weighted-Average of Grant Date Shares Fair Value Unvested — December 31, 2016 — $ — Granted 9,403,241 6.51 Vested (263,265) 5.39 Forfeited / canceled (2,202,767) 7.03 Unvested — December 31, 2017 6,937,209 $ 6.39 Outstanding vested and expected to vest — December 31, 2017 5,172,529 $ 6.39 During 2017, 263,265 shares of restricted stock units vested and were released to employees under the 2017 Equity Incentive Plan. These shares primarily vest over a period of four years. Compensation expense related to the restricted stock units is recognized using the grant date fair value recognized evenly over the service period. As of December 31, 2017, the unrecognized share‑based compensation related to unvested restricted stock units was $34.3 million which will be recognized over a period of 3.34 years. There was no restricted stock units outstanding as of December 31, 2016 and 2015. Restricted Shares The following table summarizes oustanding restricted shares, which were granted under the 2012 Equity Incentive Plan: Number Weighted-Average of Grant Date Shares Fair Value Unvested — December 31, 2016 43,750 $ 3.47 Granted — — Exercised — — Forfeited / canceled — — Vested (15,000) 3.47 Unvested — December 31, 2017 28,750 $ 3.47 Outstanding vested and expected to vest — December 31, 2017 28,750 $ 3.47 In August 2012, the Company entered into a restricted stock agreement with one of its founders for the issuance of 4,731,300 shares of restricted stock. Under the terms of the restricted stock agreement, the Company has the right to repurchase any unvested shares of restricted stock at the original issue price of $0.0282 per share in the event such founder’s services are terminated. This repurchase right lapsed over the restricted stock’s four year vesting period beginning in August 2012. This award was subsequently cancelled in May 2013 and a concurrent replacement award with substantially identical terms was issued to the Company’s founder. No incremental share‑based compensation expense arose due to this replacement award. In November 2015, the Company issued 60,000 shares of restricted stock to a nonemployee director of the Company. These shares vest over a period of four years. Compensation expense related to the restricted shares is recognized using the grant date fair value recognized evenly over the service period. As of December 31, 2017 and 2016 the unrecognized share‑based compensation related to unvested shares of restricted stock was $0.1 million and $0.2 million, respectively. Award Modifications During 2017, the Company modified the vested stock options for employees terminated as part of the company-wide realignment in order to extend the exercise period from 90 days to 12 months after termination. In addition, the Company modified the unvested equity awards of an executive of the Company to include accelerated vesting upon a change in control of the Company. These award modifications did not have a material impact on the Company’s Consolidated Financial Statements. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per Share | |
Earnings per Share | 13. Earnings per Share The Company followed the two-class method when computing net income (loss) per share for the years ended December 31, 2016 and 2015 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 year ended December 31, 2017 as the participating securities had previously converted into Class B common stock. For the year ended December 31, 2017, the Company did not have any outstanding shares of Class C common stock. For the years ended December 31, 2016 and 2015, 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. Year Ended December 31, 2017 2016 2015 Class A Class B Class C Class B Class B (in thousands, except share and per-share data) Numerator: Net income (loss) $ (25,675) $ (184,452) $ (16) $ (54,886) $ (46,965) Undistributed earnings reallocated to convertible preferred stock — — — — — Net income (loss) attributable to common stockholders $ (25,675) $ (184,452) $ (16) $ (54,886) $ (46,965) Denominator: Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic 15,645,852 112,401,537 9,941 65,425,609 51,137,406 Effect of dilutive securities — — — — — Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted 15,645,852 112,401,537 9,941 65,425,609 51,137,406 Net income (loss) per share attributable to common stockholders—basic (1) $ (1.64) $ (1.64) $ (1.64) $ (0.84) $ (0.92) Net income (loss) per share attributable to common stockholders—diluted (1) $ (1.64) $ (1.64) $ (1.64) $ (0.84) $ (0.92) (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: Year Ended December 31, 2017 2016 2015 Class A Class B Class C Class B Class B Stock options — 10,162,118 — 7,390,067 4,473,853 Restricted shares — 36,801 — 1,422,319 15,190,800 Restricted stock units 3,235,209 — — — — Convertible preferred stock — — — 85,190,551 85,190,551 Total anti-dilutive securities 3,235,209 10,198,919 — 94,002,937 104,855,204 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | 14. Income Taxes The components of the provision for income taxes are as follows: Year Ended December 31, 2017 2016 2015 (In thousands) Current provisions for income taxes: Federal $ — $ — $ — State 15 108 61 Total current 15 108 61 Deferred tax benefit: Federal — — — State — — — Total deferred — — — Provision for income taxes $ 15 $ 108 $ 61 On December 22, 2017, the Tax Cuts and Jobs Acts was enacted into law. This U.S. Tax Reform contains several key provisions including the reduction of the corporate income tax rate to 21% effective January 1, 2018 as well as a variety of other changes including the limitation of the tax deductibility of interest expense, acceleration of expensing of certain business assets, and reductions in the amount of executive pay that could qualify as a tax deduction. As a result of the change in the corporate tax rate, the Company remeasured its deferred tax assets as of December 31, 2017 based on the rate at which they are expected to reverse in the future. This remeasurement and interpretation of the new law is provisional subject to clarifications of the provisions of the new legislation and final calculations. Any future changes to the Company’s provisional estimated impact of the U.S. Tax Reform will be reflected as a change in estimate in the period in which the change in estimate is made in accordance with Staff Accounting Bulletin No. 118 (SAB 118), Income Tax Accounting Implications of the Tax Cuts and Jobs Ac. SAB 118 allows for a measurement period of up to one year after the enactment date of the U.S. Tax Reform to finalize the recording of the related tax impacts. A reconciliation of the provisions (benefits) for income taxes to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is shown as follows: Year Ended December 31, 2017 2016 2015 Tax at statutory federal rate % % % State tax — net of federal benefit (0.03) % (0.13) % (0.08) % Change in valuation allowance (9.27) % (37.71) % (36.27) % Effect of U.S. tax law change (21.52) % — % — % Share-based compensation (1.63) % (1.28) % (0.82) % Charitable contributions 0.81 % 3.47 % 2.26 % Convertible note (2.88) % — % — % Other (0.49) % 0.45 % (0.22) % Provision for income taxes (0.01) % (0.20) % (0.13) % The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are as follows: December 31, 2017 2016 (In thousands) Deferred tax assets: Tax attribute carryforwards $ 68,364 $ 47,647 Inventories 4,729 3,811 Accruals, reserves, and other 8,159 4,896 Gross deferred tax assets 81,252 56,354 Valuation allowance (81,252) (56,354) Total deferred tax assets — — Deferred tax liabilities: Property and equipment — — Total deferred tax liabilities — — Net deferred tax assets $ — $ — Recognition of deferred tax assets is appropriate when realization of these assets is more likely than not. Each reporting period the Company assesses the recoverability of its deferred tax assets and are required to establish a valuation allowance for any portion of the assets that the Company concludes is not more likely than not realizable. Based upon the weight of available evidence, which includes the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the Company recorded a valuation allowance of $81.3 million and $56.4 million against the net U.S. deferred tax assets as of December 31, 2017 and 2016, respectively. The valuation allowance increased by $24.9 million and $22.9 million during 2017 and 2016, respectively, primarily as a result of additional losses generated, net of the remeasurement of deferred tax assets based upon changes to the U.S. Corporate income tax rate. As of December 31, 2017 and 2016, the Company had U.S. federal net operating loss carryforwards of $195.2 million and $62.9 million, respectively, and state net operating loss carryforwards of $96.4 million and $42.0 million, respectively. The federal and state net operating loss carryforwards are subject to limitations under applicable tax laws and will expire at various dates beginning in 2033, if not utilized. The Company’s tax attributes may be limited by the ownership provisions of Section 382 of the Internal Revenue Code. As a result, if the Company experienced an “ownership change” during any three-year period, its use of these tax attributes may be limited. The Company has not performed a detailed analysis to determine if an ownership change has occurred. Uncertain Tax Positions As of December 31, 2017 and 2016, the Company had gross unrecognized tax benefits of $1.6 million and $0.9 million, respectively, none of which would materially impact the effective tax rate if realized during the year due to the Company’s full valuation allowance position. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in the provision for income tax. The Company believes that it is reasonably possible that a decrease of up to $1.2 million in unrecognized tax benefits may occur within the coming year. The activity related to the unrecognized tax benefits is as follows: Year Ended December 31, 2017 2016 2015 (In thousands) Gross unrecognized tax benefits—beginning balance $ 855 $ 341 $ 39 Increases related to tax positions taken in prior years 323 — — Decreases related to tax positions taken in prior years (1) (12) (2) Increases related to tax positions taken during current year 377 526 304 Decreases related to tax positions taken during the current year — — — Gross unrecognized tax benefits—ending balance $ 1,554 $ 855 $ 341 The Company is subject to taxation in the United States and various states. All tax years remain open and are subject to examinations by the appropriate governmental agencies in all of the jurisdictions where the Company files tax returns. Certain US federal income tax returns are currently under examination, the resolution of which is not expected to have a material adverse effect on the Company's results of operations, cash flows or financial condition. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments | |
Fair Value Measurements | 15. Fair Value Measurements 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. 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 December 31, 2017 and 2016, respectively, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3): December 31, 2017 Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Money market accounts $ 162,963 $ — $ — $ 162,963 Total financial assets $ 162,963 $ — $ — $ 162,963 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 December 31, 2017 and 2016, the Company had $ 163.0 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 year ended December 31, 2017 , the Company did not have net realized gains or losses related to its financial assets. As of December 31, 2017 and 2016, the Company did not have any assets or liabilities classified as Level 2 or Level 3 in the fair value hierarchy. In 2017, the Company issued and sold $64.6 million in principal amount of convertible promissory notes (the “convertible notes”). At 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. To derive 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 at issuance. Key inputs for this valuation were the stated interest rate of the convertible notes, the assumed cost of debt, assessment of the likelihood and timing of conversion, and the discount upon conversion of the notes into equity. For the year ended December 31, 2017, the Company recorded a total gain of $6.0 million in Other income (expense), net due to the change in value of the derivative liability during the period. 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 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 in Other income (expense), net, resulting in a total net loss of $15.0 million on the extinguishment of the convertible notes during the year ended December 31, 2017 . Level 3 Financial liabilities (in thousands) Balance — December 31, 2016 $ — Issuance of convertible notes derivative 15,429 Change in fair value of derivative (6,020) Settlement of convertible notes (9,409) Balance — December 31, 2017 $ — Certain non-financial assets, such as long-lived assets, are only recorded at fair value if an impairment loss is recognized. The following table presents non-financial assets that were measured and recorded at fair value on a non-recurring basis and the total impairment losses recorded during the year ended December 31, 2017 on those assets. There was no impairment loss recognized for the years ended December 31, 2016 and 2015. Non-recurring fair value measurements for the year ended December 31, 2017 include the following: Carrying value before impairment Fair value Impairment Loss Non-financial assets (in thousands) Long-lived assets $ 51,602 $ 42,146 $ 9,456 See Note 5 for further discussion on the long-lived assets impairment losses. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Acquisition (unaudited) | |
Acquisition | 16. 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. |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | 17. Restructuring Costs 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 recorded $3. 1 million in employee-related expenses in Other operating expense, primarily consisting of severance payments, substantially all of which will result in cash expenditures. The following table summarizes the activity for the realignment and related implementation charges discussed above and the related accruals recorded in Accrued expenses and other current liabilities: Employee-Related Costs (In thousands) Balance at beginning of period — December 31, 2016 $ — Charges 3,100 Cash payments (2,425) Other — Balance at end of period — December 31, 2017 $ 675 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Schedule II: Valuation and Qualifying Accounts Additions Balance at Beginning of Period Charges to Costs and Expenses Other Reductions Balance at End of Period (In thousands) Deferred Tax Asset Valuation Allowance: Fiscal year ended December 31, 2017 $ $ - $ $ (45,211) (1) $ Fiscal year ended December 31, 2016 - - Fiscal year ended December 31, 2015 - - Inventory Valuation Reserve: Fiscal year ended December 31, 2017 $ $ $ - $ (1,366) $ Fiscal year ended December 31, 2016 - (1,147) Fiscal year ended December 31, 2015 - - - Credits and Refund Reserve: Fiscal year ended December 31, 2017 $ $ $ - $ (32,304) $ Fiscal year ended December 31, 2016 - (28,394) Fiscal year ended December 31, 2015 - (13,981) (1) The carrying value of the deferred tax assets is determined by the enacted US corporate income tax rate. The Company remeasured the deferred tax assets as of December 31, 2017 based on the rates at which they are expected to reverse in the future, which is generally at the new corporate income tax rate of 21%. This resulted in a $45.2 million decrease in the deferred tax assets and corresponding decrease to the valuation allowance. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation 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”). Certain reclassifications were made to prior year amounts to conform to current year presentation. |
Use of Estimates | 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, subjective, or complex 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. Cash and cash equivalents are stated at cost plus accrued interest and consist of cash on hand, money market accounts, and amounts held by third‑party financial institutions for credit and debit card transactions. Cash as of December 31, 2017 and 2016 was $55.1 million and $13.2 million, respectively. Cash equivalents as of December 31, 2017 and 2016 was $173.4 million and $68.3 million, respectively, and consist of qualifying money market accounts and amounts due from third‑party institutions. Amounts due from third‑party institutions generally settle within three business days and were $10.4 million and $9.9 million as of December 31, 2017 and 2016, respectively. |
Accounts Receivable | Accounts Receivable Accounts receivable primarily represent amounts due from third parties that market the Company’s products and other trade receivables. Accounts receivable are recorded at invoiced amounts, net of allowances for doubtful accounts if applicable, are unsecured, and do not bear interest. The allowance for doubtful accounts was zero at December 31, 2017 and 2016. |
Other Receivables | Other Receivables Other receivables primarily include amounts due from the sale of fixed assets and miscellaneous receivables other than trade accounts receivable. Other receivables are recorded at their carrying amounts, are unsecured, and do not bear interest. |
Certain Risks and Concentrations | Certain Risks and Concentrations Financial instruments that subject the Company to significant concentrations of credit risk consist of cash, cash equivalents, and restricted cash. All of the Company’s cash, cash equivalents, and restricted cash are held at financial institutions in the United States that management believes to be of high credit quality. Deposits held in the United States with these financial institutions exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy addresses the level of credit exposure by limiting the concentration in any one corporate issuer or sector and establishing a minimum allowable credit rating. No individual customer accounted for 10% or more of the Company’s total Net revenue for the years ended December 31, 2017, 2016, and 2015. There are no significant concentration risks within the Company’s Accounts receivable as of December 31, 2017 and 2016. For the year ended December 31, 2017, an individual shipping carrier accounted for 10.2% of the Company’s total Cost of goods sold, excluding depreciation and amortization. No individual supplier accounted for 10% or more of the Company’s total Cost of goods sold, excluding depreciation and amortization for the years ended December 31, 2016 or 2015. No individual supplier accounted for 10% or more of total Accounts payable as of December 31, 2017 or December 31, 2016. |
Inventories, Net | Inventories, Net Inventories, net consist primarily of bulk and prepped food, products available for resale, packaging, and containers which are stated at the lower of cost or net realizable value. Inventory costs consist of product costs, inbound shipping and handling costs, and applicable direct labor costs. Inventories are valued on a first in, first out cost basis. The Company records an inventory valuation reserve when applicable based on currently available information about the likely method of disposition, such as through sales to individual customers, donations, or liquidations and expected recoverable values of each inventory category. |
Leases | Leases The Company categorizes lease agreements at their inception as either operating or capital leases. For operating leases, the Company recognizes rent expense on a straight‑line basis over the term of the lease. For capital leases, the Company records a leased asset with a corresponding liability. Payments are recorded as reductions to the liability with an interest charge recorded based on the remaining liability. Sublease payments received by the Company are recorded as income against the associated rent expense. The Company reviews leases for which it is involved in construction to determine if it is considered to be the owner for accounting purposes during the construction period. If the Company is determined to be the owner for accounting purposes, the Company follows build‑to‑suit accounting and capitalizes the fair value of the building and direct construction costs incurred along with a corresponding facility financing liability. At the end of the construction period, the Company assesses whether these arrangements qualify for sales recognition under sale‑leaseback accounting guidance. 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 building for accounting purposes. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, including leasehold improvements, are stated at cost and are depreciated using a straight‑line method over the estimated useful lives of the related assets. The estimated useful lives are as follows: Computer equipment 2 - 3 years Capitalized software 2 years Fulfillment equipment 5 - 7 years Furniture and fixtures 5 years Leasehold improvements Shorter of expected useful life or lease term Buildings 30 years |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company capitalizes qualifying internally‑developed software development costs that are incurred during the application development stage so long as management with the relevant authority authorizes the project, it is probable the project will be completed, and the software will be used to perform the function intended. Capitalized costs are amortized on a straight‑line basis over their expected useful lives which is approximately two years. Costs incurred for enhancements that are expected to result in additional significant functionality are capitalized and amortized over the estimated useful life of the enhancement. Costs related to preliminary project activities and post‑implementation operation activities, including training and maintenance, are expensed as incurred. Capitalized software development costs net of accumulated amortization are included as a component of Property and equipment, net in the accompanying Consolidated Balance Sheets. |
Recoverability of Long Lived Assets | Recoverability of Long‑Lived Assets Long‑lived assets consist of the Company’s property, equipment, and capitalized software development costs. The Company periodically evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long‑lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. Recoverability is measured by comparing the carrying amount of an asset group to future undiscounted net cash flows expected to be generated. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value. For the year ended December 31, 2017, the Company recorded impairment charges of $9.5 million on long-lived assets primarily related to the Jersey City and Fairfield facilities recognized in Other operating expense. For the years ended December 31, 2016 and 2015, no impairment of long‑lived assets was indicated. |
Fair Value Estimates | Fair Value Estimates The fair value of financial instruments and non-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. Cash and cash equivalents, restricted cash, receivables, accounts payable, and accrued liabilities are stated at carrying amounts as reported in the Consolidated Financial Statements, which approximates fair value due to their short‑term nature. The fair value of the long‑term debt approximates its carrying value based on the variable nature of interest rates and current market rates available to the Company. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectibility is reasonably assured. Revenue, net of promotional discounts, is deferred at the time cash is collected and recognized at the time risk of ownership transfers to the customer. The Company also defers revenue from the sale of gift cards and prepaid orders until all criteria for revenue recognition are met. Net revenue is reduced for actual and estimated customer credits and refunds expected to be issued. For the years ended December 31, 2017, 2016 and 2015 credits and refunds represented 3.5%, 3.3%, and 4.4% of Net revenue, respectively. The Company periodically enters into agreements with third parties to market the Company’s products. The Company records revenue from such arrangements at the gross amount as the Company is the primary obligor with the customer, provides primary customer service for such products sold on its website, has latitude in establishing price and selecting such products sold on its website, and maintains inventory risk. Payments received in advance under these agreements are recorded as deferred revenue until all criteria for revenue recognition are met. |
Cost of Goods Sold, Excluding Depreciation and Amortization | Cost of Goods Sold, Excluding Depreciation and Amortization Cost of goods sold, excluding depreciation and amortization consists of product and fulfillment costs. Product costs include the cost of food, packaging for food that is portioned prior to delivery to customers, labor and related personnel costs incurred to portion food for the Company’s meals, inbound shipping costs, and cost of products sold through Blue Apron Wine, Blue Apron Market, and BN Ranch. Fulfillment costs consist of costs incurred in the shipping and handling of inventory including the shipping costs to the Company’s customers, labor and related personnel costs related to receiving, inspecting, warehousing, picking inventory, and preparing customer orders for shipment, and the cost of packaging materials and shipping supplies. |
Advertising Costs | Advertising Costs Advertising costs are charged to Marketing expense in the accompanying Consolidated Statements of Operations. Advertising costs were $115.7 million, $103.4 million, $31.1 million for the years ended December 31, 2017, 2016, and 2015, respectively. The Company recognizes advertising costs the first time the advertising takes place. Deferred advertising, marketing, and promotional costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were $1.6 million and $3.9 million as of December 31, 2017 and 2016, respectively, and are recorded within prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. |
Product, Technology, General, and Administrative | Product, Technology, General, and Administrative Product, technology, general, and administrative expenses consist of costs related to the development of the Company’s products and technology, general and administrative expenses, and overhead expenses, which include: payroll and related expenses for employees involved in the application, production, and maintenance of the Company’s platform and other technology infrastructure costs; payroll and related expenses for employees performing corporate and other managerial functions; facilities costs such as occupancy and rent costs for the Company’s corporate offices and fulfillment centers; and payment processing fees, professional fees, and other general corporate and administrative costs. |
Share Based Compensation | Share‑Based Compensation The Company recognizes share‑based compensation for share‑based awards, including stock options, based on the estimated fair value of the awards, net of estimated forfeitures. The Company estimates the fair value of stock options on the grant date generally using the Black‑Scholes option‑pricing model and recognizes the related share‑based compensation on a straight‑line basis over the period in which the employee is required to provide services, generally up to four years. For stock repurchases, the Company recognizes any excess of the repurchase price over the fair value of the instruments repurchased as additional share‑based compensation. |
Other Operating Expense | Other Operating Expense Other operating expense consists primarily of impairment losses relating to long-lived assets in the Company’s fulfillment centers and employee-related charges relating to the personnel realignment implemented in October 2017. |
Interest Income (Expense), Net | Interest Income (Expense), Net Interest income and expense consists primarily of interest expense associated with the revolving credit facility, capital lease financings, and build-to-suit lease financing offset by interest income on cash and cash equivalents. |
Other Income (Expense), Net | Other Income (Expense), Net Other income and expense consists of the mark-to-market loss on the debt derivative related to the convertible notes, as well as the loss upon the automatic conversion and settlement of the convertible notes. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management makes an assessment of the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In evaluating the ability to recover deferred tax assets in the jurisdiction from which they arise, the Company considers all available positive and negative evidence. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). Based on the Company’s historical operating losses, the Company has recorded a full valuation allowance against its federal and state net operating loss carryforwards and other deferred tax assets. The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit in accordance with ASC 740, Income Taxes . An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which judgment occurs. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of provision for income taxes. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. |
Emerging Growth Company Status | 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 an offering 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 | 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 adoption of this guidance is not expected to have a material impact on the Company’s 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 adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. Recently Adopted Accounting Pronouncements In July 2015, the FASB issued Accounting Standards Update No. 2015-11 ("ASU 2015-11"), Inventory (Topic 330): Simplifying the Measurement of Inventory . ASU 2015-11 requires inventory to be measured at the lower of cost and net realizable value, and defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For non-public entities, the amendments in ASU 2015-11 are effective for annual periods beginning after December 15, 2016, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of Property and equipment, net | Computer equipment 2 - 3 years Capitalized software 2 years Fulfillment equipment 5 - 7 years Furniture and fixtures 5 years Leasehold improvements Shorter of expected useful life or lease term Buildings 30 years |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories, Net | |
Summary of inventories, net | December 31, 2017 2016 (In thousands) Fulfillment $ 7,358 $ 5,758 Product 34,569 37,129 Inventories, net $ 41,927 $ 42,887 |
Prepaid Expenses and Other Cu31
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets | |
Summary of prepaid expenses and other current assets | December 31, 2017 2016 (In thousands) Deposits $ 2,346 $ 1,122 Prepaid marketing 1,604 3,940 Prepaid rent 1,348 1,430 Other current assets 2,526 1,775 Prepaid expenses and other current assets $ 7,824 $ 8,267 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net | |
Summary of property and equipment | December 31, 2017 2016 (In thousands) Computer equipment $ 10,883 $ 6,468 Capitalized software 10,427 5,448 Fulfillment equipment 45,581 12,525 Furniture and fixtures 4,188 1,491 Leasehold improvements 40,173 23,660 Buildings (1) 148,507 — Construction in process (1) (2) 4,563 93,092 Property and equipment, gross 264,322 142,684 Less: accumulated depreciation and amortization (33,494) (11,723) Property and equipment, net $ 230,828 $ 130,961 (1) Includes build-to-suit lease arrangements where the Company is considered the owner for accounting purposes, of which $62.1 million was included in Buildings as of December 31, 2017 and $45.0 million was included in Construction in process as of December 31, 2016. Costs incurred directly by the Company relating to these arrangements were $82.3 million and $37.6 million as of December 31, 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. |
Accrued Expenses and Other Cu33
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Current Liabilities | |
Summary of accrued expenses and other current liabilities | December 31, 2017 2016 (In thousands) Accrued compensation $ 13,009 $ 11,069 Accrued credits and refunds reserve 1,079 1,235 Accrued marketing expenses 5,739 5,424 Accrued product expenses — 10,965 Accrued shipping expenses 5,319 4,930 Other current liabilities 7,469 7,288 Accrued expenses and other current liabilities $ 32,615 $ 40,911 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue | |
Summary of deferred revenue | December 31, 2017 2016 (In thousands) Cash received prior to fulfillment $ 10,635 $ 10,107 Gift cards, prepaid orders, and other 17,011 14,171 Deferred revenue $ 27,646 $ 24,278 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt | |
Summary of outstanding borrowings in long term debt | December 31, December 31, Maturity Date 2017 2016 (In thousands) Revolving credit facility 2019 $ 125,000 $ 45,000 Weighted average interest rate 3.47 % 2.84 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Contingencies and Commitments | |
Summary of aggregate future non-cancelable minimum lease payments | As of December 31, 2017, the aggregate future non‑cancelable minimum lease payments consist of the following: Capital Build-to-Suit Operating Years Ended December 31: Leases Leases Leases (In thousands) 2018 $ 263 $ 3,608 $ 13,258 2019 190 4,798 10,888 2020 123 4,918 5,873 2021 13 5,041 5,806 2022 — 5,167 5,366 Thereafter — 25,208 15,963 $ 589 $ 48,740 $ 57,154 Less: amount representing interest and taxes (45) Lease obligations net of interest and taxes 544 Less: current portion of capital lease obligations (229) Noncurrent portion of capital lease obligations $ 315 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 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 Authorized Outstanding Net Proceeds Price Per Share Preference Price Per Share Convertible Preferred Stock: (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 |
Share_based Compensation (Table
Share‑based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation | |
Schedule of Valuation Assumptions, Options | Year Ended December 31, 2017 2016 2015 Expected term (in years) - - - Risk-free interest rate - % - % - % Expected volatility - % - % - % Dividend rate — — — |
Schedule of Options Activity | Weighted- Aggregate Weighted- Average Intrinsic Number Average Remaining Value of of Exercise Contractual Outstanding Options Price Term Options (Years) (In thousands) Outstanding — December 31, 2016 9,599,015 $ 6.05 8.73 $ 36,156 Granted 2,633,962 9.69 Exercised (1,770,703) 0.57 Forfeited / canceled (2,270,705) 5.59 Outstanding — December 31, 2017 8,191,569 $ 8.53 8.28 $ 5,253 Exercisable — December 31, 2017 3,548,342 $ 6.95 7.81 $ 4,150 Outstanding vested and expected to vest — December 31, 2017 7,504,786 $ 8.66 8.23 $ 5,156 |
Schedule of Restricted Stock Units Activity | Number Weighted-Average of Grant Date Shares Fair Value Unvested — December 31, 2016 — $ — Granted 9,403,241 6.51 Vested (263,265) 5.39 Forfeited / canceled (2,202,767) 7.03 Unvested — December 31, 2017 6,937,209 $ 6.39 Outstanding vested and expected to vest — December 31, 2017 5,172,529 $ 6.39 |
Schedule of Restricted Stock Activity | Number Weighted-Average of Grant Date Shares Fair Value Unvested — December 31, 2016 43,750 $ 3.47 Granted — — Exercised — — Forfeited / canceled — — Vested (15,000) 3.47 Unvested — December 31, 2017 28,750 $ 3.47 Outstanding vested and expected to vest — December 31, 2017 28,750 $ 3.47 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per Share | |
Schedule of earnings per share | Year Ended December 31, 2017 2016 2015 Class A Class B Class C Class B Class B (in thousands, except share and per-share data) Numerator: Net income (loss) $ (25,675) $ (184,452) $ (16) $ (54,886) $ (46,965) Undistributed earnings reallocated to convertible preferred stock — — — — — Net income (loss) attributable to common stockholders $ (25,675) $ (184,452) $ (16) $ (54,886) $ (46,965) Denominator: Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic 15,645,852 112,401,537 9,941 65,425,609 51,137,406 Effect of dilutive securities — — — — — Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted 15,645,852 112,401,537 9,941 65,425,609 51,137,406 Net income (loss) per share attributable to common stockholders—basic (1) $ (1.64) $ (1.64) $ (1.64) $ (0.84) $ (0.92) Net income (loss) per share attributable to common stockholders—diluted (1) $ (1.64) $ (1.64) $ (1.64) $ (0.84) $ (0.92) (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 | Year Ended December 31, 2017 2016 2015 Class A Class B Class C Class B Class B Stock options — 10,162,118 — 7,390,067 4,473,853 Restricted shares — 36,801 — 1,422,319 15,190,800 Restricted stock units 3,235,209 — — — — Convertible preferred stock — — — 85,190,551 85,190,551 Total anti-dilutive securities 3,235,209 10,198,919 — 94,002,937 104,855,204 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Summary of components of the provision for income taxes | Year Ended December 31, 2017 2016 2015 (In thousands) Current provisions for income taxes: Federal $ — $ — $ — State 15 108 61 Total current 15 108 61 Deferred tax benefit: Federal — — — State — — — Total deferred — — — Provision for income taxes $ 15 $ 108 $ 61 |
Summary of reconciliation of the provisions (benefits) for income taxes | Year Ended December 31, 2017 2016 2015 Tax at statutory federal rate % % % State tax — net of federal benefit (0.03) % (0.13) % (0.08) % Change in valuation allowance (9.27) % (37.71) % (36.27) % Effect of U.S. tax law change (21.52) % — % — % Share-based compensation (1.63) % (1.28) % (0.82) % Charitable contributions 0.81 % 3.47 % 2.26 % Convertible note (2.88) % — % — % Other (0.49) % 0.45 % (0.22) % Provision for income taxes (0.01) % (0.20) % (0.13) % |
Summary of tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) | December 31, 2017 2016 (In thousands) Deferred tax assets: Tax attribute carryforwards $ 68,364 $ 47,647 Inventories 4,729 3,811 Accruals, reserves, and other 8,159 4,896 Gross deferred tax assets 81,252 56,354 Valuation allowance (81,252) (56,354) Total deferred tax assets — — Deferred tax liabilities: Property and equipment — — Total deferred tax liabilities — — Net deferred tax assets $ — $ — |
Schedule of activity related to the unrecognized tax benefits | Year Ended December 31, 2017 2016 2015 (In thousands) Gross unrecognized tax benefits—beginning balance $ 855 $ 341 $ 39 Increases related to tax positions taken in prior years 323 — — Decreases related to tax positions taken in prior years (1) (12) (2) Increases related to tax positions taken during current year 377 526 304 Decreases related to tax positions taken during the current year — — — Gross unrecognized tax benefits—ending balance $ 1,554 $ 855 $ 341 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments | |
Schedule of assets and liabilities measured on a recurring basis | December 31, 2017 Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Money market accounts $ 162,963 $ — $ — $ 162,963 Total financial assets $ 162,963 $ — $ — $ 162,963 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 Financial liabilities (in thousands) Balance — December 31, 2016 $ — Issuance of convertible notes derivative 15,429 Change in fair value of derivative (6,020) Settlement of convertible notes (9,409) Balance — December 31, 2017 $ — |
Schedule of assets measured on a non-recurring basis | Carrying value before impairment Fair value Impairment Loss Non-financial assets (in thousands) Long-lived assets $ 51,602 $ 42,146 $ 9,456 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Realignment and Related Implementation Charges | Employee-Related Costs (In thousands) Balance at beginning of period — December 31, 2016 $ — Charges 3,100 Cash payments (2,425) Other — Balance at end of period — December 31, 2017 $ 675 |
Organization and Description 43
Organization and Description of Business (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 05, 2017 | Dec. 31, 2017 | Jun. 30, 2017 | May 31, 2017 | Dec. 31, 2016 |
Subsidiary, Sale of Stock [Line Items] | |||||
Net proceeds | $ 283,500 | ||||
Offering costs | $ 5,490 | ||||
Convertible preferred stock, outstanding (in shares) | 0 | 0 | 14,500,938 | ||
Gross debt related to convertible notes | $ 64,600 | ||||
Convertible notes outstanding | $ 1,100 | $ 63,500 | |||
IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued and sold | 30,000,000 | ||||
Public offering price | $ 10 | ||||
Net proceeds | $ 278,000 | ||||
Underwriting discounts and commissions | 16,500 | ||||
Offering costs | $ 5,500 | ||||
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 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash and Cash Equivalents | ||
Cash | $ 55.1 | $ 13.2 |
Cash equivalents | $ 173.4 | 68.3 |
Amounts due from third-party institutions, settlement period | 3 days | |
Amounts due from third party institutions | $ 10.4 | 9.9 |
Accounts Receivable | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Certain Risks and Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2017customeritem | Dec. 31, 2016customeritem | Dec. 31, 2015customeritem | |
Customer Concentration Risk [Member] | Net Revenue | |||
Certain Risks and Concentrations | |||
Number of customers/suppliers exceeding 10% concentration | customer | 0 | 0 | 0 |
Supplier Concentration | Cost of goods sold. | |||
Certain Risks and Concentrations | |||
Number of customers/suppliers exceeding 10% concentration | 1 | 0 | 0 |
Concentration risk, percentage | 10.20% | ||
Supplier Concentration | Accounts Payable As Risk Concentration Benchmark [Member] | |||
Certain Risks and Concentrations | |||
Number of customers/suppliers exceeding 10% concentration | item | 0 | 0 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Property and Equipment, Net (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer equipment | Maximum | |
Property and equipment | |
Estimated useful life | P3Y |
Computer equipment | Minimum | |
Property and equipment | |
Estimated useful life | P2Y |
Capitalized software | |
Property and equipment | |
Estimated useful life | P2Y |
Fulfillment equipment | Maximum | |
Property and equipment | |
Estimated useful life | P7Y |
Fulfillment equipment | Minimum | |
Property and equipment | |
Estimated useful life | P5Y |
Furniture and fixtures | |
Property and equipment | |
Estimated useful life | P5Y |
Building [Member] | |
Property and equipment | |
Estimated useful life | P30Y |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Capitalized Software Development Costs (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Capitalized software | |
Capitalized Software Development Costs | |
Expected useful lives of capitalized costs | 2 years |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Recoverability of Long Lived Assets, Revenue Recognition, Advertising Costs, Share Based Compensation and Segments (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Recoverability of Long Lived Assets | |||
Impairment of long-lived assets | $ 9.5 | $ 0 | $ 0 |
Revenue Recognition | |||
Credits and refunds of Net revenue (as a percent) | 3.50% | 3.30% | 4.40% |
Advertising Costs | |||
Advertising costs | $ 115.7 | $ 103.4 | $ 31.1 |
Deferred advertising, marketing, and promotional costs | $ 1.6 | $ 3.9 | |
Share Based Compensation | |||
Service period | 4 years | ||
Deferred Income Taxes and Tax Credits [Abstract] | |||
Deferred tax assets, period for evaluating historical results | 3 years | ||
Operating Information by Segment | |||
Number of Operating Segments | segment | 1 | ||
Number of Reportable Segments | segment | 1 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Emerging Growth Company Status (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Policies | |
Threshold revenue for the company to cease to be an emerging growth company | $ 1,070 |
Threshold market value of its stock held by non affiliates for the company to cease to be an emerging growth company | $ 700 |
Threshold period in which the market value of its stock held by non affiliates exceeds $700.0 million will make company to cease to be an emerging growth company | 12 months |
Threshold issuance of non convertible debt securities for the company to cease to be an emerging growth company | $ 1,000 |
Threshold period in which the issuance of non convertible debt securities of $1.0 billion will make company to cease to be an emerging growth company | 3 years |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories, Net | ||
Fulfillment | $ 7,358 | $ 5,758 |
Product | 34,569 | 37,129 |
Inventories, net | $ 41,927 | $ 42,887 |
Prepaid Expenses and Other Cu51
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other Current Assets | ||
Deposits | $ 2,346 | $ 1,122 |
Prepaid marketing | 1,604 | 3,940 |
Prepaid rent | 1,348 | 1,430 |
Other current assets | 2,526 | 1,775 |
Prepaid expenses and other current assets | $ 7,824 | $ 8,267 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2017 | Jul. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment, net | |||||
Computer equipment | $ 10,883 | $ 6,468 | |||
Capitalized software | 10,427 | 5,448 | |||
Fulfillment equipment | 45,581 | 12,525 | |||
Furniture and fixtures | 4,188 | 1,491 | |||
Leasehold improvements | 40,173 | 23,660 | |||
Buildings | 148,507 | ||||
Construction in progress | 4,563 | 93,092 | |||
Property, Plant and Equipment, Gross, Total | 264,322 | 142,684 | |||
Less: accumulated depreciation and amortization | (33,494) | (11,723) | |||
Property and equipment, net | 230,828 | 130,961 | |||
Construction costs incurred | 82,300 | 37,600 | |||
Depreciation and amortization of property and equipment | 26,838 | 8,217 | $ 2,917 | ||
Capitalized interest | 4,200 | 1,900 | |||
Total equipment financed under capital leases | 1,000 | 1,200 | |||
Total equipment financed under capital leases, related accumulated depreciation | 400 | 400 | |||
Depreciation expense related to total property and equipment under capital leases | 200 | 300 | 100 | ||
Share based compensation | 11,300 | ||||
Net book value of capitalized software development costs | 5,300 | 3,300 | |||
Amortization expense for capitalized software development costs | 3,100 | 1,400 | 600 | ||
Impairment of long-lived assets | 9,500 | 0 | 0 | ||
Capitalized software | |||||
Property and equipment, net | |||||
Development costs | 5,800 | 3,200 | 1,600 | ||
Share based compensation | 200 | 100 | $ 0 | ||
Building [Member] | |||||
Property and equipment, net | |||||
Build-to-suit lease arrangements included in Buildings | $ 62,100 | ||||
Construction in process | |||||
Property and equipment, net | |||||
Fair value of buildings under construction | $ 45,000 | ||||
Linden, New Jersey Fulfillment Center [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 | ||||
Fairfield, California Fulfillment Center [Member] | |||||
Property and equipment, net | |||||
Property and equipment, net | $ 37,100 | ||||
Fair value of long-lived assets | 33,900 | ||||
Impairment of long-lived assets | $ 3,200 |
Accrued Expenses and Other Cu53
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other current liabilities | ||
Accrued compensation | $ 13,009 | $ 11,069 |
Accrued credits and refunds reserve | 1,079 | 1,235 |
Accrued marketing expenses | 5,739 | 5,424 |
Accrued product expenses | 10,965 | |
Accrued shipping expenses | 5,319 | 4,930 |
Other current liabilities | 7,469 | 7,288 |
Accrued expenses and other current liabilities | $ 32,615 | $ 40,911 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Revenue | ||
Cash received prior to fulfillment | $ 10,635 | $ 10,107 |
Gift cards, prepaid orders, and other | 17,011 | 14,171 |
Deferred revenue | $ 27,646 | $ 24,278 |
Long-term Debt - Revolving Cred
Long-term Debt - Revolving Credit Facility (Details) - USD ($) $ in Thousands | 24 Months Ended | ||||
Dec. 31, 2017 | Jun. 30, 2017 | May 31, 2017 | Apr. 30, 2017 | Dec. 31, 2016 | |
Revolving credit facility | |||||
Debt instruments | |||||
Maximum borrowing capacity | $ 200,000 | $ 150,000 | |||
Additional borrowing capacity | $ 25,000 | $ 25,000 | |||
Amount outstanding | 125,000 | $ 45,000 | |||
Remaining amount available to borrow | 73,600 | 104,700 | |||
Incurred and capitalized deferred financing costs | 500 | ||||
Unamortized deferred financing costs | 300 | 500 | |||
Letter of credit | |||||
Debt instruments | |||||
Amount outstanding | $ 1,400 | $ 300 |
Long-term Debt - Summary table
Long-term Debt - Summary table (Details) - Revolving credit facility - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt instruments | ||
Amount outstanding | $ 125,000 | $ 45,000 |
Weighted average interest rate | 3.47% | 2.84% |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) - USD ($) $ in Thousands | Jul. 05, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2017 |
Debt instruments | |||||
Leverage ratio period | 1 year | ||||
Unused commitment fee on undrawn amounts (as a percent) | 0.15% | ||||
Unused commitment fee incurred | $ 100 | $ 100 | |||
Convertible notes | |||||
Convertible Debt | $ 1,100 | $ 63,500 | |||
Debt issuance costs | 200 | ||||
Net proceeds | $ 64,400 | 64,600 | |||
Interest rate (as a percent) | 3.50% | ||||
Beneficial conversion feature | $ 19,600 | 19,567 | |||
Derivative liability related to convertible notes | $ 0 | $ 15,400 | |||
Amortization related to convertible notes | 2,300 | ||||
Gain (loss) from convertible notes | (14,984) | ||||
Facility Financing Obligation | |||||
Facility financing obligation | $ 70,347 | 49,809 | |||
Class B | |||||
Convertible notes | |||||
Conversion of convertible notes into common stock | 7,023,201 | ||||
Federal funds rate | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 0.50% | ||||
LIBOR | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 1.00% | ||||
Proceeds from Lines of Credit | $ 120,000 | 40,000 | |||
LIBOR | Minimum | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 1.50% | ||||
LIBOR | Maximum | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 2.00% | ||||
Base rate | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 1.00% | ||||
Base rate | Minimum | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 0.50% | ||||
Adjusted LIBOR | |||||
Debt instruments | |||||
Proceeds from Lines of Credit | $ 5,000 | $ 5,000 |
Commitments and Contingencies58
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies | ||
Deferred rent | $ 7,600 | $ 2,400 |
Total non-cancelable minimum lease payments | 57,154 | |
Fairfield, California Fulfillment Center [Member] | ||
Commitments and Contingencies | ||
Total non-cancelable minimum lease payments | 38,700 | |
Linden, New Jersey Fulfillment Center [Member] | ||
Commitments and Contingencies | ||
Future minimum sublease receipts | 5,700 | |
Total non-cancelable minimum lease payments | $ 5,200 |
Commitments and Contingencies -
Commitments and Contingencies - Non Cancelable Minimum Lease Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capital leases, aggregate future non cancelable minimum lease payments | |||
2,018 | $ 263 | ||
2,019 | 190 | ||
2,020 | 123 | ||
2,021 | 13 | ||
Total capital leases | 589 | ||
Less: amount representing interest and taxes | (45) | ||
Lease obligations net of interest and taxes | 544 | ||
Less: current portion of capital lease obligations | (229) | ||
Noncurrent portion of capital lease obligations | 315 | ||
2,018 | 3,608 | ||
2,019 | 4,798 | ||
2,020 | 4,918 | ||
2,021 | 5,041 | ||
2,022 | 5,167 | ||
Thereafter | 25,208 | ||
Total Build-to-Suit Leases | 48,740 | ||
Operating Leases, aggregate future non cancelable minimum lease payments | |||
2,018 | 13,258 | ||
2,019 | 10,888 | ||
2,020 | 5,873 | ||
2,021 | 5,806 | ||
2,022 | 5,366 | ||
Thereafter | 15,963 | ||
Total operating Leases | 57,154 | ||
Rent expense | 14,000 | $ 10,000 | $ 3,800 |
Minimum purchase obligation | 36,700 | ||
Letters of credit issued | 4,100 | 4,400 | |
Restricted Cash, Current | 0 | 100 | |
Restricted Cash, Noncurrent | $ 2,371 | $ 3,966 |
Common Stock (Details)
Common Stock (Details) | 12 Months Ended | |
Dec. 31, 2016itemVote | Dec. 31, 2017Vote | |
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 | |
Class A | ||
Class of Stock [Line Items] | ||
Number of vote per share for outstanding shares of common stock | Vote | 1 | |
Number of shares of Class A common stock will be automatically converted by each outstanding share of Class B common stock | 1 | |
Class B | ||
Class of Stock [Line Items] | ||
Votes per share of outstanding shares of common stock before reclassification | 1 | |
Number of vote per share for outstanding shares of common stock | Vote | 10 | 10 |
Common Stock - Acquisition and
Common Stock - Acquisition and IPO (Details) - shares | Jul. 05, 2017 | May 31, 2017 |
IPO | ||
Class of Stock [Line Items] | ||
Issuance of stock (in shares) | 30,000,000 | |
Class A | 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) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($)directorVote$ / sharesshares | Jul. 05, 2017shares | Dec. 31, 2016USD ($)Vote$ / sharesshares | Dec. 31, 2015shares | Dec. 31, 2014shares | |
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 | 4,199,077 | |
Convertible preferred stock, outstanding (in shares) | 0 | 0 | 14,500,938 | ||
Convertible preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||
Convertible preferred stock, liquidation value | $ | $ 0 | $ 195,317 | |||
Conversion Rights | |||||
Gross proceeds triggering automatic conversion | $ | $ 50,000 | ||||
Voting Rights | |||||
Number of directors, board of director has right to elect | director | 1 | ||||
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) | $ / shares | $ 4.0751 | ||||
Convertible preferred stock, liquidation value | $ | $ 3,025 | ||||
Conversion Price (in dollars per share) | $ / shares | $ 0.0815 | ||||
Conversion Rights | |||||
Common stock shares issued on conversion, per share of converted preferred stock | 0.02 | ||||
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) | $ / shares | $ 10.9837 | ||||
Convertible preferred stock, liquidation value | $ | $ 5,000 | ||||
Conversion Price (in dollars per share) | $ / shares | $ 0.2197 | ||||
Conversion Rights | |||||
Common stock shares issued on conversion, per share of converted preferred stock | 0.02 | ||||
Voting Rights | |||||
Number of directors a holder of preferred stock has right to elect | director | 1 | ||||
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) | $ / shares | $ 16.6586 | ||||
Convertible preferred stock, liquidation value | $ | $ 50,000 | ||||
Conversion Price (in dollars per share) | $ / shares | $ 3.3317 | ||||
Conversion Rights | |||||
Common stock shares issued on conversion, per share of converted preferred stock | 0.2 | ||||
Voting Rights | |||||
Number of directors a holder of preferred stock has right to elect | director | 1 | ||||
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) | $ / shares | $ 13.3269 | ||||
Convertible preferred stock, liquidation value | $ | $ 137,292 | ||||
Conversion Price (in dollars per share) | $ / shares | $ 13.3269 | ||||
Conversion Rights | |||||
Common stock shares issued on conversion, per share of converted preferred stock | 1 | ||||
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 | ||||
Voting Rights | |||||
Number of votes per share | Vote | 10 | ||||
Class B | |||||
Voting Rights | |||||
Number of vote per share for outstanding shares of common stock | Vote | 10 | 10 | |||
Number of directors a holder of preferred stock has right to elect | director | 4 |
Convertible Preferred Stock - D
Convertible Preferred Stock - Dividend Rights (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Dividend Rights | |
Dividends, Common Stock, Cash | $ | $ 0 |
Dividends, Preferred Stock, Cash | $ | $ 0 |
Series A convertible preferred stock | |
Dividend Rights | |
Annual dividend amount | $ 0.326 |
Series B convertible preferred stock | |
Dividend Rights | |
Annual dividend amount | 0.879 |
Series C convertible preferred stock | |
Dividend Rights | |
Annual dividend amount | 1.333 |
Series D convertible preferred stock | |
Dividend Rights | |
Annual dividend amount | $ 1.06615 |
Share_based Compensation (Detai
Share‑based Compensation (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2016shares | Feb. 29, 2016USD ($)item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation recognized | $ | $ 11.3 | ||||
Assumptions: | |||||
Granted (in shares) | 2,633,962 | ||||
Exercise price (in dollars per share) | $ / shares | $ 9.69 | ||||
Vested, Total grant date fair value | $ | $ 11.2 | $ 3.2 | $ 1 | ||
Service period | 4 years | ||||
Product, technology, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation recognized | $ | $ 10.6 | $ 3 | $ 1.1 | ||
Cost of goods sold | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation recognized | $ | $ 0.7 | ||||
2012 Equity Incentive Plan | |||||
Assumptions: | |||||
Risk-free interest rate, minimum | 1.79% | 1.28% | 1.63% | ||
Risk-free interest rate, maximum | 2.27% | 2.19% | 1.82% | ||
Expected volatility, minimum | 46.35% | 49.83% | 58.95% | ||
Expected volatility, maximum | 60.15% | 60.37% | 61.51% | ||
Exercise period | 10 years | ||||
Vesting period | 4 years | ||||
2012 Equity Incentive Plan | Maximum | |||||
Assumptions: | |||||
Expected term (in years) | 6 years 1 month 13 days | 6 years 11 months 5 days | 6 years 22 days | ||
2012 Equity Incentive Plan | Minimum | |||||
Assumptions: | |||||
Expected term (in years) | 3 years 5 months 27 days | 5 years 10 months 6 days | 5 years 10 months 10 days | ||
Percentage of fair market value at date of grant | 100.00% | ||||
2012 Equity Incentive Plan | Ten Percent Stockholder [Member] | |||||
Assumptions: | |||||
Percentage of total combined voting power of common stock | 10.00% | ||||
Exercise period | 5 years | ||||
2012 Equity Incentive Plan | Ten Percent Stockholder [Member] | Minimum | |||||
Assumptions: | |||||
Percentage of fair market value at date of grant | 110.00% | ||||
2012 Equity Incentive Plan | Class B | |||||
Assumptions: | |||||
Shares available for issuance | 2,689,682 | ||||
Increase in shares | 4,200,000 | ||||
Market Grant | |||||
Assumptions: | |||||
Granted (in shares) | 481,123 | ||||
Exercise price (in dollars per share) | $ / shares | $ 62.35 | ||||
Number of executive officers | item | 1 | ||||
Vested, Total grant date fair value | $ | $ 0.5 | ||||
Service period | 5 years 8 months 12 days | ||||
2017 Equity Incentive Plan | |||||
Assumptions: | |||||
Exercise period | 10 years | ||||
Vesting period | 4 years | ||||
Shares available for issuance | 20,612,395 | ||||
2017 Equity Incentive Plan | Minimum | |||||
Assumptions: | |||||
Percentage of fair market value at date of grant | 100.00% | ||||
2017 Equity Incentive Plan | Ten Percent Stockholder [Member] | |||||
Assumptions: | |||||
Percentage of total combined voting power of common stock | 10.00% | ||||
Exercise period | 5 years | ||||
2017 Equity Incentive Plan | Ten Percent Stockholder [Member] | Minimum | |||||
Assumptions: | |||||
Percentage of fair market value at date of grant | 110.00% | ||||
2017 Equity Incentive Plan | Class B | |||||
Assumptions: | |||||
Shares reserved | 47,656,712 |
Share-based Compensation - Opti
Share-based Compensation - Option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | |||
Outstanding at the beginning of year (in shares) | 9,599,015 | ||
Granted (in shares) | 2,633,962 | ||
Exercised (in shares) | (1,770,703) | ||
Forfeited / canceled | (2,270,705) | ||
Outstanding at the end of year (in shares) | 8,191,569 | 9,599,015 | |
Excercisable (in shares) | 3,548,342 | ||
Outstanding vested and expected to vest (in shares) | 7,504,786 | ||
Options, Weighted-Average Exercise Price | |||
Outstanding at the beginning of year (in dollars per share) | $ 6.05 | ||
Granted (in dollars per share) | 9.69 | ||
Exercised (in dollars per share) | 0.57 | ||
Forfeited / canceled (in dollars per share) | 5.59 | ||
Outstanding at the end of year (in dollars per share) | 8.53 | $ 6.05 | |
Exercisable (in dollars per share) | 6.95 | ||
Outstanding vested and expected to vest (in dollars per share) | $ 8.66 | ||
Options, Additional Disclosures | |||
Contractual term, Outstanding (in years) | 8 years 3 months 11 days | 8 years 8 months 23 days | |
Contractual term, Exercisable (in years) | 7 years 9 months 22 days | ||
Contractual term, Outstanding vested and expected to vest (in years) | 8 years 2 months 23 days | ||
Options, Aggregate Intrinsic Value | |||
Intrinsic value, Outstanding | $ 5,253 | $ 36,156 | |
Intrinsic value, Exercisable | 4,150 | ||
Intrinsic value, Outstanding vested and expected to vest | $ 5,156 | ||
Options, Weighted-Average Grant Date Fair Value | |||
Granted, Weighted-average grant date fair value | $ 4.84 | $ 2.29 | $ 1.81 |
Intrinsic value, Exercised | $ 14,400 | $ 2,000 | $ 900 |
Vested, Total grant date fair value | 11,200 | 3,200 | 1,000 |
Proceeds from the exercise of stock options | 1,010 | 402 | 54 |
Tax benefit realized from stock options exercised during the period | 0 | 0 | 0 |
Unrecognized share-based compensation related to unvested options | $ 11,100 | $ 10,500 | $ 4,300 |
Stock Options | |||
Options, Weighted-Average Grant Date Fair Value | |||
Period of recognition of costs | 2 years 9 months | 3 years 2 months 1 day | 3 years 1 month 6 days |
Share_based Compensation - Rest
Share‑based Compensation - Restricted Units and Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted stock units | ||
Nonvested instruments | ||
Unvested at the beginning of year (in shares) | 0 | 0 |
Granted (in shares) | 9,403,241 | |
Vested (in shares) | (263,265) | |
Forfeited/canceled (in shares) | (2,202,767) | |
Unvested at the end of year (in shares) | 6,937,209 | 0 |
Nonvested Instruments, Weighted-Average Grant Date Fair Value | ||
Granted (in dollars per share) | $ 6.51 | |
Vested (in dollars per share) | 5.39 | |
Forfeited/canceled (in dollars per share) | 7.03 | |
Unvested at the end of year (in dollars per share) | $ 6.39 | |
Outstanding vested and expected to vest (in shares) | 5,172,529 | |
Outstanding vested and expected to vest (in dollars per share) | $ 6.39 | |
Vesting period | 4 years | |
Unrecognized share-based compensation, other than options | $ 34.3 | |
Period of recognition of costs | 3 years 4 months 2 days | |
Restricted stock | ||
Nonvested instruments | ||
Unvested at the beginning of year (in shares) | 43,750 | |
Vested (in shares) | (15,000) | |
Unvested at the end of year (in shares) | 28,750 | 43,750 |
Nonvested Instruments, Weighted-Average Grant Date Fair Value | ||
Unvested at the beginning of year (in dollars per share) | $ 3.47 | |
Vested (in dollars per share) | 3.47 | |
Unvested at the end of year (in dollars per share) | $ 3.47 | $ 3.47 |
Outstanding vested and expected to vest (in shares) | 28,750 | |
Outstanding vested and expected to vest (in dollars per share) | $ 3.47 |
Share-based Compensaton - text
Share-based Compensaton - text after last table (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2015shares | Aug. 31, 2012item$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation | $ 11.3 | |||
Founder [Member] | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of founders | item | 1 | |||
Shares issued and sold | shares | 4,731,300 | |||
Repurchase price (in dollars per share) | $ / shares | $ 0.0282 | |||
Vesting period | 4 years | |||
Share based compensation | 0 | |||
Nonemployee director | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued and sold | shares | 60,000 | |||
Vesting period | 4 years | |||
Unrecognized share-based compensation, other than options | $ 0.1 | $ 0.2 | ||
Employees Terminated In Realignment [Member] | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise period | 12 days | 90 days |
Earnings per Share - Dilutive C
Earnings per Share - Dilutive Common Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 05, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
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) | $ (210,143) | $ (54,886) | $ (46,965) | |
Denominator: | ||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 128,057,330 | 65,425,609 | 51,137,406 | |
Weighted average diluted shares outstanding (in shares) | 128,057,330 | 65,425,609 | 51,137,406 | |
Net income (loss) per share attributable to common stockholders—basic | $ (1.64) | $ (0.84) | $ (0.92) | |
Net income (loss) per share attributable to common stockholders—diluted | $ (1.64) | $ (0.84) | $ (0.92) | |
Class A | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Common stock, outstanding (in shares) | 37,657,649 | 0 | ||
Numerator: | ||||
Net income (loss) | $ (25,675) | |||
Net income (loss) attributable to common stockholders | $ (25,675) | |||
Denominator: | ||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 15,645,852 | 0 | 0 | |
Weighted average diluted shares outstanding (in shares) | 15,645,852 | |||
Net income (loss) per share attributable to common stockholders—basic | $ (1.64) | |||
Net income (loss) per share attributable to common stockholders—diluted | $ (1.64) | |||
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) | 153,727,228 | 67,095,128 | ||
Numerator: | ||||
Net income (loss) | $ (184,452) | $ (54,886) | $ (46,965) | |
Net income (loss) attributable to common stockholders | $ (184,452) | $ (54,886) | $ (46,965) | |
Denominator: | ||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 112,401,537 | 65,425,609 | 51,137,406 | |
Weighted average diluted shares outstanding (in shares) | 112,401,537 | 65,425,609 | 51,137,406 | |
Net income (loss) per share attributable to common stockholders—basic | $ (1.64) | $ (0.84) | $ (0.92) | |
Net income (loss) per share attributable to common stockholders—diluted | $ (1.64) | $ (0.84) | $ (0.92) | |
Class C | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Common stock, outstanding (in shares) | 0 | 0 | ||
Numerator: | ||||
Net income (loss) | $ (16) | |||
Net income (loss) attributable to common stockholders | $ (16) | |||
Denominator: | ||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic | 9,941 | 0 | 0 | |
Weighted average diluted shares outstanding (in shares) | 9,941 | |||
Net income (loss) per share attributable to common stockholders—basic | $ (1.64) | |||
Net income (loss) per share attributable to common stockholders—diluted | $ (1.64) |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Common Shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | 3,235,209 | ||
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 | 3,235,209 | ||
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 | 10,198,919 | 94,002,937 | 104,855,204 |
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 | 10,162,118 | 7,390,067 | 4,473,853 |
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 | 36,801 | 1,422,319 | 15,190,800 |
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 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current provisions for income taxes: | |||
State | $ 15 | $ 108 | $ 61 |
Total current | 15 | 108 | 61 |
Provision for income taxes | $ 15 | $ 108 | $ 61 |
Income Taxes - U.S. Federal Inc
Income Taxes - U.S. Federal Income Tax Rate, Percentage (Details) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
The reconciliation of provisions (benefits) for income taxes | ||||
Tax at statutory federal rate | 35.00% | 35.00% | 35.00% | |
State tax - net of federal benefit | (0.03%) | (0.13%) | (0.08%) | |
Change in valuation allowance | (9.27%) | (37.71%) | (36.27%) | |
Effect of U.S. tax law change | (21.52%) | |||
Share-based compensation | (1.63%) | (1.28%) | (0.82%) | |
Charitable contributions | 0.81% | 3.47% | 2.26% | |
Convertible note | (2.88%) | |||
Other | (0.49%) | 0.45% | (0.22%) | |
Provision for income taxes | (0.01%) | (0.20%) | (0.13%) | |
Forecast | ||||
The reconciliation of provisions (benefits) for income taxes | ||||
Tax at statutory federal rate | 21.00% |
Income Taxes - Temporary Differ
Income Taxes - Temporary Differences of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | ||
Tax attribute carryforwards | $ 68,364 | $ 47,647 |
Inventories | 4,729 | 3,811 |
Accruals, reserves, and other | 8,159 | 4,896 |
Gross deferred tax assets | 81,252 | 56,354 |
Valuation allowance | (81,252) | (56,354) |
Deferred tax liabilities: | ||
Valuation allowance | 81,252 | 56,354 |
Increase in valuation allowance | 24,900 | 22,900 |
U.S. federal net operating loss carryforwards | 195,200 | 62,900 |
State net operating loss carryforwards | $ 96,400 | $ 42,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Uncertainties [Abstract] | |||
Unrecognized tax benefits that would materially impact the effective tax rate | $ 0 | $ 0 | |
Reasonably possible decrease in unrecognized tax benefits | 1,200 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits -beginning balance | 855 | 341 | $ 39 |
Increases related to tax positions taken in prior years | 323 | ||
Decreases related to tax positions taken in prior years | (1) | (12) | (2) |
Increases related to tax positions taken during current year | 377 | 526 | 304 |
Gross unrecognized tax benefits-ending balance | $ 1,554 | $ 855 | $ 341 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jul. 05, 2017 | Jun. 30, 2017 | Dec. 31, 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 | $ 64,400 | 64,600 | ||
Derivative liability related to convertible notes | $ 0 | $ 15,400 | ||
Loss on conversion | $ 21,000 | |||
Loss from convertible notes | 14,984 | |||
Level 2 | ||||
Convertible notes | ||||
Financial Liabilities, Fair Value Disclosure, Total | 0 | $ 0 | ||
Level 3 | ||||
Convertible notes | ||||
Financial Liabilities, Fair Value Disclosure, Total | 0 | 0 | ||
Rollforward of the fair value of Level 3 instruments | ||||
Issuance of convertible notes derivative | 15,429 | |||
Change in fair value of derivative at settlement | (6,020) | |||
Settlement of convertible notes | (9,409) | |||
Fair Value, Measurements, Recurring | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Assets, Fair Value Disclosure, Total | 162,963 | 58,320 | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Assets, Fair Value Disclosure, Total | 162,963 | 58,320 | ||
Fair Value, Measurements, Recurring | Money market accounts | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market accounts | 162,963 | 58,320 | ||
Fair Value, Measurements, Recurring | Money market accounts | Level 1 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market accounts | $ 162,963 | $ 58,320 | ||
Class B | ||||
Convertible notes | ||||
Conversion of convertible notes into common stock | 7,023,201 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Impairment of Long-Lived Assets Held-for-use | $ 0 | $ 0 | |
Fair value, measurements, nonrecurring | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Impairment of Long-Lived Assets Held-for-use | $ 9,456 | ||
Fair value, measurements, nonrecurring | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-lived assets | 51,602 | ||
Fair value, measurements, nonrecurring | Level 3 | Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-lived assets | $ 42,146 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Thousands | Oct. 18, 2017 | Dec. 31, 2017USD ($) |
Restructuring and Related Activities [Abstract] | ||
Workforce reduction, as a percent of total workforce | 6 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Charges | $ 3,100 | |
Cash payments | (2,425) | |
Restructuring Reserve, Ending Balance | $ 675 |
Schedule II - Valuation and Q77
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Tax at statutory federal rate | 35.00% | 35.00% | 35.00% | |
Forecast | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Tax at statutory federal rate | 21.00% | |||
Valuation Allowance of Deferred Tax Assets [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 81,252 | $ 56,354 | $ 33,474 | $ 14,582 |
Other | 70,109 | 22,880 | 18,891 | |
Reductions | (45,211) | |||
Balance at end of period | 81,252 | 56,354 | 33,474 | |
Inventory Valuation Reserve [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 3,057 | 1,033 | 758 | |
Charges to costs and expenses | 3,390 | 1,422 | 758 | |
Reductions | (1,366) | (1,147) | ||
Balance at end of period | 3,057 | 1,033 | 758 | |
Credits and Refund Reserve | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 1,003 | 1,235 | 1,359 | 467 |
Charges to costs and expenses | 32,072 | 28,270 | 14,873 | |
Reductions | (32,304) | (28,394) | (13,981) | |
Balance at end of period | $ 1,003 | $ 1,235 | $ 1,359 |