(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at July 29, 2020 | |||||||
Class A Common Stock, $0.001 par value per share | ||||||||
Class B Common Stock, $0.001 par value per share |
Page | ||||||||
June 30, 2020 | December 31, 2019 | |||||||||||||
(in thousands, except share and per share data) | ||||||||||||||
Assets: | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Short-term investments | ||||||||||||||
Accounts receivable, net of allowance for credit losses of $ | ||||||||||||||
Inventories | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Goodwill and intangible assets, net | ||||||||||||||
Long-term investments | ||||||||||||||
Other noncurrent assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders' Deficit: | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Unearned revenue | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 8) | ||||||||||||||
Stockholders’ deficit: | ||||||||||||||
Undesignated preferred stock, $ | ||||||||||||||
Class A common stock, par value $ | ||||||||||||||
Class B common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders’ deficit | ( | ( | ||||||||||||
Total liabilities and stockholders’ deficit | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of goods sold | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Customer service and merchant fees | ||||||||||||||||||||||||||
Advertising | ||||||||||||||||||||||||||
Selling, operations, technology, general and administrative | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Income (loss) from operations | ( | ( | ||||||||||||||||||||||||
Interest (expense), net | ( | ( | ( | ( | ||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Income (loss) before income taxes | ( | ( | ( | |||||||||||||||||||||||
Provision for income taxes, net | ||||||||||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Basic earnings (loss) per share | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Diluted earnings (loss) per share | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Weighted-average number of shares of common stock outstanding used in computing per share amounts: | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
Net unrealized (loss) gain on available-for-sale investments | ( | |||||||||||||||||||||||||
Comprehensive income (loss) | $ | $ | ( | $ | ( | $ | ( |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
Class A and Class B Common Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Shares withheld related to net settlement of RSUs | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity component of issuance of convertible notes, net (Note 15) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( |
Six Months Ended | ||||||||||||||||||||||||||||||||||||||
Class A and Class B Common Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Shares withheld related to net settlement of RSUs | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Adoption of ASU No. 2016-02 | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity component of issuance of convertible notes, net (Note 15) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Adoption of ASU No. 2016-13 | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( |
Six months ended June 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Equity-based compensation | ||||||||||||||
Amortization of discount and issuance costs on convertible notes | ||||||||||||||
Other non-cash adjustments | ( | ( | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable, net | ( | ( | ||||||||||||
Inventories | ||||||||||||||
Prepaid expenses and other current assets | ( | ( | ||||||||||||
Accounts payable and accrued expenses | ||||||||||||||
Unearned revenue and other liabilities | ||||||||||||||
Other assets | ( | |||||||||||||
Net cash provided by (used in) operating activities | ( | |||||||||||||
Cash flows from investing activities: | ||||||||||||||
Sale and maturities of short- and long-term investments | ||||||||||||||
Purchase of property and equipment | ( | ( | ||||||||||||
Site and software development costs | ( | ( | ||||||||||||
Other investing activities, net | ( | |||||||||||||
Net cash provided by (used in) investing activities | ( | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from borrowings | ||||||||||||||
Repayment of borrowings | ( | |||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | ||||||||||||||
Taxes paid related to net share settlement of equity awards | ( | |||||||||||||
Deferred financing costs | ( | |||||||||||||
Net proceeds from exercise of stock options | ||||||||||||||
Net cash provided by (used in) financing activities | ( | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents: | ||||||||||||||
Beginning of period | ||||||||||||||
End of period | $ | $ | ||||||||||||
Supplemental cash flow information: | ||||||||||||||
Cash paid for interest on long-term debt | $ | $ | ||||||||||||
Purchase of property and equipment included in accounts payable and accrued expenses and in other liabilities | $ | $ |
June 30, 2020 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Short-term: | ||||||||||||||||||||||||||
Investment securities | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2019 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Short-term: | ||||||||||||||||||||||||||
Investment securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Long-term: | ||||||||||||||||||||||||||
Investment securities | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
June 30, 2020 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Cash | $ | $ | $ | $ | ||||||||||||||||||||||
Cash equivalents | ||||||||||||||||||||||||||
Total cash and cash equivalents | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Other non-current assets: | ||||||||||||||||||||||||||
Certificate of deposit | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2019 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Cash | $ | $ | $ | $ | ||||||||||||||||||||||
Cash equivalents | ||||||||||||||||||||||||||
Total cash and cash equivalents | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Other non-current assets: | ||||||||||||||||||||||||||
Certificate of deposit | ||||||||||||||||||||||||||
Long-term investments: | ||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Furniture and computer equipment | $ | $ | ||||||||||||
Site and software development costs | ||||||||||||||
Leasehold improvements | ||||||||||||||
Construction in progress | ||||||||||||||
Less accumulated depreciation and amortization | ( | ( | ||||||||||||
Property and equipment, net | $ | $ |
Six months ended June 30, 2020 | Six months ended June 30, 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Cash payments included in operating cash flows from lease arrangements | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for lease obligations | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||
Additional lease information | ||||||||||||||
Weighted average remaining lease term | ||||||||||||||
Weighted average discount rate | % | % |
Amount | ||||||||
(in thousands) | ||||||||
2020 (excluding the six months ended June 30, 2020) | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
Total future minimum lease payments | ||||||||
Less: Imputed interest | ( | |||||||
Total | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Balance sheet line item | ||||||||||||||
Other current liabilities | $ | $ | ||||||||||||
Operating lease liabilities | ||||||||||||||
Total operating leases | $ | $ |
Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | ||||||||||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||||||||||
Options exercised | ( | $ | ||||||||||||||||||
Outstanding and exercisable at June 30, 2020 | $ |
Shares | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||||
RSUs granted | $ | |||||||||||||
RSUs vested | ( | $ | ||||||||||||
RSUs forfeited/canceled | ( | $ | ||||||||||||
Outstanding as of June 30, 2020 | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. net revenue | $ | $ | $ | $ | ||||||||||||||||||||||
International net revenue | ||||||||||||||||||||||||||
Total net revenue | $ | $ | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Adjusted EBITDA: | ||||||||||||||||||||||||||
U.S. | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
International | ( | ( | ( | |||||||||||||||||||||||
Total reportable segments Adjusted EBITDA | ( | ( | ||||||||||||||||||||||||
Less: reconciling items (1) | ( | ( | ( | ( | ||||||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ( | $ | ( |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||
Equity-based compensation and related taxes | ||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||
Other (income), net | ( | ( | ( | ( | ||||||||||||||||||||||
Provision for income taxes, net | ||||||||||||||||||||||||||
Other (1) | ||||||||||||||||||||||||||
Total reconciling items | $ | $ | $ | $ | ||||||||||||||||||||||
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
2017 Notes | 2018 Notes | 2019 Notes | 2020 Accreting Notes | 2017 Notes | 2018 Notes | 2019 Notes | ||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Principal amounts: | ||||||||||||||||||||||||||||||||||||||||||||
Principal | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Unamortized debt discount | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Net carrying amount | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||
2017 Notes | 2018 Notes | 2019 Notes | 2020 Accreting Notes | 2017 Notes | 2018 Notes | |||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Contractual interest expense | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Interest cost related to amortization of the debt discount | ||||||||||||||||||||||||||||||||||||||||||||
Total interest expense | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||||||||
2017 Notes | 2018 Notes | 2019 Notes | 2020 Accreting Notes | 2017 Notes | 2018 Notes | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Contractual interest expense | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Interest cost related to amortization of the debt discount | ||||||||||||||||||||||||||||||||||||||
Total interest expense | $ | $ | $ | $ | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||
Numerator for basic EPS - Net income (loss) | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Interest expense associated with convertible debt instruments | ||||||||||||||||||||||||||
Numerator for diluted EPS - net income (loss) available to common stockholders after the effect of dilutive securities | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||
Denominator for basic EPS - weighted-average number of shares of common stock outstanding | ||||||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Employee stock options | ||||||||||||||||||||||||||
Restricted stock units | ||||||||||||||||||||||||||
Convertible debt instruments | ||||||||||||||||||||||||||
Dilutive potential common shares | ||||||||||||||||||||||||||
Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities | ||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Diluted earnings (loss) per share | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Outstanding employee stock options | ||||||||||||||||||||||||||
Unvested restricted common stock | ||||||||||||||||||||||||||
Unvested restricted stock units | ||||||||||||||||||||||||||
Shares related to convertible debt instruments | ||||||||||||||||||||||||||
Total |
2017 Notes / Restated 2017 Capped Call Transactions | 2018 Notes / 2018 Capped Call Transactions | 2019 Notes / 2019 Capped Call Transactions | 2020 Accreting Notes | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Shares potentially issuable from convertible debt instruments | ||||||||||||||||||||||||||
Shares obtainable from the exercise of capped call transactions | ( | ( | ( | |||||||||||||||||||||||
Total |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. net revenue | $ | 3,651,704 | $ | 2,000,518 | $ | 5,626,687 | $ | 3,658,216 | ||||||||||||||||||
International net revenue | 652,968 | 342,733 | 1,008,048 | 629,864 | ||||||||||||||||||||||
Total net revenue | $ | 4,304,672 | $ | 2,343,251 | $ | 6,634,735 | $ | 4,288,080 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands, except LTM Net Revenue per Active Customer and Average Order Value) | ||||||||||||||||||||||||||
Direct Retail Financial and Operating Metrics: | ||||||||||||||||||||||||||
Direct Retail Net Revenue (1) | $ | 4,294,236 | $ | 2,331,759 | $ | 6,616,818 | $ | 4,262,940 | ||||||||||||||||||
Active Customers | 25,979 | 17,799 | 25,979 | 17,799 | ||||||||||||||||||||||
LTM Net Revenue per Active Customer | $ | 440 | $ | 447 | $ | 440 | $ | 447 | ||||||||||||||||||
Orders Delivered | 18,892 | 9,162 | 28,768 | 17,325 | ||||||||||||||||||||||
Average Order Value | $ | 227 | $ | 255 | $ | 230 | $ | 246 | ||||||||||||||||||
Non-GAAP Financial Measures: | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 439,813 | $ | (69,983) | $ | 312,536 | $ | (172,201) | ||||||||||||||||||
Free Cash Flow | $ | 1,053,602 | $ | (91,471) | $ | 698,979 | $ | (258,288) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Reconciliation of Adjusted EBITDA | ||||||||||||||||||||||||||
Net income (loss) | $ | 273,877 | $ | (181,938) | $ | (11,988) | $ | (382,327) | ||||||||||||||||||
Depreciation and amortization | 69,114 | 44,339 | 135,957 | 83,922 | ||||||||||||||||||||||
Equity-based compensation and related taxes | 70,701 | 56,855 | 134,693 | 108,688 | ||||||||||||||||||||||
Interest expense, net | 28,939 | 10,252 | 51,157 | 19,490 | ||||||||||||||||||||||
Other (income), net | (3,110) | (322) | (2,864) | (3,400) | ||||||||||||||||||||||
Provision for income taxes, net | 292 | 831 | 1,625 | 1,426 | ||||||||||||||||||||||
Other (1) | — | — | 3,956 | — | ||||||||||||||||||||||
Adjusted EBITDA | $ | 439,813 | $ | (69,983) | $ | 312,536 | $ | (172,201) | ||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 1,135,251 | $ | (2,734) | $ | 878,961 | $ | (84,082) | ||||||||||||||||||
Purchase of property and equipment | (44,846) | (54,714) | (104,810) | (115,340) | ||||||||||||||||||||||
Site and software development costs | (36,803) | (34,023) | (75,172) | (58,866) | ||||||||||||||||||||||
Free Cash Flow | $ | 1,053,602 | $ | (91,471) | $ | 698,979 | $ | (258,288) | ||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
U.S. net revenue | $ | 3,651,704 | $ | 2,000,518 | 82.5 | % | ||||||||||||||
International net revenue | 652,968 | 342,733 | 90.5 | % | ||||||||||||||||
Net revenue | $ | 4,304,672 | $ | 2,343,251 | 83.7 | % |
Three months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost of goods sold | $ | 2,983,642 | $ | 1,783,651 | 67.3 | % | ||||||||||||||
Three months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees (1) | $ | 143,773 | $ | 88,502 | 62.5 | % | ||||||||||||||
Advertising | 417,777 | 259,166 | 61.2 | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 459,482 | 383,109 | 19.9 | % | ||||||||||||||||
Total operating expenses | $ | 1,021,032 | $ | 730,777 | 39.7 | % | ||||||||||||||
As a percentage of net revenue: | ||||||||||||||||||||
Customer service and merchant fees (1) | 3.3 | % | 3.8 | % | ||||||||||||||||
Advertising | 9.7 | % | 11.1 | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 10.7 | % | 16.3 | % | ||||||||||||||||
23.7 | % | 31.2 | % |
Three months ended June 30, | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees | $ | 4,313 | $ | 2,269 | ||||||||||||||||
Selling, operations, technology, general and administrative | $ | 64,035 | $ | 53,269 |
Three months ended June 30, | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
Customer service and merchant fees | 3.2 | % | 3.7 | % | ||||||||||||||||
Selling, operations, technology, general and administrative | 9.2 | % | 14.1 | % | ||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Interest (expense), net | $ | (28,939) | $ | (10,252) | 182.3 | % |
Six months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
U.S. net revenue | $ | 5,626,687 | $ | 3,658,216 | 53.8 | % | ||||||||||||||
International net revenue | 1,008,048 | 629,864 | 60.0 | % | ||||||||||||||||
Net revenue | $ | 6,634,735 | $ | 4,288,080 | 54.7 | % |
Six months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost of goods sold | $ | 4,734,582 | $ | 3,258,024 | 45.3 | % | ||||||||||||||
Six months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees (1) | $ | 233,236 | $ | 164,975 | 41.4 | % | ||||||||||||||
Advertising | 693,537 | 503,135 | 37.8 | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 935,450 | 726,757 | 28.7 | % | ||||||||||||||||
Total operating expenses | $ | 1,862,223 | $ | 1,394,867 | 33.5 | % | ||||||||||||||
As a percentage of net revenue: | ||||||||||||||||||||
Customer service and merchant fees (1) | 3.5 | % | 3.8 | % | ||||||||||||||||
Advertising | 10.5 | % | 11.7 | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 14.1 | % | 17.0 | % | ||||||||||||||||
28.1 | % | 32.5 | % |
Six months ended June 30, | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees | $ | 6,432 | $ | 4,245 | ||||||||||||||||
Selling, operations, technology, general and administrative | $ | 124,180 | $ | 102,134 |
Six months ended June 30, | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
Customer service and merchant fees | 3.4 | % | 3.7 | % | ||||||||||||||||
Selling, operations, technology, general and administrative | 12.2 | % | 14.6 | % | ||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Interest (expense), net | $ | (51,157) | (19,490) | 162.5 | % |
June 30, 2020 | December 31, 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Cash and cash equivalents | $ | 2,181,471 | $ | 582,753 | ||||||||||
Short-term investments | $ | 192,746 | $ | 404,252 | ||||||||||
Accounts receivable, net | $ | 118,984 | $ | 99,720 | ||||||||||
Long-term investments | $ | — | $ | 155,690 | ||||||||||
Working capital | $ | 595,606 | $ | (234,381) | ||||||||||
Six months ended June 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Net loss | $ | (11,988) | $ | (382,327) | ||||||||||
Net cash provided by (used in) operating activities | $ | 878,961 | $ | (84,082) | ||||||||||
Net cash provided by (used in) investing activities | $ | 188,204 | $ | (89,269) | ||||||||||
Net cash provided by (used in) financing activities | $ | 527,643 | $ | (1,135) | ||||||||||
Exhibit | Incorporated by Reference | ||||||||||||||||||||||
Number | Exhibit Description | Filed Herewith | Form | File No. | Filing Date | Exhibit Number | |||||||||||||||||
4.1 | 8-K | 001-36666 | 4/8/2020 | 4.1 | |||||||||||||||||||
4.2 | 8-K | 001-36666 | 4/8/2020 | 4.2 | |||||||||||||||||||
10.1 | 8-K | 001-36666 | 4/8/2020 | 10.1 | |||||||||||||||||||
10.2 | 8-K | 001-36666 | 4/8/2020 | 10.2 | |||||||||||||||||||
31.1 | X | ||||||||||||||||||||||
31.2 | X | ||||||||||||||||||||||
32.1# | X | ||||||||||||||||||||||
32.2# | X | ||||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | |||||||||||||||||||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | X | |||||||||||||||||||||
101.DEF | XBRL Taxonomy Definition Linkbase Document | X | |||||||||||||||||||||
101.LAB | XBRL Taxonomy Labels Linkbase Document | X | |||||||||||||||||||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | X | |||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) | X |
+ | Indicates a management contract or compensatory plan | |||||||
# | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act. |
WAYFAIR INC. | ||||||||
Date: August 5, 2020 | By: | /s/ NIRAJ SHAH | ||||||
Niraj Shah | ||||||||
Chief Executive Officer and President | ||||||||
(Principal Executive Officer) | ||||||||
Date: August 5, 2020 | By: | /s/ MICHAEL FLEISHER | ||||||
Michael Fleisher | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Date: August 5, 2020 | /s/ NIRAJ SHAH | |||||||
Niraj Shah | ||||||||
Chief Executive Officer and President |
Date: August 5, 2020 | /s/ MICHAEL FLEISHER | |||||||
Michael Fleisher | ||||||||
Chief Financial Officer |
Date: August 5, 2020 | /s/ NIRAJ SHAH | |||||||
Niraj Shah | ||||||||
Chief Executive Officer and President |
Date: August 5, 2020 | /s/ MICHAEL FLEISHER | |||||||
Michael Fleisher | ||||||||
Chief Financial Officer |
CONSOLIDATED AND CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts receivable allowance for credit losses | $ 28,155 | $ 22,774 |
Undesignated preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Undesignated preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Undesignated preferred shares, shares issued (in shares) | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 68,108,216 | 66,642,611 |
Common stock, shares outstanding (in shares) | 68,108,216 | 66,642,611 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 164,000,000 | 164,000,000 |
Common stock, shares issued (in shares) | 26,956,796 | 26,957,815 |
Common stock, shares outstanding (in shares) | 26,956,796 | 26,957,815 |
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Statement [Abstract] | ||||
Net revenue | $ 4,304,672 | $ 2,343,251 | $ 6,634,735 | $ 4,288,080 |
Cost of goods sold | 2,983,642 | 1,783,651 | 4,734,582 | 3,258,024 |
Gross profit | 1,321,030 | 559,600 | 1,900,153 | 1,030,056 |
Operating expenses: | ||||
Customer service and merchant fees | 143,773 | 88,502 | 233,236 | 164,975 |
Advertising | 417,777 | 259,166 | 693,537 | 503,135 |
Selling, operations, technology, general and administrative | 459,482 | 383,109 | 935,450 | 726,757 |
Total operating expenses | 1,021,032 | 730,777 | 1,862,223 | 1,394,867 |
Income (loss) from operations | 299,998 | (171,177) | 37,930 | (364,811) |
Interest (expense), net | (28,939) | (10,252) | (51,157) | (19,490) |
Other income, net | 3,110 | 322 | 2,864 | 3,400 |
Income (loss) before income taxes | 274,169 | (181,107) | (10,363) | (380,901) |
Provision for income taxes, net | 292 | 831 | 1,625 | 1,426 |
Net income (loss) | $ 273,877 | $ (181,938) | $ (11,988) | $ (382,327) |
Basic earnings (loss) per share (in usd per share) | $ 2.89 | $ (1.98) | $ (0.13) | $ (4.18) |
Diluted earnings (loss) per share (in usd per share) | $ 2.54 | $ (1.98) | $ (0.13) | $ (4.18) |
Weighted-average number of shares of common stock outstanding used in computing per share amounts: | ||||
Basic (in shares) | 94,834 | 91,802 | 94,461 | 91,455 |
Diluted (in shares) | 119,932 | 91,802 | 94,461 | 91,455 |
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 273,877 | $ (181,938) | $ (11,988) | $ (382,327) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (1,093) | (439) | 230 | 204 |
Net unrealized (loss) gain on available-for-sale investments | (73) | 47 | 673 | 200 |
Comprehensive income (loss) | $ 272,711 | $ (182,330) | $ (11,085) | $ (381,923) |
Description of Business |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business Wayfair Inc. (the "Company") is one of the world's largest online destinations for the home. Through its e-commerce business model, the Company offers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over eighteen million products from over 12,000 suppliers.
|
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited Consolidated and Condensed Financial Statements contained in this Quarterly Report on Form 10-Q are those of the Company and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. The Consolidated and Condensed Balance Sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results of the interim periods presented. Interim results are not necessarily indicative of the results for the full year ended December 31, 2020 or future periods. The Company believes that other than the implementation of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), there have been no significant changes during the six months ended June 30, 2020 to the items disclosed in Note 2, Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Principles of Consolidation The accompanying unaudited Consolidated and Condensed Financial Statements of Wayfair Inc. include its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of the Consolidated and Condensed 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 financial statements and the reported amounts of net revenues and expenses during the reporting period. Actual results could differ from those estimates. Earnings (Loss) per Share The Company follows the two-class method when computing earnings (loss) per share for its two issued classes of common stock - Class A and Class B. Basic earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period plus, if dilutive, stock awards, including stock options and restricted stock units, as determined under the treasury stock method, and convertible debt instruments, as determined under the if-converted method. In periods when we have a net loss, stock awards and convertible debt instruments are excluded from our calculations of earnings per share as their inclusion would have an antidilutive effect. Credit ImpairmentThe Company adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective transition method. This ASU revises how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. As of January 1, 2020, the adoption of resulted in a $5.5 million cumulative adjustment to accumulated deficit on our Consolidated and Condensed Balance Sheet. Refer to Note 4, Credit Losses, for additional detail.
|
Investments and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments and Fair Value Measurements | 3. Investments and Fair Value Measurements Investments As of June 30, 2020 and December 31, 2019, the Company's investments consisted of corporate bonds and other government obligations priced at fair value. These investments were classified as available-for-sale and their estimated fair values were $192.7 million and $559.9 million, respectively. To the extent the amortized cost basis of the available-for-sale debt securities exceeds the fair value, management assesses the debt securities for credit loss, however management considers the risk of credit loss to be minimized by the Company's policy of investing in financial instruments issued by highly-rated financial institutions. When assessing the risk of credit loss, management considers factors such as the severity and the reason of the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management's intended holding period and time horizon for selling. During the three and six months ended June 30, 2020 and 2019, the Company did not recognize any credit losses related to its available-for-sale debt securities. Further, as of June 30, 2020 and December 31, 2019, the Company did not record an allowance for credit losses related to its available-for-sale debt securities. During the six months ended June 30, 2020, the Company collected $161.3 million of proceeds from the sale of long-term investments and recognized a realized gain of $0.8 million. The Company did not recognize any realized gains or losses during the three months ended June 30, 2020 or during the three and six months ended June 30, 2019. The following tables present details of the Company’s investments as of June 30, 2020 and December 31, 2019:
Fair Value Measurements The Company's financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The three levels of inputs used to measure fair value are as follows: ▪Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities ▪Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability ▪Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company measures its cash equivalents and short-term and long-term investments at fair value. The Company classifies its cash equivalents and certificates of deposits within Level 1 because the Company values these investments using quoted market prices. The fair value of the Company's Level 1 financial assets is based on quoted market prices of the identical underlying security. The Company classifies short-term and long-term investments within Level 2 because unadjusted quoted prices for identical or similar assets in markets are not active. The Company does not have any assets or liabilities classified as Level 3 financial assets. The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 based on the three-tier value hierarchy:
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Credit Losses |
6 Months Ended |
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Jun. 30, 2020 | |
Credit Loss [Abstract] | |
Credit Losses | 4. Credit Losses Accounts receivable are stated net of credit losses, which are recorded based on historical losses as well as management's expectation of future collections. Uncollectible amounts are written off against the allowance after all collection efforts have been exhausted. The Company's exposure to credit loss is minimized through fraud assessments performed prior to customer checkout and the Company's policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. Further, management notes credit risk is mitigated as approximately 99% of the net revenue recognized for the three and six months ended June 30, 2020 was collected in advance of recognition. As of June 30, 2020, the Company reported $119.0 million of accounts receivable, net of allowance for credit losses of $28.2 million. Other than the adjustment related to the adoption of ASU 2016-13, as discussed in Note 2, Summary of Significant Accounting Policies, changes in the allowance for credit losses were not material for the three and six months ended June 30, 2020.
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Intangible Assets and Goodwill |
6 Months Ended |
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Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill As of June 30, 2020 and December 31, 2019, the Company had $17.6 million and $18.4 million of intangible assets, respectively. Amortization expense related to intangible assets was $0.4 million and $0.1 million for the three months ended June 30, 2020 and 2019, respectively, and $0.8 million and $0.3 million for the six months ended June 30, 2020 and 2019, respectively. Goodwill was $0.4 million as of June 30, 2020 and December 31, 2019.
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Property and Equipment, net |
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Property and Equipment, net | 6. Property and Equipment, net The following table summarizes property and equipment, net as of June 30, 2020 and December 31, 2019:
Property and equipment depreciation and amortization expense was $68.7 million and $44.2 million for the three months ended June 30, 2020 and 2019, respectively, and $135.2 million and $83.6 million for the six months ended June 30, 2020 and 2019, respectively.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 7. Leases The Company has lease arrangements for warehouse, fulfillment center, office, and data center spaces. These leases expire at various dates through 2036. Operating lease expense was $44.2 million and $29.4 million in the three months ended June 30, 2020 and 2019, respectively, and $80.3 million and $55.0 million for the six months ended June 30, 2020 and 2019, respectively. The following table presents supplemental cash flow information related to leases:
The following table presents supplemental balance sheet information related to leases:
The following table presents future minimum lease payments under non-cancellable leases as of June 30, 2020:
The following table presents total operating leases as of June 30, 2020 and December 31, 2019:
As of June 30, 2020, the Company has entered into $167.7 million of additional operating leases, primarily related to build-to-suit warehouse leases that have not yet commenced. As the Company does not control the underlying assets during the construction period, the Company is not considered the owner of the construction projects for accounting purposes. These operating leases will commence between 2020 and 2021 with lease terms of 2 to 15 years.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Letters of Credit The Company has issued letters of credit, primarily as security for certain lease agreements, for approximately $54.3 million and $46.7 million, as of June 30, 2020 and December 31, 2019, respectively. Legal Matters From time to time the Company is involved in claims that arise during the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently believe that the outcome of any of these legal matters will have a material adverse effect on the Company's results of operation or financial condition. Regardless of the outcome, litigation can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting the Company's overall operations. In addition, the Company may also find itself at greater risk to outside party claims as it increases its operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable, or unclear On January 10, 2019 and January 16, 2019, putative securities class action complaints were filed against the Company and three of its officers in the U.S. District Court for the District of Massachusetts. The two complaints alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, relating to certain prior disclosures of the Company. Each plaintiff was seeking to represent a class of shareholders who purchased or acquired stock of the Company between August 2, 2018 and October 31, 2018 and was seeking damages and other relief based on allegations that the defendants' conduct affected the value of such stock. On July 8, 2020, the consolidated complaint was dismissed with prejudice.
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Equity-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Compensation | 9. Equity-Based Compensation The board of directors of the Company (the "Board") adopted the 2014 Incentive Award Plan ("2014 Plan") to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The 2014 Plan is administered by the Board with respect to awards to non-employee directors and by the compensation committee of the Board with respect to other participants and provides for the issuance of stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs"), performance shares, stock payments, cash payments, dividend awards and other incentives. Prior to the adoption of the 2014 Plan, Wayfair LLC issued certain equity awards pursuant to the Wayfair LLC Amended and Restated Common Unit Plan (the "2010 Plan"), which was administered by the board of directors of Wayfair LLC. Awards issued under the 2010 Plan that remain outstanding currently represent Class A or Class B common stock of the Company. For awards granted pursuant to the 2014 Plan, 8,603,066 shares of Class A common stock were initially available for issuance. The 2014 Plan also contains an evergreen provision whereby the shares available for future grant are increased on the first day of each calendar year beginning January 1, 2016 and ending on and including January 1, 2024. As of January 1, 2020, 5,111,305 shares of Class A common stock were available for future grant under the 2014 Plan. Shares or RSUs forfeited, withheld for minimum statutory tax obligations, and unexercised stock option lapses from the 2010 and 2014 Plans are available for future grant under the 2014 Plan. The following table presents activity relating to stock options for the six months ended June 30, 2020:
The intrinsic value of stock options exercised was $2.2 million and $3.7 million for the six months ended June 30, 2020 and 2019, respectively. The aggregate intrinsic value of stock options outstanding and currently exercisable is $5.1 million as of June 30, 2020. All stock options were fully vested at June 30, 2020. The following table presents activity relating to RSUs for the six months ended June 30, 2020:
The intrinsic value of RSUs vested was $137.1 million and $187.3 million for the six months ended June 30, 2020 and 2019, respectively. The aggregate intrinsic value of RSUs unvested is $1.4 billion as of June 30, 2020. Unrecognized equity-based compensation expense related to outstanding RSUs is $695.5 million with a weighted average remaining vesting term of 1.3 years at June 30, 2020.
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Unearned Revenue |
6 Months Ended |
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Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Unearned Revenue | 10. Unearned Revenue The Company has three types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are initially recorded in unearned revenue, and are recognized as net revenue when the products are delivered, (ii) unredeemed gift cards and site and store credits, which are initially recorded in unearned revenue, and are recognized in the period they are redeemed, and (iii) membership rewards redeemable for future purchases, which are earned by customers on purchases made with the Company's Wayfair branded, private label credit card, and are initially recorded in other current liabilities, and are recognized as net revenue when redeemed. The portion of gift cards and site and store credits not expected to be redeemed ("breakage") are recognized as net revenue based on historical redemption patterns, which is substantially within twenty-four months from the date of issuance, to the extent there is no requirement for remitting balances to governmental agencies. Contractual liabilities included in unearned revenue and other current liabilities in the Consolidated and Condensed Balance Sheet were $333.8 million and $6.1 million at June 30, 2020 and $167.6 million and $4.6 million at December 31, 2019, respectively. During the six months ended June 30, 2020, the Company recognized $136.2 million and $2.2 million of net revenue that was included in unearned revenue and other current liabilities, respectively, at December 31, 2019. Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing, and uncertainty of net revenue and cash flows are affected by economic factors. Refer to Note 11, Segment and Geographic Information, for additional detail.
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Segment and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information | 11. Segment and Geographic Information Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its chief executive officer. The Company's operating and reportable segments are the U.S. and International. These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) before depreciation and amortization, equity-based compensation and related taxes, interest (expense), net, other income, net, provision for income taxes, net, non-recurring items, and other items not indicative of our ongoing operating performance. These charges are excluded from evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis as these costs may vary independent of business performance. The Company allocates certain operating expenses to the operating and reportable segments, including customer service and merchant fees and selling, operations, technology, general and administrative based on the usage and relative contribution provided to the segments. It excludes from the allocations certain operating expense lines, including depreciation and amortization, equity-based compensation and related taxes, interest (expense), net, other income, net, and provision for income taxes, net. There are no net revenue transactions between the Company's reportable segments. U.S. The U.S. segment primarily consists of amounts earned through product sales through the Company's family of sites in the U.S. and through websites operated by third parties in the U.S. The U.S. net revenue for the three and six months ended June 30, 2019 includes $11.5 million and $25.1 million, respectively, of net revenue previously classified as other net revenue. International The International segment primarily consists of amounts earned through product sales through the Company's international sites. Net revenue from external customers for each group of similar products and services are not reported to the CODM. Separate identification of this information for purposes of segment disclosure is impractical, as it is not readily available and the cost to develop it would be excessive. No individual country outside of the U.S. provided greater than 10% of consolidated net revenue. The following tables present net revenues and Adjusted EBITDA attributable to the Company's reportable segments for the periods presented:
(1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net income (loss):
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The provision for income taxes, net was $0.3 million and $0.8 million for the three months ended June 30, 2020 and 2019, respectively, and $1.6 million and $1.4 million for the six months ended June 30, 2020 and 2019, respectively. The provision for income taxes, net recorded in the three and six months ended June 30, 2020 is primarily related to income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes, offset by a discrete tax benefit related to excess tax benefits on equity awards for U.S. employees. The provision for income taxes, net recorded in the three and six months ended June 30, 2019 is primarily related to income earned in certain foreign jurisdictions and U.S. state income taxes. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The Company has deferred tax assets related to its net operating loss carryforwards accumulated since the fourth quarter of 2014 and related to net operating loss carryforwards of certain of its foreign subsidiaries. A valuation allowance against net deferred tax assets is required if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reassesses the valuation allowance on a quarterly basis and has provided a valuation allowance on substantially all of its worldwide net deferred tax assets. The Company had no material unrecognized tax benefits as of June 30, 2020 and December 31, 2019. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes, net.
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Stockholders' Deficit |
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Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | 13. Stockholders’ Deficit Preferred Stock The Company authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value per share, for future issuance. As of June 30, 2020, the Company had no shares of undesignated preferred stock issued or outstanding. Common Stock The Company authorized 500,000,000 shares of Class A common stock, $0.001 par value per share, and 164,000,000 shares of Class B common stock, $0.001 par value per share, of which 68,108,216 and 66,642,611 shares of Class A common stock and 26,956,796 and 26,957,815 shares of Class B common stock were outstanding as of June 30, 2020 and December 31, 2019, respectively. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate number of shares of the then outstanding Class A common stock and Class B common stock, or in the event of the affirmative vote or written consent of holders of at least 66 2/3% of the outstanding shares of Class B common stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to receive dividends out of funds legally available if the Board, in its discretion, determines to issue dividends and then only at the times and in the amounts that the Board may determine. Since the Company's initial public offering through June 30, 2020, 55,082,738 shares of Class B common stock were converted to Class A common stock.
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Credit Agreement |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Agreement | 14. Credit Agreement On February 21, 2019 (the "Closing Date"), the Company, as guarantor, and Wayfair LLC, a wholly-owned subsidiary of the Company, as borrower (the “Borrower”) entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Citibank, in its capacity as administrative agent, swing line lender and letter of credit issuer, and certain other lenders party thereto. The Amended Credit Agreement replaced the Company's existing credit facility with Citibank. The Amended Credit Agreement consists of: •A secured revolving credit facility under which the Borrower may borrow up to $165 million, subject to certain sublimits, with a final maturity date of February 21, 2022 (the “Revolver”). •The Borrower also has the right, subject to certain customary conditions, to increase the Revolver by $50 million. •The Revolver has the following sublimits: ◦a $100 million letter of credit sublimit; and ◦a $15 million swing line sublimit. The Borrower’s obligations under the Amended Credit Agreement are guaranteed by the Company and certain of its subsidiaries (together, the “Guarantors”). The obligations of the Borrower and the Guarantors are secured by first-priority liens on substantially all of the assets of the Borrower and the Guarantors, including, with certain exceptions, all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of the Company’s first-tier foreign subsidiaries. The proceeds of the Revolver may be used to finance working capital, to refinance certain existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. Borrowings under the Revolver will bear interest through maturity at a variable rate based upon, at the Borrower’s option, either the Eurodollar rate or the base rate (which is the highest of (x) Citibank’s prime rate, (y) one-half of 1.00% in excess of the federal funds effective rate, and (z) 1.00% in excess of the one-month Eurodollar rate), plus, in each case an applicable margin. As of the Closing Date, the applicable margin for Eurodollar rate loans was 1.75% per annum and the applicable margin for base rate loans was 0.75% per annum. The applicable margin is subject to specified changes depending on the Liquidity (as defined in the Amended Credit Agreement) of the Company. Any amounts outstanding under the Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the Amended Credit Agreement, the Borrower is required to make certain mandatory prepayments prior to maturity. The Amended Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, will limit or restrict the ability of the Borrower and the Guarantors, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of their businesses. The Amended Credit Agreement also contains customary events of default, subject to thresholds and grace periods, including, among others, payment default, covenant default, cross default to other material indebtedness, and judgment default. In addition, the Amended Credit Agreement requires the Company to maintain certain levels of Free Cash Flow (as defined in the Amended Credit Agreement). In the six months ended June 30, 2020, the Company borrowed under the Revolver. All borrowings were repaid as of June 30, 2020. As a result, there was no debt outstanding as of June 30, 2020. The Company did not borrow any amounts under its credit agreement during the year ended December 31, 2019. 15. Convertible Debt On September 15, 2017, the Company issued $431.25 million in aggregate principal amount of 0.375% Convertible Senior Notes due 2022 (the "2017 Notes"), which includes the exercise in full of a $56.25 million over-allotment option, to certain financial institutions as the initial purchasers of the 2017 Notes (the "2017 Initial Purchasers"). On September 11, 2017, in connection with the pricing of the 2017 Notes, the Company entered into privately negotiated capped call transactions (the "2017 Base Capped Call Transactions") with two of the 2017 Initial Purchasers and certain other financial institutions (the "2017 Option Counterparties") and, in connection with the exercise in full of the over-allotment option by the 2017 Initial Purchasers, on September 14, 2017, entered into additional capped call transactions (such additional capped call transactions, the "2017 Additional Capped Call Transactions” and, together with the 2017 Base Capped Call Transactions, the "2017 Capped Call Transactions") with the 2017 Option Counterparties. Collectively, the 2017 Capped Call Transactions covered, initially, the number of shares of the Company’s Class A common stock underlying the 2017 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2017 Notes. On November 15, 2018, the Company amended and restated the 2017 Capped Call Transactions (the "Restated 2017 Capped Call Transactions") with each of the 2017 Option Counterparties in order to, among other things, provide that the options underlying the Restated 2017 Capped Call Transactions can, at the Company’s option, remain outstanding until September 1, 2022, which is the maturity date for the 2017 Notes, even if all or a portion of the 2017 Notes are converted, repurchased or redeemed prior to such date. In November 2018, the Company issued $575.0 million in aggregate principal amount of 1.125% Convertible Senior Notes due 2024 (the "2018 Notes"), which includes the exercise in full of a $75.0 million option granted to the initial purchasers, to certain financial institutions as the initial purchasers of the 2018 Notes (the "2018 Initial Purchasers"). The issuance of $500.0 million of 2018 Notes closed on November 19, 2018 and the additional $75.0 million of additional 2018 Notes, which were issued pursuant to the exercise of the 2018 Initial Purchasers' option to purchase such additional 2018 Notes, closed on November 29, 2018. On November 14, 2018, in connection with the pricing of the 2018 Notes, the Company entered into privately negotiated capped call transactions (the "2018 Base Capped Call Transactions") with one of the 2018 Initial Purchasers and certain other financial institutions (the "2018 Option Counterparties") and, in connection with the exercise in full of the 2018 Initial Purchasers' option to purchase such additional 2018 Notes, on November 27, 2018, entered into additional capped call transactions (such additional capped call transactions, the "2018 Additional Capped Call Transactions" and, together with the 2018 Base Capped Call Transactions, the "2018 Capped Call Transactions") with the 2018 Option Counterparties. Collectively, the 2018 Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the 2018 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2018 Notes. On August 19, 2019, the Company issued $948.75 million in aggregate principal amount of 1.00% Convertible Senior Notes due 2026 (the "2019 Notes" and together with the 2017 Notes and 2018 Notes, the "Non-Accreting Notes"), which includes the exercise in full of a $123.75 million option granted to the initial purchasers, to certain financial institutions as the initial purchasers of the 2019 Notes (the "2019 Initial Purchasers"). On August 14, 2019, in connection with the pricing of the 2019 Notes, the Company entered into privately negotiated capped call transactions (the "2019 Base Capped Call Transactions") with certain of the 2019 Initial Purchasers or their affiliates and another financial institution (the "2019 Option Counterparties") and, in connection with the exercise in full of the 2019 Initial Purchasers' option to purchase such additional 2019 Notes, on August 16, 2019, entered into additional capped call transactions (such additional capped call transactions, the "2019 Additional Capped Call Transactions" and, together with the 2019 Base Capped Call Transactions, the "2019 Capped Call Transactions") with the 2019 Option Counterparties. Collectively, the 2019 Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the 2019 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2019 Notes. On April 8, 2020, the Company issued $535.0 million in aggregate original principal amount of 2.50% Accreting Convertible Senior Notes due 2025 (the "2020 Accreting Notes" and together with the Non-Accreting Notes, the "Notes") to GHEP VII Aggregator, L.P. ("Great Hill"), CBEP Investments, LLC ("Charlesbank") and The Spruce House Partnership LLC. The 2020 Accreting Notes are fully and unconditionally guaranteed on a senior unsecured basis by Wayfair LLC, a wholly-owned subsidiary of the Company, as guarantor. The net proceeds from the sale of the 2017 Notes, 2018 Notes, 2019 Notes, and the 2020 Accreting Notes were approximately $420.4 million, $562.0 million, $935.1 million, and $527.4 million, respectively, after deducting the initial purchasers’ discounts or placement agent fees, as applicable and the offering expenses payable by the Company. The Company used approximately $44.2 million, $93.4 million, and $145.7 million, respectively, of the net proceeds from the 2017 Notes, 2018 Notes, and 2019 Notes to pay the cost of the 2017 Capped Call Transactions, the 2018 Capped Call Transactions, and the 2019 Capped Call Transactions, respectively. The Company intends to use the remainder of the net proceeds from the Notes for working capital and general corporate purposes. The Company may also use a portion of the net proceeds to finance acquisitions, strategic transactions, investments or the repayment, purchase or exchange of indebtedness (including its existing convertible notes). The Notes are general senior unsecured obligations of the Company. The Notes rank senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; are effectively subordinated in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; the Non-Accreting Notes are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries, including Wayfair LLC’s guaranty of the 2020 Accreting Notes; and the 2020 Accreting Notes are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries (other than Wayfair LLC). In accounting for the issuance of the Non-Accreting Notes, the Company separated the Non-Accreting Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Non-Accreting Notes. The difference between the principal amount of the Non-Accreting Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and amortized to interest expense using the effective interest method over the term of the Non-Accreting Notes. The effective interest rate of the 2017 Notes, 2018 Notes and 2019 Notes is 6.0%, 8.1% and 6.4%, respectively. The equity component of the 2017 Notes, 2018 Notes and 2019 Notes of approximately $95.8 million, $181.5 million and $280.3 million, respectively, is included in additional paid-in capital in the Consolidated and Condensed Balance Sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Non-Accreting Notes using the same proportions as the proceeds from the Non-Accreting Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and amortized to interest expense over the term of the Non-Accreting Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ deficit. In accounting for the issuance of the 2020 Accreting Notes, the Company determined there was a beneficial conversion feature which was calculated as the excess of the fair value of the underlying common stock at the commitment date less the effective conversion price of the shares convertible at that time. The beneficial conversion feature of $38.9 million was recorded to additional paid-in capital in the Consolidated and Condensed Balance Sheet and represents a debt discount to the 2020 Accreting Notes, which was recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and is amortized to interest expense using the effective interest method over the term of the 2020 Accreting Notes. The effective interest of the 2020 Accreting Notes is 4.3%. All transaction costs incurred were recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and are amortized to interest expense using the effective interest method over the term of the 2020 Accreting Notes. The 2020 Accreting Notes accrue interest at a rate of 2.50% per annum which will accrete to the principal amount on April 1 and October 1 of each year, beginning on October 1, 2020. The interest is amortized to interest expense using the effective interest method over the term of the 2020 Accreting Notes and recorded to other long-term liabilities in the Consolidated and Condensed Balance Sheet. Upon accretion to the principal amount on April 1 and October 1 of each year, the Company will reclassify the interest accrued as of that date to long-term debt. The beneficial conversion feature for additional shares which would be issued upon conversion of paid in kind interest will be recorded as additional interest expense and additional paid-in capital over the term of the 2020 Accreting Notes as such interest accrues. The following table presents the outstanding principal amount and carrying value of the Notes as of the date presented:
The following tables present total interest expense recognized related to the Notes:
The estimated fair value of the 2017 Notes, the 2018 Notes, the 2019 Notes, and the 2020 Accreting Notes was $821.1 million, $1.0 billion, $1.4 billion, and $1.5 billion, respectively, as of June 30, 2020. The estimated fair value of the Non-Accreting Notes was determined through consideration of quoted market prices. The estimated fair value of the 2020 Accreting Notes was determined through an option pricing model using Level 3 inputs including volatility and credit spread. The fair values of the Non-Accreting Notes and the 2020 Accreting Notes are classified as Level 2 and Level 3, respectively, as defined in Note 3, Investments and Fair Value Measurements. The if-converted value of the 2017 Notes, 2018 Notes, 2019 Notes, and 2020 Accreting Notes respectively, exceeded the principal value by $387.7 million, $401.2 million, $313.9 million, and $923.2 million, respectively, as of June 30, 2020. 2017 Notes The 2017 Notes were issued pursuant to an indenture, dated September 15, 2017 (the "2017 Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company pays interest on the 2017 Notes semiannually in arrears at a rate of 0.375% per annum on March 1 and September 1 of each year. The 2017 Notes are convertible based upon an initial conversion rate of 9.61 shares of the Company’s Class A common stock per $1,000 principal amount of 2017 Notes (equivalent to a conversion price of approximately $104.06 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the 2017 Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The 2017 Notes will mature on September 1, 2022, unless earlier purchased, redeemed or converted. Prior to June 1, 2022, holders may convert all or a portion of their 2017 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 business day period after any 10 consecutive trading day period (the "2017 Notes measurement period") in which the trading price per $1,000 principal amount of 2017 Notes for each trading day of the 2017 Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any 2017 Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after June 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2017 Notes at any time, regardless of the foregoing circumstances. Holders of 2017 Notes who convert their 2017 Notes in connection with a notice of a redemption or a make-whole fundamental change (each as defined in the 2017 Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the 2017 Notes. The 2017 Notes are convertible during the third quarter of 2020, however, none of the 2017 Notes have been converted to date. The Company may not redeem the 2017 Notes prior to September 8, 2020. On or after September 8, 2020, the Company may redeem for cash all or part of the 2017 Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2017 Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the 2017 Indenture), holders may require the Company to repurchase all or a portion of their 2017 Notes for cash at a price equal to 100% of the principal amount of the 2017 Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. The 2017 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2017 Notes then outstanding may declare the entire principal amount of all the 2017 Notes plus accrued interest, if any, to be immediately due and payable. 2018 Notes The 2018 Notes were issued pursuant to an indenture, dated November 19, 2018 (the "2018 Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the 2018 Notes semiannually in arrears at a rate of 1.125% per annum on May 1 and November 1 of each year commencing on May 1, 2019. The 2018 Notes are convertible based upon an initial conversion rate of 8.5910 shares of the Company’s Class A common stock per $1,000 principal amount of 2018 Notes (equivalent to a conversion price of approximately $116.40 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the 2018 Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The 2018 Notes will mature on November 1, 2024, unless earlier purchased, redeemed or converted. Prior to August 1, 2024, holders may convert all or a portion of their 2018 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the business day period after any consecutive trading day period (the "2018 Notes measurement period") in which the trading price per $1,000 principal amount of 2018 Notes for each trading day of the 2018 Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any 2018 Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after August 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2018 Notes at any time, regardless of the foregoing circumstances. Holders of 2018 Notes who convert their 2018 Notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the 2018 Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the 2018 Notes. The 2018 Notes are convertible during the third quarter of 2020, however, none of the 2018 Notes have been converted to date. The Company may not redeem the 2018 Notes prior to May 8, 2022. On or after May 8, 2022, the Company may redeem for cash all or part of the 2018 Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2018 Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the 2018 Indenture), holders may require the Company to repurchase all or a portion of their 2018 Notes for cash at a price equal to 100% of the principal amount of the 2018 Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. The 2018 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2018 Notes then outstanding may declare the entire principal amount of all the 2018 Notes plus accrued interest, if any, to be immediately due and payable. 2019 Notes The 2019 Notes were issued pursuant to an indenture, dated August 19, 2019 (the "2019 Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the 2019 Notes semiannually in arrears at a rate of 1.00% per annum on February 15 and August 15 of each year commencing on February 15, 2020. The 2019 Notes are convertible based upon an initial conversion rate of 6.7349 shares of the Company’s Class A common stock per $1,000 principal amount of 2019 Notes (equivalent to a conversion price of approximately $148.48 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the 2019 Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The 2019 Notes will mature on August 15, 2026, unless earlier purchased, redeemed or converted. Prior to May 15, 2026, holders may convert all or a portion of their 2019 Notes only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the business day period after any consecutive trading day period (the “2019 Notes measurement period”) in which the trading price per $1,000 principal amount of 2019 Notes for each trading day of the 2019 Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any 2019 Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after May 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2019 Notes at any time, regardless of the foregoing circumstances. Holders of 2019 Notes who convert their 2019 Notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the 2019 Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the 2019 Notes. The 2019 Notes are not convertible during the third quarter of 2020 and none of the 2019 Notes have been converted to date. The Company may not redeem the 2019 Notes prior to August 20, 2023. On or after August 20, 2023, the Company may redeem for cash all or part of the 2019 Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2019 Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the 2019 Indenture), holders may require the Company to repurchase all or a portion of their 2019 Notes for cash at a price equal to 100% of the principal amount of the 2019 Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. The 2019 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2019 Notes then outstanding may declare the entire principal amount of all the 2019 Notes plus accrued interest, if any, to be immediately due and payable. 2020 Accreting Notes The 2020 Accreting Notes were issued pursuant to an indenture, dated April 8, 2020 (the "2020 Indenture"), among the Company, Wayfair LLC, as guarantor, and U.S. Bank National Association, as trustee. The 2020 Accreting Notes are fully and unconditionally guaranteed on a senior unsecured basis by Wayfair LLC. No cash interest will be payable on the 2020 Accreting Notes. Instead, the 2020 Accreting Notes will accrue interest at a rate of 2.50% per annum which will accrete to the principal amount on April 1 and October 1 of each year, beginning on October 1, 2020. The 2020 Accreting Notes are convertible based upon an initial conversion price of $72.50 per share of the Company’s Class A common stock. The conversion price is subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company's Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversion of 2020 Accreting Notes with a number of shares of the Company's Class A common stock per $1,000 original principal amount of 2020 Accreting Notes equal to the accreted principal amount of such original principal amount of 2020 Accreting Notes divided by the conversion price. The 2020 Accreting Notes will mature on April 1, 2025, unless earlier purchased, redeemed or converted. Holders may convert all or a portion of their 2020 Accreting Notes at any time prior to the second business day immediately preceding the maturity date. Holders of the 2020 Accreting Notes who convert in connection with a make-whole fundamental change (as defined in the 2020 Indenture) may be entitled to a premium in the form of additional shares of the Company's Class A common stock. None of the 2020 Accreting Notes have been converted to date. The Company may not redeem the 2020 Accreting Notes prior to May 9, 2023. On or after May 9, 2023, the Company may redeem for cash all or part of the 2020 Accreting Notes if the last reported sale price of the Company's Class A common stock equals or exceeds 276% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the accreted principal amount of the 2020 Accreting Notes to be redeemed, including accrued interest, if any, but excluding, the redemption date. Upon the occurrence of a fundamental change (as defined in the 2020 Indenture), holders may require the Company to repurchase all or a portion of their 2020 Accreting Notes for cash at a price equal to 100% of the accreted principal amount of the 2020 Accreting Notes to be repurchased (which accreted principal amount upon repurchase will include interest, if any, accrued to, but excluding, the fundamental change repurchase date). The 2020 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2020 Accreting Notes then outstanding may declare the entire principal amount of all the 2020 Accreting Notes plus accrued interest, if any, to be immediately due and payable. Capped Call Transactions The Restated 2017 Capped Call Transactions, 2018 Capped Call Transactions, and 2019 Capped Call Transactions (collectively, the "Capped Call Transactions") are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the Non-Accreting Notes upon conversion of the Non-Accreting Notes in the event that the market price per share of the Company’s Class A common stock is greater than the strike price of the Capped Call Transactions (which initially corresponds to the initial conversion price of the Non-Accreting Notes and is subject to certain adjustments under the terms of the Capped Call Transactions), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Transactions. The Restated 2017 Capped Call Transactions have an initial cap price of $154.16 per share of the Company’s Class A common stock, which represents a premium of 100% over the last reported sale price of the Company’s Class A common stock on September 11, 2017, which is the date the 2017 Notes priced, and is subject to certain adjustments under the terms of the Restated 2017 Capped Call Transactions. The 2018 Capped Call Transactions have an initial cap price of $219.63 per share of the Company’s Class A common stock, which represents a premium of 150% over the last reported sale price of the Company’s Class A common stock on November 14, 2018, which is the day the 2018 Notes priced, and is subject to certain adjustments under the terms of the 2018 Capped Call Transactions. The 2019 Capped Call Transactions have an initial cap price of $280.15 per share of the Company's Class A common stock, which represents a premium of 150% over the last reported sale price of the Company's Class A common stock on August 14, 2019, which is the day the 2019 Notes priced, and is subject to certain adjustments under the terms of the 2019 Capped Call Transactions. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the Non-Accreting Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Non-Accreting Notes. The Capped Call Transactions are separate transactions, in each case, entered into by the Company with the 2017 Option Counterparties, the 2018 Option Counterparties, and 2019 Option Counterparties, and are not part of the terms of the Non-Accreting Notes and will not affect any holder’s rights under the Non-Accreting Notes. Holders of the Non-Accreting Notes will not have any rights with respect to the Capped Call Transactions. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock. The premiums paid for the Capped Call Transactions have been included as a net reduction to additional paid-in capital within shareholders’ deficit.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Debt | 14. Credit Agreement On February 21, 2019 (the "Closing Date"), the Company, as guarantor, and Wayfair LLC, a wholly-owned subsidiary of the Company, as borrower (the “Borrower”) entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Citibank, in its capacity as administrative agent, swing line lender and letter of credit issuer, and certain other lenders party thereto. The Amended Credit Agreement replaced the Company's existing credit facility with Citibank. The Amended Credit Agreement consists of: •A secured revolving credit facility under which the Borrower may borrow up to $165 million, subject to certain sublimits, with a final maturity date of February 21, 2022 (the “Revolver”). •The Borrower also has the right, subject to certain customary conditions, to increase the Revolver by $50 million. •The Revolver has the following sublimits: ◦a $100 million letter of credit sublimit; and ◦a $15 million swing line sublimit. The Borrower’s obligations under the Amended Credit Agreement are guaranteed by the Company and certain of its subsidiaries (together, the “Guarantors”). The obligations of the Borrower and the Guarantors are secured by first-priority liens on substantially all of the assets of the Borrower and the Guarantors, including, with certain exceptions, all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of the Company’s first-tier foreign subsidiaries. The proceeds of the Revolver may be used to finance working capital, to refinance certain existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. Borrowings under the Revolver will bear interest through maturity at a variable rate based upon, at the Borrower’s option, either the Eurodollar rate or the base rate (which is the highest of (x) Citibank’s prime rate, (y) one-half of 1.00% in excess of the federal funds effective rate, and (z) 1.00% in excess of the one-month Eurodollar rate), plus, in each case an applicable margin. As of the Closing Date, the applicable margin for Eurodollar rate loans was 1.75% per annum and the applicable margin for base rate loans was 0.75% per annum. The applicable margin is subject to specified changes depending on the Liquidity (as defined in the Amended Credit Agreement) of the Company. Any amounts outstanding under the Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the Amended Credit Agreement, the Borrower is required to make certain mandatory prepayments prior to maturity. The Amended Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, will limit or restrict the ability of the Borrower and the Guarantors, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of their businesses. The Amended Credit Agreement also contains customary events of default, subject to thresholds and grace periods, including, among others, payment default, covenant default, cross default to other material indebtedness, and judgment default. In addition, the Amended Credit Agreement requires the Company to maintain certain levels of Free Cash Flow (as defined in the Amended Credit Agreement). In the six months ended June 30, 2020, the Company borrowed under the Revolver. All borrowings were repaid as of June 30, 2020. As a result, there was no debt outstanding as of June 30, 2020. The Company did not borrow any amounts under its credit agreement during the year ended December 31, 2019. 15. Convertible Debt On September 15, 2017, the Company issued $431.25 million in aggregate principal amount of 0.375% Convertible Senior Notes due 2022 (the "2017 Notes"), which includes the exercise in full of a $56.25 million over-allotment option, to certain financial institutions as the initial purchasers of the 2017 Notes (the "2017 Initial Purchasers"). On September 11, 2017, in connection with the pricing of the 2017 Notes, the Company entered into privately negotiated capped call transactions (the "2017 Base Capped Call Transactions") with two of the 2017 Initial Purchasers and certain other financial institutions (the "2017 Option Counterparties") and, in connection with the exercise in full of the over-allotment option by the 2017 Initial Purchasers, on September 14, 2017, entered into additional capped call transactions (such additional capped call transactions, the "2017 Additional Capped Call Transactions” and, together with the 2017 Base Capped Call Transactions, the "2017 Capped Call Transactions") with the 2017 Option Counterparties. Collectively, the 2017 Capped Call Transactions covered, initially, the number of shares of the Company’s Class A common stock underlying the 2017 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2017 Notes. On November 15, 2018, the Company amended and restated the 2017 Capped Call Transactions (the "Restated 2017 Capped Call Transactions") with each of the 2017 Option Counterparties in order to, among other things, provide that the options underlying the Restated 2017 Capped Call Transactions can, at the Company’s option, remain outstanding until September 1, 2022, which is the maturity date for the 2017 Notes, even if all or a portion of the 2017 Notes are converted, repurchased or redeemed prior to such date. In November 2018, the Company issued $575.0 million in aggregate principal amount of 1.125% Convertible Senior Notes due 2024 (the "2018 Notes"), which includes the exercise in full of a $75.0 million option granted to the initial purchasers, to certain financial institutions as the initial purchasers of the 2018 Notes (the "2018 Initial Purchasers"). The issuance of $500.0 million of 2018 Notes closed on November 19, 2018 and the additional $75.0 million of additional 2018 Notes, which were issued pursuant to the exercise of the 2018 Initial Purchasers' option to purchase such additional 2018 Notes, closed on November 29, 2018. On November 14, 2018, in connection with the pricing of the 2018 Notes, the Company entered into privately negotiated capped call transactions (the "2018 Base Capped Call Transactions") with one of the 2018 Initial Purchasers and certain other financial institutions (the "2018 Option Counterparties") and, in connection with the exercise in full of the 2018 Initial Purchasers' option to purchase such additional 2018 Notes, on November 27, 2018, entered into additional capped call transactions (such additional capped call transactions, the "2018 Additional Capped Call Transactions" and, together with the 2018 Base Capped Call Transactions, the "2018 Capped Call Transactions") with the 2018 Option Counterparties. Collectively, the 2018 Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the 2018 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2018 Notes. On August 19, 2019, the Company issued $948.75 million in aggregate principal amount of 1.00% Convertible Senior Notes due 2026 (the "2019 Notes" and together with the 2017 Notes and 2018 Notes, the "Non-Accreting Notes"), which includes the exercise in full of a $123.75 million option granted to the initial purchasers, to certain financial institutions as the initial purchasers of the 2019 Notes (the "2019 Initial Purchasers"). On August 14, 2019, in connection with the pricing of the 2019 Notes, the Company entered into privately negotiated capped call transactions (the "2019 Base Capped Call Transactions") with certain of the 2019 Initial Purchasers or their affiliates and another financial institution (the "2019 Option Counterparties") and, in connection with the exercise in full of the 2019 Initial Purchasers' option to purchase such additional 2019 Notes, on August 16, 2019, entered into additional capped call transactions (such additional capped call transactions, the "2019 Additional Capped Call Transactions" and, together with the 2019 Base Capped Call Transactions, the "2019 Capped Call Transactions") with the 2019 Option Counterparties. Collectively, the 2019 Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the 2019 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2019 Notes. On April 8, 2020, the Company issued $535.0 million in aggregate original principal amount of 2.50% Accreting Convertible Senior Notes due 2025 (the "2020 Accreting Notes" and together with the Non-Accreting Notes, the "Notes") to GHEP VII Aggregator, L.P. ("Great Hill"), CBEP Investments, LLC ("Charlesbank") and The Spruce House Partnership LLC. The 2020 Accreting Notes are fully and unconditionally guaranteed on a senior unsecured basis by Wayfair LLC, a wholly-owned subsidiary of the Company, as guarantor. The net proceeds from the sale of the 2017 Notes, 2018 Notes, 2019 Notes, and the 2020 Accreting Notes were approximately $420.4 million, $562.0 million, $935.1 million, and $527.4 million, respectively, after deducting the initial purchasers’ discounts or placement agent fees, as applicable and the offering expenses payable by the Company. The Company used approximately $44.2 million, $93.4 million, and $145.7 million, respectively, of the net proceeds from the 2017 Notes, 2018 Notes, and 2019 Notes to pay the cost of the 2017 Capped Call Transactions, the 2018 Capped Call Transactions, and the 2019 Capped Call Transactions, respectively. The Company intends to use the remainder of the net proceeds from the Notes for working capital and general corporate purposes. The Company may also use a portion of the net proceeds to finance acquisitions, strategic transactions, investments or the repayment, purchase or exchange of indebtedness (including its existing convertible notes). The Notes are general senior unsecured obligations of the Company. The Notes rank senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; are effectively subordinated in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; the Non-Accreting Notes are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries, including Wayfair LLC’s guaranty of the 2020 Accreting Notes; and the 2020 Accreting Notes are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries (other than Wayfair LLC). In accounting for the issuance of the Non-Accreting Notes, the Company separated the Non-Accreting Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Non-Accreting Notes. The difference between the principal amount of the Non-Accreting Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and amortized to interest expense using the effective interest method over the term of the Non-Accreting Notes. The effective interest rate of the 2017 Notes, 2018 Notes and 2019 Notes is 6.0%, 8.1% and 6.4%, respectively. The equity component of the 2017 Notes, 2018 Notes and 2019 Notes of approximately $95.8 million, $181.5 million and $280.3 million, respectively, is included in additional paid-in capital in the Consolidated and Condensed Balance Sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Non-Accreting Notes using the same proportions as the proceeds from the Non-Accreting Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and amortized to interest expense over the term of the Non-Accreting Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ deficit. In accounting for the issuance of the 2020 Accreting Notes, the Company determined there was a beneficial conversion feature which was calculated as the excess of the fair value of the underlying common stock at the commitment date less the effective conversion price of the shares convertible at that time. The beneficial conversion feature of $38.9 million was recorded to additional paid-in capital in the Consolidated and Condensed Balance Sheet and represents a debt discount to the 2020 Accreting Notes, which was recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and is amortized to interest expense using the effective interest method over the term of the 2020 Accreting Notes. The effective interest of the 2020 Accreting Notes is 4.3%. All transaction costs incurred were recorded as a direct deduction from the related debt liability in the Consolidated and Condensed Balance Sheet and are amortized to interest expense using the effective interest method over the term of the 2020 Accreting Notes. The 2020 Accreting Notes accrue interest at a rate of 2.50% per annum which will accrete to the principal amount on April 1 and October 1 of each year, beginning on October 1, 2020. The interest is amortized to interest expense using the effective interest method over the term of the 2020 Accreting Notes and recorded to other long-term liabilities in the Consolidated and Condensed Balance Sheet. Upon accretion to the principal amount on April 1 and October 1 of each year, the Company will reclassify the interest accrued as of that date to long-term debt. The beneficial conversion feature for additional shares which would be issued upon conversion of paid in kind interest will be recorded as additional interest expense and additional paid-in capital over the term of the 2020 Accreting Notes as such interest accrues. The following table presents the outstanding principal amount and carrying value of the Notes as of the date presented:
The following tables present total interest expense recognized related to the Notes:
The estimated fair value of the 2017 Notes, the 2018 Notes, the 2019 Notes, and the 2020 Accreting Notes was $821.1 million, $1.0 billion, $1.4 billion, and $1.5 billion, respectively, as of June 30, 2020. The estimated fair value of the Non-Accreting Notes was determined through consideration of quoted market prices. The estimated fair value of the 2020 Accreting Notes was determined through an option pricing model using Level 3 inputs including volatility and credit spread. The fair values of the Non-Accreting Notes and the 2020 Accreting Notes are classified as Level 2 and Level 3, respectively, as defined in Note 3, Investments and Fair Value Measurements. The if-converted value of the 2017 Notes, 2018 Notes, 2019 Notes, and 2020 Accreting Notes respectively, exceeded the principal value by $387.7 million, $401.2 million, $313.9 million, and $923.2 million, respectively, as of June 30, 2020. 2017 Notes The 2017 Notes were issued pursuant to an indenture, dated September 15, 2017 (the "2017 Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company pays interest on the 2017 Notes semiannually in arrears at a rate of 0.375% per annum on March 1 and September 1 of each year. The 2017 Notes are convertible based upon an initial conversion rate of 9.61 shares of the Company’s Class A common stock per $1,000 principal amount of 2017 Notes (equivalent to a conversion price of approximately $104.06 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the 2017 Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The 2017 Notes will mature on September 1, 2022, unless earlier purchased, redeemed or converted. Prior to June 1, 2022, holders may convert all or a portion of their 2017 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 business day period after any 10 consecutive trading day period (the "2017 Notes measurement period") in which the trading price per $1,000 principal amount of 2017 Notes for each trading day of the 2017 Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any 2017 Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after June 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2017 Notes at any time, regardless of the foregoing circumstances. Holders of 2017 Notes who convert their 2017 Notes in connection with a notice of a redemption or a make-whole fundamental change (each as defined in the 2017 Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the 2017 Notes. The 2017 Notes are convertible during the third quarter of 2020, however, none of the 2017 Notes have been converted to date. The Company may not redeem the 2017 Notes prior to September 8, 2020. On or after September 8, 2020, the Company may redeem for cash all or part of the 2017 Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2017 Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the 2017 Indenture), holders may require the Company to repurchase all or a portion of their 2017 Notes for cash at a price equal to 100% of the principal amount of the 2017 Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. The 2017 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2017 Notes then outstanding may declare the entire principal amount of all the 2017 Notes plus accrued interest, if any, to be immediately due and payable. 2018 Notes The 2018 Notes were issued pursuant to an indenture, dated November 19, 2018 (the "2018 Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the 2018 Notes semiannually in arrears at a rate of 1.125% per annum on May 1 and November 1 of each year commencing on May 1, 2019. The 2018 Notes are convertible based upon an initial conversion rate of 8.5910 shares of the Company’s Class A common stock per $1,000 principal amount of 2018 Notes (equivalent to a conversion price of approximately $116.40 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the 2018 Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The 2018 Notes will mature on November 1, 2024, unless earlier purchased, redeemed or converted. Prior to August 1, 2024, holders may convert all or a portion of their 2018 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the business day period after any consecutive trading day period (the "2018 Notes measurement period") in which the trading price per $1,000 principal amount of 2018 Notes for each trading day of the 2018 Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any 2018 Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after August 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2018 Notes at any time, regardless of the foregoing circumstances. Holders of 2018 Notes who convert their 2018 Notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the 2018 Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the 2018 Notes. The 2018 Notes are convertible during the third quarter of 2020, however, none of the 2018 Notes have been converted to date. The Company may not redeem the 2018 Notes prior to May 8, 2022. On or after May 8, 2022, the Company may redeem for cash all or part of the 2018 Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2018 Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the 2018 Indenture), holders may require the Company to repurchase all or a portion of their 2018 Notes for cash at a price equal to 100% of the principal amount of the 2018 Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. The 2018 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2018 Notes then outstanding may declare the entire principal amount of all the 2018 Notes plus accrued interest, if any, to be immediately due and payable. 2019 Notes The 2019 Notes were issued pursuant to an indenture, dated August 19, 2019 (the "2019 Indenture"), between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the 2019 Notes semiannually in arrears at a rate of 1.00% per annum on February 15 and August 15 of each year commencing on February 15, 2020. The 2019 Notes are convertible based upon an initial conversion rate of 6.7349 shares of the Company’s Class A common stock per $1,000 principal amount of 2019 Notes (equivalent to a conversion price of approximately $148.48 per share of the Company’s Class A common stock). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversions of the 2019 Notes in cash, shares of the Company’s Class A common stock or a combination thereof, with the form of consideration determined at the Company’s election. The 2019 Notes will mature on August 15, 2026, unless earlier purchased, redeemed or converted. Prior to May 15, 2026, holders may convert all or a portion of their 2019 Notes only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the business day period after any consecutive trading day period (the “2019 Notes measurement period”) in which the trading price per $1,000 principal amount of 2019 Notes for each trading day of the 2019 Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (3) with respect to any 2019 Notes called for redemption by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after May 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2019 Notes at any time, regardless of the foregoing circumstances. Holders of 2019 Notes who convert their 2019 Notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the 2019 Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the 2019 Notes. The 2019 Notes are not convertible during the third quarter of 2020 and none of the 2019 Notes have been converted to date. The Company may not redeem the 2019 Notes prior to August 20, 2023. On or after August 20, 2023, the Company may redeem for cash all or part of the 2019 Notes if the last reported sale price of the Company’s Class A common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the 2019 Notes to be redeemed, plus accrued and unpaid interest, if any. Upon the occurrence of a fundamental change (as defined in the 2019 Indenture), holders may require the Company to repurchase all or a portion of their 2019 Notes for cash at a price equal to 100% of the principal amount of the 2019 Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. The 2019 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2019 Notes then outstanding may declare the entire principal amount of all the 2019 Notes plus accrued interest, if any, to be immediately due and payable. 2020 Accreting Notes The 2020 Accreting Notes were issued pursuant to an indenture, dated April 8, 2020 (the "2020 Indenture"), among the Company, Wayfair LLC, as guarantor, and U.S. Bank National Association, as trustee. The 2020 Accreting Notes are fully and unconditionally guaranteed on a senior unsecured basis by Wayfair LLC. No cash interest will be payable on the 2020 Accreting Notes. Instead, the 2020 Accreting Notes will accrue interest at a rate of 2.50% per annum which will accrete to the principal amount on April 1 and October 1 of each year, beginning on October 1, 2020. The 2020 Accreting Notes are convertible based upon an initial conversion price of $72.50 per share of the Company’s Class A common stock. The conversion price is subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company's Class A common stock, but will not be adjusted for accrued and unpaid interest. The Company will settle any conversion of 2020 Accreting Notes with a number of shares of the Company's Class A common stock per $1,000 original principal amount of 2020 Accreting Notes equal to the accreted principal amount of such original principal amount of 2020 Accreting Notes divided by the conversion price. The 2020 Accreting Notes will mature on April 1, 2025, unless earlier purchased, redeemed or converted. Holders may convert all or a portion of their 2020 Accreting Notes at any time prior to the second business day immediately preceding the maturity date. Holders of the 2020 Accreting Notes who convert in connection with a make-whole fundamental change (as defined in the 2020 Indenture) may be entitled to a premium in the form of additional shares of the Company's Class A common stock. None of the 2020 Accreting Notes have been converted to date. The Company may not redeem the 2020 Accreting Notes prior to May 9, 2023. On or after May 9, 2023, the Company may redeem for cash all or part of the 2020 Accreting Notes if the last reported sale price of the Company's Class A common stock equals or exceeds 276% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the accreted principal amount of the 2020 Accreting Notes to be redeemed, including accrued interest, if any, but excluding, the redemption date. Upon the occurrence of a fundamental change (as defined in the 2020 Indenture), holders may require the Company to repurchase all or a portion of their 2020 Accreting Notes for cash at a price equal to 100% of the accreted principal amount of the 2020 Accreting Notes to be repurchased (which accreted principal amount upon repurchase will include interest, if any, accrued to, but excluding, the fundamental change repurchase date). The 2020 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2020 Accreting Notes then outstanding may declare the entire principal amount of all the 2020 Accreting Notes plus accrued interest, if any, to be immediately due and payable. Capped Call Transactions The Restated 2017 Capped Call Transactions, 2018 Capped Call Transactions, and 2019 Capped Call Transactions (collectively, the "Capped Call Transactions") are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the Non-Accreting Notes upon conversion of the Non-Accreting Notes in the event that the market price per share of the Company’s Class A common stock is greater than the strike price of the Capped Call Transactions (which initially corresponds to the initial conversion price of the Non-Accreting Notes and is subject to certain adjustments under the terms of the Capped Call Transactions), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Transactions. The Restated 2017 Capped Call Transactions have an initial cap price of $154.16 per share of the Company’s Class A common stock, which represents a premium of 100% over the last reported sale price of the Company’s Class A common stock on September 11, 2017, which is the date the 2017 Notes priced, and is subject to certain adjustments under the terms of the Restated 2017 Capped Call Transactions. The 2018 Capped Call Transactions have an initial cap price of $219.63 per share of the Company’s Class A common stock, which represents a premium of 150% over the last reported sale price of the Company’s Class A common stock on November 14, 2018, which is the day the 2018 Notes priced, and is subject to certain adjustments under the terms of the 2018 Capped Call Transactions. The 2019 Capped Call Transactions have an initial cap price of $280.15 per share of the Company's Class A common stock, which represents a premium of 150% over the last reported sale price of the Company's Class A common stock on August 14, 2019, which is the day the 2019 Notes priced, and is subject to certain adjustments under the terms of the 2019 Capped Call Transactions. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s Class A common stock underlying the Non-Accreting Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Non-Accreting Notes. The Capped Call Transactions are separate transactions, in each case, entered into by the Company with the 2017 Option Counterparties, the 2018 Option Counterparties, and 2019 Option Counterparties, and are not part of the terms of the Non-Accreting Notes and will not affect any holder’s rights under the Non-Accreting Notes. Holders of the Non-Accreting Notes will not have any rights with respect to the Capped Call Transactions. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock. The premiums paid for the Capped Call Transactions have been included as a net reduction to additional paid-in capital within shareholders’ deficit.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) per Share | 16. Earnings (Loss) per Share Basic and diluted net earnings (loss) per share is presented using the two-class method required for participating securities: Class A and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. For more information on the rights of Class A and Class B common stockholders, see Note 13, Stockholders’ Deficit. Basic net earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net earnings (loss) per share is computed using the weighted-average number of shares of common stock plus, if dilutive, common stock equivalents outstanding during the period and stock issuable upon conversion of our convertible debt instruments. The Company's common stock equivalents consist of shares issuable upon the release of RSUs, and to a lesser extent, the incremental shares of common stock issuable upon the exercise of stock options and unvested restricted stock. The dilutive effect of these common stock equivalents is reflected in diluted earnings (loss) per share by application of the treasury stock method. The dilutive effect of shares issuable upon conversion of the Company's convertible debt instruments are included in the calculation of diluted net earnings (loss) per share under the if-converted method. For periods in which the Company has generated a net loss, the Company's basic and diluted earnings (loss) per share are the same as basic earnings (loss) per share, as the effects of common stock equivalents outstanding and shares issuable upon conversion of convertible debt instruments are antidilutive and therefore excluded from the calculation of diluted earnings (loss) per share. The Company allocates undistributed earnings between the classes on a one-to-one basis when computing net earnings (loss) per share. As a result, basic and diluted net income (loss) per Class A and Class B shares of common stock are equivalent. The following table presents the calculation of basic and diluted net earnings (loss) per share:
The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted net earnings (loss) per share were as follows:
The Company may settle conversions of the Non-Accreting Notes in cash, shares of the Company's Class A common stock or any combination thereof at its election. The Company will settle conversions of the 2020 Accreting Notes in shares. The Capped Call Transactions are generally expected to reduce the potential dilution of the Company's Class A common stock upon any conversion of Notes and/or offset the cash payments the Company is required to make in excess of the principal amount of the Notes. The number of shares of the Company's Class A common stock potentially issuable and obtainable at the respective conversion prices of the Notes and the Capped Call Transactions, respectively, by year, are as follows:
For more information on the structure of the Notes and the Capped Call Transactions, including potential adjustments to the conversion prices used to determine the shares presented in the preceding table, see Note 15, Convertible Debt.
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. Related Party Transactions As discussed in Note 15, Convertible Debt, on April 8, 2020, pursuant to the terms of the amended and restated purchase agreement, dated April 7, 2020 (the "Purchase Agreement"), the Company issued $535.0 million in aggregate original principal amount of 2020 Accreting Notes. The issuance of the 2020 Accreting Notes constitutes a related party transaction because of Michael W. Choe's positions as a director of the Company (as of May 12, 2020) and Managing Director and Chief Executive Officer of Charlesbank Capital Partners, LLC, the sole owner of the ultimate general partner of Charlesbank, a party to the Purchase Agreement; Michael Kumin's positions as a director of the Company and a Managing Partner at Great Hill Partners, LP, Manager of the ultimate general partner of Great Hill, a party to the Purchase Agreement; and the limited partnership interests held by Niraj Shah and Steve Conine, the Company's co-founders and co-chairmen, in affiliates of Great Hill and Charlesbank.
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated and Condensed Financial Statements contained in this Quarterly Report on Form 10-Q are those of the Company and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. The Consolidated and Condensed Balance Sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the results of the interim periods presented. Interim results are not necessarily indicative of the results for the full year ended December 31, 2020 or future periods.
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New Accounting Policies | The Company believes that other than the implementation of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), there have been no significant changes during the six months ended June 30, 2020 to the items disclosed in Note 2, Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.Credit ImpairmentThe Company adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective transition method. This ASU revises how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. As of January 1, 2020, the adoption of resulted in a $5.5 million cumulative adjustment to accumulated deficit on our Consolidated and Condensed Balance Sheet. Refer to Note 4, Credit Losses, for additional detail. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited Consolidated and Condensed Financial Statements of Wayfair Inc. include its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
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Use of Estimates | Use of Estimates The preparation of the Consolidated and Condensed 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 financial statements and the reported amounts of net revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company follows the two-class method when computing earnings (loss) per share for its two issued classes of common stock - Class A and Class B. Basic earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period plus, if dilutive, stock awards, including stock options and restricted stock units, as determined under the treasury stock method, and convertible debt instruments, as determined under the if-converted method. In periods when we have a net loss, stock awards and convertible debt instruments are excluded from our calculations of earnings per share as their inclusion would have an antidilutive effect.
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Credit Impairment | Accounts receivable are stated net of credit losses, which are recorded based on historical losses as well as management's expectation of future collections. Uncollectible amounts are written off against the allowance after all collection efforts have been exhausted. The Company's exposure to credit loss is minimized through fraud assessments performed prior to customer checkout and the Company's policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. |
Investments and Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The following tables present details of the Company’s investments as of June 30, 2020 and December 31, 2019:
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Schedule of the Fair Value of the Company's Financial Assets Measured at Fair Value on a Recurring Basis Based on the Three-Tier Value Hierarchy | The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 based on the three-tier value hierarchy:
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Property and Equipment, net (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment, net | The following table summarizes property and equipment, net as of June 30, 2020 and December 31, 2019:
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Leases (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Information Related to Leases | The following table presents supplemental cash flow information related to leases:
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Supplemental Balance Sheet Information | The following table presents supplemental balance sheet information related to leases:
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Future Minimum Lease Payments | The following table presents future minimum lease payments under non-cancellable leases as of June 30, 2020:
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Operating Lease Balance Sheet Items | The following table presents total operating leases as of June 30, 2020 and December 31, 2019:
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Equity-Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Activity Relating to Stock Options | The following table presents activity relating to stock options for the six months ended June 30, 2020:
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Summary of Activity Relating to RSUs | The following table presents activity relating to RSUs for the six months ended June 30, 2020:
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Segment and Geographic Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity Related to Net Revenue, Adjusted EBITDA by Segment | The following tables present net revenues and Adjusted EBITDA attributable to the Company's reportable segments for the periods presented:
(1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net income (loss):
|
Convertible Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Principal Amount and Carrying Value of Notes | The following table presents the outstanding principal amount and carrying value of the Notes as of the date presented:
|
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Schedule of Interest Expense Related to Notes | The following tables present total interest expense recognized related to the Notes:
|
Earnings (Loss) per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net earnings (loss) per share:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted net earnings (loss) per share were as follows:
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Shares Issued at Conversion and Capped Call Transactions | The number of shares of the Company's Class A common stock potentially issuable and obtainable at the respective conversion prices of the Notes and the Capped Call Transactions, respectively, by year, are as follows:
|
Description of Business (Details) supplier in Thousands, product in Millions |
6 Months Ended |
---|---|
Jun. 30, 2020
product
supplier
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of products offered | product | 18 |
Number of suppliers providing products offered | supplier | 12 |
Investments and Fair Value Measurements - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Estimated fair values | $ 192,746,000 | $ 192,746,000 | $ 559,942,000 | ||
Credit losses recognized | 0 | $ 0 | 0 | $ 0 | |
Allowance for credit losses | 0 | 0 | 0 | ||
Realized gains or losses | $ 0 | $ 0 | 800,000 | $ 0 | |
Other long-term investments | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Estimated fair values | $ 155,690,000 | ||||
Proceeds from sale of investments | $ 161,300,000 |
Investments and Fair Value Measurements - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Marketable securities and fair value measurements | ||
Amortized Cost | $ 192,041 | $ 559,910 |
Gross Unrealized Gains | 705 | 112 |
Gross Unrealized Losses | 0 | (80) |
Estimated Fair Value | 192,746 | 559,942 |
Short-term Investment securities | ||
Marketable securities and fair value measurements | ||
Amortized Cost | 192,041 | 404,294 |
Gross Unrealized Gains | 705 | 20 |
Gross Unrealized Losses | 0 | (62) |
Estimated Fair Value | $ 192,746 | 404,252 |
Long-term Investment securities | ||
Marketable securities and fair value measurements | ||
Amortized Cost | 155,616 | |
Gross Unrealized Gains | 92 | |
Gross Unrealized Losses | (18) | |
Estimated Fair Value | $ 155,690 |
Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Credit Loss [Abstract] | |||
Revenue recognized, percent collected | 99.00% | 99.00% | |
Accounts receivable, net of allowance for credit losses | $ 118,984 | $ 118,984 | $ 99,720 |
Accounts receivable allowance for credit losses | $ 28,155 | $ 28,155 | $ 22,774 |
Intangible Assets and Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangible assets | $ 17.6 | $ 17.6 | $ 18.4 | ||
Amortization expense related to intangibles | 0.4 | $ 0.1 | 0.8 | $ 0.3 | |
Goodwill | $ 0.4 | $ 0.4 | $ 0.4 |
Property and Equipment, net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Property and equipment, net | |||||
Property and equipment, gross | $ 1,238,609 | $ 1,238,609 | $ 1,080,389 | ||
Less accumulated depreciation and amortization | (571,153) | (571,153) | (455,845) | ||
Property and equipment, net | 667,456 | 667,456 | 624,544 | ||
Depreciation and amortization | 68,700 | $ 44,200 | 135,200 | $ 83,600 | |
Furniture and computer equipment | |||||
Property and equipment, net | |||||
Property and equipment, gross | 537,080 | 537,080 | 509,120 | ||
Site and software development costs | |||||
Property and equipment, net | |||||
Property and equipment, gross | 367,394 | 367,394 | 297,252 | ||
Leasehold improvements | |||||
Property and equipment, net | |||||
Property and equipment, gross | 311,372 | 311,372 | 228,514 | ||
Construction in progress | |||||
Property and equipment, net | |||||
Property and equipment, gross | $ 22,763 | $ 22,763 | $ 45,503 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 44.2 | $ 29.4 | $ 80.3 | $ 55.0 |
Operating leases not yet commenced | $ 167.7 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating leases not yet commenced, term of contract | 2 years | 2 years | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating leases not yet commenced, term of contract | 15 years | 15 years |
Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Supplemental cash flows information | |||
Cash payments included in operating cash flows from lease arrangements | $ 69,598 | $ 50,387 | |
Right-of-use assets obtained in exchange for lease obligations | $ 78,250 | $ 138,064 | |
Additional lease information | |||
Weighted average remaining lease term | 9 years 6 months | 10 years | |
Weighted average discount rate | 6.70% | 6.70% |
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
2020 (excluding the six months ended June 30, 2020) | $ 76,545 | |
2021 | 163,559 | |
2022 | 157,560 | |
2023 | 152,990 | |
2024 | 150,827 | |
Thereafter | 587,907 | |
Total future minimum lease payments | 1,289,388 | |
Less: Imputed interest | (328,493) | |
Total | $ 960,895 | $ 913,706 |
Leases - Operating Leases Balance Sheet Locations (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Other current liabilities | $ 97,760 | $ 91,104 |
Operating lease liabilities | 863,135 | 822,602 |
Total operating leases | $ 960,895 | $ 913,706 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Commitments and Contingencies (Details) $ in Millions |
Jan. 16, 2019
officer
plaintiff
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
---|---|---|---|
Commitments and Contingencies Disclosure [Abstract] | |||
Letter of credit issued as security for lease agreements | $ | $ 54.3 | $ 46.7 | |
Number of Company's officers | officer | 3 | ||
Number of plaintiffs | plaintiff | 2 |
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jan. 01, 2020 |
|
Employee stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of stock options exercised | $ 2.2 | $ 3.7 | |
Aggregate intrinsic value of stock options outstanding | 5.1 | ||
Aggregate intrinsic value of stock options exercisable | 5.1 | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of stock vested | 137.1 | $ 187.3 | |
Aggregate intrinsic value of stock unvested | 1,400.0 | ||
Unrecognized equity-based compensation | $ 695.5 | ||
Weighted average remaining vesting term | 1 year 3 months 18 days | ||
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 8,603,066 | ||
Number of shares available for future grant (in shares) | 5,111,305 |
Equity-Based Compensation - Summary of Activity Relating to Stock Options (Details) - Employee stock options - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Shares | ||
Outstanding at the beginning of the period (in shares) | 43,606 | |
Options exercised (in shares) | (17,485) | |
Outstanding and exercisable at the end of the period (in shares) | 26,121 | 43,606 |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 3.00 | |
Options exercised (in dollars per share) | 3.00 | |
Outstanding and exercisable at the end of the period (in dollars per share) | $ 3.00 | $ 3.00 |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding | 1 year | 1 year 6 months |
Equity-Based Compensation - Summary of Activity Relating to Restricted Stock (Details) - RSUs |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 8,112,736 |
RSUs granted (in shares) | shares | 1,467,735 |
RSUs vested (in shares) | shares | (1,447,101) |
RSUs forfeited/canceled (in shares) | shares | (953,319) |
Outstanding at the end of the period (in shares) | shares | 7,180,051 |
Weighted- Average Grant Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 95.69 |
RSUs granted (in dollars per share) | $ / shares | 151.05 |
RSUs vested (in dollars per share) | $ / shares | 92.00 |
RSUs forfeited/canceled (in dollars per share) | $ / shares | 101.67 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 107.16 |
Unearned Revenue (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Unearned revenue | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 333.8 | $ 167.6 |
Revenue recognized that was included in deferred revenue | 136.2 | |
Other current liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 6.1 | $ 4.6 |
Revenue recognized that was included in deferred revenue | $ 2.2 |
Segment and Geographic Information - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 4,304,672 | $ 2,343,251 | $ 6,634,735 | $ 4,288,080 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 3,651,704 | 2,000,518 | $ 5,626,687 | 3,658,216 |
U.S. | Other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ (11,500) | $ (25,100) |
Segment and Geographic Information - Activity Related to Net Revenue and Adjusted EBITDA (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 4,304,672 | $ 2,343,251 | $ 6,634,735 | $ 4,288,080 |
Adjusted EBITDA | 439,813 | (69,983) | 312,536 | (172,201) |
Less: reconciling items | (165,936) | (111,955) | (324,524) | (210,126) |
Net income (loss) | 273,877 | (181,938) | (11,988) | (382,327) |
Depreciation and amortization | 69,114 | 44,339 | 135,957 | 83,922 |
Equity-based compensation and related taxes | 70,701 | 56,855 | 134,693 | 108,688 |
Interest expense, net | 28,939 | 10,252 | 51,157 | 19,490 |
Other (income), net | (3,110) | (322) | (2,864) | (3,400) |
Provision for income taxes, net | 292 | 831 | 1,625 | 1,426 |
Other | 0 | 0 | 3,956 | 0 |
Less: reconciling items | 165,936 | 111,955 | 324,524 | 210,126 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 3,651,704 | 2,000,518 | 5,626,687 | 3,658,216 |
Adjusted EBITDA | 434,574 | (342) | 389,479 | (28,124) |
International | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 652,968 | 342,733 | 1,008,048 | 629,864 |
Adjusted EBITDA | $ 5,239 | $ (69,641) | $ (76,943) | $ (144,077) |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 292 | $ 831 | $ 1,625 | $ 1,426 | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Convertible Debt - Schedule of Outstanding Principal Amount and Carrying Value of Notes (Details) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
Aug. 19, 2019 |
Nov. 30, 2018 |
Nov. 19, 2018 |
Sep. 15, 2017 |
---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||
Net carrying amount | $ 1,988,213,000 | $ 1,456,195,000 | ||||
Convertible Debt | 2017 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 431,250,000 | 431,250,000 | $ 431,250,000 | |||
Unamortized debt discount | (49,329,000) | (59,830,000) | ||||
Net carrying amount | 381,921,000 | 371,420,000 | ||||
Convertible Debt | 2018 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 575,000,000 | 575,000,000 | $ 575,000,000.0 | $ 500,000,000.0 | ||
Unamortized debt discount | (147,371,000) | (161,275,000) | ||||
Net carrying amount | 427,629,000 | 413,725,000 | ||||
Convertible Debt | 2019 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 948,750,000 | 948,750,000 | $ 948,750,000 | |||
Unamortized debt discount | (260,306,000) | (277,700,000) | ||||
Net carrying amount | 688,444,000 | $ 671,050,000 | ||||
Convertible Debt | 2020 Accreting Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 535,000,000 | |||||
Unamortized debt discount | (44,781,000) | |||||
Net carrying amount | $ 490,219,000 |
Earnings (Loss) per Share - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Allocation of undistributed earnings between stock classes, conversion ratio | 1 |
Related Party Transactions (Details) |
Apr. 08, 2020
USD ($)
|
---|---|
Director | 2020 Accreting Notes | |
Related Party Transaction [Line Items] | |
Debt, aggregate principal | $ 535,000,000.0 |
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