Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 12, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Entity Registrant Name | Switch, Inc. | ||
Entity Central Index Key | 1,710,583 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 0 | ||
Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 36,066,544 | ||
Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 173,624,316 | ||
Class C | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 42,944,647 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash | $ 264,666 | $ 22,713 |
Accounts receivable, net of allowance of $472 and $340, respectively | 16,386 | 9,131 |
Prepaid expenses | 5,037 | 3,921 |
Other current assets | 2,101 | 2,052 |
Total current assets | 288,190 | 37,817 |
Property and equipment, net | 1,133,572 | 874,259 |
Long-term deposit | 3,842 | 4,440 |
Investments | 0 | 169 |
Other assets | 9,155 | 4,330 |
TOTAL ASSETS | 1,434,759 | 921,015 |
CURRENT LIABILITIES: | ||
Long-term debt, current portion | 5,194 | 14,330 |
Accounts payable | 18,934 | 1,663 |
Accrued salaries and benefits | 5,211 | 4,221 |
Accrued expenses | 6,469 | 8,906 |
Accrued construction payables | 7,052 | 47,528 |
Accrued Michigan building and land purchase | 0 | 23,916 |
Accrued impact fee expense | 0 | 27,018 |
Deferred revenue, current portion | 11,482 | 7,157 |
Customer deposits | 8,634 | 6,939 |
Capital lease obligations, current portion | 2,309 | 4,000 |
Total current liabilities | 65,285 | 145,678 |
Long-term debt, net | 586,566 | 457,737 |
Capital lease obligations | 19,466 | 19,466 |
Accrued interest, capital lease obligations | 1,927 | 2,070 |
Deferred revenue | 19,382 | 17,701 |
TOTAL LIABILITIES | 692,626 | 642,652 |
Commitments and contingencies (Note 7 and Note 9) | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Members' equity | 279,056 | |
Preferred stock, $0.001 par value per share, 10,000,000 shares authorized, none issued and outstanding as of December 31, 2017 | 0 | |
Additional paid in capital | 107,008 | |
Retained earnings | 1,602 | 0 |
Accumulated other comprehensive gain (loss) | 31 | (693) |
Total Switch, Inc. stockholders'/Switch, Ltd. members' equity | 108,894 | |
Total Switch, Inc. stockholders'/Switch, Ltd. members' equity | 278,363 | |
Non-controlling interest | 633,239 | |
Non-controlling interest | 0 | |
TOTAL STOCKHOLDERS'/MEMBERS' EQUITY | 742,133 | |
TOTAL STOCKHOLDERS'/MEMBERS' EQUITY | 278,363 | |
TOTAL LIABILITIES AND STOCKHOLDERS'/MEMBERS' EQUITY | 1,434,759 | $ 921,015 |
Class A | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Common stock | 36 | |
Class B | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Common stock | 174 | |
Class C | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Common stock | $ 43 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Allowance for accounts receivable | $ 472 | $ 340 |
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Class A | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized | 750,000,000 | |
Common stock, shares issued | 35,937,500 | |
Common stock, shares outstanding | 35,937,500 | |
Class B | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized | 300,000,000 | |
Common stock, shares issued | 173,624,316 | |
Common stock, shares outstanding | 173,624,316 | |
Class C | ||
STOCKHOLDERS'/MEMBERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized | 75,000,000 | |
Common stock, shares issued | 42,944,647 | |
Common stock, shares outstanding | 42,944,647 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 378,275,000 | $ 318,352,000 | $ 265,870,000 |
Cost of revenue | 198,230,000 | 168,844,000 | 141,060,000 |
Gross profit | 180,045,000 | 149,508,000 | 124,810,000 |
Selling, general and administrative expense | 160,569,000 | 71,420,000 | 45,251,000 |
Impact fee expense | 649,000 | 27,018,000 | 0 |
Income from operations | 18,827,000 | 51,070,000 | 79,559,000 |
Other income (expense): | |||
Interest expense, including $1,303, $922, and $625, respectively, in amortization of debt issuance costs | (25,079,000) | (10,836,000) | (7,682,000) |
Equity in net (losses) earnings of investments | (1,077,000) | (10,138,000) | 821,000 |
Loss on extinguishment of debt | (3,565,000) | 0 | (212,000) |
Gain on sale of asset | 0 | 0 | 248,000 |
Impairment of notes receivable | 0 | (2,371,000) | 0 |
Gain on lease termination | 0 | 2,801,000 | 0 |
Other | 1,333,000 | 842,000 | 738,000 |
Total other expense | (28,388,000) | (19,702,000) | (6,087,000) |
(Loss) income before income taxes | (9,561,000) | 31,368,000 | 73,472,000 |
Income tax benefit | 981,000 | 0 | 0 |
Net (loss) income | (8,580,000) | 31,368,000 | 73,472,000 |
Less: net income attributable to non-controlling interest | 6,628,000 | 0 | 0 |
Net (loss) income attributable to Switch, Inc. | $ (15,208,000) | $ 31,368,000 | $ 73,472,000 |
Net (loss) income per share/unit (Note 15): | |||
Basic (in dollars per share) | $ (1.88) | $ 0.16 | $ 0.37 |
Diluted (in dollars per share) | $ (1.88) | $ 0.15 | $ 0.37 |
Weighted average shares/units used in computing net (loss) income per share/unit: | |||
Basic (in shares) | 8,073,908 | 199,047,070 | 196,773,458 |
Diluted (in shares) | 8,073,908 | 203,461,420 | 199,272,269 |
Other comprehensive income: | |||
Foreign currency translation adjustments | $ 908,000 | $ (86,000) | $ (607,000) |
Comprehensive (loss) income | (7,672,000) | 31,282,000 | 72,865,000 |
Less: comprehensive income attributable to non-controlling interest | 6,732,000 | 0 | 0 |
Comprehensive (loss) income attributable to Switch, Inc. | $ (14,404,000) | $ 31,282,000 | $ 72,865,000 |
Consolidated Statements of Ope5
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other income (expense): | |||
Amortization of debt issuance costs | $ 1,303 | $ 922 | $ 625 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders'/Members' Equity - USD ($) $ in Thousands | Total | Members' Equity | Notes Receivable Issued to Members | Common StockClass A | Common StockClass B | Common StockClass C | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Gain (Loss) | Non-controlling Interest |
Balance at Dec. 31, 2014 | $ 227,815 | $ 245,981 | $ (18,166) | $ 0 | $ 0 | |||||
Increase (Decrease) in Members' Equity | ||||||||||
Net (loss) income | 73,472 | 73,472 | ||||||||
Distributions | (18,210) | (18,212) | 2 | |||||||
Net settlement of recourse notes issued to Members | 18,164 | 18,164 | ||||||||
Taxes paid on behalf of employees for option exercises | (1,558) | (1,558) | ||||||||
Net settlement of outstanding vested options | (3,878) | (3,878) | ||||||||
Issuance of membership units for net settlement | 3,878 | 3,878 | ||||||||
Repurchase of Member options | (18,301) | (18,301) | ||||||||
Repurchase of units | (1,393) | (1,393) | ||||||||
Equity-based compensation expense | 5,237 | 5,237 | ||||||||
Issuance of membership units upon exercise of unit options | 75 | 75 | ||||||||
Foreign currency translation adjustments | (607) | (607) | ||||||||
Balance at Dec. 31, 2015 | 284,694 | 285,301 | 0 | (607) | 0 | |||||
Increase (Decrease) in Members' Equity | ||||||||||
Net (loss) income | 31,368 | 31,368 | ||||||||
Distributions | (28,110) | (28,110) | ||||||||
Taxes paid on behalf of employees for option exercises | (290) | (290) | ||||||||
Net settlement of outstanding vested options | (744) | (744) | ||||||||
Issuance of membership units for net settlement | 744 | 744 | ||||||||
Repurchase of member options and units | (15,148) | (15,148) | ||||||||
Equity-based compensation expense | 4,969 | 4,969 | ||||||||
Common units awarded | 966 | 966 | ||||||||
Foreign currency translation adjustments | (86) | (86) | ||||||||
Balance at Dec. 31, 2016 | 278,363 | $ 279,056 | $ 0 | (693) | 0 | |||||
Increase (Decrease) in Members' Equity | ||||||||||
Net (loss) income | (8,580) | |||||||||
Foreign currency translation adjustments | 908 | |||||||||
Balance (in shares) at Dec. 31, 2017 | 35,937,500 | 173,624,316 | 42,944,647 | |||||||
Balance at Dec. 31, 2017 | $ 742,133 | $ 36 | $ 174 | $ 43 | $ 107,008 | $ 1,602 | $ 31 | $ 633,239 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | $ (8,580,000) | $ 31,368,000 | $ 73,472,000 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 89,124,000 | 66,591,000 | 55,355,000 |
Loss on disposal of property and equipment | 569,000 | 1,994,000 | 1,307,000 |
Income tax benefit | (981,000) | 0 | 0 |
Amortization of debt issuance costs | 1,303,000 | 922,000 | 625,000 |
Bad debts | 423,000 | 383,000 | 242,000 |
Loss on extinguishment of debt | 2,065,000 | 0 | 212,000 |
Equity in net losses (earnings) on investments | 1,077,000 | 5,764,000 | (821,000) |
Gain on sale of asset | 0 | 0 | (248,000) |
Planet3 impairment | 0 | 7,696,000 | 0 |
Amortization of notes receivable discount | 0 | (267,000) | 0 |
Other income | 0 | 0 | (147,000) |
Equity-based compensation | 84,790,000 | 5,935,000 | 5,237,000 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,435,000) | (1,101,000) | (3,566,000) |
Prepaid expenses | (1,116,000) | 187,000 | (487,000) |
Other current assets | (261,000) | (122,000) | (781,000) |
Other assets | (1,221,000) | (463,000) | (3,229,000) |
Accounts payable | 5,248,000 | 634,000 | (1,155,000) |
Accrued interest, capital lease obligations | (143,000) | 64,000 | 108,000 |
Accrued salaries and benefits | 991,000 | 3,144,000 | 412,000 |
Accrued expenses | (2,435,000) | 4,353,000 | (153,000) |
Accrued impact fee expense | (27,018,000) | 27,018,000 | 0 |
Deferred revenue | 6,006,000 | 10,605,000 | 1,797,000 |
Customer deposits | 1,695,000 | 1,360,000 | 1,101,000 |
Net cash provided by operating activities | 145,101,000 | 166,065,000 | 129,281,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of property and equipment | (402,561,000) | (287,097,000) | (190,113,000) |
Acquisition of intangible asset | (32,000) | 0 | (449,000) |
Proceeds from sale of property and equipment | 100,000 | 0 | 1,243,000 |
Proceeds from notes receivable | 211,000 | 468,000 | 0 |
Purchase of notes receivable | 0 | (3,000,000) | (485,000) |
Purchase of investments | 0 | (1,500,000) | (6,540,000) |
Purchase of portfolio energy credits | (169,000) | (872,000) | 0 |
Net cash used in investing activities | (402,451,000) | (292,001,000) | (196,344,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock sold in initial public offering, net of offering costs | 572,432,000 | 0 | 0 |
Proceeds from borrowings | 976,000,000 | 189,000,000 | 321,883,000 |
Long-term deposit | 598,000 | 0 | (4,440,000) |
Repayment of borrowings, including capital lease obligations | (854,991,000) | (10,000,000) | (223,600,000) |
Debt issuance costs on new loan | (8,968,000) | (1,005,000) | (2,756,000) |
Issuance of membership units upon exercise of unit options | 0 | 0 | 75,000 |
Taxes paid for net settlement of exercised options | 0 | (290,000) | (1,558,000) |
Distributions paid to members and non-controlling interests | (185,265,000) | (28,100,000) | (20,519,000) |
Dividends paid to Class A common stockholders | (503,000) | 0 | 0 |
Repurchase of member options | 0 | (15,148,000) | (1,392,000) |
Net cash provided by financing activities | 499,303,000 | 134,457,000 | 67,693,000 |
NET INCREASE IN CASH | 241,953,000 | 8,521,000 | 630,000 |
CASH — Beginning of year | 22,713,000 | 14,192,000 | 13,562,000 |
CASH — End of year | 264,666,000 | 22,713,000 | 14,192,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for interest, net of amounts capitalized | 23,494,000 | 8,415,000 | 7,123,000 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||
(Decrease) increase in liabilities incurred to acquire property and equipment | (53,455,000) | 51,413,000 | (3,125,000) |
Liability incurred upon acquisition of capital lease asset | 0 | 4,000,000 | 0 |
Forgiveness of note receivable in exchange for capital lease asset | 0 | 2,100,000 | 0 |
Liability incurred related to investment in Planet3 | 0 | 0 | 1,500,000 |
Distributions declared but not paid | 152,000 | 757,000 | 623,000 |
Net settlement of recourse notes including interest issued to members | 0 | 0 | 18,256,000 |
Net settlement of outstanding vested options | 0 | 744,000 | 3,878,000 |
Distributions used for payment of option loans and related interest | $ 173,000 | $ 10,000 | $ 9,000 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Switch, Inc. was formed as a Nevada corporation in June 2017 for the purpose of completing an initial public offering ("IPO") and related organizational transactions in order to carry on the business of Switch, Ltd. and its subsidiaries (collectively, "Switch," and together with Switch, Inc., the "Company"). Switch is comprised of limited liability companies that provide colocation space and related services to global enterprises, financial companies, government agencies, and others that conduct critical business on the internet. Switch develops and operates data centers in Nevada, which are Tier IV Gold certified, and Michigan, and is developing data centers in Georgia, delivering redundant services with low latency and super capacity transport environments. As the manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch. On October 11, 2017, Switch, Inc. completed its IPO of 35,937,500 shares of its Class A common stock at a public offering price of $17.00 per share, which included 4,687,500 shares of Class A common stock pursuant to the underwriters' option to acquire additional shares of Class A common stock. Switch, Inc. received approximately $577.3 million in proceeds, net of underwriting discounts and commissions and before offering expenses of $4.9 million . Switch, Inc. used the proceeds to purchase 35,937,500 newly issued common units of Switch, Ltd. ("Common Units"), at a price per Common Unit equal to the IPO price per share of Class A common stock, less underwriting discounts and commissions. As a result of the IPO, Rob Roy, the Founder, Chief Executive Officer and Chairman of Switch, Ltd., and an affiliated entity of Mr. Roy (collectively, the "Founder Members") collectively control approximately 67.2% of the combined voting power of Switch, Inc.'s common stock, which remains unchanged as of December 31, 2017 , as a result of their ownership of Switch, Inc.'s Class C common stock. In connection with the closing of the IPO, Switch, Inc. and Switch, Ltd. consummated the following organizational transactions (the "Transactions"): • Switch, Ltd. adopted and approved the Fifth Amended and Restated Operating Agreement of Switch, Ltd. (the "Switch Operating Agreement"), which amended and restated Switch, Ltd.'s prior operating agreement to, among other things, convert all incentive units in Switch, Ltd. into Common Units and to appoint Switch, Inc. as the sole manager of Switch, Ltd.; • Switch, Inc. amended and restated its articles of incorporation to, among other things, provide for Class A common stock, Class B common stock, and Class C common stock; • Switch, Inc. issued shares of its Class B common stock to the holders of Common Units other than Switch, Inc. and the Founder Members (the "Non-Founder Members" and, together with the Founder Members, the "Members") on a one-to-one basis with the number of Common Units they owned, for nominal consideration, and shares of its Class C common stock to the Founder Members on a one-to-one basis with the number of Common Units they own, for nominal consideration; • Switch, Inc. issued and sold 35,937,500 shares of its Class A common stock in exchange for net proceeds of approximately $577.3 million , after deducting underwriting discounts and commissions but before offering expenses of $4.9 million ; • Switch, Inc. used all of the net proceeds from the IPO to acquire Common Units from Switch, Ltd. at a purchase price per Common Unit equal to the initial public offering price of Class A common stock, less underwriting discounts and commissions, collectively representing 14.5% of Switch, Ltd.'s outstanding Common Units; and • Switch, Inc. entered into (i) a Tax Receivable Agreement with Switch, Ltd. and the Members and (ii) an Amended and Restated Registration Rights Agreement with the Members who, upon the completion of the IPO, owned an aggregate of 216,568,963 shares of Switch, Inc.'s Class B common stock and Class C common stock, representing approximately 94.4% of the combined voting power of all of Switch, Inc.'s common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Accounting The accompanying consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), and include the accounts of the Company. All significant intercompany transactions and balances have been eliminated. As the sole manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch, and has the sole voting interest in, and controls the management of, Switch, and has the obligation to absorb the losses of, and receive benefits from, Switch. Accordingly, Switch, Inc. identifies itself as the primary beneficiary of Switch and began consolidating Switch in its consolidated financial statements as of the closing date of the IPO, resulting in a non-controlling interest related to the Common Units held by the Members on its consolidated financial statements. Switch has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior to the IPO and the Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 2017 through October 10, 2017, as of December 31, 2016, and for the years ended December 31, 2016 and December 31, 2015 presented in the consolidated financial statements and notes to consolidated financial statements herein represent the historical operations of Switch. The amounts as of December 31, 2017 and for the period from October 11, 2017 through December 31, 2017 reflect the consolidated operations of the Company. For the period from June 13, 2017 to October 10, 2017, Switch, Inc. had no business transactions or activities and had no assets or liabilities with the exception of the issuance of one share at par value of $0.001 per share, which was canceled as of the closing date of the IPO. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity ("VIE") accounting model. A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity's economic performance or (ii) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, collectability of notes receivable, useful lives of property and equipment, equity-based compensation, deferred revenue, fair value of leased property at inception of lease term, fair value of deliverables under multiple element arrangements, probability assessments of exercising renewal options on leases and other than temporary impairments on investments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Cash The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2017 and 2016 . Investments The Company's investments in entities where it holds at least a 20% ownership interest and has the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. The Company's share of the investee's results of operations is included in equity in net (losses) earnings of investments and foreign currency translation adjustments, as applicable, are included in other comprehensive income with a corresponding adjustment to its investment. The Company discontinues applying the equity method of accounting when the investment is reduced to zero. If the investee subsequently reports net income or other comprehensive income, the Company resumes applying the equity method of accounting only after its share of unrecognized net income and other comprehensive income, respectively, equals the share of losses not recognized during the period the equity method of accounting was suspended. The Company gives precedence to other comprehensive income and losses when determining whether to resume applying the equity method of accounting. Investments in entities where the Company holds less than a 20% ownership interest are generally accounted for using the cost method of accounting. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Derivative Financial Instruments A derivative is a financial instrument whose value changes in response to an underlying variable, requires little or no initial net investment and is settled at a future date. Derivatives are initially recognized at fair value on the date on which the derivatives are entered into and subsequently re-measured at fair value. Embedded derivatives included in hybrid instruments are treated and disclosed as separate derivatives when their economic characteristics and risks are not closely related to those of the host contract, the terms of the embedded derivative are the same as those of a stand-alone derivative and the combined contract is not measured at fair value through earnings. The financial host contracts are accounted for and measured using the applicable GAAP of the relevant financial instrument category. The method of recognizing fair value gains and losses depends on whether the derivatives are designated as hedging instruments, and if so, the nature of the hedge relationship. All gains and losses from changes in the fair values of derivatives that do not qualify for hedge accounting are recognized immediately in earnings. During the year ended December 31, 2017 , the Company entered into an agreement for the purchase of electricity (Note 9). The accounting guidance for derivative instruments provides a scope exception for commodity contracts that meet the normal purchase and sales criteria specified in the standard. The normal purchases and normal sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that are designated as normal purchases and normal sales are not recorded on the consolidated balance sheets at fair value. Based on these requirements, the agreement entered into by the Company meets the normal purchases and normal sales scope exception criteria. Concentration of Credit and Other Risks Although the Company operates primarily in Nevada, realization of its customer accounts receivable and its future operations and cash flows could be affected by adverse economic conditions, both regionally and elsewhere in the United States. During the years ended December 31, 2017 , 2016 , and 2015 , the Company's largest customer and its affiliates comprised 11% , 13% , and 14% , respectively, of the Company's revenue. One customer accounted for 18% of accounts receivable as of December 31, 2017 . No single customer accounted for 10% or more of accounts receivable as of December 31, 2016 . The Company generally carries cash on deposit with financial institutions in excess of federally insured limits. Through May 31, 2017, the Company was also exposed to a limited extent, to a risk of unfavorable price increases from its principal provider of power, Nevada Power Company dba NV Energy ("NV Energy"), whose rates are set by and services are regulated by the Public Utilities Commission of Nevada ("PUCN"). On June 1, 2017, the Company became an unbundled purchaser of energy in Nevada. Accounts Receivable Customer receivables are non-interest bearing and the Company generally does not request collateral from its customers, however, it usually obtains a lien or other security interest in certain customers' equipment placed in the Company's data center, and/or obtains a deposit. In the event collection is not reasonably assured at inception of a contract, recognition of related revenue is deferred generally until receipt of cash payment. The Company maintains an allowance for doubtful accounts for estimated losses up to the full amount of invoices based on the age of the invoices. If the financial condition of the Company's customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debt, customer concentrations, customer credit-worthiness and changes in customer payment terms when evaluating revenue recognition and the adequacy of the Company's reserves. Delinquent account balances are written-off after management has determined the likelihood of collection is not probable. The Company recorded bad debt expense of $423,000 , $383,000 , and $242,000 for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Notes Receivable Notes receivable are recorded at amortized cost using the interest method. The Company evaluates the collectability of both principal and interest based on an assessment of any significant changes in the amount and timing of the expected future cash flows. As of December 31, 2016 , the Company fully impaired the carrying value of its notes receivable (Note 5). Internal Use Software The Company capitalizes certain costs incurred in connection with developing or obtaining internal use software. Capitalized software costs placed into service are included in computer equipment, furniture and fixtures within property and equipment, net on the consolidated balance sheets and are amortized on a straight-line basis over a three -year period. Software costs that do not meet capitalization criteria are expensed immediately. The Company capitalized internal use software costs of $1.8 million , $1.3 million , and $542,000 during the years ended December 31, 2017 , 2016 , and 2015 , respectively. Leases Upon lease inception, the Company categorizes leases as either operating or capital leases. On certain lease agreements, the Company may receive rent holidays and other incentives. The Company recognizes rent expense on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. For assets held under capital leases and leasehold improvements, the estimated useful lives are limited to the shorter of the useful life of the asset or the term of the lease, including renewal option periods if exercise is intended (Note 7). Amortization of assets that are recorded under capital leases is included in depreciation expense. Property and Equipment Property and equipment is stated at cost. Depreciation and amortization of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. Costs of repairs and maintenance are expensed as incurred. For assets used in data center operations, the related depreciation and amortization are included in cost of revenue. The Company's estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 4.5-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 40 Deferred installation charges 3-5 Computer equipment, furniture and fixtures 3-5 In addition, the Company has capitalized interest costs during the construction phase of data centers. Once a data center or expansion project becomes operational, these costs are allocated to certain property and equipment categories and are depreciated over the estimated useful life of the underlying assets. Impairment of Long‑Lived Assets The Company's long‑lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Portfolio Energy Credits The Company recognizes portfolio energy credits ("PECs") at their cost when purchased as an intangible asset, subject to impairment testing. PECs are not considered outputs by the Company. Amortization of PECs is recorded within cost of revenue on the consolidated statements of operations and comprehensive income (loss) when PECs are utilized in operations. Commitments and Contingencies The Company accrues for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. Deferred Debt Issuance Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the terms of the related debt instruments using the straight line-method for both term debt, which approximates the interest method, and revolving debt. Deferred Offering Costs The Company capitalized certain legal, accounting, and other third-party fees that were directly associated with in-process equity financings until such financings were consummated. After consummation of the equity financing, these costs were recorded in stockholders' equity as a reduction of additional paid in capital generated as a result of the offering. Upon the successful consummation of Switch, Inc.'s IPO in October 2017, deferred offering costs of approximately $4.9 million were recorded in the Company's stockholders' equity as a reduction of additional paid in capital. The Company did not record any deferred offering costs as of December 31, 2016 . Foreign Currency Translation SUPERNAP International, S.A. ("SUPERNAP International"), an equity method investment of the Company, has investments in foreign subsidiaries. Gains or losses from translation of foreign operations where the local currency is the functional currency are included in other comprehensive income. Revenue Recognition During each of the years ended December 31, 2017 , 2016 , and 2015 , the Company derived more than 95% of its revenue from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing of cabinet space and power; and (2) connectivity services, which includes cross-connects, broadband services, and external connectivity. The remainder of the Company's revenue is from non-recurring revenue streams, which primarily include installation and contract settlements. Recurring revenue is generally billed monthly and recognized ratably over the period to which the service relates. The Company's contracts with its customers generally have terms of three to five years. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the expected life of the installation, which was 66 months and 73 months as of December 31, 2017 and 2016 , respectively, for colocation contracts, 29 months and 34 months as of December 31, 2017 and 2016 , respectively, for broadband services contracts, and 41 months and 35 months as of December 31, 2017 and 2016 , respectively, for external connectivity contracts. The expected life of the installation is determined based on (i) the weighted average term of new contracts entered into during the period with customers, plus (ii) the average term of contract renewals entered into during the period with existing customers. Revenue from connectivity services is generally recognized on a gross basis in accordance with the accounting standard related to reporting revenue gross as a principal versus net as an agent, primarily because the Company acts as the principal in the transactions, takes title to services and bears credit risk. Revenue from contract settlements, which result when a customer wishes to terminate their contract early, is generally recognized when no remaining performance obligations exist, to the extent that the revenue has not previously been recognized. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved, the Company reduces revenue for any credits given to the customer as a result. There were no service level credits issued during the years ended December 31, 2017 , 2016 , and 2015 . Revenue is recognized only when the service has been provided and when there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the receivable is reasonably assured. It is the Company's customary business practice to obtain a signed colocation facility agreement and service order prior to recognizing revenue in an arrangement. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. The Company generally does not request collateral from its customers except it usually obtains a lien and/or other security interest in a customer's equipment placed in the Company's data centers or obtains a deposit. If the Company determines that collection of a fee is not reasonably assured, the fee is deferred and revenue is recognized at the time collection becomes reasonably assured, which is generally upon receipt of cash. Multiple Element Arrangements The Company enters into multiple element revenue arrangements in which a customer may purchase a combination of the right to use network capacity (e.g., conduit and fiber optic cables), maintenance services, and colocation services. Terms of performance, cancellation, termination, or refunds in these arrangements are similar to those for individual stand-alone deliverables. To the extent these revenue arrangements involve the use of property and equipment, they are evaluated under lease accounting guidance to determine whether the arrangement meets the definition of a lease. None of the multiple element arrangements entered into by the Company during any of the periods presented have met the definition of a lease. The services offered under these revenue arrangements qualify as separate units of accounting. Multiple deliverables within revenue arrangements are allocated to separate units of accounting if the deliverables meet both of the following criteria: • The delivered items have value to the customer on a stand-alone basis. The items have value on a stand-alone basis if they are sold separately by any vendor or the customer could resell the delivered items on a stand-alone basis; and • If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of the Company. At the inception of a multiple element arrangement, the Company: (1) determines whether and when each unit of accounting has been delivered or performed; (2) determines the fair value of each unit of accounting using the selling price hierarchy of vendor-specific evidence of fair value ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, and management's best estimate of the selling price ("BESP") if neither VSOE nor TPE is available; and (3) allocates the total price among the various units of accounting using the relative selling price method. Once the total price has been allocated among the various units of accounting, revenue is recognized when the relevant revenue recognition criteria are met for each element, which is upon acceptance or use of the services by the customer. VSOE generally exists when the deliverable is sold separately; however, in certain instances VSOE cannot be established if the deliverable cannot be priced within a narrow range or has a limited sales history. TPE is determined based on competitor prices for similar deliverables when sold separately. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, pricing practices, market conditions, competitive landscape, type of customer, geographies, internal costs, and gross margin objectives. Revenue is allocated to rights to use network capacity and related colocation services and maintenance services under these arrangements based on TPE. Revenue allocated to other colocation services provided under these arrangements is based on VSOE. Income Taxes Switch, Inc.'s corporate structure following the IPO, as described above, is commonly referred to as an "Up-C" structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure allows the Members to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or "passthrough" entity, for income tax purposes following the offering. One of these benefits is that future taxable income of Switch, Ltd. that is allocated to the Members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the entity level. Additionally, because the Members may redeem their Common Units for shares of Switch, Inc.'s Class A common stock or, at Switch, Inc.'s option, for cash, the Up-C structure also provides the Members with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. The Company reduces the carrying amounts of deferred tax assets by a valuation allowance if, based on the evidence available, it is more likely than not that such assets will not be realized. In making the assessment under the more likely than not standard, appropriate consideration must be given to all positive and negative evidence related to the realization of the deferred tax assets. The assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods by jurisdiction, the Company's experience with loss carryforwards not expiring unutilized and all tax planning alternatives that may be available. The Company utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating tax positions and estimating tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company includes interest and penalties related to our tax contingencies in interest expense. See Note 10 "Income Taxes" for additional information. Advertising Costs Advertising costs are expensed when incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of operations and comprehensive income (loss). Advertising expense was $1.8 million , $2.2 million , and $1.6 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is attributed on a straight-line basis for awards with service conditions and on an accelerated attribution basis for awards with performance conditions over the requisite service period, which is generally the vesting period. The Company used the Black-Scholes option-pricing model to determine the fair value of Switch, Ltd.'s incentive unit awards. The determination of the fair value of the incentive unit awards was affected by assumptions regarding a number of complex and subjective variables including the fair value of Switch, Ltd.'s member equity units, the expected price volatility of the member equity units over the term of the awards and actual and projected employee purchase behaviors. Switch, Ltd.'s member equity units' fair value per unit was estimated using a weighted average approach of a combination of the following three methods: (1) publicly traded data center company multiples; (2) data center precedent transaction multiples; and (3) the discounted cash flow method based on Switch, Ltd.'s five-year forecast. The weighting of these three methods varied over time. Switch, Ltd. estimated the expected volatility by analyzing the volatility of companies in the same industry and selecting volatility within the range. The risk-free interest rate was based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the Incentive Unit awards. The expected dividend rate was determined at the grant date for each Incentive Unit award. The expected term of the incentive unit award was calculated by analyzing historical exercise data and obtaining the weighted average of the holding period for the incentive unit awards. The Company uses the Black-Scholes option-pricing model to determine the fair value of Switch, Inc.'s stock option awards. Switch, Inc. estimates the expected volatility by analyzing the volatility of publicly-traded companies in the same industry and selecting the average volatility of the peer group. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the stock option awards. The expected dividend rate is based on the Company's estimate of annual dividends expected to be paid at the time of grant. The expected term for stock options granted is estimated using the "simplified" method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to Switch, Inc.'s lack of sufficient historical data. Switch, Inc.'s restricted stock unit awards are measured based on the fair market value of the underlying common stock on the date of grant. Net Income (Loss) per Share/Unit Basic net income (loss) per share/unit is computed by dividing net income (loss) attributable to Switch, Inc. by the weighted average number of shares/units outstanding during the period. Diluted net income (loss) per share/unit is computed giving effect to all potential weighted average dilutive shares/units including unit options and incentive units for historical periods prior to the closing of the IPO and stock options, restricted stock units, and Switch, Ltd. common units convertible into shares of Class A common stock for the period after the closing of the IPO. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share/unit by application of the treasury stock method or if-converted method, as applicable. Refer to Note 15 for further information on net income (loss) per share/unit. Recent Accounting Pronouncements As the Company is an emerging growth company, it has elected not to opt out of the available extended transition period. Therefore, when a standard is issued or revised with different application dates for public or private companies, the Company, as an emerging growth company, is permitted to adopt the new or revised standard at the time private companies adopt the new or revised standard. As a result, adoption dates of Accounting Standards Updates herein are based on a private company timeline. ASU 2014-09–Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). The ASU replaces much of the current guidance regarding revenue recognition including most industry-specific guidance. The core principle of the ASU is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity will be required to identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligation in the contract, and recognize revenue when (or as) the entity satisfies a performance obligation. In addition to the new revenue recognition requirements, entities will be required to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Entities may choose between two retrospective transition methods when applying the ASU. In July 2015, the FASB voted to defer the effective date by one year (ASU 2015-14) to December 15, 2018 for annual reporting periods beginning after that date, and interim periods within annual periods beginning after December 15, 2019, and permitted early adoption of the standard, but not before the original effective date of December 15, 2017. Companies may use either a full retrospective or a modified-retrospective approach to adopt the standard |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, consists of the following as of: December 31, 2017 2016 (in thousands) Land and land improvements $ 151,286 $ 104,318 Data center equipment 784,290 591,085 Capitalized leased assets 35,974 36,408 Buildings, building improvements, and leasehold improvements 338,763 248,680 Substation equipment 4,247 — Cloud computing equipment 5,661 5,661 Fiber facilities 8,459 6,344 Computer equipment, furniture and fixtures 30,745 21,007 Vehicles 1,573 1,241 Construction in progress 90,059 97,368 Core network equipment 31,472 23,859 Deferred installation charges 4,436 3,858 Property and equipment, gross 1,486,965 1,139,829 Less: accumulated depreciation and amortization (353,393 ) (265,570 ) Total property and equipment, net $ 1,133,572 $ 874,259 During the years ended December 31, 2017 , 2016 , and 2015 , depreciation and amortization expense was $89.1 million , $66.6 million , and $55.4 million , respectively. Accumulated amortization for the capitalized leased assets totaled $8.3 million and $6.6 million as of December 31, 2017 and December 31, 2016 , respectively. During the years ended December 31, 2017 , 2016 , and 2015 , capitalized interest was $2.9 million , $2.7 million , and $1.4 million , respectively. |
Long-Term Deposit
Long-Term Deposit | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Long-Term Deposit | Long-Term Deposit On March 10, 2015, NV Energy and Switch, Ltd. entered into a Substation Agreement and related land purchase agreement for land owned by a wholly-owned subsidiary of Switch, Ltd. Pursuant to the Substation Agreement, NV Energy designed, constructed, maintains, and owns a substation and related feeders in connection with service to Switch's development of three of its data center facilities in Las Vegas. The substation was placed into service in April 2016. Switch has paid the associated costs and associated tax gross-up related to the development of the substation and related feeders as defined in the Substation Agreement. These costs are subject to reimbursement based upon Switch's future power usage. Costs incurred as of December 31, 2016 totaled $6.2 million , of which $4.4 million are classified as long-term deposits and $1.8 million as property and equipment on the consolidated balance sheets. In October 2017, a reimbursement of $1.4 million was received related to the substation, of which $598,000 was classified as long-term deposits and $815,000 as property and equipment. Costs incurred as of December 31, 2017 totaled $4.8 million , of which $3.8 million is classified as long-term deposits and $964,000 as property and equipment. |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company currently holds two investments, SUPERNAP International and Planet3, Inc. ("Planet3"). As of December 31, 2017 and 2016 , the Company determined that it continued to have a variable interest in both SUPERNAP International and Planet3, as the entities do not have sufficient equity at risk. However, the Company concluded that it is not the primary beneficiary of SUPERNAP International or of Planet3 as it does not have deemed control of either entity. As a result, it does not consolidate either entity into its consolidated financial statements. As of December 31, 2017 and 2016 , the investment in SUPERNAP International was accounted for under the equity method of accounting. SUPERNAP International is an investment of which the Company holds a 50% ownership interest. As of December 31, 2017 and 2016 , the Company had invested $1.3 million in SUPERNAP International. As of December 31, 2017 , the Company's carrying value of its investment in SUPERNAP International was reduced to zero as a result of recording its share of the investee's losses. Accordingly, as the Company does not have any guaranteed obligations and is not otherwise committed to provide further financial support to SUPERNAP International, the Company discontinued the equity method of accounting for its investment in SUPERNAP International as of December 31, 2017 and will not provide for additional losses until its share of future net income or comprehensive income, if any, equals the share of net losses or comprehensive losses not recognized during the period the equity method was suspended. The Company's share of net loss recorded for the years ended December 31, 2017 , and 2016 , amounted to $1.0 million and $2.1 million , respectively. In 2015, SUPERNAP International recognized $10.0 million in revenue under a license agreement with a Thailand joint venture. As a result, the Company recognized equity in net earnings of SUPERNAP International of $2.8 million during the year ended December 31, 2015 . As of December 31, 2017 and 2016 , the Company had recorded amounts consisting of reimbursable expenses due from SUPERNAP International of $337,000 and $1.4 million , respectively, within accounts receivable on the consolidated balance sheets. Planet3 is an investment of which the Company holds a 45% ownership interest. As of December 31, 2017 and 2016 , the Company had invested $10.0 million in Planet3. The Company's share of net loss recorded for the years ended December 31, 2016 and 2015 amounted to $3.7 million and $2.0 million , respectively. As of December 31, 2016, as the Company does not have any guaranteed obligations and is not otherwise committed to provide further financial support to Planet3, the Company discontinued the equity method of accounting for its investment in Planet3 and will not provide for additional losses until its share of future net income, if any, equals the share of net losses not recognized during the period the equity method was suspended. On May 13, 2016, Switch, Ltd. entered into an agreement with Planet3 (the "Note Purchase Agreement") pursuant to which Planet3 agreed to issue to Switch, Ltd. secured convertible promissory notes with an aggregate principal amount not to exceed $3.0 million . Interest accrues on the unpaid principal balance of the notes at 5% per annum. The notes, together with any then unpaid and accrued interest, matured on September 1, 2017. On the maturity date, the outstanding principal balance and accrued interest can be converted at the Company's option into ownership interests of Planet3, which remained unexercised by the Company as of December 31, 2017 . On September 6, 2017, the Company delivered to Planet3 a Notice of Default. As of December 31, 2017 and 2016 , the Company had purchased notes having an aggregate principal amount of $3.0 million . If a qualified financing, as defined in the notes, had occurred on or prior to the maturity date, then, upon the closing of the qualified financing, the outstanding principal amount of the notes and all accrued and unpaid interest would have automatically converted into shares of the preferred stock issued by Planet3 at a discount. The Company had identified and separately accounted for an embedded derivative related to the automatic conversion feature of the secured convertible promissory notes. The estimated fair value of the embedded derivative was based on Level 3 inputs, such as the value of the preferred stock upon conversion, using a present value of future cash flow valuation technique that relied on management assumptions of the probability of occurrence, term, and the risk-free discount rate. The embedded derivative was fully impaired as of December 31, 2016 . As of December 31, 2016, the Company determined an other than temporary loss in value of its investment in Planet3 had occurred due to Planet3's continued operating losses and the release of a beta product that did not generate the projected sales activity. The Company fully impaired the carrying values of its investment in Planet3 of $4.4 million , notes receivable of $2.4 million , net of a $629,000 discount, interest receivable of $55,000 , and related embedded derivative of $896,000 for a total write-down of $7.7 million . The estimated fair value of the Company's investment in Planet3 was based on Level 3 inputs, using a present value of future cash flow valuation technique that relied on management assumptions to derive an enterprise value. The summarized financial information of the Company's equity method investments is as follows: December 31, 2017 2016 (in thousands) Current assets $ 2,169 $ 5,683 Noncurrent assets $ 17,075 $ 18,956 Current liabilities $ 2,583 $ 2,558 Noncurrent liabilities $ 19,445 $ 23,164 Years Ended December 31, 2017 2016 2015 (in thousands) Revenue $ 700 $ 1,239 $ 10,866 Gross (loss) profit $ (3,467 ) $ (2,313 ) $ 7,628 Net (loss) income $ (5,834 ) $ (12,353 ) $ 1,412 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt 2015 Credit Agreement On May 5, 2015, Switch, Ltd. entered into a credit agreement ("2015 Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders, which replaced its previous $250.0 million credit agreement. The 2015 Credit Agreement consisted of a $200.0 million term loan facility (the "2015 Term Loan Facility") and a $400.0 million revolving credit facility (the "2015 Revolving Credit Facility," and, together with the 2015 Term Loan Facility, the "2015 Facilities"), each with a term of five years. Upon satisfying certain conditions, the 2015 Credit Agreement provided that Switch, Ltd. could increase the amount available for borrowing under the 2015 Facilities no more than five times (up to an additional $125.0 million in total) during the term of the 2015 Credit Agreement. On May 2, 2016, Switch, Ltd. amended the 2015 Credit Agreement to increase the aggregate amount available for borrowing under the 2015 Facilities by an additional $125.0 million and to modify certain other terms and conditions. On the closing date of the amendment, the Company recorded additional deferred debt issuance costs of $1.0 million , of which $860,000 related to the 2015 Revolving Credit Facility and $145,000 related to the 2015 Term Loan Facility. Total deferred debt issuance costs as of December 31, 2016 totaled $3.4 million , net of accumulated amortization of $1.4 million . Net debt issuance costs related to the 2015 Term Loan Facility are presented together with long-term debt and were $2.2 million as of December 31, 2016 . Net debt issuance costs associated with the 2015 Revolving Credit Facility are included within other assets and were $1.1 million as of December 31, 2016 . The 2015 Facilities were collateralized by substantially all of Switch's tangible and intangible personal property and guaranteed by certain of Switch, Ltd.'s wholly-owned subsidiaries. Interest on the 2015 Facilities was calculated based on a base rate plus the applicable margin or a LIBOR rate plus the applicable margin, at Switch, Ltd.'s election. Interest calculations were based on 365/366 days for a base rate loan and 360 days for a LIBOR loan. Base rate interest payments were due and payable in arrears on the last day of each calendar quarter, beginning December 31, 2015. LIBOR rate interest payments were due and payable on the last day of each selected interest period (not to extend beyond three-month intervals). The 2015 Facilities had, among other things, financial and other covenants. Beginning with the fiscal quarter ended June 30, 2015, the 2015 Credit Agreement required compliance with the consolidated total leverage and consolidated fixed charge coverage ratios (as defined in the 2015 Credit Agreement). As of December 31, 2016 , the maximum consolidated total leverage ratio was 4.25 to 1.00 and the minimum consolidated fixed charge coverage ratio was 1.50 to 1.00 . The maximum consolidated total leverage ratio was subject to change periodically for future fiscal quarters. Switch, Ltd. was in compliance with these covenants as of December 31, 2016 . The terms of the 2015 Facilities limited Switch, Ltd.'s ability, among other things, to return capital to equity interest holders, grant liens on its assets, and incur additional debt. Switch, Ltd.'s net assets were subject to restrictions, including the ability to pay distributions. As of December 31, 2016 , none of Switch, Ltd.'s net assets were deemed restricted under the 2015 Facilities. 2017 Credit Agreement On June 27, 2017, Switch, Ltd. entered into an amended and restated credit agreement ("2017 Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders, consisting of a $600.0 million term loan facility (the "2017 Term Loan Facility"), maturing on June 27, 2024, and a $500.0 million revolving credit facility (the "2017 Revolving Credit Facility," and, together with the 2017 Term Loan Facility, the "2017 Facilities"), maturing on June 27, 2022, which replaced its 2015 Credit Agreement. The 2017 Term Loan Facility is subject to principal amortization of $1.5 million per calendar quarter commencing on September 30, 2017. On December 28, 2017, Switch, Ltd. amended the 2017 Credit Agreement (the "First Amendment") to reduce the interest rate margin applicable to borrowings under the 2017 Facilities. In addition, the First Amendment has a prepayment premium of 1.0% of the aggregate principal outstanding under the 2017 Term Loan Facility in the event that, prior to the six-month anniversary of the closing date of the First Amendment, Switch, Ltd. enters into another repricing transaction. Upon satisfying certain conditions, the 2017 Credit Agreement provides that Switch, Ltd. can increase the amount available for borrowing under the 2017 Facilities no more than five times (up to an additional $75.0 million in total, plus an additional amount subject to certain leverage restrictions) during the term of the 2017 Credit Agreement. The Company recorded debt issuance costs of $8.8 million on the closing date of the 2017 Credit Agreement, of which $5.6 million related to the 2017 Term Loan Facility and $3.2 million related to the 2017 Revolving Credit Facility. In connection with the 2017 Credit Agreement, $811,000 of the unamortized debt issuance costs on the 2015 Revolving Credit Facility continued to be deferred as a result of modification accounting. The Company recorded additional debt issuance costs of $110,000 related to the 2017 Revolving Credit Facility and interest expense of $137,000 representing third-party costs related to the 2017 Term Loan Facility on the closing date of the First Amendment as a result of modification accounting. Unamortized debt issuance costs as of December 31, 2017 totaled $9.0 million . Unamortized debt issuance costs related to the 2017 Term Loan Facility are presented together with long-term debt and were $5.2 million as of December 31, 2017 . As of December 31, 2017 , unamortized debt issuance costs are included within other assets and were comprised of $3.0 million related to the 2017 Revolving Credit Facility and $730,000 associated with the modification accounting on the 2015 Revolving Credit Facility. The 2017 Facilities are collateralized by substantially all of Switch's tangible and intangible personal property and guaranteed by certain of Switch, Ltd.'s wholly-owned subsidiaries. Interest on the 2017 Facilities is calculated based on the base rate plus the applicable margin or a LIBOR rate plus the applicable margin, at Switch, Ltd.'s election. Interest calculations are based on 365/366 days for a base rate loan and 360 days for a LIBOR loan. Base rate interest payments are due and payable in arrears on the last day of each calendar quarter, beginning September 30, 2017. LIBOR rate interest payments are due and payable on the last day of each selected interest period (not to extend beyond three-month intervals). In addition, the 2017 Revolving Credit Facility incurs a fee on unused lender commitments based on the applicable margin and payments are due and payable in arrears on the last day of each calendar quarter, beginning September 30, 2017. The 2017 Facilities have, among other things, financial and other covenants. Beginning with the fiscal quarter ended June 30, 2017, the 2017 Credit Agreement required compliance with the consolidated total leverage ratio (as defined in the 2017 Credit Agreement). As of December 31, 2017 , the maximum consolidated total leverage ratio was 5.50 to 1.00 . The maximum consolidated total leverage ratio is subject to change periodically for future fiscal quarters. Switch, Ltd. was in compliance with this covenant as of December 31, 2017 . The terms of the 2017 Facilities limit Switch, Ltd.'s ability, among other things, to incur additional debt, incur additional liens, encumbrances or contingent liabilities, and pay distributions or make certain other restricted payments (with certain exceptions and baskets, including a restricted payment basket of $15.0 million per fiscal year). Loss on Extinguishment of Debt During the year ended December 31, 2017 , the Company recorded a $3.6 million loss related to the refinancing of Switch, Ltd.'s 2015 Credit Agreement and closing of Switch, Ltd.'s 2017 Credit Agreement in June 2017. The loss was comprised of the write-off of previously unamortized debt issuance costs of $2.1 million and lender fees of $1.5 million . Long-term debt consists of the following as of: December 31, 2017 2016 (in thousands) 2015 Term Loan Facility, interest paid at the defined LIBOR rate plus applicable interest margin (2.77% at December 31, 2016); matures May 2020 $ — $ 185,000 2017 Term Loan Facility, interest paid at the defined LIBOR rate plus applicable interest margin (3.81% at December 31, 2017); matures June 2024 597,000 — Less: unamortized debt issuance costs (5,241 ) (2,233 ) 591,759 182,767 2015 Revolving Credit Facility, interest paid at the defined LIBOR rate plus applicable interest margin (2.71% at December 31, 2016); matures May 2020 — 289,300 2017 Revolving Credit Facility, interest paid at the defined LIBOR rate plus applicable interest margin; matures June 2022 — — $ 591,759 $ 472,067 As of December 31, 2017 , long-term debt maturities are as follows (in thousands): 2018 $ 6,000 2019 6,000 2020 6,000 2021 6,000 2022 6,000 Thereafter 567,000 597,000 Less: unamortized debt issuance costs (5,241 ) $ 591,759 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases | Leases Capital Leases The Company leases the land and building for one of its data centers from an entity in which a member of its Board of Directors has a beneficial ownership interest, under which the building portion of the lease has been capitalized. Pursuant to GAAP, the lease attributable to the land is accounted for as an operating lease. The lease expires in 2033 with two subsequent 10 -year and one five -year renewal option periods. As of December 31, 2017 , minimum payment obligations for this capital lease are as follows: Related Party Building Lease (1) (in thousands) 2018 $ 1,952 2019 2,064 2020 2,124 2021 2,243 2022 2,306 Thereafter 31,330 42,019 Less: amount representing interest (22,553 ) Present value of minimum capital lease payments $ 19,466 ________________________________________ (1) Until 2023, capital lease payments are applied only to accrued interest, thus, there is no current portion. In February 2016, a wholly-owned subsidiary of Switch, Ltd. acquired rights and interests to manage, construct and use the Nevada Broadband Telemedicine Initiative ("NBTI") fiber network. The right to use the NBTI fiber network is accounted for as a capital lease. As of December 31, 2017 and 2016 , capital lease assets related to the NBTI fiber network were $16.1 million and $15.9 million , respectively, and related future minimum payment obligations are $2.3 million , which are expected to be paid during the year ending December 31, 2018. The capital lease will expire 25 years from the date the network is accepted by the Nevada Hospital Association, the entity that holds title to the network, and has a 25 -year renewal option. Acceptance occurred in September 2017. The Company is the sole consumer of output from four feeders related to a substation owned by NV Energy (Note 4). The Company accounts for this arrangement as a capital lease. As of December 31, 2017 and 2016 , capital lease assets related to the feeders were $515,000 and $930,000 , respectively. There are no future minimum payment obligations related to this capital lease. The capital lease will expire 39 years from the date the substation was placed into service, which was April 2016. Operating Lease Commitments The Company leases land, warehouse storage space and data center buildings under operating leases (including the land portion of the capitalized building lease) that have non-cancellable terms expiring through 2066 with entities in which a member of its Board of Directors has a beneficial ownership interest. In addition, the Company leases warehouse storage space, storage yards for fiber and construction materials and equipment under operating leases in Nevada that have non-cancellable terms expiring through 2055. As of December 31, 2017 , future minimum lease payments for all operating leases with remaining terms in excess of one year are as follows: Related Parties Other Total (in thousands) 2018 $ 4,706 $ 2,358 $ 7,064 2019 4,798 2,369 7,167 2020 4,860 2,372 7,232 2021 4,256 506 4,762 2022 2,863 179 3,042 Thereafter 56,653 643 57,296 $ 78,136 $ 8,427 $ 86,563 During the years ended December 31, 2017 , 2016 , and 2015 , rent expense related to operating leases was approximately $7.4 million , $8.7 million , and $3.8 million , respectively. Related party rent included in these amounts was approximately $4.8 million , $4.2 million , and $3.8 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans The Company has a defined contribution retirement plan that covers its eligible employees (the "Plan"). The Plan is qualified in accordance with section 401(k) of the Internal Revenue Code. Eligible employees can participate in the Company's pre-tax 401(k) plan or after-tax Roth 401(k) plan. As of February 2016, the Company makes matching contributions equal to 100% of the first 3% of compensation deferred by a participant. The Company may make a discretionary additional matching contribution. The Company recognized expense related to its contributions to the Plan of $1.3 million and $939,000 for the years ended December 31, 2017 and 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments In March 2017, the Company entered into a firm Power Purchase & Sale Agreement of electricity with Morgan Stanley Capital Group Inc. to purchase a minimum of 40 megawatts per energy hour for a term of 36 months, or a minimum purchase commitment of $33.4 million during the term, starting June 1, 2017. In addition, the agreement also contains a variable cost component for any megawatt hours in excess of the minimum megawatt hour commitment. The remaining minimum purchase commitment is $26.9 million as of December 31, 2017 . Future minimum power purchase commitments for 2018 , 2019 , and 2020 are $11.1 million , $11.1 million , and $4.7 million , respectively, with no additional commitments upon termination of the agreement thereafter. In December 2016, the Company notified the landlord for its data center building and land in Michigan of its intent to exercise the purchase option pursuant to the lease agreement. The purchase price of $25.0 million , less 65% of all rent payments made to the landlord, was payable at closing of the sale in December 2017. The Company recorded the present value of the adjusted purchase price within accrued Michigan building and land purchase on the consolidated balance sheet as of December 31, 2016 . In September 2016, the Company entered into a take-or-pay contract with a lit fiber transport services vendor whereby the Company will be required to purchase a minimum of $75,000 in eligible services on a monthly basis for a term equal to or greater than 24 months beginning 12 months after the eligible services are made available. The eligible services were made available in September 2017. In June 2015, the Company entered into an agreement for the purchase of three parcels of land in northern Nevada. The first closing on two of the land parcels was completed in August 2015 in accordance with the agreement. The second closing on the third land parcel with a purchase price of $5.4 million will occur on or before 36 months after the date of the first closing, or by August 2018. PEC Purchase Commitments In November 2015, the Company entered into a five -year contract beginning January 1, 2016 with the Southern Nevada Water Authority ("SNWA") to purchase an estimated 82 million in PECs, or a minimum remaining purchase commitment of $508,000 as of December 31, 2017 , from the 14 megawatt solar photovoltaic generating plant constructed at SNWA's River Mountains Water Treatment Facility to meet its anticipated requirements under the State of Nevada's Renewal Portfolio Standard Statute. In November 2015, the Company entered into a renewable energy agreement with NV Energy to purchase all PECs realized from Switch Station 2, a 79 megawatt photovoltaic solar generation facility, for a minimum purchase commitment of $13.2 million during the remaining term as of December 31, 2017 . The term of the renewable energy agreement is 20 years from the commercial operation date of Switch Station 2, which achieved commercial operation on October 11, 2017. In June 2015, the Company entered into a renewable energy agreement with NV Energy to purchase all PECs realized from Switch Station 1, a 100 megawatt photovoltaic solar generation facility, not to exceed the Company's total electric load from its data center facilities, for a minimum purchase commitment of $21.6 million during the remaining term as of December 31, 2017 . The term of the renewable energy agreement is 20 years from the commercial operation date of Switch Station 1, which was July 21, 2017. As of December 31, 2017 , future minimum PEC purchase commitments are as follows (in thousands): 2018 $ 1,908 2019 1,908 2020 1,908 2021 1,738 2022 1,738 Thereafter 26,079 $ 35,279 Impact Fee Expense On September 30, 2016, Switch filed its application with the PUCN to become an unbundled purchaser of energy, capacity, and/or ancillary services in Nevada from a new provider of electric resources. The application was approved on December 28, 2016 and Switch paid the impact fee of $27.0 million in a lump sum on May 31, 2017 to NV Energy, the Company's energy provider in Nevada through May 31, 2017, and became an unbundled purchaser of energy in Nevada on June 1, 2017. As there is no future economic benefit to the Company from the impact fee, it was recognized as an expense within impact fee expense during the year ended December 31, 2016 in the consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2017 , the Company also incurred an additional $649,000 in impact fee expense related to deferred energy adjustments representing the difference between actual costs and amounts collected by NV Energy for fuel and purchased power. Similarly, as no future economic benefit is realized by the Company from the deferred energy adjustments, it was recognized as an expense during the year ended December 31, 2017 in the consolidated statements of operations and comprehensive income (loss). Self-Insurance Reserves Effective January 1, 2017, the Company is self-insured for various levels of employee health coverage. Insurance reserves include accruals for estimated settlements for known claims, as well as accruals for estimates of incurred but not reported claims. As of December 31, 2017 , the estimated liabilities for unpaid and incurred but not reported claims totaled $417,000 , which is included within accrued salaries and benefits on the consolidated balance sheets. Energy Litigation In July 2016, Switch filed a lawsuit in the U.S. District Court for the District of Nevada against, among other parties, the PUCN and the former Commissioners of the PUCN, NV Energy, and the former General Counsel to the PUCN Commissioners. The lawsuit alleged, among other things, that the defendants violated state and federal law to conspire and defraud Switch so that NV Energy could unlawfully retain Switch as a customer of NV Energy and impair renewable energy development in the state of Nevada. Switch sought damages, attorneys' fees, costs and preliminary injunctive relief. On December 21, 2016, Switch and NV Energy agreed to settle the lawsuit on confidential terms which do not create any material financial liability to Switch. On January 4, 2017, Switch filed a voluntary dismissal of the energy litigation lawsuit with the U.S. District Court for the District of Nevada. Patent Litigation On August 7, 2017, Switch filed a lawsuit in the U.S. District Court for the Eastern District of Texas against Aligned Data Centers LLC, or ("Aligned"), and MTechnology Inc. The lawsuit alleges, among other things, that Aligned has used and promoted technology at its data centers to attract clients to its facility, directly and indirectly infringing at least three of Switch's patents and using Switch's patented technology to attempt to unlawfully compete with Switch. The complaint also alleges that Aligned hired a consultant to design their data centers; that this consultant had toured Switch under non-disclosure agreement; and that this consultant breached his confidentiality agreements with Switch by using Switch's designs to design the Aligned data centers. Switch is seeking an injunction to prevent the defendants in the lawsuit from infringing Switch's patents, as well as other remedies. On August 16, 2017, Aligned filed an answer to the complaint and a motion to dismiss the lawsuit. Among other things, Aligned alleges in its answer that Switch's patents in question should be declared invalid, and countersued for declaratory judgment of the non-infringement of certain of Switch's patents, injunctive relief, and damages for alleged anti-competition practices involving Aligned's trademarks in violation of the Lanham Act, tortious interference with Aligned's business, and disparagement of Aligned's business. Switch has retained outside counsel to represent it and is vigorously defending its rights and interests. Given certain jurisdictional issues, Switch filed a separate complaint in the Eighth Judicial District of Nevada against the consultant, Stephen Fairfax, and his business, MTechnology, on September 12, 2017. Among other claims, Switch has raised allegations of breach of contract and misappropriation of trade secrets. The outcome of Switch's legal proceedings is inherently unpredictable, subject to significant uncertainties, and could be material to the Company's financial condition, results of operations, and cash flows for a particular period. For the pending matter described above, it is not possible to estimate the reasonably possible loss or range of loss. Cobalt Litigation On September 7, 2017, Switch, Ltd. and Switch, Inc. (collectively, the "Defendants"), were named in a lawsuit filed in the U.S. District Court for the District of Nevada by V5 Technologies formerly d/b/a Cobalt Data Centers (now defunct). The lawsuit alleges, among other things, that the Defendants have monopolized the Las Vegas Metropolitan area of Southern Nevada's data center colocation market and have engaged in unfair business practices leading to the failure of Cobalt Data Centers in 2015 and seeks monetary damages in an amount yet to be disclosed. The Defendants have retained outside counsel and are vigorously pursuing their rights and interests. The outcome of the Defendants' legal proceedings is inherently unpredictable, subject to significant uncertainties, and could be material to the Company's financial condition, results of operations, and cash flows for a particular period. For the pending matter described above, it is not possible to estimate the reasonably possible loss or range of loss. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Switch, Inc. incurs U.S. federal, state, and local income taxes on Switch, Inc.'s allocable share of taxable income of Switch. As a result, the consolidated statements of operations and comprehensive income (loss) reflect an adjustment to provide for corporate income taxes at Switch, Inc.'s effective rate of 10.2% for the year ended December 31, 2017 . The effective rate includes the provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state and local jurisdiction. As the IPO occurred during the year ended December 31, 2017 , and Switch, Inc. had no business transactions or activities prior to the IPO, with the exception of the issuance of one share at par value of $0.001 , which was canceled as of the closing date of the IPO, no amounts related to the provision for income taxes were incurred for the period from January 1, 2017 to October 10, 2017, and for the years ended December 31, 2016 and 2015 . The operations of Switch are primarily conducted in the state of Nevada, which does not have a corporate level income tax. Consolidated loss before taxes and non-controlling interests for domestic and foreign operations is as follows: Year Ended (in thousands) Domestic $ (8,386 ) Foreign (1,175 ) Total loss before income taxes $ (9,561 ) Switch, Inc. recognized an income tax benefit of $981,000 on its share of Switch's taxable loss, exclusive of the non-controlling interest of $6.6 million for the year ended December 31, 2017 . Components of income tax benefit consist of the following: Year Ended (in thousands) Current Federal $ — State and local — Total current tax benefit $ — Deferred Federal $ (978 ) State and local (3 ) Total deferred tax benefit $ (981 ) Total tax benefit $ (981 ) The provision for income taxes from operations differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate to income before provision for income taxes. A reconciliation of the U.S. statutory rate to the effective tax rate is presented below: Year Ended U.S statutory tax rate 35.0 % Foreign rate differential (4.3 ) Rate effect from flow-through entity (34.8 ) Rate change impact due to tax reform (7.0 ) Partnership outside basis difference 26.2 Other (4.9 ) Effective tax rate 10.2 % Switch, Inc.'s effective tax rate includes a rate benefit attributable to approximately 85.5% of Switch's earnings of which are not subject to corporate level taxes as the applicable income tax expense will be incurred by, and be the obligation of, the members of Switch, Ltd. holding non-controlling interests. Thus, the effective tax rate on the portion of loss attributable to Switch, Inc. is 10.2% for the year ended December 31, 2017 . Deferred tax balances reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at the tax rates in effect when the temporary differences are expected to be recovered or settled. Significant components of Switch, Inc.'s deferred tax assets and liabilities were as follows as of: December 31, 2017 (in thousands) Deferred tax assets Net operating loss carryforwards $ 981 Subtotal 981 Valuation allowance — Total deferred tax assets $ 981 Deferred tax liabilities Other — Total deferred tax liabilities $ — Net deferred tax assets $ 981 As of December 31, 2017 , Switch had net operating losses ("NOLs") of approximately $4.8 million available to offset future taxable income that begin to expire in 2037. Switch also has state NOLs for the state of Michigan of $16,000 and local NOLs for Grand Rapids, Michigan, of $161,000 , which begin to expire in 2027 and 2037, respectively. Management believes on a more-likely-than not basis that Switch will be able to realize the tax benefit of its NOLs. On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. A majority of the provisions of the newly enacted federal income tax law are effective for taxable years beginning after December 31, 2017 and includes, but is not limited to: • Significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%; • Limitation of the tax deduction for interest expense to 30% of adjusted earnings; • Limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of NOL carrybacks; • Immediate deductions for certain new investments instead of deductions for depreciation expense over time; • Modifying or repealing many business deductions and credits; and • One-time taxation of offshore earnings at reduced rates regardless of repatriation. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain. In addition, it is uncertain how various states will respond to the newly enacted federal tax law. The Staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 ("SAB No. 118") to provide guidance to registrants in applying Accounting Standards Codification Topic 740 ("ASC 740") in connection with the Tax Cuts and Jobs Act. SAB No. 118 provides that in the period of enactment, the income tax effects of the Tax Cuts and Jobs Act may be reported as a provisional amount based on a reasonable estimate to the extent a reasonable estimate can be determined, which would be subject to adjustment during a "measurement period." The measurement period begins in the reporting period of the Tax Cuts and Jobs Act's enactment and ends when a registrant has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC 740. SAB No. 118 also describes supplemental disclosures that should accompany the provisional amounts. The Company has applied the guidance in SAB No. 118 to account for the financial accounting impacts of the Tax Cuts and Jobs Act as of December 31, 2017 . For the year ended December 31, 2017 , the Company recorded a provisional tax benefit of $667,000 related to the remeasurement of its net deferred tax asset using the new U.S. federal corporate tax rate of 21%. The Company is still in the process of analyzing certain aspects of the Tax Cuts and Jobs Act and, as a result, the amounts reflected in its annual consolidated financial statements may be subject to revision based on the future issuance of new guidance and interpretations. If the final tax outcome of these matters is different from the provisional amounts recorded by the Company, then adjustments to the provisional amounts will impact the tax provision and effective tax rate in the period recorded. As of December 31, 2017 and 2016 , the Company has not recognized any uncertain tax positions, penalties, or interest as management has concluded that no such positions exist. The Company is subject to examination for tax years beginning with the year ended December 31, 2017 . The Company is not currently subject to income tax audits in any U.S. or state jurisdictions for any tax year. |
Stockholders'_Members' Equity
Stockholders'/Members' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders'/Members' Equity | Stockholders'/Members' Equity As of December 31, 2017 , under Switch, Inc.'s amended and restated articles of incorporation dated October 5, 2017, Switch, Inc. was authorized to issue: (i) 750,000,000 shares of Class A common stock, par value $0.001 per share, (ii) 300,000,000 shares of Class B common stock, par value $0.001 per share, (iii) 75,000,000 shares of Class C common stock, par value $0.001 per share, and (iv) 10,000,000 shares of blank check preferred stock, par value $0.001 per share. Holders of shares of Class A common stock, Class B common stock, and Class C common stock are entitled to one vote, one vote, and 10 votes, respectively, on all matters to be voted upon by the stockholders. Once the Founder Members and any permitted transferees beneficially own an aggregate of less than 50% of the number of shares of Class C common stock issued and outstanding as of the completion of the IPO, each share of Class C common stock will entitle its holder to one vote per share. Holders of shares of Class A common stock are entitled to receive cash dividends as may be declared from time to time at the sole discretion of Switch, Inc.'s Board of Directors. Holders of shares of Class B common stock and Class C common stock are not entitled to participate in any such dividends declared by Switch, Inc.'s Board of Directors. In December 2017, Switch, Inc.'s Board of Directors declared a dividend of $0.014 per share of Class A common stock to holders of record as of the close of business on December 18, 2017 and paid on December 29, 2017 . Prior to the payment of the dividend, Switch, Ltd. made a cash distribution to all holders of record of Common Units of Switch, Ltd., including Switch, Inc., of $0.014 per Common Unit for a total distribution of $3.5 million , of which $503,000 was distributed to Switch, Inc. and $3.0 million was distributed to the other holders of record of Common Units of Switch, Ltd. The declaration, amount, and payment of any future dividends on shares of Class A common stock will be at the discretion of Switch, Inc.'s Board of Directors and will depend upon many factors, including Switch, Inc.'s results of operations, financial condition, capital requirements, restrictions in Switch, Ltd.'s debt agreements, and other factors that Switch, Inc.'s Board of Directors deems relevant. Switch, Ltd. Distributions During the year ended December 31, 2017 , Switch, Ltd.'s Board of Managers for the period prior to the IPO and Switch, Inc.'s Board of Directors for the period subsequent to the IPO approved distributions of $185.4 million , comprised of $112.0 million to Switch, Ltd.'s members in accordance with their percentage interests (inclusive of $8.2 million of which was distributed to members upon the accelerated vesting of Incentive Units in connection with the closing of the IPO) and $73.4 million to certain of Switch, Ltd.'s members with unreturned capital contributions in accordance with Switch, Ltd.'s then-current operating agreement. As of December 31, 2017 , of the distributions declared during the year ended December 31, 2017 , Switch, Ltd. made distributions of $185.3 million and retained the distribution of $152,000 , which represents the unvested portions of the CEO Award and President Award, each as described in Note 12, as of December 31, 2017 that will be distributed upon vesting. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation 2005 Common Membership Unit Plan In 2005, Switch, Ltd. established the 2005 Common Membership Unit Plan (the "Unit Option Plan") for the purpose of attracting and retaining the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants of Switch and to promote the success of its business. All options granted under the Unit Option Plan were intended to be treated as non-statutory unit options under the Internal Revenue Code of 1986, as amended. The term of each option was the term stated in the option agreement, which was no more than 10 years from the date of grant. Options exercised under the plan provide the purchaser with full rights equivalent to those of existing members and holders as of the date of exercise. Since the inception of the Unit Option Plan through December 31, 2017 , members have exercised or exchanged 21,440,000 unit awards. The unit option activity under the Unit Option Plan is summarized as follows: Number of Units (in thousands) Weighted Average Exercise Price per Unit Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (1) (in thousands) Unit options outstanding—December 31, 2014 6,752 $ 2.07 Unit options exercised (2,575 ) 2.00 Unit options settled (3,536 ) 2.04 Unit options outstanding—December 31, 2015 641 2.52 4.73 $ 1,930 Unit options exercised (119 ) 2.67 Unit options settled (160 ) 2.67 Unit options forfeited (195 ) 2.67 Unit options outstanding—December 31, 2016 167 2.09 1.75 $ 939 Unit options exercised (57 ) 2.85 Unit options outstanding—December 31, 2017 110 $ 2.85 0.75 $ 1,691 Unit options vested and exercisable—December 31, 2015 167 $ 2.09 2.75 $ 574 Unit options vested and exercisable—December 31, 2016 167 $ 2.09 1.75 $ 939 Unit options vested and exercisable—December 31, 2017 110 $ 2.85 0.75 $ 1,691 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the unit on December 31, 2017 , 2016 , and 2015 and the exercise price of the option. The number and weighted average grant date fair value for nonvested unit options outstanding are as follows: Number of Nonvested Options Outstanding (in thousands) Weighted Average Grant Date Fair Value per Option Nonvested unit options outstanding—December 31, 2014 1,398 $ 0.93 Options vested (924 ) 0.90 Nonvested unit options outstanding—December 31, 2015 474 0.97 Options forfeited (195 ) 0.97 Unit options vested (279 ) 0.97 Nonvested unit options outstanding—December 31, 2016 — — Nonvested unit options outstanding—December 31, 2017 — $ — In February 2015, Switch, Ltd. settled the outstanding notes receivable issued to members including accrued interest of $18.3 million by repurchasing 4,286,000 units from certain of its members. Additionally, Switch, Ltd. permitted employees holding 4,293,000 options to exercise their options by net settling the exercise price through a repurchase of 2,433,000 units from those employees. In addition, in November 2015, Switch, Ltd. permitted employees holding 1,758,000 options to exercise their options by net settling the exercise price of $3.9 million and related payroll taxes of $1.5 million , for a total value of $5.4 million . The following additional disclosures are provided for unit options during the periods presented: Years Ended 2017 2016 2015 (in thousands) Total fair value of unit options vested $ — $ 271 $ 835 Total aggregate intrinsic value of unit options exercised (1) $ 869 $ 601 $ 9,098 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the unit on December 31, 2017 , 2016 , and 2015 and the exercise price of the option. Common Unit Awards In 2012, Switch, Ltd. began issuing common unit awards ("Incentive Units") containing a hurdle amount (similar to an exercise price) where employees benefited from any appreciation in the value of their awards above the hurdle amount under the Switch, Ltd. operating agreement. In September 2017, Switch, Ltd. granted 7,500,000 Incentive Units to its Chief Executive Officer (the "CEO Award"). Switch, Ltd. also granted 1,511,572 Incentive Units to its President with a hurdle amount of $11.69 per Incentive Unit (the "President Award"). The CEO Award contained a provision that caused the Incentive Units underlying the CEO Award to convert into Common Units on a one-to-one basis in connection with the closing of Switch, Inc.'s IPO. Each of the CEO Award and President Award vested as to 40% of the award on the closing of Switch, Inc.'s IPO and will subsequently vest as to 2.5% of the award on each of the eight quarterly anniversaries of the closing of Switch, Inc.'s IPO and 5% of the award each quarterly anniversary thereafter, subject to continued service. As vesting of the CEO Award and President Award commenced solely upon the closing of Switch, Inc.'s IPO or other qualifying event, they were treated as performance based awards. In connection with the closing of Switch, Inc.'s IPO, all outstanding Incentive Units, other than the CEO Award and the President Award, accelerated in full and were converted into Common Units after net settling the hurdle amount. In connection with the effectiveness of the Switch Operating Agreement, the CEO Award converted into 7,500,000 Common Units and the President Award converted into 472,144 Common Units after net settling the hurdle amount. As of December 31, 2017 , unvested Common Units related to the CEO Award and President Award totaled 4,783,286 with a weighted average grant date fair value per unit of $11.11 . As of December 31, 2017 , total equity-based compensation cost related to all unvested Common Units is $46.3 million , which is expected to be recognized over a weighted average period of 3.78 years. If a forfeiture of unvested Common Units under the CEO Award and President Award occurs, the associated shares of Class C common stock and Class B common stock, respectively, are also forfeited. The Incentive Unit activity is summarized below: Number of Units (in thousands) Weighted Average Hurdle Amount per Unit Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (1) (in thousands) Incentive Units outstanding—December 31, 2014 8,760 $ 3.53 Incentive Units granted 10,444 4.35 Incentive Units forfeited (899 ) 3.71 Incentive Units outstanding—December 31, 2015 18,305 3.99 2.85 $ 28,235 Incentive Units granted 2,197 6.38 Incentive Units forfeited (1,109 ) 5.08 Incentive Units outstanding—December 31, 2016 19,393 4.20 1.98 $ 68,139 CEO Award 7,500 — President Award 1,512 11.69 Incentive Units forfeited (873 ) 4.62 Incentive Units net settled at IPO (5,589 ) 5.74 Incentive Units converted into Common Units at IPO (21,943 ) 2.87 Incentive Units outstanding—December 31, 2017 — $ — — $ — Incentive Units vested—December 31, 2015 1,191 $ 3.47 1.94 $ 2,454 Incentive Units vested—December 31, 2016 4,558 $ 3.97 1.50 $ 17,053 Incentive Units vested—December 31, 2017 22,125 $ 3.82 — $ 318,033 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the Incentive Unit on December 31, 2017 , 2016 , and 2015 and the hurdle amount of the Incentive Unit. The number and weighted average grant date fair value for nonvested Incentive Units granted and outstanding are as follows: Number of Nonvested Incentive Units Outstanding (in thousands) Weighted Average Grant Date Fair Value per Incentive Unit Nonvested Incentive Units outstanding—December 31, 2014 7,977 $ 1.36 Incentive Units granted 10,444 $ 1.18 Incentive Units forfeited (899 ) $ 1.26 Incentive Units vested (408 ) $ 1.36 Nonvested Incentive Units outstanding—December 31, 2015 17,114 $ 1.26 Incentive Units granted 2,197 $ 2.04 Incentive Units forfeited (1,109 ) $ 1.75 Incentive Units vested (3,367 ) $ 1.24 Nonvested Incentive Units outstanding—December 31, 2016 14,835 $ 1.34 CEO Award 7,500 $ 11.69 President Award 1,512 $ 1.98 Incentive Units forfeited (873 ) $ 0.97 President Award net settled at IPO (624 ) $ 1.98 Nonvested Incentive Units converted into nonvested Common Units at IPO—CEO Award (4,500 ) $ 11.69 Nonvested Incentive Units converted into nonvested Common Units at IPO—President Award (283 ) $ 1.98 Incentive Units vested (17,567 ) $ 3.14 Nonvested Incentive Units outstanding—December 31, 2017 — $ — The weighted average assumptions used in estimating the grant date fair value of these awards, exclusive of the CEO Award, are listed in the table below: Years Ended 2017 2016 2015 Expected volatility 29.3 % 39.8 % 35.1 % Risk-free interest rate 1.4 % 1.5 % 1.4 % Expected term (in years) 2.0 3.7 3.1 Dividend rate 0.6 % 0.9 % 1.3 % As the CEO Award contained a provision that caused the Incentive Units underlying the CEO Award to convert into Common Units on a one-to-one basis in connection with the closing of Switch, Inc.'s IPO, the grant date fair value of the underlying units was $11.69 per unit. Excluding $17.1 million of fair value attributable to the accelerated vesting of Incentive Units as a result of the IPO and $1.2 million and $35.1 million of fair value related to the vesting of the President Award and CEO Award, respectively, in 2017 the total fair value of Incentive Units vested for the years ended December 31, 2017 , 2016 , and 2015 was $1.8 million , $4.2 million , and $555,000 , respectively. During the year ended December 31, 2017 , Switch, Ltd. awarded 150,880 fully vested Common Units at a fair market value of $7.39 per unit totaling $1.1 million in equity-based compensation. During the year ended December 31, 2016 , Switch, Ltd. awarded 150,895 fully vested Common Units at a fair market value of $5.53 per unit totaling $835,000 in equity-based compensation. 2017 Incentive Award Plan On September 22, 2017, Switch, Inc.'s Board of Directors adopted the 2017 Incentive Award Plan (the "2017 Plan"). The 2017 Plan provides that the initial aggregate number of shares of Class A common stock reserved and available for issuance be 25,000,000 shares of Class A common stock plus an increase each January 1, beginning on January 1, 2018 and ending on and including January 1, 2027, equal to the lesser of (A) 17,000,000 shares of Class A common stock, (B) 5% of the aggregate number of shares of Switch, Inc.'s Class A common stock, Class B common stock and Class C common stock outstanding on the final day of the immediately preceding calendar year and (C) such smaller number of shares of Class A common stock as is determined by the Board of Directors. This number is subject to adjustment in the event of a stock split, stock dividend or other defined changes in Switch, Inc.'s capitalization. The 2017 Plan was effective as of its adoption date. All awards granted under the 2017 Plan are intended to be treated as (i) stock options, including incentive stock options, (ii) stock appreciation rights, (iii) non-statutory stock options under the Internal Revenue Code of 1986, as amended, (iv) restricted stock, (v) restricted stock units ("RSUs"), or (vi) other stock or cash based awards as may be determined by the plan's administrator from time to time. The term of each option award shall be no more than 10 years from the date of grant. Options exercised under the 2017 Plan provide the purchaser with full rights equivalent to those of existing Class A common stock holders and holders as of the date of exercise. The Company's policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. Additionally, the Switch Operating Agreement states that Switch, Ltd. will maintain at all times a one-to-one ratio between the number of Common Units owned by Switch, Inc. and the number of outstanding shares of Class A common stock, including those issued as a result of stock option exercises and vesting of RSU awards. In October 2017, Switch, Inc. granted stock options covering 5,724,896 shares of Class A common stock under the 2017 Plan with an exercise price of $17.00 per share, the public offering price per share of the Class A common stock in Switch, Inc.'s IPO. Of these stock options, stock options covering 5,626,470 shares of Class A common stock were vested in full as of the closing date of the IPO resulting in equity-based compensation expense of $28.1 million recorded on the closing date of the IPO. Stock options covering the remaining 98,426 shares of Class A common stock will vest ratably over three years. The following table summarizes information related to stock options: Number of Stock Options (in thousands) Weighted Average Exercise Price per Stock Option Weighted Average Remaining Contractual Life (Years) Aggregate (1) Stock options outstanding—December 31, 2016 — $ — Stock options granted 5,725 $ 17.00 Stock options outstanding—December 31, 2017 5,725 $ 17.00 9.77 $ 6,813 Stock options vested and exercisable—December 31, 2017 5,626 $ 17.00 9.77 $ 6,695 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the stock option on December 31, 2017 and the exercise price of the stock option. The number and weighted average grant date fair value for nonvested stock options granted and outstanding are as follows: Number of Stock Options (in thousands) Weighted Average Grant Date Fair Value Nonvested stock options outstanding—December 31, 2016 — $ — Stock options granted 5,725 $ 5.00 Stock options vested (5,626 ) $ 4.99 Nonvested stock options outstanding—December 31, 2017 99 $ 5.37 The weighted average assumptions used in estimating the grant date fair value of the stock options are listed in the table below: Year Ended December 31, 2017 Expected volatility 31.8 % Risk-free interest rate 1.9 % Expected term (in years) 5.0 Dividend rate 0.6 % As of December 31, 2017 , total equity-based compensation cost related to all unvested stock options is $451,000 , which is expected to be recognized over a weighted average period of 2.76 years. Pursuant to the terms of the CEO Award, since the total number of Common Units granted under the CEO Award was equal to less than 3% of all outstanding shares of Switch, Inc. following the closing of its IPO, including the exercise of the underwriters' option to purchase additional shares (the "Threshold"), Switch, Inc. granted 50,638 RSUs (the "CEO RSU Award") to the Chief Executive Officer of Switch, Ltd. under the 2017 Plan in December 2017, such that the CEO Award together with the CEO RSU Award represented a number of shares of common stock of Switch, Inc. equal to the Threshold. The CEO RSU Award vested as to 40% of the award on the grant date and will subsequently vest as to 2.5% of the award on each of the eight quarterly anniversaries of the closing of Switch, Inc.'s IPO and 5% of the award each quarterly anniversary thereafter, subject to continued service. The following table summarizes information related to RSUs: Number of RSUs (in thousands) Weighted Average Grant Date Fair Value per RSU RSUs outstanding—December 31, 2016 — $ — CEO RSU Award 51 $ 18.01 RSUs vested (20 ) $ 18.01 RSUs outstanding—December 31, 2017 31 $ 18.01 As of December 31, 2017 , total equity-based compensation cost related to all unvested RSU awards is $547,000 , which is expected to be recognized over a weighted average period of 3.78 years. Total equity-based compensation recognized in the consolidated statements of operations and comprehensive income (loss) for the 2017 Plan, Unit Option Plan, Incentive Units, and Common Units is as follows for each of the periods presented: Years Ended 2017 2016 2015 (in thousands) Cost of revenue $ 1,289 $ 181 $ — Selling, general and administrative 83,501 5,754 5,237 Total equity-based compensation expense $ 84,790 $ 5,935 $ 5,237 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts as of December 31, 2017 for cash, accounts receivable, and accounts payable approximate their estimated fair values due to the short maturity of these instruments. Management believes the fair value of the Company's long-term debt was $599.2 million based on Level 2 inputs using quoted market prices on or about December 31, 2017 . The carrying amounts as of December 31, 2016 for cash, accounts receivable, accounts payable, and long-term debt approximate their estimated fair values due to the short maturity of these instruments, or because the related interest rates approximate current market rates. Management has elected not to adopt the option available under GAAP to measure any of its eligible financial instruments or other items at fair value. Accordingly, the Company continues to measure all of its assets and liabilities on the historical cost basis of accounting except as otherwise required under GAAP. |
Non-controlling Interest
Non-controlling Interest | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest | Non-controlling Interest Switch, Inc. owns an indirect economic interest in Switch, Ltd., where "economic interests" means the right to receive any distributions, whether cash, property or securities of Switch, Ltd., in connection with Common Units. Prior to the IPO, all membership interests in Switch, Ltd. represented controlling interests. As a result of the IPO and Transactions described in Note 1, the Members at December 31, 2017 became non-controlling interest holders of Switch, Ltd. and owned 85.5% of the outstanding Common Units, with the remaining 14.5% owned by Switch, Inc. Prospectively, non-controlling interest will be adjusted to reflect the impact of any changes in Switch, Inc.'s ownership interest in Switch, Ltd. The ownership of the Common Units is summarized as follows: December 31, 2017 Units Ownership % Switch, Inc.'s ownership of Common Units (equal to outstanding Class A common stock) 35,937,500 14.5 % Non-controlling interest holders' ownership of Common Units (1) 211,675,452 85.5 % Total Common Units 247,612,952 100.0 % ________________________________________ (1) Common Units held as of December 31, 2017 exclude 4,500,000 and 283,286 of unvested Common Units granted under the CEO Award and President Award, respectively, and 110,225 of vested and exercisable unit options under the Unit Option Plan. The Company uses the weighted average ownership percentages during the period to calculate the pretax income attributable to Switch, Inc. and the non-controlling interest holders of Switch, Ltd. |
Net Income (Loss) Per Share_Uni
Net Income (Loss) Per Share/Unit | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share/Unit | Net Income (Loss) Per Share/Unit The following table sets forth the calculation of basic and diluted net income (loss) per share/unit during the periods presented (in thousands, except share/unit and per share/unit data): Years Ended 2017 2016 2015 (in thousands, except share/unit and per share/unit data) Net income (loss) per share/unit: Numerator—basic and diluted: Net (loss) income attributable to Switch, Inc.—basic and diluted $ (15,208 ) $ 31,368 $ 73,472 Denominator—basic: Weighted average shares/units outstanding—basic (1) 8,073,908 199,047,070 196,773,458 Net (loss) income per share/unit—basic $ (1.88 ) $ 0.16 $ 0.37 Denominator—diluted: Weighted average shares/units outstanding—basic (1) 8,073,908 199,047,070 196,773,458 Weighted average effect of dilutive securities: Effect of dilutive options — 230,511 1,498,228 Effect of unvested Incentive Units — 4,183,839 1,000,583 Weighted average shares/units outstanding—diluted (1) 8,073,908 203,461,420 199,272,269 Net (loss) income per share/unit—diluted $ (1.88 ) $ 0.15 $ 0.37 ________________________________________ (1) Amounts for the year ended December 31, 2017 represent shares of Class A common stock outstanding. Amounts for the years ended December 31, 2016 and 2015 represent Common Units outstanding. Shares of Class B common stock and Class C common stock do not share in the earnings or losses of Switch, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted net income (loss) per share for each of Class B common stock and Class C common stock under the two-class method has not been presented. The following table presents potentially dilutive securities excluded from the computation of diluted net income (loss) per share/unit for the periods presented because their effect would have been anti-dilutive. Years Ended 2017 2016 2015 Weighted average unvested Incentive Units — 533,390 4,233,993 Stock options (1) 5,724,896 — — RSUs (1) 30,383 — — Shares of Class B and Class C common stock (2) 216,568,963 — — ________________________________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net income (loss) per share. (2) Shares of Class B common stock and Class C common stock at the end of the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company's chief operating decision maker is its Chief Executive Officer. The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. All of the Company's assets are maintained in the United States. The Company derives a substantial majority of its revenue from sales to customers in the United States, based upon the billing address of the customer. Revenue derived from customers outside the United States, based upon the billing address of the customer, were less than 2% of total revenues for each period presented. The Company's revenue is comprised of the following: Years Ended 2017 2016 2015 (in thousands) Colocation $ 304,720 $ 259,046 $ 218,498 Connectivity 67,690 53,715 43,147 Other 5,865 5,591 4,225 Revenue $ 378,275 $ 318,352 $ 265,870 |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) Quarterly financial information is presented below (amounts in thousands, except per share/unit data): Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 89,157 $ 92,101 $ 97,689 $ 99,328 $ 378,275 Income (loss) from operations $ 24,439 $ 23,541 $ 25,451 $ (54,604 ) $ 18,827 Net income (loss) $ 20,328 $ 14,953 $ 16,486 $ (60,347 ) $ (8,580 ) Net income (loss) attributable to Switch, Inc. $ 20,328 $ 14,953 $ 16,486 $ (66,975 ) $ (15,208 ) Basic net income (loss) per unit/share $ 0.10 $ 0.07 $ 0.08 $ (2.09 ) $ (1.88 ) Diluted net income (loss) per unit/share $ 0.10 $ 0.07 $ 0.08 $ (2.09 ) $ (1.88 ) Year Ended December 31, 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 73,966 $ 80,832 $ 81,666 $ 81,888 $ 318,352 Income (loss) from operations $ 19,813 $ 22,342 $ 16,412 $ (7,497 ) $ 51,070 Net income (loss) $ 16,678 $ 18,535 $ 15,926 $ (19,771 ) $ 31,368 Net income (loss) attributable to Switch, Inc. $ 16,678 $ 18,535 $ 15,926 $ (19,771 ) $ 31,368 Basic net income (loss) per unit $ 0.08 $ 0.09 $ 0.08 $ (0.10 ) $ 0.16 Diluted net income (loss) per unit $ 0.08 $ 0.09 $ 0.08 $ (0.10 ) $ 0.15 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent events through April 2, 2018 , the date on which the annual consolidated financial statements as of and for the year ended December 31, 2017 were available to be issued, were evaluated by the Company to determine the need, if any, for recognition or disclosure in its consolidated financial statements. In January 2018, a wholly-owned subsidiary of Switch, Ltd. entered into a Master Power Purchase & Sale Agreement of electricity with Tenaska Power Services Co. to purchase a minimum of 10 megawatts per energy hour for a term of 23 months , or a minimum purchase commitment of $4.9 million during the term, which started on February 1, 2018. In April 2018, Switch, Inc.'s Board of Directors declared a dividend of $0.0147 per share of Class A common stock to holders of record as of the close of business on April 13, 2018 for the first quarter of 2018. The dividend will be payable on April 23, 2018. Prior to the payment of this dividend, Switch, Ltd. will make a cash distribution to all holders of record of Common Units of Switch, Ltd., including Switch, Inc., of $0.0147 per Common Unit. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting | Basis of Presentation and Accounting The accompanying consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), and include the accounts of the Company. All significant intercompany transactions and balances have been eliminated. As the sole manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch, and has the sole voting interest in, and controls the management of, Switch, and has the obligation to absorb the losses of, and receive benefits from, Switch. Accordingly, Switch, Inc. identifies itself as the primary beneficiary of Switch and began consolidating Switch in its consolidated financial statements as of the closing date of the IPO, resulting in a non-controlling interest related to the Common Units held by the Members on its consolidated financial statements. Switch has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior to the IPO and the Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 2017 through October 10, 2017, as of December 31, 2016, and for the years ended December 31, 2016 and December 31, 2015 presented in the consolidated financial statements and notes to consolidated financial statements herein represent the historical operations of Switch. The amounts as of December 31, 2017 and for the period from October 11, 2017 through December 31, 2017 reflect the consolidated operations of the Company. For the period from June 13, 2017 to October 10, 2017, Switch, Inc. had no business transactions or activities and had no assets or liabilities with the exception of the issuance of one share at par value of $0.001 per share, which was canceled as of the closing date of the IPO. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity ("VIE") accounting model. A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity's economic performance or (ii) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, collectability of notes receivable, useful lives of property and equipment, equity-based compensation, deferred revenue, fair value of leased property at inception of lease term, fair value of deliverables under multiple element arrangements, probability assessments of exercising renewal options on leases and other than temporary impairments on investments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. |
Cash | Cash The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. |
Investments | Investments The Company's investments in entities where it holds at least a 20% ownership interest and has the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. The Company's share of the investee's results of operations is included in equity in net (losses) earnings of investments and foreign currency translation adjustments, as applicable, are included in other comprehensive income with a corresponding adjustment to its investment. The Company discontinues applying the equity method of accounting when the investment is reduced to zero. If the investee subsequently reports net income or other comprehensive income, the Company resumes applying the equity method of accounting only after its share of unrecognized net income and other comprehensive income, respectively, equals the share of losses not recognized during the period the equity method of accounting was suspended. The Company gives precedence to other comprehensive income and losses when determining whether to resume applying the equity method of accounting. Investments in entities where the Company holds less than a 20% ownership interest are generally accounted for using the cost method of accounting. |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Derivative Financial Instruments | Derivative Financial Instruments A derivative is a financial instrument whose value changes in response to an underlying variable, requires little or no initial net investment and is settled at a future date. Derivatives are initially recognized at fair value on the date on which the derivatives are entered into and subsequently re-measured at fair value. Embedded derivatives included in hybrid instruments are treated and disclosed as separate derivatives when their economic characteristics and risks are not closely related to those of the host contract, the terms of the embedded derivative are the same as those of a stand-alone derivative and the combined contract is not measured at fair value through earnings. The financial host contracts are accounted for and measured using the applicable GAAP of the relevant financial instrument category. The method of recognizing fair value gains and losses depends on whether the derivatives are designated as hedging instruments, and if so, the nature of the hedge relationship. All gains and losses from changes in the fair values of derivatives that do not qualify for hedge accounting are recognized immediately in earnings. During the year ended December 31, 2017 , the Company entered into an agreement for the purchase of electricity (Note 9). The accounting guidance for derivative instruments provides a scope exception for commodity contracts that meet the normal purchase and sales criteria specified in the standard. The normal purchases and normal sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that are designated as normal purchases and normal sales are not recorded on the consolidated balance sheets at fair value. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Although the Company operates primarily in Nevada, realization of its customer accounts receivable and its future operations and cash flows could be affected by adverse economic conditions, both regionally and elsewhere in the United States. During the years ended December 31, 2017 , 2016 , and 2015 , the Company's largest customer and its affiliates comprised 11% , 13% , and 14% , respectively, of the Company's revenue. One customer accounted for 18% of accounts receivable as of December 31, 2017 . No single customer accounted for 10% or more of accounts receivable as of December 31, 2016 . The Company generally carries cash on deposit with financial institutions in excess of federally insured limits. Through May 31, 2017, the Company was also exposed to a limited extent, to a risk of unfavorable price increases from its principal provider of power, Nevada Power Company dba NV Energy ("NV Energy"), whose rates are set by and services are regulated by the Public Utilities Commission of Nevada ("PUCN"). On June 1, 2017, the Company became an unbundled purchaser of energy in Nevada. |
Accounts Receivable | Accounts Receivable Customer receivables are non-interest bearing and the Company generally does not request collateral from its customers, however, it usually obtains a lien or other security interest in certain customers' equipment placed in the Company's data center, and/or obtains a deposit. In the event collection is not reasonably assured at inception of a contract, recognition of related revenue is deferred generally until receipt of cash payment. The Company maintains an allowance for doubtful accounts for estimated losses up to the full amount of invoices based on the age of the invoices. If the financial condition of the Company's customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debt, customer concentrations, customer credit-worthiness and changes in customer payment terms when evaluating revenue recognition and the adequacy of the Company's reserves. Delinquent account balances are written-off after management has determined the likelihood of collection is not probable. |
Notes Receivable | Notes Receivable Notes receivable are recorded at amortized cost using the interest method. The Company evaluates the collectability of both principal and interest based on an assessment of any significant changes in the amount and timing of the expected future cash flows. |
Internal Use Software | Internal Use Software The Company capitalizes certain costs incurred in connection with developing or obtaining internal use software. Capitalized software costs placed into service are included in computer equipment, furniture and fixtures within property and equipment, net on the consolidated balance sheets and are amortized on a straight-line basis over a three -year period. Software costs that do not meet capitalization criteria are expensed immediately. |
Leases | Leases Upon lease inception, the Company categorizes leases as either operating or capital leases. On certain lease agreements, the Company may receive rent holidays and other incentives. The Company recognizes rent expense on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. For assets held under capital leases and leasehold improvements, the estimated useful lives are limited to the shorter of the useful life of the asset or the term of the lease, including renewal option periods if exercise is intended (Note 7). Amortization of assets that are recorded under capital leases is included in depreciation expense. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Depreciation and amortization of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. Costs of repairs and maintenance are expensed as incurred. For assets used in data center operations, the related depreciation and amortization are included in cost of revenue. The Company's estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 4.5-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 40 Deferred installation charges 3-5 Computer equipment, furniture and fixtures 3-5 In addition, the Company has capitalized interest costs during the construction phase of data centers. Once a data center or expansion project becomes operational, these costs are allocated to certain property and equipment categories and are depreciated over the estimated useful life of the underlying assets. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets The Company's long‑lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. |
Portfolio Energy Credits | Portfolio Energy Credits The Company recognizes portfolio energy credits ("PECs") at their cost when purchased as an intangible asset, subject to impairment testing. PECs are not considered outputs by the Company. Amortization of PECs is recorded within cost of revenue on the consolidated statements of operations and comprehensive income (loss) when PECs are utilized in operations. |
Commitments and Contingencies | Commitments and Contingencies The Company accrues for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. |
Deferred Debt Issuance Costs and Deferred Offering Costs | Deferred Debt Issuance Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the terms of the related debt instruments using the straight line-method for both term debt, which approximates the interest method, and revolving debt. Deferred Offering Costs The Company capitalized certain legal, accounting, and other third-party fees that were directly associated with in-process equity financings until such financings were consummated. After consummation of the equity financing, these costs were recorded in stockholders' equity as a reduction of additional paid in capital generated as a result of the offering. Upon the successful consummation of Switch, Inc.'s IPO in October 2017, deferred offering costs of approximately $4.9 million were recorded in the Company's stockholders' equity as a reduction of additional paid in capital. The Company did not record any deferred offering costs as of December 31, 2016 . |
Foreign Currency Translation | Foreign Currency Translation SUPERNAP International, S.A. ("SUPERNAP International"), an equity method investment of the Company, has investments in foreign subsidiaries. Gains or losses from translation of foreign operations where the local currency is the functional currency are included in other comprehensive income. |
Revenue Recognition | Revenue Recognition During each of the years ended December 31, 2017 , 2016 , and 2015 , the Company derived more than 95% of its revenue from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing of cabinet space and power; and (2) connectivity services, which includes cross-connects, broadband services, and external connectivity. The remainder of the Company's revenue is from non-recurring revenue streams, which primarily include installation and contract settlements. Recurring revenue is generally billed monthly and recognized ratably over the period to which the service relates. The Company's contracts with its customers generally have terms of three to five years. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the expected life of the installation, which was 66 months and 73 months as of December 31, 2017 and 2016 , respectively, for colocation contracts, 29 months and 34 months as of December 31, 2017 and 2016 , respectively, for broadband services contracts, and 41 months and 35 months as of December 31, 2017 and 2016 , respectively, for external connectivity contracts. The expected life of the installation is determined based on (i) the weighted average term of new contracts entered into during the period with customers, plus (ii) the average term of contract renewals entered into during the period with existing customers. Revenue from connectivity services is generally recognized on a gross basis in accordance with the accounting standard related to reporting revenue gross as a principal versus net as an agent, primarily because the Company acts as the principal in the transactions, takes title to services and bears credit risk. Revenue from contract settlements, which result when a customer wishes to terminate their contract early, is generally recognized when no remaining performance obligations exist, to the extent that the revenue has not previously been recognized. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved, the Company reduces revenue for any credits given to the customer as a result. There were no service level credits issued during the years ended December 31, 2017 , 2016 , and 2015 . Revenue is recognized only when the service has been provided and when there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the receivable is reasonably assured. It is the Company's customary business practice to obtain a signed colocation facility agreement and service order prior to recognizing revenue in an arrangement. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. The Company generally does not request collateral from its customers except it usually obtains a lien and/or other security interest in a customer's equipment placed in the Company's data centers or obtains a deposit. If the Company determines that collection of a fee is not reasonably assured, the fee is deferred and revenue is recognized at the time collection becomes reasonably assured, which is generally upon receipt of cash. Multiple Element Arrangements The Company enters into multiple element revenue arrangements in which a customer may purchase a combination of the right to use network capacity (e.g., conduit and fiber optic cables), maintenance services, and colocation services. Terms of performance, cancellation, termination, or refunds in these arrangements are similar to those for individual stand-alone deliverables. To the extent these revenue arrangements involve the use of property and equipment, they are evaluated under lease accounting guidance to determine whether the arrangement meets the definition of a lease. None of the multiple element arrangements entered into by the Company during any of the periods presented have met the definition of a lease. The services offered under these revenue arrangements qualify as separate units of accounting. Multiple deliverables within revenue arrangements are allocated to separate units of accounting if the deliverables meet both of the following criteria: • The delivered items have value to the customer on a stand-alone basis. The items have value on a stand-alone basis if they are sold separately by any vendor or the customer could resell the delivered items on a stand-alone basis; and • If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of the Company. At the inception of a multiple element arrangement, the Company: (1) determines whether and when each unit of accounting has been delivered or performed; (2) determines the fair value of each unit of accounting using the selling price hierarchy of vendor-specific evidence of fair value ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, and management's best estimate of the selling price ("BESP") if neither VSOE nor TPE is available; and (3) allocates the total price among the various units of accounting using the relative selling price method. Once the total price has been allocated among the various units of accounting, revenue is recognized when the relevant revenue recognition criteria are met for each element, which is upon acceptance or use of the services by the customer. VSOE generally exists when the deliverable is sold separately; however, in certain instances VSOE cannot be established if the deliverable cannot be priced within a narrow range or has a limited sales history. TPE is determined based on competitor prices for similar deliverables when sold separately. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, pricing practices, market conditions, competitive landscape, type of customer, geographies, internal costs, and gross margin objectives. Revenue is allocated to rights to use network capacity and related colocation services and maintenance services under these arrangements based on TPE. Revenue allocated to other colocation services provided under these arrangements is based on VSOE. |
Revenue Recognition, Multiple Element Arrangements | Multiple Element Arrangements The Company enters into multiple element revenue arrangements in which a customer may purchase a combination of the right to use network capacity (e.g., conduit and fiber optic cables), maintenance services, and colocation services. Terms of performance, cancellation, termination, or refunds in these arrangements are similar to those for individual stand-alone deliverables. To the extent these revenue arrangements involve the use of property and equipment, they are evaluated under lease accounting guidance to determine whether the arrangement meets the definition of a lease. None of the multiple element arrangements entered into by the Company during any of the periods presented have met the definition of a lease. The services offered under these revenue arrangements qualify as separate units of accounting. Multiple deliverables within revenue arrangements are allocated to separate units of accounting if the deliverables meet both of the following criteria: • The delivered items have value to the customer on a stand-alone basis. The items have value on a stand-alone basis if they are sold separately by any vendor or the customer could resell the delivered items on a stand-alone basis; and • If the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the control of the Company. At the inception of a multiple element arrangement, the Company: (1) determines whether and when each unit of accounting has been delivered or performed; (2) determines the fair value of each unit of accounting using the selling price hierarchy of vendor-specific evidence of fair value ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, and management's best estimate of the selling price ("BESP") if neither VSOE nor TPE is available; and (3) allocates the total price among the various units of accounting using the relative selling price method. Once the total price has been allocated among the various units of accounting, revenue is recognized when the relevant revenue recognition criteria are met for each element, which is upon acceptance or use of the services by the customer. VSOE generally exists when the deliverable is sold separately; however, in certain instances VSOE cannot be established if the deliverable cannot be priced within a narrow range or has a limited sales history. TPE is determined based on competitor prices for similar deliverables when sold separately. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, pricing practices, market conditions, competitive landscape, type of customer, geographies, internal costs, and gross margin objectives. Revenue is allocated to rights to use network capacity and related colocation services and maintenance services under these arrangements based on TPE. Revenue allocated to other colocation services provided under these arrangements is based on VSOE. |
Income Taxes | Income Taxes Switch, Inc.'s corporate structure following the IPO, as described above, is commonly referred to as an "Up-C" structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure allows the Members to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or "passthrough" entity, for income tax purposes following the offering. One of these benefits is that future taxable income of Switch, Ltd. that is allocated to the Members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the entity level. Additionally, because the Members may redeem their Common Units for shares of Switch, Inc.'s Class A common stock or, at Switch, Inc.'s option, for cash, the Up-C structure also provides the Members with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. The Company reduces the carrying amounts of deferred tax assets by a valuation allowance if, based on the evidence available, it is more likely than not that such assets will not be realized. In making the assessment under the more likely than not standard, appropriate consideration must be given to all positive and negative evidence related to the realization of the deferred tax assets. The assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods by jurisdiction, the Company's experience with loss carryforwards not expiring unutilized and all tax planning alternatives that may be available. The Company utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating tax positions and estimating tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company includes interest and penalties related to our tax contingencies in interest expense. |
Advertising Costs | Advertising Costs Advertising costs are expensed when incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of operations and comprehensive income (loss). |
Equity-Based Compensation | Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is attributed on a straight-line basis for awards with service conditions and on an accelerated attribution basis for awards with performance conditions over the requisite service period, which is generally the vesting period. The Company used the Black-Scholes option-pricing model to determine the fair value of Switch, Ltd.'s incentive unit awards. The determination of the fair value of the incentive unit awards was affected by assumptions regarding a number of complex and subjective variables including the fair value of Switch, Ltd.'s member equity units, the expected price volatility of the member equity units over the term of the awards and actual and projected employee purchase behaviors. Switch, Ltd.'s member equity units' fair value per unit was estimated using a weighted average approach of a combination of the following three methods: (1) publicly traded data center company multiples; (2) data center precedent transaction multiples; and (3) the discounted cash flow method based on Switch, Ltd.'s five-year forecast. The weighting of these three methods varied over time. Switch, Ltd. estimated the expected volatility by analyzing the volatility of companies in the same industry and selecting volatility within the range. The risk-free interest rate was based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the Incentive Unit awards. The expected dividend rate was determined at the grant date for each Incentive Unit award. The expected term of the incentive unit award was calculated by analyzing historical exercise data and obtaining the weighted average of the holding period for the incentive unit awards. The Company uses the Black-Scholes option-pricing model to determine the fair value of Switch, Inc.'s stock option awards. Switch, Inc. estimates the expected volatility by analyzing the volatility of publicly-traded companies in the same industry and selecting the average volatility of the peer group. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the stock option awards. The expected dividend rate is based on the Company's estimate of annual dividends expected to be paid at the time of grant. The expected term for stock options granted is estimated using the "simplified" method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to Switch, Inc.'s lack of sufficient historical data. Switch, Inc.'s restricted stock unit awards are measured based on the fair market value of the underlying common stock on the date of grant. |
Net Income (Loss) per Share | Net Income (Loss) per Share/Unit Basic net income (loss) per share/unit is computed by dividing net income (loss) attributable to Switch, Inc. by the weighted average number of shares/units outstanding during the period. Diluted net income (loss) per share/unit is computed giving effect to all potential weighted average dilutive shares/units including unit options and incentive units for historical periods prior to the closing of the IPO and stock options, restricted stock units, and Switch, Ltd. common units convertible into shares of Class A common stock for the period after the closing of the IPO. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share/unit by application of the treasury stock method or if-converted method, as applicable. Refer to Note 15 for further information on net income (loss) per share/unit. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As the Company is an emerging growth company, it has elected not to opt out of the available extended transition period. Therefore, when a standard is issued or revised with different application dates for public or private companies, the Company, as an emerging growth company, is permitted to adopt the new or revised standard at the time private companies adopt the new or revised standard. As a result, adoption dates of Accounting Standards Updates herein are based on a private company timeline. ASU 2014-09–Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). The ASU replaces much of the current guidance regarding revenue recognition including most industry-specific guidance. The core principle of the ASU is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity will be required to identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligation in the contract, and recognize revenue when (or as) the entity satisfies a performance obligation. In addition to the new revenue recognition requirements, entities will be required to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Entities may choose between two retrospective transition methods when applying the ASU. In July 2015, the FASB voted to defer the effective date by one year (ASU 2015-14) to December 15, 2018 for annual reporting periods beginning after that date, and interim periods within annual periods beginning after December 15, 2019, and permitted early adoption of the standard, but not before the original effective date of December 15, 2017. Companies may use either a full retrospective or a modified-retrospective approach to adopt the standard. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). The core principle of the guidance in Revenue from Contracts with Customers in ASU 2014-09 is not changed by the amendments in ASU 2016-08. The amendments clarify the implementation guidance on principal versus agent considerations. Per ASU 2016-08, when another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself (principal) or to arrange for that good or service to be provided by the other party (agent). When an entity that is a principal satisfies a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified good or service transferred to the customer. When an entity that is an agent satisfies a performance obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements for ASU 2014-09. In April 2016 and May 2016, the FASB issued guidance which amends certain other aspects of ASU 2014-09. The amendments include the identification of performance obligations and the licensing implementation guidance (ASU 2016-10) and the collectability of revenue, presentation of sales tax and other similar taxes collected from customers, contracts containing noncash considerations, and contract modifications and completed contracts at transition (ASU 2016-12). In December 2016, the FASB amended ASU 2014-09 to make minor corrections and minor improvements to the guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost (ASU 2016-20). The effective date and transition provisions in these amendments are aligned with the requirements of ASU 2014-09. The Company is in the process of selecting a transition method and determining the effect of this guidance on its consolidated financial statements. ASU 2015-02–Consolidation In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) ("ASU 2015-02"). This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. The early adoption of ASU 2015-02 in the first quarter of 2017 did not impact the Company's consolidated financial statements. ASU 2015-17–Income Taxes In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) ("ASU 2015-17"). To simplify the presentation of deferred income taxes, this standard requires the classification of deferred tax assets and liabilities as noncurrent within a classified statement of financial position. The amendments in ASU 2015-17 are effective for all fiscal years beginning after December 15, 2017, and all interim periods within annual periods beginning after December 15, 2018. The early adoption of ASU 2015-17 during the year ended December 31, 2017 did not materially impact the Company's consolidated financial statements. ASU 2016-02–Leases On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). The principle of ASU 2016-02 is that a lessee should recognize the assets and liabilities that arise from leases. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability. For income statement purposes, ASU 2016-02 requires leases to be classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. ASU 2016-02 is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The new standard must be adopted using a modified-retrospective transition, and provides for certain practical expedients. In addition, in January 2018, the FASB also issued ASU 2018-01, which permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity's adoption of ASU 2016-02 and were not previously accounted for as leases. The Company is evaluating the potential effects of the adoption of these ASUs on its consolidated financial statements. The Company has not decided if early adoption will be considered. ASU 2016-09–Compensation–Stock Compensation In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 was issued to simplify accounting guidance by identifying, evaluating, and improving areas for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The areas affected by ASU 2016-09 include accounting for income taxes, classification of excess tax benefits on the statement of cash flows, minimum statutory tax withholding requirements, and classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. In addition, under this guidance, an entity can make an accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. Upon early adoption of this guidance during the first quarter of 2017, the Company changed its policy to account for forfeitures as they occur. The adoption of this guidance during the first quarter of 2017 did not materially impact the Company's consolidated financial statements. ASU 2016-13–Financial Instruments–Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). Under this guidance, a company will be required to use a new forward-looking "expected loss" model for trade and other receivables that generally will result in the earlier recognition of allowances for losses. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, and requires a modified-retrospective approach to adoption. Early adoption is permitted in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the potential effects the adoption of this standard will have on its consolidated financial statements. The Company has not decided if early adoption will be considered. ASU 2016-15–Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). The areas affected by ASU 2016-15 are debt prepayment and debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies), distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. Specifically, under this guidance, cash payments for debt prepayment or debt extinguishment costs will be classified as cash outflows for financing activities. The amendments in ASU 2016-15 are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in ASU 2016-15 will be applied using a retrospective transition method to each period presented. The adoption of ASU 2016-15 is not expected to materially impact the Company's consolidated financial statements. The Company has not decided if early adoption will be considered. ASU 2017-09–Compensation–Stock Compensation In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). This update provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. For all entities, the amendments in ASU 2017-09 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of ASU 2017-09 is not expected to materially impact the Company's consolidated financial statements. ASU 2018-02–Income Statement–Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. For all entities, the amendments in ASU 2018-02 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company is evaluating the potential effects the adoption of this standard will have on its consolidated financial statements. The Company has not decided if early adoption will be considered. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimated useful lives of property and equipment | The Company's estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 4.5-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 40 Deferred installation charges 3-5 Computer equipment, furniture and fixtures 3-5 Property and equipment, net, consists of the following as of: December 31, 2017 2016 (in thousands) Land and land improvements $ 151,286 $ 104,318 Data center equipment 784,290 591,085 Capitalized leased assets 35,974 36,408 Buildings, building improvements, and leasehold improvements 338,763 248,680 Substation equipment 4,247 — Cloud computing equipment 5,661 5,661 Fiber facilities 8,459 6,344 Computer equipment, furniture and fixtures 30,745 21,007 Vehicles 1,573 1,241 Construction in progress 90,059 97,368 Core network equipment 31,472 23,859 Deferred installation charges 4,436 3,858 Property and equipment, gross 1,486,965 1,139,829 Less: accumulated depreciation and amortization (353,393 ) (265,570 ) Total property and equipment, net $ 1,133,572 $ 874,259 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | The Company's estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 4.5-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 40 Deferred installation charges 3-5 Computer equipment, furniture and fixtures 3-5 Property and equipment, net, consists of the following as of: December 31, 2017 2016 (in thousands) Land and land improvements $ 151,286 $ 104,318 Data center equipment 784,290 591,085 Capitalized leased assets 35,974 36,408 Buildings, building improvements, and leasehold improvements 338,763 248,680 Substation equipment 4,247 — Cloud computing equipment 5,661 5,661 Fiber facilities 8,459 6,344 Computer equipment, furniture and fixtures 30,745 21,007 Vehicles 1,573 1,241 Construction in progress 90,059 97,368 Core network equipment 31,472 23,859 Deferred installation charges 4,436 3,858 Property and equipment, gross 1,486,965 1,139,829 Less: accumulated depreciation and amortization (353,393 ) (265,570 ) Total property and equipment, net $ 1,133,572 $ 874,259 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized financial information of equity method investments | The summarized financial information of the Company's equity method investments is as follows: December 31, 2017 2016 (in thousands) Current assets $ 2,169 $ 5,683 Noncurrent assets $ 17,075 $ 18,956 Current liabilities $ 2,583 $ 2,558 Noncurrent liabilities $ 19,445 $ 23,164 Years Ended December 31, 2017 2016 2015 (in thousands) Revenue $ 700 $ 1,239 $ 10,866 Gross (loss) profit $ (3,467 ) $ (2,313 ) $ 7,628 Net (loss) income $ (5,834 ) $ (12,353 ) $ 1,412 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consists of the following as of: December 31, 2017 2016 (in thousands) 2015 Term Loan Facility, interest paid at the defined LIBOR rate plus applicable interest margin (2.77% at December 31, 2016); matures May 2020 $ — $ 185,000 2017 Term Loan Facility, interest paid at the defined LIBOR rate plus applicable interest margin (3.81% at December 31, 2017); matures June 2024 597,000 — Less: unamortized debt issuance costs (5,241 ) (2,233 ) 591,759 182,767 2015 Revolving Credit Facility, interest paid at the defined LIBOR rate plus applicable interest margin (2.71% at December 31, 2016); matures May 2020 — 289,300 2017 Revolving Credit Facility, interest paid at the defined LIBOR rate plus applicable interest margin; matures June 2022 — — $ 591,759 $ 472,067 |
Long-term debt maturities | As of December 31, 2017 , long-term debt maturities are as follows (in thousands): 2018 $ 6,000 2019 6,000 2020 6,000 2021 6,000 2022 6,000 Thereafter 567,000 597,000 Less: unamortized debt issuance costs (5,241 ) $ 591,759 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Minimum payment obligations for capital lease | As of December 31, 2017 , minimum payment obligations for this capital lease are as follows: Related Party Building Lease (1) (in thousands) 2018 $ 1,952 2019 2,064 2020 2,124 2021 2,243 2022 2,306 Thereafter 31,330 42,019 Less: amount representing interest (22,553 ) Present value of minimum capital lease payments $ 19,466 ________________________________________ (1) Until 2023, capital lease payments are applied only to accrued interest, thus, there is no current portion. |
Future minimum lease payments for operating leases | As of December 31, 2017 , future minimum lease payments for all operating leases with remaining terms in excess of one year are as follows: Related Parties Other Total (in thousands) 2018 $ 4,706 $ 2,358 $ 7,064 2019 4,798 2,369 7,167 2020 4,860 2,372 7,232 2021 4,256 506 4,762 2022 2,863 179 3,042 Thereafter 56,653 643 57,296 $ 78,136 $ 8,427 $ 86,563 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum PEC purchase commitments | As of December 31, 2017 , future minimum PEC purchase commitments are as follows (in thousands): 2018 $ 1,908 2019 1,908 2020 1,908 2021 1,738 2022 1,738 Thereafter 26,079 $ 35,279 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Consolidated (loss) income before taxes and non-controlling interests for domestic and foreign operations | Consolidated loss before taxes and non-controlling interests for domestic and foreign operations is as follows: Year Ended (in thousands) Domestic $ (8,386 ) Foreign (1,175 ) Total loss before income taxes $ (9,561 ) |
Components of income tax expense (benefit) | Components of income tax benefit consist of the following: Year Ended (in thousands) Current Federal $ — State and local — Total current tax benefit $ — Deferred Federal $ (978 ) State and local (3 ) Total deferred tax benefit $ (981 ) Total tax benefit $ (981 ) |
Reconciliation of the U.S. statutory rate to the effective tax rate | The provision for income taxes from operations differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate to income before provision for income taxes. A reconciliation of the U.S. statutory rate to the effective tax rate is presented below: Year Ended U.S statutory tax rate 35.0 % Foreign rate differential (4.3 ) Rate effect from flow-through entity (34.8 ) Rate change impact due to tax reform (7.0 ) Partnership outside basis difference 26.2 Other (4.9 ) Effective tax rate 10.2 % |
Significant components of deferred tax assets and liabilities | Significant components of Switch, Inc.'s deferred tax assets and liabilities were as follows as of: December 31, 2017 (in thousands) Deferred tax assets Net operating loss carryforwards $ 981 Subtotal 981 Valuation allowance — Total deferred tax assets $ 981 Deferred tax liabilities Other — Total deferred tax liabilities $ — Net deferred tax assets $ 981 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Option activity | The number and weighted average grant date fair value for nonvested unit options outstanding are as follows: Number of Nonvested Options Outstanding (in thousands) Weighted Average Grant Date Fair Value per Option Nonvested unit options outstanding—December 31, 2014 1,398 $ 0.93 Options vested (924 ) 0.90 Nonvested unit options outstanding—December 31, 2015 474 0.97 Options forfeited (195 ) 0.97 Unit options vested (279 ) 0.97 Nonvested unit options outstanding—December 31, 2016 — — Nonvested unit options outstanding—December 31, 2017 — $ — The following table summarizes information related to stock options: Number of Stock Options (in thousands) Weighted Average Exercise Price per Stock Option Weighted Average Remaining Contractual Life (Years) Aggregate (1) Stock options outstanding—December 31, 2016 — $ — Stock options granted 5,725 $ 17.00 Stock options outstanding—December 31, 2017 5,725 $ 17.00 9.77 $ 6,813 Stock options vested and exercisable—December 31, 2017 5,626 $ 17.00 9.77 $ 6,695 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the stock option on December 31, 2017 and the exercise price of the stock option. The number and weighted average grant date fair value for nonvested stock options granted and outstanding are as follows: Number of Stock Options (in thousands) Weighted Average Grant Date Fair Value Nonvested stock options outstanding—December 31, 2016 — $ — Stock options granted 5,725 $ 5.00 Stock options vested (5,626 ) $ 4.99 Nonvested stock options outstanding—December 31, 2017 99 $ 5.37 The unit option activity under the Unit Option Plan is summarized as follows: Number of Units (in thousands) Weighted Average Exercise Price per Unit Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (1) (in thousands) Unit options outstanding—December 31, 2014 6,752 $ 2.07 Unit options exercised (2,575 ) 2.00 Unit options settled (3,536 ) 2.04 Unit options outstanding—December 31, 2015 641 2.52 4.73 $ 1,930 Unit options exercised (119 ) 2.67 Unit options settled (160 ) 2.67 Unit options forfeited (195 ) 2.67 Unit options outstanding—December 31, 2016 167 2.09 1.75 $ 939 Unit options exercised (57 ) 2.85 Unit options outstanding—December 31, 2017 110 $ 2.85 0.75 $ 1,691 Unit options vested and exercisable—December 31, 2015 167 $ 2.09 2.75 $ 574 Unit options vested and exercisable—December 31, 2016 167 $ 2.09 1.75 $ 939 Unit options vested and exercisable—December 31, 2017 110 $ 2.85 0.75 $ 1,691 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the unit on December 31, 2017 , 2016 , and 2015 and the exercise price of the option. |
Additional disclosures for unit options | The following additional disclosures are provided for unit options during the periods presented: Years Ended 2017 2016 2015 (in thousands) Total fair value of unit options vested $ — $ 271 $ 835 Total aggregate intrinsic value of unit options exercised (1) $ 869 $ 601 $ 9,098 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the unit on December 31, 2017 , 2016 , and 2015 and the exercise price of the option. |
Summary of unit activity | The Incentive Unit activity is summarized below: Number of Units (in thousands) Weighted Average Hurdle Amount per Unit Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (1) (in thousands) Incentive Units outstanding—December 31, 2014 8,760 $ 3.53 Incentive Units granted 10,444 4.35 Incentive Units forfeited (899 ) 3.71 Incentive Units outstanding—December 31, 2015 18,305 3.99 2.85 $ 28,235 Incentive Units granted 2,197 6.38 Incentive Units forfeited (1,109 ) 5.08 Incentive Units outstanding—December 31, 2016 19,393 4.20 1.98 $ 68,139 CEO Award 7,500 — President Award 1,512 11.69 Incentive Units forfeited (873 ) 4.62 Incentive Units net settled at IPO (5,589 ) 5.74 Incentive Units converted into Common Units at IPO (21,943 ) 2.87 Incentive Units outstanding—December 31, 2017 — $ — — $ — Incentive Units vested—December 31, 2015 1,191 $ 3.47 1.94 $ 2,454 Incentive Units vested—December 31, 2016 4,558 $ 3.97 1.50 $ 17,053 Incentive Units vested—December 31, 2017 22,125 $ 3.82 — $ 318,033 ________________________________________ (1) The intrinsic value is calculated as the difference between the fair value of the Incentive Unit on December 31, 2017 , 2016 , and 2015 and the hurdle amount of the Incentive Unit. |
Number and weighted average grant date fair value for nonvested stock options granted and outstanding | The number and weighted average grant date fair value for nonvested Incentive Units granted and outstanding are as follows: Number of Nonvested Incentive Units Outstanding (in thousands) Weighted Average Grant Date Fair Value per Incentive Unit Nonvested Incentive Units outstanding—December 31, 2014 7,977 $ 1.36 Incentive Units granted 10,444 $ 1.18 Incentive Units forfeited (899 ) $ 1.26 Incentive Units vested (408 ) $ 1.36 Nonvested Incentive Units outstanding—December 31, 2015 17,114 $ 1.26 Incentive Units granted 2,197 $ 2.04 Incentive Units forfeited (1,109 ) $ 1.75 Incentive Units vested (3,367 ) $ 1.24 Nonvested Incentive Units outstanding—December 31, 2016 14,835 $ 1.34 CEO Award 7,500 $ 11.69 President Award 1,512 $ 1.98 Incentive Units forfeited (873 ) $ 0.97 President Award net settled at IPO (624 ) $ 1.98 Nonvested Incentive Units converted into nonvested Common Units at IPO—CEO Award (4,500 ) $ 11.69 Nonvested Incentive Units converted into nonvested Common Units at IPO—President Award (283 ) $ 1.98 Incentive Units vested (17,567 ) $ 3.14 Nonvested Incentive Units outstanding—December 31, 2017 — $ — |
Weighted average assumptions used to estimate the grant date fair value of incentive units | The weighted average assumptions used in estimating the grant date fair value of these awards, exclusive of the CEO Award, are listed in the table below: Years Ended 2017 2016 2015 Expected volatility 29.3 % 39.8 % 35.1 % Risk-free interest rate 1.4 % 1.5 % 1.4 % Expected term (in years) 2.0 3.7 3.1 Dividend rate 0.6 % 0.9 % 1.3 % |
Weighted average assumptions used to estimate the grant date fair value of stock options | The weighted average assumptions used in estimating the grant date fair value of the stock options are listed in the table below: Year Ended December 31, 2017 Expected volatility 31.8 % Risk-free interest rate 1.9 % Expected term (in years) 5.0 Dividend rate 0.6 % |
RSU information | The following table summarizes information related to RSUs: Number of RSUs (in thousands) Weighted Average Grant Date Fair Value per RSU RSUs outstanding—December 31, 2016 — $ — CEO RSU Award 51 $ 18.01 RSUs vested (20 ) $ 18.01 RSUs outstanding—December 31, 2017 31 $ 18.01 |
Equity-based compensation expense | Total equity-based compensation recognized in the consolidated statements of operations and comprehensive income (loss) for the 2017 Plan, Unit Option Plan, Incentive Units, and Common Units is as follows for each of the periods presented: Years Ended 2017 2016 2015 (in thousands) Cost of revenue $ 1,289 $ 181 $ — Selling, general and administrative 83,501 5,754 5,237 Total equity-based compensation expense $ 84,790 $ 5,935 $ 5,237 |
Non-controlling Interest (Table
Non-controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Ownership of Common Units | The ownership of the Common Units is summarized as follows: December 31, 2017 Units Ownership % Switch, Inc.'s ownership of Common Units (equal to outstanding Class A common stock) 35,937,500 14.5 % Non-controlling interest holders' ownership of Common Units (1) 211,675,452 85.5 % Total Common Units 247,612,952 100.0 % ________________________________________ (1) Common Units held as of December 31, 2017 exclude 4,500,000 and 283,286 of unvested Common Units granted under the CEO Award and President Award, respectively, and 110,225 of vested and exercisable unit options under the Unit Option Plan. |
Net Income (Loss) Per Share_U36
Net Income (Loss) Per Share/Unit (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of basic and diluted net income (loss) per share/unit | The following table sets forth the calculation of basic and diluted net income (loss) per share/unit during the periods presented (in thousands, except share/unit and per share/unit data): Years Ended 2017 2016 2015 (in thousands, except share/unit and per share/unit data) Net income (loss) per share/unit: Numerator—basic and diluted: Net (loss) income attributable to Switch, Inc.—basic and diluted $ (15,208 ) $ 31,368 $ 73,472 Denominator—basic: Weighted average shares/units outstanding—basic (1) 8,073,908 199,047,070 196,773,458 Net (loss) income per share/unit—basic $ (1.88 ) $ 0.16 $ 0.37 Denominator—diluted: Weighted average shares/units outstanding—basic (1) 8,073,908 199,047,070 196,773,458 Weighted average effect of dilutive securities: Effect of dilutive options — 230,511 1,498,228 Effect of unvested Incentive Units — 4,183,839 1,000,583 Weighted average shares/units outstanding—diluted (1) 8,073,908 203,461,420 199,272,269 Net (loss) income per share/unit—diluted $ (1.88 ) $ 0.15 $ 0.37 ________________________________________ (1) Amounts for the year ended December 31, 2017 represent shares of Class A common stock outstanding. Amounts for the years ended December 31, 2016 and 2015 represent Common Units outstanding. |
Potentially dilutive securities excluded from the computation of diluted net income (loss) per share/unit | The following table presents potentially dilutive securities excluded from the computation of diluted net income (loss) per share/unit for the periods presented because their effect would have been anti-dilutive. Years Ended 2017 2016 2015 Weighted average unvested Incentive Units — 533,390 4,233,993 Stock options (1) 5,724,896 — — RSUs (1) 30,383 — — Shares of Class B and Class C common stock (2) 216,568,963 — — ________________________________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net income (loss) per share. (2) Shares of Class B common stock and Class C common stock at the end of the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Composition of revenue | The Company's revenue is comprised of the following: Years Ended 2017 2016 2015 (in thousands) Colocation $ 304,720 $ 259,046 $ 218,498 Connectivity 67,690 53,715 43,147 Other 5,865 5,591 4,225 Revenue $ 378,275 $ 318,352 $ 265,870 |
Quarterly Financial Informati38
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial information | Quarterly financial information is presented below (amounts in thousands, except per share/unit data): Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 89,157 $ 92,101 $ 97,689 $ 99,328 $ 378,275 Income (loss) from operations $ 24,439 $ 23,541 $ 25,451 $ (54,604 ) $ 18,827 Net income (loss) $ 20,328 $ 14,953 $ 16,486 $ (60,347 ) $ (8,580 ) Net income (loss) attributable to Switch, Inc. $ 20,328 $ 14,953 $ 16,486 $ (66,975 ) $ (15,208 ) Basic net income (loss) per unit/share $ 0.10 $ 0.07 $ 0.08 $ (2.09 ) $ (1.88 ) Diluted net income (loss) per unit/share $ 0.10 $ 0.07 $ 0.08 $ (2.09 ) $ (1.88 ) Year Ended December 31, 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 73,966 $ 80,832 $ 81,666 $ 81,888 $ 318,352 Income (loss) from operations $ 19,813 $ 22,342 $ 16,412 $ (7,497 ) $ 51,070 Net income (loss) $ 16,678 $ 18,535 $ 15,926 $ (19,771 ) $ 31,368 Net income (loss) attributable to Switch, Inc. $ 16,678 $ 18,535 $ 15,926 $ (19,771 ) $ 31,368 Basic net income (loss) per unit $ 0.08 $ 0.09 $ 0.08 $ (0.10 ) $ 0.16 Diluted net income (loss) per unit $ 0.08 $ 0.09 $ 0.08 $ (0.10 ) $ 0.15 |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 11, 2017 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||
Offering costs paid | $ 4.9 | |
Switch, Ltd. | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued (in shares) | 35,937,500 | |
Founder Members | ||
Subsidiary, Sale of Stock [Line Items] | ||
Percentage of voting interests | 67.20% | |
Continuing Members | ||
Subsidiary, Sale of Stock [Line Items] | ||
Percentage of voting interests | 94.40% | |
IPO | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued (in shares) | 35,937,500 | |
Consideration received | $ 577.3 | |
Class A | ||
Subsidiary, Sale of Stock [Line Items] | ||
Shares of common stock outstanding (in shares) | 35,937,500 | |
Class A | IPO | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued (in shares) | 35,937,500 | |
Price per share (in dollars per share) | $ 17 | |
Class A | Over-Allotment Option | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued (in shares) | 4,687,500 | |
Common Class B and Common Class C | Continuing Members | ||
Subsidiary, Sale of Stock [Line Items] | ||
Shares of common stock outstanding (in shares) | 216,568,963 | |
Switch, Ltd. | ||
Subsidiary, Sale of Stock [Line Items] | ||
Switch, Inc.'s ownership of Common Units | 14.50% |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Basis of Presentation and Accounting (Details) | Oct. 10, 2017$ / sharesshares |
Accounting Policies [Abstract] | |
Shares of common stock issued (in shares) | shares | 1 |
Par value of common stock (in dollars per share) | $ / shares | $ 0.001 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Cash and Concentration of Credit and Other Risks (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Cash equivalents | $ 0 | $ 0 | |
Largest Customer | Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 11.00% | 13.00% | 14.00% |
Largest Customer | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 18.00% |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Accounts Receivable and Internal Use Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Significant Accounting Policies [Line Items] | |||
Bad debt expense (recovery) | $ 423 | $ 383 | $ 242 |
Capitalized internal use software costs | $ 1,800 | $ 1,300 | $ 542 |
Internal Use Software | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life | 3 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 20 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 30 years |
Buildings, building improvements and leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 4 years 6 months |
Buildings, building improvements and leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 40 years |
Substation equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 30 years |
Data center equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Data center equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 10 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 7 years |
Core network equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Core network equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 7 years |
Cloud computing equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Fiber facilities | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 20 years |
Fiber facilities | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 40 years |
Deferred installation charges | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Deferred installation charges | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Computer equipment, furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Computer equipment, furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Deferred Offering Costs, Revenue Recognition, Equity-Based Compensation, and Advertising Costs (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Significant Accounting Policies [Line Items] | ||||
Adjustments to additional paid-in capital, deferred offering costs | $ 4,900,000 | |||
Deferred offering costs | $ 0 | |||
Advertising expense | $ 1,800,000 | $ 2,200,000 | $ 1,600,000 | |
Colocation Contracts | ||||
Significant Accounting Policies [Line Items] | ||||
Expected life of installations | 66 months | 73 months | ||
Broadband Services Contracts | ||||
Significant Accounting Policies [Line Items] | ||||
Expected life of installations | 29 months | 34 months | ||
External Connectivity Contracts | ||||
Significant Accounting Policies [Line Items] | ||||
Expected life of installations | 41 months | 35 months | ||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Length of contract | 3 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Length of contract | 5 years | |||
Revenue | Product Concentration Risk | Colocation and Connectivity Services | ||||
Significant Accounting Policies [Line Items] | ||||
Percentage of concentration risk | 95.00% | 95.00% | 95.00% |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,486,965 | $ 1,139,829 |
Less: accumulated depreciation and amortization | (353,393) | (265,570) |
Total property and equipment, net | 1,133,572 | 874,259 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 151,286 | 104,318 |
Data center equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 784,290 | 591,085 |
Capitalized leased assets | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 35,974 | 36,408 |
Buildings, building improvements, and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 338,763 | 248,680 |
Substation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,247 | 0 |
Cloud computing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,661 | 5,661 |
Fiber facilities | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,459 | 6,344 |
Computer equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,745 | 21,007 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,573 | 1,241 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 90,059 | 97,368 |
Core network equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 31,472 | 23,859 |
Deferred installation charges | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,436 | $ 3,858 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization of property and equipment | $ 89,124 | $ 66,591 | $ 55,355 |
Accumulated amortization for capitalized leased assets | 8,300 | 6,600 | |
Capitalized interest | $ 2,900 | $ 2,700 | $ 1,400 |
Long-Term Deposit (Details)
Long-Term Deposit (Details) $ in Thousands | 1 Months Ended | |||
Oct. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 10, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Number of facilities under development | 3 | |||
Costs incurred | $ 4,800 | $ 6,200 | ||
Costs incurred classified as long-term deposits | 3,800 | 4,400 | ||
Costs incurred classified as property and equipment | $ 964 | $ 1,800 | ||
Reimbursement of development costs | $ 1,400 | |||
Reimbursement of development costs classified as long-term deposits | 598 | |||
Reimbursement of development costs classified as property and equipment | $ 815 |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)investment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | May 13, 2016USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Number of investments | investment | 2 | |||
Share of net income (loss) from equity method investment | $ (1,077,000) | $ (5,764,000) | $ 821,000 | |
Revenue under license agreement | $ 700,000 | 1,239,000 | 10,866,000 | |
Convertible Notes Payable | Note Purchase Agreement with Planet3 | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Principal face amount of debt issued | $ 3,000,000 | |||
Interest rate on debt | 5.00% | |||
SUPERNAP International | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest in equity method investment | 50.00% | |||
Invested amount | $ 1,300,000 | 1,300,000 | ||
Carrying value of investment | 0 | |||
Share of net income (loss) from equity method investment | (1,000,000) | (2,100,000) | 2,800,000 | |
Revenue under license agreement | 10,000,000 | |||
SUPERNAP International | Equity Method Investee | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Accounts receivable due | $ 337,000 | 1,400,000 | ||
Planet3, Inc. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest in equity method investment | 45.00% | |||
Invested amount | $ 10,000,000 | 10,000,000 | ||
Carrying value of investment | 4,400,000 | |||
Share of net income (loss) from equity method investment | (3,700,000) | $ (2,000,000) | ||
Equity method investment, notes receivable | 2,400,000 | |||
Equity method investment, discount on notes receivable | 629,000 | |||
Equity method investment, interest receivable | 55,000 | |||
Equity method investment, embedded derivative | $ 896,000 | |||
Other than temporary impairment loss | $ 7,700,000 |
Equity Method Investments - Sum
Equity Method Investments - Summarized Financial Information of Equity Method Investments, Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Current assets | $ 2,169 | $ 5,683 |
Noncurrent assets | 17,075 | 18,956 |
Current liabilities | 2,583 | 2,558 |
Noncurrent liabilities | $ 19,445 | $ 23,164 |
Equity Method Investments - S50
Equity Method Investments - Summarized Financial Information of Equity Method Investments, Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Revenue | $ 700 | $ 1,239 | $ 10,866 |
Gross (loss) profit | (3,467) | (2,313) | 7,628 |
Net (loss) income | $ (5,834) | $ (12,353) | $ 1,412 |
Long-Term Debt - 2015 Credit Ag
Long-Term Debt - 2015 Credit Agreement (Details) | 12 Months Ended | |||||
Dec. 31, 2017USD ($) | Jun. 27, 2017USD ($) | Dec. 31, 2016USD ($) | May 02, 2016USD ($) | May 05, 2015USD ($)Instance | May 04, 2015USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 5,241,000 | |||||
Accumulated amortization of debt issuance costs | $ 1,400,000 | |||||
Previous Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Principal face amount of debt issued | $ 250,000,000 | |||||
2015 Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Number of times available borrowing limit can be increased | Instance | 5 | |||||
Available borrowing limit | $ 125,000,000 | |||||
Debt issuance costs | $ 3,400,000 | $ 1,000,000 | ||||
Debt issuance costs | 730,000 | $ 811,000 | ||||
Maximum consolidated total leverage ratio | 4.25 | |||||
Consolidated fixed charge coverage ratio | 1.5 | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 5,241,000 | $ 2,233,000 | ||||
Term Loan | 2015 Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal face amount of debt issued | 200,000,000 | |||||
Debt instrument term | 5 years | |||||
Debt issuance costs | 2,200,000 | 145,000 | ||||
Credit Facility | Revolving Credit Facility | 2015 Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility | $ 400,000,000 | |||||
Debt instrument term | 5 years | |||||
Debt issuance costs | $ 1,100,000 | $ 860,000 |
Long-Term Debt - 2017 Credit Ag
Long-Term Debt - 2017 Credit Agreement (Details) | Dec. 28, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 27, 2017USD ($)Instance | May 02, 2016USD ($) | May 05, 2015USD ($)Instance |
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | $ 5,241,000 | $ 5,241,000 | ||||||
Interest expense | 25,079,000 | $ 10,836,000 | $ 7,682,000 | |||||
Unamortized debt issuance costs | $ 9,000,000 | $ 9,000,000 | ||||||
2017 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest expense | $ 137,000 | |||||||
2017 Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of times available borrowing limit can be increased | Instance | 5 | |||||||
Available borrowing limit | $ 75,000,000 | |||||||
Debt issuance costs | 8,800,000 | |||||||
Maximum consolidated total leverage ratio | 5.5 | 5.5 | ||||||
Restricted payment basket amount | $ 15,000,000 | $ 15,000,000 | ||||||
2017 Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | $ 110,000 | |||||||
2015 Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of times available borrowing limit can be increased | Instance | 5 | |||||||
Available borrowing limit | $ 125,000,000 | |||||||
Debt issuance costs | $ 3,400,000 | $ 1,000,000 | ||||||
Debt issuance costs | 730,000 | 730,000 | 811,000 | |||||
Maximum consolidated total leverage ratio | 4.25 | |||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | 5,241,000 | 5,241,000 | $ 2,233,000 | |||||
Term Loan | 2017 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal face amount of debt issued | $ 600,000,000 | |||||||
Principal amortization | 1,500,000 | |||||||
Prepayment premium percentage | 1.00% | |||||||
Debt issuance costs | $ 5,600,000 | |||||||
Credit Facility | Revolving Credit Facility | 2017 Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility | 500,000,000 | |||||||
Debt issuance costs | $ 3,000,000 | $ 3,000,000 | $ 3,200,000 |
Long-Term Debt - Loss on Exting
Long-Term Debt - Loss on Extinguishment of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Extinguishment of Debt [Line Items] | |||
Loss on extinguishment of debt | $ 3,565 | $ 0 | $ 212 |
Write-off of previously unamortized debt issuance costs | 2,065 | $ 0 | $ 212 |
2015 Facilities | |||
Extinguishment of Debt [Line Items] | |||
Loss on extinguishment of debt | 3,600 | ||
Write-off of previously unamortized debt issuance costs | 2,100 | ||
Write off of lender fees | $ 1,500 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 27, 2017 | Dec. 31, 2016 | May 02, 2016 |
Debt Instrument [Line Items] | ||||
Term Loan Facility | $ 597,000 | |||
Less: unamortized debt issuance costs | (5,241) | |||
Long-term debt | 591,759 | $ 472,067 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Less: unamortized debt issuance costs | (5,241) | (2,233) | ||
Long-term debt | 591,759 | 182,767 | ||
Term Loan | 2015 Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | 0 | 185,000 | ||
Less: unamortized debt issuance costs | $ (2,200) | $ (145) | ||
Interest rate on debt | 2.77% | |||
Term Loan | 2017 Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | $ 597,000 | $ 0 | ||
Less: unamortized debt issuance costs | $ (5,600) | |||
Interest rate on debt | 3.81% | |||
Revolving Credit Facility | 2015 Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 0 | $ 289,300 | ||
Interest rate on debt | 2.71% | |||
Revolving Credit Facility | 2017 Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 0 | $ 0 |
Long-Term Debt - Long-Term De55
Long-Term Debt - Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 6,000 | |
2,019 | 6,000 | |
2,020 | 6,000 | |
2,021 | 6,000 | |
2,022 | 6,000 | |
Thereafter | 567,000 | |
Long-term debt, gross | 597,000 | |
Less: unamortized debt issuance costs | (5,241) | |
Long-term debt | $ 591,759 | $ 472,067 |
Leases - Capital Leases (Detail
Leases - Capital Leases (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($)renewal_option | Dec. 31, 2016USD ($) | |
Capital Leased Assets [Line Items] | ||
Capital leases, number of renewal options | renewal_option | 2 | |
Capital leases, renewal option period one | 10 years | |
Capital leases, renewal option period two | 5 years | |
Minimum capital lease payment obligations | $ 42,019,000 | |
Fiber facilities | ||
Capital Leased Assets [Line Items] | ||
Capital leases, renewal option period one | 25 years | |
Capital lease assets | $ 16,100,000 | $ 15,900,000 |
Minimum capital lease payment obligations | $ 2,300,000 | |
Capital leases, term of lease | 25 years | |
Substation equipment | ||
Capital Leased Assets [Line Items] | ||
Capital lease assets | $ 515,000 | $ 930,000 |
Minimum capital lease payment obligations | $ 0 | |
Capital leases, term of lease | 39 years |
Leases - Minimum Payment Obliga
Leases - Minimum Payment Obligations for Capital Lease (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Leases [Abstract] | |
2,018 | $ 1,952 |
2,019 | 2,064 |
2,020 | 2,124 |
2,021 | 2,243 |
2,022 | 2,306 |
Thereafter | 31,330 |
Minimum capital lease payment obligations | 42,019 |
Less: amount representing interest | (22,553) |
Present value of minimum capital lease payments | $ 19,466 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments for Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leased Assets [Line Items] | |||
2,018 | $ 7,064 | ||
2,019 | 7,167 | ||
2,020 | 7,232 | ||
2,021 | 4,762 | ||
2,022 | 3,042 | ||
Thereafter | 57,296 | ||
Future minimum lease payments for all operating leases | 86,563 | ||
Operating leases, rent expense | 7,400 | $ 8,700 | $ 3,800 |
Related Parties | |||
Operating Leased Assets [Line Items] | |||
2,018 | 4,706 | ||
2,019 | 4,798 | ||
2,020 | 4,860 | ||
2,021 | 4,256 | ||
2,022 | 2,863 | ||
Thereafter | 56,653 | ||
Future minimum lease payments for all operating leases | 78,136 | ||
Operating leases, rent expense | 4,800 | $ 4,200 | $ 3,800 |
Other | |||
Operating Leased Assets [Line Items] | |||
2,018 | 2,358 | ||
2,019 | 2,369 | ||
2,020 | 2,372 | ||
2,021 | 506 | ||
2,022 | 179 | ||
Thereafter | 643 | ||
Future minimum lease payments for all operating leases | $ 8,427 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Matching contributions equal to percentage of compensation | 100.00% | ||
Percent of compensation matched under contribution plan | 3.00% | ||
Defined contribution plan expense | $ 1,300 | $ 939 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) portfolio_energy_credit in Millions | Mar. 08, 2017USD ($)MWh | Sep. 30, 2016USD ($) | Nov. 30, 2015USD ($)portfolio_energy_credit | Aug. 31, 2015USD ($)land_parcel | Jun. 30, 2015USD ($)land_parcel | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Long-term Purchase Commitment [Line Items] | ||||||||
Impact fee expense | $ 649,000 | $ 27,018,000 | $ 0 | |||||
Estimated liabilities for claims unreported and unclaimed but incurred | 417,000 | |||||||
Energy | Morgan Stanley Capital Group | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase commitment | $ 33,400,000 | 26,900,000 | ||||||
Future minimum power purchase commitment, 2018 | 11,100,000 | |||||||
Future minimum power purchase commitment, 2019 | 11,100,000 | |||||||
Future minimum power purchase commitment, 2020 | 4,700,000 | |||||||
Michigan building and land | Michigan data center landlord | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase commitment | $ 25,000,000 | |||||||
Percentage of previous rent payments applied as credit in purchase | 65.00% | |||||||
Fiber services | Lit fiber transport services vendor | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase obligation term | 24 months | |||||||
Monthly minimum purchase requirements | $ 75,000 | |||||||
Land | Land purchase counterparty, June 2015 | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Minimum quantity required under purchase commitment (mwh) | land_parcel | 3 | |||||||
Purchase commitment | $ 5,400,000 | |||||||
Parcels of land purchased | land_parcel | 2 | |||||||
Remaining purchase obligation term | 36 months | |||||||
Portfolio energy credits | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase commitment | 35,279,000 | |||||||
Future minimum power purchase commitment, 2018 | 1,908,000 | |||||||
Future minimum power purchase commitment, 2019 | 1,908,000 | |||||||
Future minimum power purchase commitment, 2020 | $ 1,908,000 | |||||||
Portfolio energy credits | Switch Station 2 | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase commitment | $ 13,200,000 | |||||||
Portfolio energy credits | Switch Station 1 | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase commitment | $ 21,600,000 | |||||||
Energy | Morgan Stanley Capital Group | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Minimum quantity required under purchase commitment (mwh) | MWh | 40 | |||||||
Purchase obligation term | 36 months | |||||||
Portfolio energy credits | Southern Nevada Water Authority | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Minimum quantity required under purchase commitment (mwh) | portfolio_energy_credit | 82 | |||||||
Purchase obligation term | 5 years | |||||||
Portfolio energy credits | Switch Station 2 | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase obligation term | 20 years | |||||||
Portfolio energy credits | Switch Station 1 | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase obligation term | 20 years | |||||||
Switch, Ltd. | Portfolio energy credits | Southern Nevada Water Authority | ||||||||
Long-term Purchase Commitment [Line Items] | ||||||||
Purchase commitment | $ 508,000 |
Commitments and Contingencies61
Commitments and Contingencies - Future Minimum PEC Purchase Commitments (Details) - Portfolio Energy Credits $ in Thousands | Dec. 31, 2017USD ($) |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2,018 | $ 1,908 |
2,019 | 1,908 |
2,020 | 1,908 |
2,021 | 1,738 |
2,022 | 1,738 |
Thereafter | 26,079 |
Total | $ 35,279 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 10, 2017 | |
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | 10.20% | |||
Shares of common stock issued (in shares) | 1 | |||
Par value of common stock (in dollars per share) | $ 0.001 | |||
Income tax benefit | $ 981,000 | $ 0 | $ 0 | |
Net income attributable to non-controlling interest | 6,628,000 | $ 0 | $ 0 | |
Provisional tax benefit related to the Tax Cuts and Jobs Act | $ 667,000 | |||
Switch, Ltd. | ||||
Operating Loss Carryforwards [Line Items] | ||||
Percent ownership held by non-controlling interests | 85.50% | |||
Domestic Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | $ 4,800,000 | |||
State Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | 16,000 | |||
Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | $ 161,000 |
Income Taxes - Consolidated (Lo
Income Taxes - Consolidated (Loss) Income Before Taxes and Non-Controlling Interests for Domestic and Foreign Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (8,386) | ||
Foreign | (1,175) | ||
(Loss) income before income taxes | $ (9,561) | $ 31,368 | $ 73,472 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||
Federal | $ 0 | ||
State and local | 0 | ||
Total current tax benefit | 0 | ||
Deferred | |||
Federal | (978,000) | ||
State and local | (3,000) | ||
Total deferred tax benefit | (981,000) | ||
Total tax benefit | $ (981,000) | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the U.S. Statutory Rate to the Effective Tax Rate (Details) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
U.S statutory tax rate | 35.00% |
Foreign rate differential | (4.30%) |
Rate effect from flow-through entity | (34.80%) |
Rate change impact due to tax reform | (7.00%) |
Partnership outside basis difference | 26.20% |
Other | (4.90%) |
Effective tax rate | 10.20% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Deferred tax assets | |
Net operating loss carryforwards | $ 981 |
Subtotal | 981 |
Valuation allowance | 0 |
Total deferred tax assets | 981 |
Deferred tax liabilities | |
Other | 0 |
Total deferred tax liabilities | 0 |
Net deferred tax assets | $ 981 |
Stockholders'_Members' Equity (
Stockholders'/Members' Equity (Details) | Dec. 29, 2017USD ($)$ / shares | Dec. 18, 2017$ / shares | Oct. 11, 2017USD ($) | Oct. 10, 2017USD ($)$ / shares | Dec. 31, 2017USD ($)vote$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Class of Stock [Line Items] | |||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.001 | ||||||
Shares of preferred stock authorized (in shares) | shares | 10,000,000 | ||||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.001 | ||||||
Distributions declared | $ | $ 174,235,000 | $ 28,110,000 | $ 18,210,000 | ||||
Switch, Ltd. | |||||||
Class of Stock [Line Items] | |||||||
Total distribution to holders of record | $ | $ 503,000 | ||||||
Other Holders | |||||||
Class of Stock [Line Items] | |||||||
Total distribution to holders of record | $ | $ 3,000,000 | ||||||
Switch, Ltd. | |||||||
Class of Stock [Line Items] | |||||||
Distribution paid (in dollars per share) | $ / shares | $ 0.014 | ||||||
Total distribution to holders of record | $ | $ 3,500,000 | $ 185,300,000 | |||||
Distributions declared | $ | 185,400,000 | ||||||
Distributions payable | $ | 152,000 | ||||||
Switch, Ltd. | Cash Distribution | |||||||
Class of Stock [Line Items] | |||||||
Distributions declared | $ | $ 8,200,000 | 112,000,000 | |||||
Switch, Ltd. | Return of Capital | |||||||
Class of Stock [Line Items] | |||||||
Distributions declared | $ | $ 73,400,000 | ||||||
Class A | |||||||
Class of Stock [Line Items] | |||||||
Shares of common stock authorized (in shares) | shares | 750,000,000 | ||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.001 | ||||||
Number of votes per share held | vote | 1 | ||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.014 | ||||||
Dividends paid (in dollars per share) | $ / shares | $ 0.014 | ||||||
Class B | |||||||
Class of Stock [Line Items] | |||||||
Shares of common stock authorized (in shares) | shares | 300,000,000 | ||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.001 | ||||||
Number of votes per share held | vote | 1 | ||||||
Class C | |||||||
Class of Stock [Line Items] | |||||||
Shares of common stock authorized (in shares) | shares | 75,000,000 | ||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.001 | ||||||
Minimum | Class C | |||||||
Class of Stock [Line Items] | |||||||
Number of votes per share held | vote | 1 | ||||||
Maximum | Class C | |||||||
Class of Stock [Line Items] | |||||||
Number of votes per share held | vote | 10 |
Equity-Based Compensation - 200
Equity-Based Compensation - 2005 Common Membership Unit Plan (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | 36 Months Ended | |||
Nov. 30, 2015 | Feb. 28, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Notes receivable issued to members, including accrued interest | $ 18,301 | |||||
2005 Common Membership Unit Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Repurchase of units (in units) | 1,758 | 21,440 | ||||
Options settled (in shares) | 4,286 | 160 | 3,536 | |||
Exercise price of options | $ 3,900 | |||||
Related payroll taxes | 1,500 | |||||
Total settlement value | $ 5,400 | |||||
2005 Common Membership Unit Plan | Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Repurchase of units (in units) | 2,433 | |||||
Notes receivable issued to members, including accrued interest | $ 18,300 | |||||
Options settled (in shares) | 4,293 | |||||
2005 Common Membership Unit Plan | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Term of award | 10 years |
Equity-Based Compensation - Uni
Equity-Based Compensation - Unit Option Activity Under the Unit Option Plan (Details) - 2005 Common Membership Unit Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Units | |||||
Options outstanding (in shares) | 167 | 641 | 6,752 | ||
Options exercised (in shares) | (57) | (119) | (2,575) | ||
Options settled (in shares) | (4,286) | (160) | (3,536) | ||
Options forfeited (in shares) | (195) | ||||
Options outstanding (in shares) | 110 | 167 | 641 | ||
Options vested and exercisable (in shares) | 110 | 167 | 167 | ||
Weighted Average Exercise Price per Unit | |||||
Options outstanding (in dollars per share) | $ 2.85 | $ 2.09 | $ 2.52 | $ 2.07 | |
Options exercised (in dollars per share) | 2.85 | 2.67 | 2 | ||
Options settled (in dollars per share) | 2.67 | 2.04 | |||
Options forfeited (in dollars per share) | 2.67 | ||||
Options vested and exercisable (in dollars per share) | $ 2.85 | $ 2.09 | $ 2.09 | ||
Weighted Average Remaining Contractual Life | |||||
Options outstanding | 9 months | 1 year 9 months | 4 years 8 months 23 days | ||
Options vested and exercisable | 9 months | 1 year 9 months | 2 years 9 months | ||
Aggregate Intrinsic Value | |||||
Options outstanding | $ 1,691 | $ 939 | $ 1,930 | ||
Options vested and exercisable | $ 1,691 | $ 939 | $ 574 |
Equity-Based Compensation - Non
Equity-Based Compensation - Nonvested Unit Options Outstanding (Details) - 2005 Common Membership Unit Plan - $ / shares shares in Thousands | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Nonvested Options Outstanding | |||||||
Nonvested options outstanding (in shares) | 0 | 474 | 1,398 | ||||
Options forfeited (in units) | (195) | ||||||
Options vested (in units) | (279) | (924) | |||||
Nonvested options outstanding (in shares) | 0 | 0 | 474 | ||||
Nonvested options outstanding (in shares) | 0 | 474 | 1,398 | 0 | 0 | 474 | 1,398 |
Weighted Average Grant Date Fair Value per Option | |||||||
Nonvested unit options outstanding (in dollars per unit) | $ 0 | $ 0 | $ 0.97 | $ 0.93 | |||
Options forfeited (in dollars per unit) | $ 0.97 | ||||||
Options vested (in dollars per unit) | $ 0.97 | $ 0.90 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Disclosures for Unit Options (Details) - 2005 Common Membership Unit Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of unit options vested | $ 0 | $ 271 | $ 835 |
Total aggregate intrinsic value of unit options exercised | $ 869 | $ 601 | $ 9,098 |
Equity-Based Compensation - Com
Equity-Based Compensation - Common Unit Awards (Details) $ / shares in Units, $ in Thousands | Oct. 11, 2017USD ($) | Dec. 31, 2017$ / sharesshares | Sep. 30, 2017shares | Dec. 31, 2017USD ($)Quarter$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation expense | $ | $ 84,790 | $ 5,935 | $ 5,237 | ||||
Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incentive units awarded (in shares) | 2,197,000 | 10,444,000 | |||||
Incentive units awarded (in dollars per share) | $ / shares | $ 11.69 | $ 6.38 | $ 4.35 | ||||
Incentive units converted (in shares) | 21,943,000 | ||||||
Unvested units (in shares) | 0 | 0 | 14,835,000 | 17,114,000 | 7,977,000 | ||
Units outstanding (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 1.34 | $ 1.26 | $ 1.36 | ||
Units awarded (in shares) | 2,197,000 | 10,444,000 | |||||
Units awarded (in dollars per share) | $ / shares | $ 2.04 | $ 1.18 | |||||
Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested units (in shares) | 4,783,286 | 4,783,286 | |||||
Units outstanding (in dollars per share) | $ / shares | $ 11.11 | $ 11.11 | |||||
Equity-based compensation expense | $ | $ 46,300 | ||||||
Recognition period | 3 years 9 months 11 days | ||||||
CEO | Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incentive units awarded (in shares) | 7,500,000 | 7,500,000 | |||||
Incentive units awarded (in dollars per share) | $ / shares | $ 0 | ||||||
Units awarded (in shares) | 7,500,000 | ||||||
Units awarded (in dollars per share) | $ / shares | $ 11.69 | ||||||
CEO | Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incentive units converted (in shares) | 7,500,000 | ||||||
Unvested units (in shares) | 4,500,000 | 4,500,000 | |||||
President | Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incentive units awarded (in shares) | 1,511,572 | 1,512,000 | |||||
Incentive units awarded (in dollars per share) | $ / shares | $ 11.69 | ||||||
Units awarded (in shares) | 1,512,000 | ||||||
Units awarded (in dollars per share) | $ / shares | $ 1.98 | ||||||
President | Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incentive units converted (in shares) | 472,144 | ||||||
Unvested units (in shares) | 283,286 | 283,286 | |||||
Switch, Ltd. | Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vested in period fair value | $ | $ 1,800 | $ 4,200 | $ 555 | ||||
Switch, Ltd. | Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation expense | $ | $ 1,100 | $ 835 | |||||
Units awarded (in shares) | 150,880 | 150,895 | |||||
Units awarded (in dollars per share) | $ / shares | $ 7.39 | $ 5.53 | |||||
Switch, Ltd. | CEO | Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vested in period fair value | $ | $ 35,100 | ||||||
Switch, Ltd. | President | Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vested in period fair value | $ | 1,200 | ||||||
IPO | Switch, Ltd. | Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vested in period fair value | $ | $ 17,100 | ||||||
2017 Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation expense | $ | $ 28,100 | ||||||
2017 Incentive Award Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested units (in shares) | 31,000 | 31,000 | 0 | ||||
Units outstanding (in dollars per share) | $ / shares | $ 18.01 | $ 18.01 | $ 0 | ||||
Recognition period | 3 years 9 months 11 days | ||||||
2017 Incentive Award Plan | CEO | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incentive units awarded (in shares) | 50,638 | ||||||
Units awarded (in shares) | 51,000 | ||||||
Units awarded (in dollars per share) | $ / shares | $ 18.01 | ||||||
2017 Incentive Award Plan | CEO | Restricted Stock Units | Tranche 1 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 40.00% | ||||||
2017 Incentive Award Plan | CEO | Restricted Stock Units | Tranche 2 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 2.50% | ||||||
Vesting period | Quarter | 8 | ||||||
2017 Incentive Award Plan | CEO | Restricted Stock Units | Tranche 3 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 5.00% |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Incentive Unit Activity (Details) - Incentive Units - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Units | ||||
Outstanding (in shares) | 19,393,000 | 18,305,000 | 8,760,000 | |
Incentive units awarded (in shares) | 2,197,000 | 10,444,000 | ||
Incentive units forfeited (in shares) | (873,000) | (1,109,000) | (899,000) | |
Incentive units net settled at IPO (in shares) | (5,589,000) | |||
Incentive units converted into common units at IPO (in shares) | (21,943,000) | |||
Outstanding (in shares) | 0 | 19,393,000 | 18,305,000 | |
Incentive units vested (in shares) | 22,125,000 | 4,558,000 | 1,191,000 | |
Weighted Average Hurdle Amount per Unit | ||||
Incentive units outstanding (in dollars per share) | $ 4.20 | $ 3.99 | $ 3.53 | |
Incentive units awarded (in dollars per share) | 11.69 | 6.38 | 4.35 | |
Incentive units forfeited (in dollars per share) | 4.62 | 5.08 | 3.71 | |
Incentive units net settled at IPO (in dollars per share) | 5.74 | |||
Incentive units converted into common units at IPO (in dollars per share) | 2.87 | |||
Incentive units outstanding (in dollars per share) | 0 | 4.20 | 3.99 | |
Incentive units vested (in dollars per share) | $ 3.82 | $ 3.97 | $ 3.47 | |
Weighted Average Remaining Contractual Life | ||||
Incentive units outstanding | 1 year 11 months 23 days | 2 years 10 months 6 days | ||
Incentive units vested | 0 years | 1 year 6 months | 1 year 11 months 9 days | |
Aggregate Intrinsic Value | ||||
Incentive units outstanding | $ 0 | $ 68,139 | $ 28,235 | |
Incentive units vested | $ 318,033 | $ 17,053 | $ 2,454 | |
CEO | ||||
Number of Units | ||||
Incentive units awarded (in shares) | 7,500,000 | 7,500,000 | ||
Weighted Average Hurdle Amount per Unit | ||||
Incentive units awarded (in dollars per share) | $ 0 | |||
President | ||||
Number of Units | ||||
Incentive units awarded (in shares) | 1,511,572 | 1,512,000 | ||
Weighted Average Hurdle Amount per Unit | ||||
Incentive units awarded (in dollars per share) | $ 11.69 |
Equity-Based Compensation - N74
Equity-Based Compensation - Nonvested Incentive Units (Details) - Incentive Units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incentive units outstanding | 1 year 11 months 23 days | 2 years 10 months 6 days | |
Number of Nonvested Incentive Units Outstanding (in thousands) | |||
Outstanding (in shares) | 14,835 | 17,114 | 7,977 |
Units awarded (in shares) | 2,197 | 10,444 | |
Units forfeited (in shares) | (873) | (1,109) | (899) |
Units vested (in shares) | (17,567) | (3,367) | (408) |
Outstanding (in shares) | 0 | 14,835 | 17,114 |
Weighted Average Grant Date Fair Value per Incentive Unit | |||
Units outstanding (in dollars per share) | $ 1.34 | $ 1.26 | $ 1.36 |
Units awarded (in dollars per share) | 2.04 | 1.18 | |
Units forfeited (in dollars per share) | 0.97 | 1.75 | 1.26 |
Units vested (in dollars per share) | 3.14 | 1.24 | 1.36 |
Units outstanding (in dollars per share) | $ 0 | $ 1.34 | $ 1.26 |
CEO | |||
Number of Nonvested Incentive Units Outstanding (in thousands) | |||
Units awarded (in shares) | 7,500 | ||
Units converted (in shares) | (4,500) | ||
Weighted Average Grant Date Fair Value per Incentive Unit | |||
Units awarded (in dollars per share) | $ 11.69 | ||
Units converted (in dollars per share) | $ 11.69 | ||
President | |||
Number of Nonvested Incentive Units Outstanding (in thousands) | |||
Units awarded (in shares) | 1,512 | ||
Units settled (in shares) | (624) | ||
Units converted (in shares) | (283) | ||
Weighted Average Grant Date Fair Value per Incentive Unit | |||
Units awarded (in dollars per share) | $ 1.98 | ||
Units settled (in dollars per share) | 1.98 | ||
Units converted (in dollars per share) | $ 1.98 |
Equity-Based Compensation - Wei
Equity-Based Compensation - Weighted Average Assumptions Used in Estimating Grant Date Fair Value of Stock Options (Details) - Incentive Units | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Assumptions: | |||
Expected volatility | 29.30% | 39.80% | 35.10% |
Risk-free interest rate | 1.40% | 1.50% | 1.40% |
Expected term | 2 years | 3 years 8 months 12 days | 3 years 1 month 6 days |
Dividend rate | 0.60% | 0.90% | 1.30% |
Equity-Based Compensation - 201
Equity-Based Compensation - 2017 Award Incentive Plan (Details) $ / shares in Units, $ in Thousands | Oct. 11, 2017USD ($) | Dec. 31, 2017USD ($)shares | Oct. 31, 2017$ / sharesshares | Dec. 31, 2017USD ($)Quartershares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | Sep. 22, 2017shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation expense | $ | $ 84,790 | $ 5,935 | $ 5,237 | ||||
2017 Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of option awards | 9 years 9 months 7 days | ||||||
Stock options granted (in shares) | 5,724,896 | 5,725,000 | |||||
Price per share (in dollars per share) | $ / shares | $ 17 | ||||||
Stock options vested (in shares) | 5,626,470 | 5,626,000 | |||||
Equity-based compensation expense | $ | $ 28,100 | ||||||
Unvested stock options oustanding (in shares) | 99,000 | 98,426 | 99,000 | 0 | |||
Vesting period | 3 years | ||||||
2017 Incentive Award Plan | Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of option awards | 10 years | ||||||
Recognition period | 2 years 9 months 4 days | ||||||
2017 Incentive Award Plan | Stock Options | All Excluding CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation cost | $ | $ 451 | $ 451 | |||||
2017 Incentive Award Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation cost | $ | $ 547 | $ 547 | |||||
Recognition period | 3 years 9 months 11 days | ||||||
2017 Incentive Award Plan | Restricted Stock Units | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
RSUs awarded (in shares) | 50,638 | ||||||
2017 Incentive Award Plan | Restricted Stock Units | CEO | Tranche 1 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 40.00% | ||||||
2017 Incentive Award Plan | Restricted Stock Units | CEO | Tranche 2 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 2.50% | ||||||
Vesting period | Quarter | 8 | ||||||
2017 Incentive Award Plan | Restricted Stock Units | CEO | Tranche 3 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 5.00% | ||||||
2017 Incentive Award Plan | Class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for issuance (in shares) | 25,000,000 | ||||||
Number of additional shares to be issued (in shares) | 17,000,000 | ||||||
Percent of shares outstanding for potential increase in authorized shares | 5.00% |
Equity-Based Compensation - S77
Equity-Based Compensation - Summary of Information Related to Stock Options (Details) - 2017 Incentive Award Plan - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Stock Options | |||
Options outstanding (in shares) | 0 | ||
Options granted (in shares) | 5,724,896 | 5,725,000 | |
Options outstanding (in shares) | 5,725,000 | 0 | |
Options vested and exercisable (in shares) | 5,626,000 | ||
Weighted Average Exercise Price per Stock Option | |||
Options outstanding (in dollars per share) | $ 17 | $ 0 | |
Options granted (in dollars per share) | 17 | ||
Options vested and exercisable (in dollars per share) | $ 17 | ||
Weighted Average Remaining Contractual Life | |||
Options outstanding | 9 years 9 months 7 days | ||
Options vested and exercisable | 9 years 9 months 7 days | ||
Aggregate Intrinsic Value | |||
Options outstanding | $ 6,813 | ||
Options vested and exercisable | $ 6,695 |
Equity-Based Compensation - Num
Equity-Based Compensation - Number and Weighted Average Grant Date Fair Value for Nonvested Stock Options Granted and Outstanding (Details) - 2017 Incentive Award Plan - $ / shares | 1 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Dec. 31, 2017 | |
Number of Stock Options | ||
Nonvested options outstanding (in shares) | 0 | |
Stock options granted (in shares) | 5,724,896 | 5,725,000 |
Stock options vested (in shares) | (5,626,470) | (5,626,000) |
Nonvested options outstanding (in shares) | 98,426 | 99,000 |
Weighted Average Grant Date Fair Value | ||
Nonvested stock options outstanding (in dollars per share) | $ 0 | |
Stock options granted (in dollars per share) | 5 | |
Stock options vested (in dollars per share) | 4.99 | |
Nonvested stock options outstanding (in dollars per share) | $ 5.37 |
Equity-Based Compensation - W79
Equity-Based Compensation - Weighted Average Assumptions Used to Estimate the Grant Date Fair Value of Stock Options (Details) - 2017 Incentive Award Plan - Stock Options | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 31.80% |
Risk-free interest rate | 1.90% |
Expected term | 5 years |
Dividend rate | 0.60% |
Equity-Based Compensation - S80
Equity-Based Compensation - Summary of Information Related to RSUs (Details) - 2017 Incentive Award Plan - Restricted Stock Units shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of RSUs | |
Outstanding (in shares) | shares | 0 |
RSUs vested (in shares) | shares | (20) |
Outstanding (in shares) | shares | 31 |
Weighted Average Grant Date Fair Value | |
Units outstanding (in dollars per share) | $ / shares | $ 0 |
RSUs vested (in dollars per share) | $ / shares | 18.01 |
Units outstanding (in dollars per share) | $ / shares | $ 18.01 |
CEO | |
Number of RSUs | |
RSUs awarded (in shares) | shares | 51 |
Weighted Average Grant Date Fair Value | |
RSUs granted (in dollars per share) | $ / shares | $ 18.01 |
Equity-Based Compensation - Equ
Equity-Based Compensation - Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total equity-based compensation expense | $ 84,790 | $ 5,935 | $ 5,237 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total equity-based compensation expense | 1,289 | 181 | 0 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total equity-based compensation expense | $ 83,501 | $ 5,754 | $ 5,237 |
Fair Value of Financial Instr82
Fair Value of Financial Instruments (Details) $ in Millions | Dec. 31, 2017USD ($) |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of long-term debt | $ 599.2 |
Non-controlling Interest (Detai
Non-controlling Interest (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Common Units | |||
Noncontrolling Interest [Line Items] | |||
Unvested Common Units (in shares) | 4,783,286 | ||
Common Units | CEO | |||
Noncontrolling Interest [Line Items] | |||
Unvested Common Units (in shares) | 4,500,000 | ||
Common Units | President | |||
Noncontrolling Interest [Line Items] | |||
Unvested Common Units (in shares) | 283,286 | ||
2005 Common Membership Unit Plan | |||
Noncontrolling Interest [Line Items] | |||
Options vested and exercisable (in shares) | 110,000 | 167,000 | 167,000 |
2005 Common Membership Unit Plan | Options | |||
Noncontrolling Interest [Line Items] | |||
Options vested and exercisable (in shares) | 110,225 | ||
Switch, Ltd. | |||
Noncontrolling Interest [Line Items] | |||
Switch, Inc.'s ownership of Common Units (equal to outstanding Class A common stock) (in shares) | 35,937,500 | ||
Switch, Inc.'s ownership of Common Units (equal to outstanding Class A common stock) | 14.50% | ||
Non-controlling interest holders' ownership of Common Units (in shares) | 211,675,452 | ||
Non-controlling interest holders' ownership of Common Units | 85.50% | ||
Total Common Units (in shares) | 247,612,952 |
Net Income (Loss) Per Share_U84
Net Income (Loss) Per Share/Unit - Calculation of Basic and Diluted Net Income (Loss) Per Share/Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator—basic and diluted: | |||||||||||
Net (loss) income attributable to Switch, Inc.—basic and diluted | $ (66,975) | $ 16,486 | $ 14,953 | $ 20,328 | $ (19,771) | $ 15,926 | $ 18,535 | $ 16,678 | $ (15,208) | $ 31,368 | $ 73,472 |
Denominator—basic: | |||||||||||
Weighted average shares/units outstanding—basic (in shares) | 8,073,908 | 199,047,070 | 196,773,458 | ||||||||
Basic net income (loss) per unit/share (in dollars per share) | $ (2.09) | $ 0.08 | $ 0.07 | $ 0.10 | $ (0.10) | $ 0.08 | $ 0.09 | $ 0.08 | $ (1.88) | $ 0.16 | $ 0.37 |
Denominator: | |||||||||||
Weighted average shares/units outstanding—basic (in shares) | 8,073,908 | 199,047,070 | 196,773,458 | ||||||||
Weighted average effect of dilutive securities: | |||||||||||
Weighted average shares/units outstanding-diluted (in shares) | 8,073,908 | 203,461,420 | 199,272,269 | ||||||||
Diluted net income (loss) per unit/share (in dollars per share) | $ (2.09) | $ 0.08 | $ 0.07 | $ 0.10 | $ (0.10) | $ 0.08 | $ 0.09 | $ 0.08 | $ (1.88) | $ 0.15 | $ 0.37 |
Stock Options | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Effect of dilutive securities (in shares) | 0 | 230,511 | 1,498,228 | ||||||||
Incentive Units | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Effect of dilutive securities (in shares) | 0 | 4,183,839 | 1,000,583 |
Net Income (Loss) Per Share_U85
Net Income (Loss) Per Share/Unit - Weighted Average Unvested Shares/Incentive Units Excluded from the Computation of the Diluted Net Income (Loss) Per Share/Unit (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Incentive Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income (loss) per share/unit (in shares) | 0 | 533,390 | 4,233,993 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income (loss) per share/unit (in shares) | 5,724,896 | 0 | 0 |
Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income (loss) per share/unit (in shares) | 30,383 | 0 | 0 |
Shares of Class B and Class C Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income (loss) per share/unit (in shares) | 216,568,963 | 0 | 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Outside of the United States | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk (less than) | 2.00% | 2.00% | 2.00% |
Segment Reporting - Composition
Segment Reporting - Composition of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 99,328 | $ 97,689 | $ 92,101 | $ 89,157 | $ 81,888 | $ 81,666 | $ 80,832 | $ 73,966 | $ 378,275 | $ 318,352 | $ 265,870 |
Colocation | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 304,720 | 259,046 | 218,498 | ||||||||
Connectivity | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 67,690 | 53,715 | 43,147 | ||||||||
Other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 5,865 | $ 5,591 | $ 4,225 |
Quarterly Financial Informati88
Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 99,328 | $ 97,689 | $ 92,101 | $ 89,157 | $ 81,888 | $ 81,666 | $ 80,832 | $ 73,966 | $ 378,275 | $ 318,352 | $ 265,870 |
Income (loss) from operations | (54,604) | 25,451 | 23,541 | 24,439 | (7,497) | 16,412 | 22,342 | 19,813 | 18,827 | 51,070 | 79,559 |
Net income (loss) | (60,347) | 16,486 | 14,953 | 20,328 | (19,771) | 15,926 | 18,535 | 16,678 | (8,580) | 31,368 | |
Net income (loss) attributable to Switch, Inc. | $ (66,975) | $ 16,486 | $ 14,953 | $ 20,328 | $ (19,771) | $ 15,926 | $ 18,535 | $ 16,678 | $ (15,208) | $ 31,368 | $ 73,472 |
Basic net income (loss) per unit/share (in dollars per share) | $ (2.09) | $ 0.08 | $ 0.07 | $ 0.10 | $ (0.10) | $ 0.08 | $ 0.09 | $ 0.08 | $ (1.88) | $ 0.16 | $ 0.37 |
Diluted net income (loss) per unit/share (in dollars per share) | $ (2.09) | $ 0.08 | $ 0.07 | $ 0.10 | $ (0.10) | $ 0.08 | $ 0.09 | $ 0.08 | $ (1.88) | $ 0.15 | $ 0.37 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions | 1 Months Ended | ||
Apr. 30, 2018$ / shares | Jan. 31, 2018MWh | Feb. 01, 2018USD ($) | |
Subsequent Event [Line Items] | |||
Minimum quantity required under purchase commitment (mwh) | MWh | 10 | ||
Purchase obligation term | 23 months | ||
Purchase commitment | $ | $ 4.9 | ||
Dividends declared (in dollars per share) | $ 0.0147 | ||
Switch, Ltd. | |||
Subsequent Event [Line Items] | |||
Cash distributions declared (in dollars per share) | $ 0.0147 |
Uncategorized Items - swch-2017
Label | Element | Value |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | $ 11,203,000 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 75,110,000 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 8,565,000 |
Stock Issued During Period, Value, Stock Options Exercised | us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised | 161,000 |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 1,115,000 |
Dividends | us-gaap_Dividends | 503,000 |
Member Units [Member] | ||
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Declared | us-gaap_DistributionMadeToLimitedLiabilityCompanyLLCMemberCashDistributionsDeclared | 174,235,000 |
Stockholders' Equity, Effect Of Reorganization | swch_StockholdersEquityEffectOfReorganization | 163,894,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (17,313,000) |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 75,110,000 |
Stock Issued During Period, Value, Stock Options Exercised | us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised | 161,000 |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 1,115,000 |
Additional Paid-in Capital [Member] | ||
Initial Public Offering, Allocation Of Equity To Noncontrolling Interest | swch_InitialPublicOfferingAllocationOfEquityToNoncontrollingInterest | (629,507,000) |
Stockholders' Equity, Effect Of Reorganization | swch_StockholdersEquityEffectOfReorganization | (163,894,000) |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 442,000 |
AOCI Attributable to Parent [Member] | ||
Initial Public Offering, Allocation Of Equity To Noncontrolling Interest | swch_InitialPublicOfferingAllocationOfEquityToNoncontrollingInterest | (80,000) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax | 786,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax | 18,000 |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 2,105,000 |
Dividends | us-gaap_Dividends | 503,000 |
Noncontrolling Interest [Member] | ||
Initial Public Offering, Allocation Of Equity To Noncontrolling Interest | swch_InitialPublicOfferingAllocationOfEquityToNoncontrollingInterest | 629,587,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax | 104,000 |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 11,203,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 6,628,000 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 8,123,000 |
Common Class B [Member] | Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ (174,000) |
Common Class B [Member] | Common Stock [Member] | ||
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 173,624,316 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 174,000 |
Common Class C [Member] | Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ (43,000) |
Common Class C [Member] | Common Stock [Member] | ||
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 42,944,647 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 43,000 |
Common Class A [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 572,432,000 |
Common Class A [Member] | Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 572,396,000 |
Common Class A [Member] | Common Stock [Member] | ||
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 35,937,500 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 36,000 |