FORM 10-Q |
Pandora Media, Inc. (Exact name of registrant as specified in its charter) |
Delaware | 94-3352630 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2101 Webster Street, Suite 1650 Oakland, CA | 94612 |
(Address of principal executive offices) | (Zip Code) |
(510) 451-4100 (Registrant’s telephone number, including area code) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) | Emerging growth company o |
Page No. | ||
As of December 31, 2016 | As of September 30, 2017 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Accounts receivable, net of allowance of $3,633 at December 31, 2016 and $5,854 at September 30, 2017 | |||||||
Prepaid content acquisition costs | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Convertible promissory note receivable | |||||||
Long-term investments | |||||||
Property and equipment, net | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
Liabilities, redeemable convertible preferred stock and stockholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | $ | |||||
Accrued liabilities | |||||||
Accrued content acquisition costs | |||||||
Accrued compensation | |||||||
Deferred revenue | |||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt, net | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Redeemable convertible preferred stock: 480,000 shares issued and outstanding at September 30, 2017 | |||||||
Stockholders’ equity | |||||||
Common stock: 235,162,757 shares issued and outstanding at December 31, 2016 and 248,681,713 at September 30, 2017 | |||||||
Additional paid-in capital | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
Revenue | |||||||||||||||
Advertising | $ | $ | $ | $ | |||||||||||
Subscription and other | |||||||||||||||
Ticketing service | |||||||||||||||
Total revenue | |||||||||||||||
Cost of revenue | |||||||||||||||
Cost of revenue—Content acquisition costs | |||||||||||||||
Cost of revenue—Other | |||||||||||||||
Cost of revenue—Ticketing service | |||||||||||||||
Total cost of revenue | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses | |||||||||||||||
Product development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Goodwill impairment | |||||||||||||||
Contract termination (benefit) fees | ( | ) | |||||||||||||
Total operating expenses | |||||||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other income, net | |||||||||||||||
Total other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Loss before (provision for) benefit from income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
(Provision for) benefit from income taxes | ( | ) | ( | ) | ( | ) | |||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss available to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Basic and diluted net loss per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Weighted-average basic and diluted common shares |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Change in foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Change in net unrealized loss on marketable securities | ( | ) | |||||||||||||
Other comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Nine months ended September 30, | |||||||
2016 | 2017 | ||||||
Operating activities | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||||
Goodwill impairment | |||||||
Loss on sales of subsidiaries | |||||||
Depreciation and amortization | |||||||
Stock-based compensation | |||||||
Amortization of premium on investments, net | |||||||
Accretion of discount on convertible promissory note receivable | ( | ) | |||||
Other operating activities | |||||||
Amortization of debt discount | |||||||
Interest income | ( | ) | |||||
Provision for bad debt | |||||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Prepaid content acquisition costs | ( | ) | ( | ) | |||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Accounts payable, accrued and other current liabilities | ( | ) | ( | ) | |||
Accrued content acquisition costs | |||||||
Accrued compensation | ( | ) | |||||
Other long-term liabilities | ( | ) | |||||
Deferred revenue | |||||||
Reimbursement of cost of leasehold improvements | |||||||
Net cash used in operating activities | ( | ) | ( | ) | |||
Investing activities | |||||||
Purchases of property and equipment | ( | ) | ( | ) | |||
Internal-use software costs | ( | ) | ( | ) | |||
Changes in restricted cash | ( | ) | ( | ) | |||
Purchases of investments | ( | ) | |||||
Proceeds from maturities of investments | |||||||
Proceeds from sales of investments | |||||||
Proceeds from sales of subsidiaries, net of cash | |||||||
Payments related to acquisitions, net of cash acquired | ( | ) | |||||
Net cash (used in) provided by investing activities | ( | ) | |||||
Financing activities | |||||||
Proceeds from issuance of redeemable convertible preferred stock | |||||||
Payments of issuance costs | ( | ) | ( | ) | |||
Repayment of debt arrangements | ( | ) | |||||
Borrowings under debt arrangements | |||||||
Proceeds from employee stock purchase plan | |||||||
Proceeds from exercise of stock options | |||||||
Tax payments from net share settlements of restricted stock units | ( | ) | |||||
Net cash provided by financing activities | |||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | |||||
Net (decrease) increase in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental disclosures of cash flow information | |||||||
Cash paid during the period for interest | $ | $ | |||||
Purchases of property and equipment recorded in accounts payable and accrued liabilities | $ | $ | |||||
Accretion of preferred stock issuance costs | $ | $ | |||||
Stock dividend payable to preferred stockholders | $ | $ | |||||
Fair value of convertible promissory note receivable received as partial consideration for sale of subsidiary | $ | $ |
As of December 31, 2016 | As of September 30, 2017 | ||||||
(in thousands) | |||||||
Cash and cash equivalents | |||||||
Cash | $ | $ | |||||
Money market funds | |||||||
Total cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Corporate debt securities | $ | $ | |||||
Total short-term investments | $ | $ | |||||
Long-term investments | |||||||
Corporate debt securities | $ | $ | |||||
Total long-term investments | $ | $ | |||||
Cash, cash equivalents and investments | $ | $ |
As of December 31, 2016 | |||||||||||||||
Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Total cash equivalents and marketable securities | $ | $ | $ | ( | ) | $ |
As of September 30, 2017 | |||||||||||||||
Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Total cash equivalents and marketable securities | $ | $ | $ | ( | ) | $ |
As of December 31, 2016 | |||||||
Adjusted Cost | Fair Value | ||||||
(in thousands) | |||||||
Due in one year or less | $ | $ | |||||
Due after one year through three years | |||||||
Total | $ | $ |
As of September 30, 2017 | |||||||
Adjusted Cost | Fair Value | ||||||
(in thousands) | |||||||
Due in one year or less | $ | $ | |||||
Total | $ | $ |
As of December 31, 2016 | |||||||||||||||||||||||
Twelve Months or Less | More than Twelve Months | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
As of September 30, 2017 | |||||||||||||||||||||||
Twelve Months or Less | More than Twelve Months | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||
Total | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) |
As of December 31, 2016 | |||||||||||
Fair Value Measurement Using | |||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Total | |||||||||
(in thousands) | |||||||||||
Assets | |||||||||||
Corporate debt securities | $ | $ | $ | ||||||||
Total assets measured at fair value | $ | $ | $ |
As of September 30, 2017 | |||||||||||
Fair Value Measurement Using | |||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Total | |||||||||
(in thousands) | |||||||||||
Assets | |||||||||||
Corporate debt securities | $ | $ | $ | ||||||||
Total assets measured at fair value | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Loss before benefit from (provision for) income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(in thousands) | |||
Assets | |||
Cash and cash equivalents | $ | ||
Accounts receivable, net | |||
Prepaid expenses and other current assets | |||
Property and equipment, net | |||
Goodwill | |||
Intangible assets, net | |||
Other long-term assets | |||
Total assets | $ | ||
Liabilities | |||
Accounts payable, accrued liabilities and accrued compensation | $ | ||
Other current liabilities | |||
Other long-term liabilities | |||
Total liabilities | $ |
Pandora | Ticketfly | Total | |||||||||
(in thousands) | |||||||||||
Balance as of December 31, 2016 | $ | $ | $ | ||||||||
Goodwill impairment | ( | ) | ( | ) | ( | ) | |||||
Goodwill related to disposed assets | ( | ) | ( | ) | ( | ) | |||||
Effect of currency translation adjustment | |||||||||||
Balance as of September 30, 2017 | $ | $ | $ |
As of December 31, 2016 | As of September 30, 2017 | |||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Disposal of Intangible Assets | Net Carrying Value | ||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||
Finite-lived intangible assets | ||||||||||||||||||||||||||||
Patents | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Developed technology | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Customer relationships—clients | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Customer relationships—users | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Trade names | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Total finite-lived intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Indefinite-lived intangible assets | ||||||||||||||||||||||||||||
FCC license - Broadcast Radio | $ | $ | — | $ | $ | $ | — | $ | ( | ) | $ | — | ||||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Note: Amounts may not recalculate due to rounding |
As of September 30, 2017 | |||
(in thousands) | |||
Remainder of 2017 | $ | ||
2018 | |||
2019 | |||
2020 | |||
2021 | |||
Thereafter | |||
Total future amortization expense | $ |
Three and nine months ended | |||
September 30, 2017 | |||
(in thousands except for effective interest rate) | |||
Effective interest rate | % | ||
Contractually stated interest income | $ | ||
Amortization of discount | $ |
As of December 31, | As of September 30, | ||||||
2016 | 2017 | ||||||
(in thousands) | |||||||
1.75% convertible senior notes due 2020 | $ | $ | |||||
Credit facility | |||||||
Unamortized discount and deferred issuance costs | ( | ) | ( | ) | |||
Long-term debt, net | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
(in thousands except for effective interest rate) | |||||||||||||||
Effective interest rate | % | % | % | % | |||||||||||
Contractually stated interest expense | $ | $ | $ | $ | |||||||||||
Amortization of discount | $ | $ | $ | $ |
As of September 30, | ||||
2017 | ||||
(in thousands) | ||||
Series A redeemable convertible preferred stock | $ | |||
Issuance costs | ( | ) | ||
Accretion of issuance costs | ||||
Stock dividend payable to preferred stockholders | ||||
Redeemable convertible preferred stock | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||
Expected life (in years) | |||||||||||
Risk-free interest rate | 0.41 - 0.44% | 0.65 - 1.13% | 0.24 - 0.44% | 0.44 - 1.13% | |||||||
Expected volatility | 41 - 52% | 39 - 45% | 41 - 52% | 39 - 52% | |||||||
Expected dividend yield | % | % | % | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||
2016 | 2017 | 2016 | 2017 | ||||||
Expected life (in years) | N/A | N/A | 5.93 - 6.25 | ||||||
Risk-free interest rate | N/A | % | N/A | 1.92 - 2.18% | |||||
Expected volatility | N/A | % | N/A | % | |||||
Expected dividend yield | N/A | % | N/A | % |
• | One-third of the target MSUs are eligible to be earned for a performance period that is the first calendar year of the MSU grant (the "One-Year Performance Period"); |
• | One-third of the target MSUs are eligible to be earned for a performance period that is the first two calendar years of the MSU grant (the "Two-Year Performance Period"); and |
• | Any remaining portion of the total potential MSUs are eligible to be earned for a performance period that is the entire three calendar years of the MSU grant (the "Three-Year Performance Period"). |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Stock-based compensation expense | |||||||||||||||
Cost of revenue—Other | $ | $ | $ | $ | |||||||||||
Cost of revenue—Ticketing service | |||||||||||||||
Product development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
(in thousands except per share amounts) | (in thousands except per share amounts) | ||||||||||||||
Numerator | |||||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Less: Stock dividend payable and transaction costs | |||||||||||||||
Net loss available to common stockholders | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Denominator | |||||||||||||||
Weighted-average basic and diluted common shares | |||||||||||||||
Net loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
As of September 30, | |||||
2016 | 2017 | ||||
(in thousands) | |||||
Options to purchase common stock | |||||
Restricted stock units | |||||
Performance awards* | |||||
Shares issuable pursuant to the ESPP | |||||
Total common stock equivalents | |||||
*Includes potential common shares outstanding for MSUs and PSUs |
• | Ad-Supported Service. Our ad-supported Pandora service allows listeners to access our music and comedy catalogs and personalized playlist generating system for free across all of our delivery platforms. Listeners can obtain more features, such as skips and the ability to replay tracks, by watching an advertisement. |
• | Subscription Service—Pandora Plus. Pandora Plus is a paid, ad-free subscription version of the Pandora service that includes replays, additional skipping, offline listening, higher quality audio on supported devices and longer timeout-free listening. |
• | Subscription Service—Pandora Premium. Our on-demand subscription service, Pandora Premium, launched to select listeners on March 15, 2017, with general availability in the United States on April 18, 2017. Pandora Premium is a paid, ad-free version of the Pandora service that offers a unique, on-demand experience, providing users with the ability to search, play and collect songs and albums, build playlists on their own or with the tap of a button and automatically generates playlists based on the user’s listening activity. The features of Pandora Plus are also included in Pandora Premium. |
• | Advertising Revenue. Listener hours define the number of opportunities we have to sell advertisements, which we refer to as inventory. Our ability to attract advertisers depends in large part on our ability to offer sufficient inventory within desired demographics. |
• | Cost of Revenue—Content Acquisition Costs—Ad-Supported Service. We pay content acquisition costs to the copyright owners and performers, or their agents, of each sound recording that we stream, as well as to the publishers and songwriters, or their agents, for the musical works embodied in each of those sound recordings, subject to certain exclusions. The majority of the content acquisition costs related to our ad-supported service are driven by direct license agreements with major and independent labels and distributors, as discussed above in "Factors Affecting Our Business Model—Content Acquisition Costs". Certain of these license agreements include minimum guarantee payments, some of which are paid in advance. |
• | Subscription Revenue. Our subscription revenue depends upon the number of paid subscriptions we are able to sell and the price that our subscribers pay for those subscriptions. Our ability to attract subscribers depends in large part on our ability to offer features and functionality on our subscription services that are valued by consumers within desired demographics, on terms that are attractive to those consumers, and still enable us to maintain adequate gross margins. |
• | Cost of Revenue—Content Acquisition Costs—Subscription Service. We pay content acquisition costs to the copyright owners, performers, songwriters, or their agents, subject to certain exclusions. The majority of our content acquisition costs related to our subscription service are generally driven by direct license agreements with major and independent labels and distributors, PROs and publishers, as discussed above in "Factors Affecting Our Business Model—Content Acquisition Costs". Certain of these license agreements include minimum guarantee payments, some of which are paid in advance. |
Subscribers | ||
(in millions) | ||
Paid subscribers as of December 31, 2016 | 4.39 | |
Net new paid subscribers | 0.80 | |
Paid subscribers as of September 30, 2017 | 5.19 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||
Subscription ARPU | N/A | $ | 5.58 | N/A | $ | 5.05 | ||||||
Subscription LPU | N/A | $ | 3.87 | N/A | $ | 3.33 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||
Service | (in billions) | (in billions) | |||||||||
Advertising | 4.71 | 3.91 | 14.53 | 12.49 | |||||||
Subscription | 0.69 | 1.24 | 2.04 | 3.09 | |||||||
Total | 5.40 | 5.15 | 16.57 | 15.58 |
As of September 30, | ||||
2016 | 2017 | |||
(in millions) | ||||
Active users—all services | 77.9 | 73.7 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
Advertising RPM | $ | 58.10 | $ | 70.27 | $ | 52.26 | $ | 62.08 | |||||||
Advertising LPM | $ | 31.60 | $ | 37.01 | $ | 30.90 | $ | 35.36 | |||||||
*The calculation of RPM does not include revenue generated by Ticketfly or Next Big Sound. |
Three months ended September 30, | Nine months ended September 30, | ||||||||
2016 | 2017 | 2016 | 2017 | ||||||
Revenue | |||||||||
Advertising | 78 | % | 73 | % | 77 | % | 73 | % | |
Subscription and other | 16 | 22 | 17 | 20 | |||||
Ticketing service | 6 | 5 | 7 | 7 | |||||
Total revenue | 100 | 100 | 100 | 100 | |||||
Cost of revenue | |||||||||
Cost of revenue—Content acquisition costs | 50 | 54 | 53 | 55 | |||||
Cost of revenue—Other | 7 | 7 | 7 | 7 | |||||
Cost of revenue—Ticketing service | 4 | 3 | 5 | 5 | |||||
Total cost of revenue | 61 | 64 | 64 | 67 | |||||
Gross profit | 39 | 36 | 36 | 33 | |||||
Operating expenses | |||||||||
Product development | 10 | 10 | 10 | 11 | |||||
Sales and marketing | 33 | 28 | 36 | 35 | |||||
General and administrative | 12 | 13 | 13 | 14 | |||||
Goodwill impairment | — | — | — | 12 | |||||
Contract termination (benefit) fees | — | — | — | 2 | |||||
Total operating expenses | 54 | 51 | 59 | 75 | |||||
Loss from operations | (16 | ) | (16 | ) | (24 | ) | (42 | ) | |
Interest expense | (2 | ) | (2 | ) | (2 | ) | (2 | ) | |
Other income, net | — | — | — | — | |||||
Total other expense, net | (2 | ) | (2 | ) | (2 | ) | (2 | ) | |
Loss before (provision for) benefit from income taxes | (17 | ) | (17 | ) | (26 | ) | (44 | ) | |
(Provision for) benefit from income taxes | — | — | — | — | |||||
Net loss | (17 | ) | (17 | ) | (25 | ) | (44 | ) | |
Net loss available to common stockholders | (17 | )% | (22 | )% | (25 | )% | (47 | )% |
(1) Includes stock-based compensation as follows: | |||||||||
Cost of revenue - Other | 0.4 | % | 0.2 | % | 0.5 | % | 0.2 | % | |
Cost of revenue - Ticketing service | — | — | — | — | |||||
Product development | 2.1 | 2.2 | 2.3 | 2.4 | |||||
Sales and marketing | 4.2 | 3.7 | 4.4 | 4.0 | |||||
General and administrative | 2.5 | 1.8 | 3.3 | 2.6 | |||||
Note: Amounts may not recalculate due to rounding |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Advertising | $ | 273,716 | $ | 275,741 | $ | 2,025 | $ | 759,150 | $ | 777,253 | $ | 18,103 | |||||||||||
Subscription and other | 56,100 | 84,414 | 28,314 | 165,957 | 218,192 | 52,235 | |||||||||||||||||
Ticketing service | 22,085 | 18,484 | (3,601 | ) | 67,121 | 76,032 | 8,911 | ||||||||||||||||
Total revenue | $ | 351,901 | $ | 378,639 | $ | 26,738 | $ | 992,228 | $ | 1,071,477 | $ | 79,249 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Cost of revenue—Content acquisition costs | $ | 174,334 | $ | 204,222 | $ | 29,888 | $ | 522,231 | $ | 587,517 | $ | 65,286 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Cost of revenue—Other | $ | 25,896 | $ | 27,287 | $ | 1,391 | $ | 72,197 | $ | 80,259 | $ | 8,062 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Cost of revenue—Ticketing service | $ | 15,318 | $ | 11,269 | $ | (4,049 | ) | $ | 45,223 | $ | 50,397 | $ | 5,174 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Total revenue | $ | 351,901 | $ | 378,639 | $ | 26,738 | $ | 992,228 | $ | 1,071,477 | $ | 79,249 | |||||||||||
Total cost of revenue | 215,548 | 242,778 | 27,230 | 639,651 | 718,173 | 78,522 | |||||||||||||||||
Gross profit | $ | 136,353 | $ | 135,861 | $ | (492 | ) | $ | 352,577 | $ | 353,304 | $ | 727 | ||||||||||
Gross margin | 39 | % | 36 | % | 36 | % | 33 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Product development | $ | 33,560 | $ | 39,469 | $ | 5,909 | $ | 102,731 | $ | 120,290 | $ | 17,559 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Sales and marketing | $ | 116,091 | $ | 107,588 | $ | (8,503 | ) | $ | 357,113 | $ | 378,581 | $ | 21,468 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
General and administrative | $ | 41,909 | $ | 48,171 | $ | 6,262 | $ | 129,193 | $ | 150,650 | $ | 21,457 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Goodwill impairment | — | — | — | — | 131,997 | 131,997 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2016 | 2017 | $ Change | 2016 | 2017 | $ Change | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Contract termination (benefit) fees | — | (423 | ) | (423 | ) | — | 23,044 | 23,044 |
Nine months ended September 30, | |||||||
2016 | 2017 | ||||||
(in thousands) | |||||||
Net cash used in operating activities | $ | (179,073 | ) | $ | (218,627 | ) | |
Net cash (used in) provided by investing activities | (43,755 | ) | 135,063 | ||||
Net cash provided by financing activities | 96,248 | 376,564 |
• | unanticipated costs or liabilities associated with the acquisition; |
• | incurrence of acquisition-related costs; |
• | diversion of management’s attention from other business concerns; |
• | regulatory uncertainties; |
• | harm to our existing business relationships with business partners and advertisers as a result of the acquisition; |
• | harm to our brand and reputation; |
• | the potential loss of key employees; |
• | use of resources that are needed in other parts of our business; and |
• | use of substantial portions of our available cash to consummate the acquisition. |
Incorporated by Reference | ||||||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed By | Filed Herewith | |||||||
S-1/A | 333-172215 | 3.1 | 4/4/2011 | |||||||||||
10-Q | 001-35198 | 3.02 | 7/26/2016 | |||||||||||
S-1/A | 333-172215 | 3.2 | 4/4/2011 | |||||||||||
10-Q | 001-35198 | 3.04 | 7/26/2016 | |||||||||||
8-K | 001-35198 | 3.1 | 3/2/2017 | |||||||||||
8-K | 001-35198 | 3.1 | 3/16/2017 | |||||||||||
8-K | 001-35198 | 3.1 | 3/30/2017 | |||||||||||
8-K | 001-35198 | 3.1 | 4/14/2017 | |||||||||||
8-K | 001-35198 | 3.1 | 4/27/2017 | |||||||||||
8-K | 001-35198 | 3.2 | 9/26/2017 | |||||||||||
8-K | 001-35198 | 3.1 | 6/14/2017 | |||||||||||
X | ||||||||||||||
X | ||||||||||||||
X | ||||||||||||||
8-K | 001-35198 | 10.1 | 8/14/2017 | |||||||||||
X |
X | ||||||||||||||
X | ||||||||||||||
X | ||||||||||||||
X | ||||||||||||||
X | ||||||||||||||
X | ||||||||||||||
X | ||||||||||||||
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 | X | ||||||||||||
101. SCH | XBRL Taxonomy Schema Linkbase 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 |
* | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished on a supplemental basis to the Securities and Exchange Commission upon request; provided, however that we may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules or exhibits so furnished. |
† | Indicates management contract or compensatory plan. |
PANDORA MEDIA, INC. | ||
Date: November 2, 2017 | By: | /s/ Naveen Chopra |
Naveen Chopra | ||
Chief Financial Officer | ||
(Duly Authorized Officer and Principal Financial Officer) |
A. | Executive is the Founder of Pandora, and has been employed by the Company since the Company’s inception; and |
B. | Executive will be separated from employment with Pandora effective as of the Separation Date; and |
C. | The Parties desire to reach an agreement as to the rights, benefits, and obligations of each Party arising out of Executive’s employment and the anticipated separation from the Company, to resolve all disputes Executive may have against Pandora or the other Releasees (as defined below) – known, unknown, asserted or un-asserted. |
(a) | A cash payment equal to twelve (12) times Executive’s monthly base salary in effect on the Separation Date, gross, paid in a lump sum by the Payment Date (Severance Months); |
(b) | A cash payment equal to a prorated (to the Separation Date) portion of the amount that Executive would have received under Pandora’s Corporate Incentive Plan for the Fiscal Year Ending December 31, 2017, based on the Company’s actual performance as determined by the Compensation Committee of the Board of Directors in its discretion for the remaining executive officers of the Company following the completion of the Current Year’s annual performance period; provided that such payment will not exceed Executive’s prorated annual |
(c) | So long as Executive timely elects (and remains eligible for) health benefits continuation pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), payment by the Company of Executive’s applicable premiums (including spouse or family coverage if Executive had such coverage on the Separation Date) for such continuation coverage under COBRA (payable as and when such payments become due) during the period commencing on the Separation Date and ending on the earliest to occur of (a) twelve (12) months following the Separation Date, and (b) the date on which the Executive and Executive’s covered dependents, if any, become eligible for health insurance coverage through another employer, or becomes otherwise covered under another group health plan; |
(d) | Reasonable outplacement and career continuation services by a firm to be selected by the Company for up to three (3) months following the Separation Date, if Executive elects to participate in such services; and |
(e) | The following vesting schedule: |
i. | Effective on the Effective Date, accelerated vesting by twelve (12) months of all outstanding Company stock options held by Executive as of the Separation Date; provided that, in lieu of the foregoing, stock options that do not vest monthly will be accelerated through twelve (12) months following the Separation Date as if such stock options had been on a monthly vesting schedule through the original vesting |
ii. | Effective on the Effective Date, accelerated vesting by twelve (12) months of all outstanding non-performance-based equity awards, restricted stock, restricted stock units or RSUs, held by Executive as of the Separation Date; provided that, in lieu of the foregoing, non-performance-based equity awards that do not vest monthly will be accelerated through twelve (12) months following the Separation Date, as if such equity award had been on a monthly vesting schedule through the original vesting period, but only if the date reflecting the number of Severance Months past the Separation Date is later than such equity award’s originally scheduled vesting date; provided that the parties agree that Attachment A correctly sets forth all outstanding Non-Performance RSUs held by Executive and the Non-Performance RSUs to be accelerated under this Section 3(e)(ii); |
iii. | In the case of any outstanding performance-based equity awards (as defined by the Company’s 2011 Equity Incentive Plan) held by Executive as of the Separation Date, continued eligibility for the vesting of market stock units (“MSUs”), performance-based restricted stock units (“PSUs”) (collectively “Performance Awards”) based on the achievement of the Performance Award vesting conditions on the applicable Vesting Dates (as such term is defined in the applicable Notice(s) of Performance Award Grant(s)); provided that the parties agree that Attachment A correctly sets |
iv. | provided, that all remaining stock options, restricted stock, restricted stock units or other equity-based awards, or portions thereof, that do not vest in accordance with this Agreement shall be forfeited and cancelled by the Company. |
Vesting/Exercise Schedule: | So long as your Continuous Service Status continues, the RSUs shall vest in accordance with the following schedule: |
PANDORA MEDIA, INC. | |
/s/ Naveen Chopra | By: /s/ Naveen Chopra |
Naveen K Chopra | Name: Naveen Chopra |
Title: Interim CEO |
• | 121,800 of the RSUs set forth in the Notice shall vest on August 15, 2018 and 30,450 of the RSUs set forth in the Notice shall vest on February 15, 2019, subject to the Participant remaining in Continuous Service Status on the applicable vesting date. |
• | In the case of an Involuntary Termination (as defined in the Company’s Executive Severance Change of Control Policy, as amended, (the “Policy”)) of Participant, the RSUs set forth in the Notice shall fully vest on the effective date of the Release (as defined in the Policy), and such acceleration shall supersede and replace any other acceleration benefit with respect to the RSUs set forth in the Notice that would have been provided under the Policy in the case of an Involuntary Termination. The RSUs that vest pursuant to this provision shall be settled within 30 days following Participant’s Involuntary Termination. |
• | In the case of a voluntary termination for Good Reason (as defined below) (and regardless of whether or not a Change of Control (as defined in the Company’s 2011 Equity Incentive Plan) precedes said voluntary termination) of Participant, the RSUs set forth in the Notice shall fully vest on the effective date of the Release (as defined in the Policy), and such acceleration shall supersede and replace any other acceleration benefit with respect to the RSUs set forth in the Notice that would have been provided under the Policy in the case of a voluntary termination for Good Reason. The RSUs that vest pursuant to this provision shall be settled within 30 days following Participant’s termination of employment for Good Reason. |
o | “Good Reason” means Participant’s resignation from employment after the occurrence of one of the following events without Participant’s consent: (A) a material reduction of Participant’s base salary or target annual incentive bonus; (B) any requirement by the Company (or its successor) that Participant engage in any illegal or unethical conduct, after Participant has given the Company thirty (30) days’ notice and opportunity to cure; (C) the Company’s failure to fully cure within thirty (30) days any material breach by the Company of the Policy or of any other material agreement between Participant and the Company, in each case which Participant has notified the Committee in writing; (D) a relocation of Participant’s principal place of employment by more than fifty (50) miles or (E) a material reduction in duties and responsibilities; provided that in any event, Participant notifies the Company of the event constituting Good Reason within ninety (90) days after the occurrence of the event constituting Good Reason and gives the Company thirty (30) days to cure (to the extent capable of cure), and then Participant resigns within thirty (30) days thereafter provided further that (A) with respect to clause (E) above, Participant acknowledges and agrees that his ceasing to serve as CEO and perform the Additional Duties (each as defined in that certain Amendment to Employment Offer dated August 7, 2017 (the “Amendment”)) in connection with the Transition End Date (as defined in the Amendment) will not, by itself, constitute Good Reason to voluntarily terminate employment and (B) in the event Participant voluntarily terminates employment for Good Reason as a result of the occurrence of the events described in clause (E) only 121,800 of the RSUs shall be subject to accelerated vesting in accordance with this Appendix. |
• | The RSUs are intended to be exempt from or comply with Section 409A of the Code and shall be interpreted and construed accordingly, and each vesting hereunder shall be considered a separate payment. Notwithstanding any other provision in the RSU Agreement, to the extent the RSUs |
A. | Executive has been employed by Pandora since the Employment Start Date; and |
B. | Executive will be separated from employment with Pandora effective as of the Separation Date; and |
C. | The parties desire to reach an agreement as to the rights, benefits, and obligations of each party arising out of Executive’s employment and the anticipated separation from the Company, to resolve all disputes Executive may have against Pandora or the other Releasees (as defined below) – known, unknown, asserted or un-asserted. |
(a) | A cash payment equal to six (6) times Executive’s monthly base salary in effect on the Separation Date, gross, paid in a lump sum by the Payment Date (“Severance Months”); |
(b) | A cash payment equal to a prorated (to the Separation Date) portion of the amount that Executive would have received under Pandora Media, Inc.’s Corporate Incentive Plan for Fiscal Year Ending December 31, 2017, based on the Company’s actual performance as determined by the Compensation Committee of the Board in its discretion for the remaining executive officers of the Company following the completion of the Current Year’s annual performance period; provided that such payment will not exceed |
(c) | So long as Executive timely elects (and remains eligible for) health benefits continuation pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), payment by the Company of Executive’s applicable premiums (including spouse or family coverage if Executive had such coverage on the Separation Date) for such continuation coverage under COBRA (payable as and when such payments become due) during the period commencing on the Separation Date and ending on the earliest to occur of (a) six (6) months following the Separation Date, and (b) the date on which the Executive and Executive’s covered dependents, if any, become eligible for health insurance coverage through another employer, or becomes otherwise covered under another group health plan; |
(d) | Reasonable outplacement and career continuation services by a firm to be selected by the Company for up to three (3) months following the Separation Date, if Executive elects to participate in such services; and |
(e) | The following vesting schedule: |
i. | Effective on the Effective Date, accelerated vesting by six (6) months of all outstanding Company stock options held by Executive as of the Separation Date; provided that, in lieu of the foregoing, stock options that do not vest monthly will be accelerated through six (6) months following the Separation Date as if such stock option had been on a monthly vesting schedule through |
ii. | Effective on the Effective Date, accelerated vesting by six (6) months of all outstanding non-performance-based equity awards, restricted stock, restricted stock units or RSUs (“Non-Performance RSUs”), held by Executive as of the Separation Date; provided that, in lieu of the foregoing, Non-Performance- RSUs that do not vest monthly will be accelerated through six (6) months following the Separation Date, as if such equity award had been on a monthly vesting schedule through the original vesting period, but only if the date reflecting the number of Severance Months above past the Separation Date is later than such equity award’s originally scheduled vesting date; provided that the parties agree that Attachment A correctly sets forth all outstanding Non-Performance RSUs held by Executive and the Non-Performance RSUs to be accelerated under this Section 3(e)(ii). |
iii. | Continued eligibility for the vesting of market stock units (“MSUs”), performance-based restricted stock units (“PSUs”) (collectively “Performance Awards”) based on the achievement of the Performance Award vesting conditions on the applicable Vesting Dates (as such term is defined in the applicable Notice(s) of Performance Award Grant; provided that the parties agree that Attachment A correctly sets forth the Performance Awards |
iv. | provided, that all remaining stock options, restricted stock, restricted stock units or other equity-based awards, or performance-based restricted stock units, or portions thereof, that do not vest in accordance with this Agreement shall be forfeited and cancelled by the Company. |
Vesting/Exercise Schedule: | So long as your Continuous Service Status continues, the RSUs shall vest in accordance with the following schedule: |
PANDORA MEDIA, INC. | |
/s/ Roger Joseph Lynch | By: /s/ Naveen Chopra |
Roger Joseph Lynch | Name: Naveen Chopra |
Title: Interim CEO |
Vesting/Exercise Schedule: | So long as your Continuous Service Status continues, the RSUs shall vest in accordance with the following schedule: |
PANDORA MEDIA, INC. | |
/s/ Roger Joseph Lynch | By: /s/ Naveen Chopra |
Roger Joseph Lynch | Name: Naveen Chopra |
Title: Interim CEO |
Date of Grant: | 09/18/2017 |
Type of Option: | Nonstatutory Stock Option |
Vesting/Exercise Schedule: | So long as your Continuous Service Status continues, the Shares underlying this Option shall vest and become exercisable in accordance with the following schedule: |
Termination Period: | This Option may be exercised for 12 months after termination of Continuous Service Status for any reason (but in no event later than the Expiration Date). Optionee is responsible for keeping track of this exercise period following termination for any reason of his or her service relationship with |
Transferability: | This Option may not be transferred. |
PANDORA MEDIA, INC. | |
/s/ Roger Joseph Lynch | By: /s/ Naveen Chopra |
Roger Joseph Lynch | Name: Naveen Chopra |
Title: Interim CEO |
/s/ Roger Lynch | ||
Name: | Roger Lynch | |
Title: | Chief Executive Officer (Principal Executive Officer) |
/s/ Naveen Chopra | ||
Name: | Naveen Chopra | |
Title: | Chief Financial Officer (Principal Financial Officer) |
/s/ Roger Lynch | ||
Name: | Roger Lynch | |
Title: | Chief Executive Officer (Principal Executive Officer) | |
/s/ Naveen Chopra | ||
Name: | Naveen Chopra | |
Title: | Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 31, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Pandora Media, Inc. | |
Entity Central Index Key | 0001230276 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 248,782,017 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 5,854 | $ 3,633 |
Redeemable convertible preferred stock, shares issued | 480,000 | |
Redeemable convertible preferred stock, shares outstanding | 480,000 | |
Common stock, shares issued | 248,681,713 | 235,162,757 |
Common stock, shares outstanding | 248,681,713 | 235,162,757 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenue | ||||
Advertising | $ 275,741 | $ 273,716 | $ 777,253 | $ 759,150 |
Subscription and other | 84,414 | 56,100 | 218,192 | 165,957 |
Ticketing service | 18,484 | 22,085 | 76,032 | 67,121 |
Total revenue | 378,639 | 351,901 | 1,071,477 | 992,228 |
Cost of revenue | ||||
Cost of revenue—Content acquisition costs | 204,222 | 174,334 | 587,517 | 522,231 |
Cost of revenue—Other | 27,287 | 25,896 | 80,259 | 72,197 |
Cost of revenue—Ticketing service | 11,269 | 15,318 | 50,397 | 45,223 |
Total cost of revenue | 242,778 | 215,548 | 718,173 | 639,651 |
Gross profit | 135,861 | 136,353 | 353,304 | 352,577 |
Operating expenses | ||||
Product development | 39,469 | 33,560 | 120,290 | 102,731 |
Sales and marketing | 107,588 | 116,091 | 378,581 | 357,113 |
General and administrative | 48,171 | 41,909 | 150,650 | 129,193 |
Goodwill impairment | 0 | 0 | 131,997 | 0 |
Contract termination (benefit) fees | (423) | 0 | 23,044 | 0 |
Total operating expenses | 194,805 | 191,560 | 804,562 | 589,037 |
Loss from operations | (58,944) | (55,207) | (451,258) | (236,460) |
Interest expense | (7,592) | (6,494) | (22,377) | (18,916) |
Other income, net | 559 | 579 | 866 | 1,696 |
Total other expense, net | (7,033) | (5,915) | (21,511) | (17,220) |
Loss before (provision for) benefit from income taxes | (65,977) | (61,122) | (472,769) | (253,680) |
(Provision for) benefit from income taxes | (266) | (412) | (877) | 711 |
Net loss | (66,243) | (61,534) | (473,646) | (252,969) |
Net loss available to common stockholders | $ (84,562) | $ (61,534) | $ (506,493) | $ (252,969) |
Bbasic and diluted net loss per common share (in dollars per share) | $ (0.34) | $ (0.27) | $ (2.10) | $ (1.10) |
Weighted-average basic and diluted common shares | 245,810 | 232,139 | 241,579 | 229,524 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (66,243) | $ (61,534) | $ (473,646) | $ (252,969) |
Change in foreign currency translation adjustment | (729) | (129) | (600) | (417) |
Change in net unrealized loss on marketable securities | 8 | (45) | 50 | 348 |
Other comprehensive loss | (721) | (174) | (550) | (69) |
Total comprehensive loss | $ (66,964) | $ (61,708) | $ (474,196) | $ (253,038) |
Description of Business and Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Pandora—Internet Radio and On-Demand Music Services Pandora is the world’s most powerful music discovery platform, offering a personalized experience for each of our listeners wherever and whenever they want to listen to music—whether through earbuds, car speakers or live on stage. Pandora is available as an ad-supported service, a radio subscription service called Pandora Plus and an on-demand subscription service called Pandora Premium. The majority of our listener hours occur on mobile devices, with the majority of our revenue generated from advertising on our ad-supported service on these devices. We offer both local and national advertisers the opportunity to deliver targeted messages to our listeners using a combination of audio, display and video advertisements. We also generate revenue from subscriptions to Pandora Plus and Pandora Premium. We were incorporated as a California corporation in January 2000 and reincorporated as a Delaware corporation in December 2010. Our principal operations are located in the United States and the United Kingdom. Ticketing Service We completed the sale of Ticketfly on September 1, 2017. Prior to the date of disposition, we operated our ticketing service through our former subsidiary Ticketfly, a leading live events technology company that provides ticketing and marketing software and services for clients, which are venues and event promoters across North America. Ticketfly's ticketing, digital marketing and analytics software helps promoters book talent, sell tickets and drive in-venue revenue, while Ticketfly's consumer tools help fans find and purchase tickets to events. Ticketfly’s revenue primarily consists of service and merchant processing fees from ticketing operations. Refer to Note 6 "Dispositions" in the Notes to Condensed Consolidated Financial Statements for further details on the Ticketfly disposition. As used herein, "Pandora," "we," "our," "the Company" and similar terms include Pandora Media, Inc. and its subsidiaries, unless the context indicates otherwise. Basis of Presentation The interim unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") along with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission ("SEC") Regulation S-X, and include the accounts of Pandora and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of our management, the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position for the periods presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period and should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016. Certain changes in presentation have been made to conform the prior period presentation to current period reporting. We have reclassified amortization of internal use-software costs from the product development and sales and marketing line items to the cost of revenue—other and general and administrative line items of our condensed consolidated statements of operations. We have also reclassified bad debt and goodwill impairment from the other operating activities line item to the bad debt and goodwill impairment line items of the condensed consolidated statements of cash flows. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates are used in several areas including, but not limited to determining accrued content acquisition costs, amortization of minimum guarantees under content acquisition agreements, selling prices for elements sold in multiple-element arrangements, the allowance for doubtful accounts, the fair value of stock options, market stock units ("MSUs"), stock-settled performance-ba sed restricted stock units ("PSUs"), the Employee Stock Purchase Plan ("ESPP"), the benefit from (provision for) income taxes, the fair value of the convertible subordinated promissory note ("Convertible Promissory Note"), the fair value of acquired property and equipment, intangible assets and goodwill and the useful lives of acquired intangible assets. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements could be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result.
|
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Other than discussed below, there have been no material changes to our significant accounting policies as compared to those described in our Annual Report on Form 10-K for the year ended December 31, 2016. Stock-Based Compensation—Restricted Stock Units and Stock Options Stock-based awards granted to employees, including grants of restricted stock units ("RSUs") and stock options, are recognized as expense in our statements of operations based on their grant date fair value. We recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally three to four years. We estimate the fair value of RSUs at our stock price on the grant date. We generally estimate the grant date fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model is affected by our stock price on the date of grant, the expected stock price volatility over the expected term of the award, which is based on projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award and expected dividends. Stock-based compensation expense is recorded in the statement of operations for only those stock-based awards that will vest. In the first quarter of 2017 we adopted new accounting guidance from the Financial Accounting Standards Board ("FASB") on stock compensation, or ASU 2016-09, as described in "Recently Adopted Accounting Standards" below and have elected to account for forfeitures as they occur, rather than estimating expected forfeitures. In addition, we recognize all income tax effects of awards in the income statement when the awards vest or are settled as required by ASU 2016-09. Net Loss per Common Share Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by giving effect to all potential shares of common stock, including stock options, restricted stock units, market stock units, performance-based RSUs, potential ESPP shares and instruments convertible into common stock, to the extent dilutive. Basic and diluted net loss per common share were the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. Concentration of Credit Risk For the three and nine months ended September 30, 2016 and 2017, we had no customers that accounted for more than 10% of our total revenue. As of December 31, 2016 and September 30, 2017, we had no customers that accounted for more than 10% of our total accounts receivable. Recently Issued Accounting Standards In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which amends the existing accounting standards for revenue recognition. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue. Under the guidance, revenue is recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard is effective for public entities with annual and interim reporting periods beginning after December 15, 2017. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt the guidance. We expect to adopt ASU 2014-09 as of January 1, 2018 using the modified retrospective method. We have completed our initial assessment and do not believe there will be a material impact to our condensed consolidated financial statements for the majority of our advertising and subscription revenue arrangements. We are finalizing the impact of ASU 2014-09 and are continuing to evaluate the expected impact on our business processes, systems and controls. We expect to complete our assessment of the effects of adopting ASU 2014-09 during the fourth quarter of 2017, and we will continue our evaluation of ASU 2014-09, including how it may impact new arrangements we enter into as well as new or emerging interpretations of the standard, through the date of adoption. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires lessees to put most leases on their balance sheets and recognize expenses on their income statements and also eliminates the real estate-specific provisions for all entities. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We have completed our initial assessment and expect to adopt ASU 2016-02 as of January 1, 2019 using the modified retrospective method. We expect the potential impact of adopting ASU 2016-02 to be material to our lease liabilities and assets on our consolidated balance sheets. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Credit Losses—Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 will replace today’s incurred loss approach with an expected loss model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within that fiscal year, although early adoption is permitted. We are currently evaluating the impact that this standard update will have on our condensed consolidated financial statements. In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance is effective prospectively for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. We do not expect the adoption of ASU 2017-09 will have a material impact on our financial statements. Recently Adopted Accounting Standards In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718) ("ASU 2016-09"). ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. Additionally, it allows an employer to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. We adopted this guidance in the first quarter of 2017 using the modified retrospective transition method. Upon adoption, we recognized the previously unrecognized excess tax benefits as of January 1, 2017 through retained earnings. The previously unrecognized excess tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance. As a result, the net impact resulted in no effect on net deferred tax assets or our accumulated deficit as of January 1, 2017. Without the valuation allowance, the Company’s net deferred tax assets would have increased by approximately $142.0 million. Additionally, we elected to account for forfeitures as they occur, rather than estimating expected forfeitures. The net cumulative effect of this change was an increase to additional paid in capital as of January 1, 2017 of $1.2 million. |
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Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments Cash, cash equivalents and investments consisted of the following:
Our short-term investments have maturities of twelve months or less and are classified as available-for-sale. Our long-term investments have maturities of greater than twelve months and are classified as available-for-sale. The following tables summarize our available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of December 31, 2016 and September 30, 2017.
The following table presents available-for-sale securities by contractual maturity date as of December 31, 2016 and September 30, 2017.
The following tables summarize our available-for-sale securities’ fair value and gross unrealized losses aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position as of December 31, 2016 and September 30, 2017.
Our investment policy requires investments to be investment grade, primarily rated "A1" by Standard & Poor’s or "P1" by Moody’s or better for short-term investments and rated "A" by Standard & Poor’s or "A2" by Moody’s or better for long-term investments, with the objective of minimizing the potential risk of principal loss. In addition, the investment policy limits the amount of credit exposure to any one issuer. |
Fair Value |
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Fair Value | Fair Value We record cash equivalents and investments at fair value. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are required to be disclosed by level within the following fair value hierarchy: Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 — Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 — Inputs lack observable market data to corroborate management’s estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. When determining fair value, whenever possible we use observable market data and rely on unobservable inputs only when observable market data is not available. The following fair value hierarchy tables categorize information regarding our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and September 30, 2017:
Our cash equivalents and short-term investments are classified as Level 2 within the fair value hierarchy because they are valued using professional pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. As of December 31, 2016 and September 30, 2017, we held no Level 3 assets or liabilities measured on a recurring basis. The fair value of our Convertible Promissory Note was calculated on a nonrecurring basis as of September 1, 2017 and i s classified as a Level 3 measurement within the fair value hierarchy. Refer to Note 8 "Convertible Promissory Note Receivable" in the Notes to Condensed Consolidated Financial Statements for further details on the Convertible Promissory Note. Our money market funds are no longer classified within the fair value hierarchy, as the fair values are measured at net asset value using the practical expedient. As of December 31, 2016 and September 30, 2017, the fair values of our money market funds were $55.8 million and $87.5 million. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Minimum Guarantees and Other Provisions—Content Acquisition Costs Certain of our content acquisition agreements contain minimum guarantees, and require that we make upfront minimum guarantee payments. During the three and nine months ended September 30, 2017, we prepaid $111.5 million and $257.3 million in content acquisition costs related to minimum guarantees, which were offset by amortization of prepaid content acquisition costs of $31.3 million and $177.2 million. As of September 30, 2017, we have future minimum guarantee commitments of $472.5 million, of which $65.0 million will be paid in 2017 and the remainder will be paid thereafter. On a quarterly basis, we record the greater of the cumulative actual content acquisition costs incurred or the cumulative minimum guarantee based on forecasted usage for the minimum guarantee period. The minimum guarantee period is the period of time that the minimum guarantee relates to, as specified in each agreement, which may be annual or a longer period. The cumulative minimum guarantee, based on forecasted usage considers factors such as listening hours, revenue, subscribers and other terms of each agreement that impact our expected attainment or recoupment of the minimum guarantees based on the relative attribution method. Several of our content acquisition agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, could cause our payments under those agreements to escalate. In addition, record labels, publishers and PROs with whom we have entered into direct license agreements have the right to audit our content acquisition payments, and any such audit could result in disputes over whether we have paid the proper content acquisition costs. However, as of September 30, 2017, we do not believe it is probable that these provisions of our agreements discussed above will, individually or in the aggregate, have a material adverse effect on our business, financial position, results of operations or cash flows. Legal Proceedings We have been in the past, and continue to be, a party to various legal proceedings, which have consumed, and may continue to consume, financial and managerial resources. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Our management periodically evaluates developments that could affect the amount, if any, of liability that we have previously accrued and make adjustments as appropriate. Determining both the likelihood and the estimated amount of a loss requires significant judgment, and management’s judgment may be incorrect. We do not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our business, financial position, results of operations or cash flows. Pre-1972 copyright litigation On October 2, 2014, Flo & Eddie Inc. filed a class action suit against Pandora Media Inc. in the federal district court for the Central District of California. The complaint alleges misappropriation and conversion in connection with the public performance of sound recordings recorded prior to February 15, 1972. On December 19, 2014, Pandora filed a motion to strike the complaint pursuant to California’s Anti-Strategic Lawsuit Against Public Participation ("Anti-SLAPP") statute, which was appealed to the Ninth Circuit Court of Appeals. The district court litigation is currently stayed pending the Ninth Circuit’s decision. On December 8, 2016, the Ninth Circuit heard oral arguments on the Anti-SLAPP motion. On March 15, 2017, the Ninth Circuit requested certification to the California Supreme Court on the substantive legal questions. The California Supreme Court has accepted certification and the Company filed its opening brief on August 4, 2017. Between September 14, 2015 and October 19, 2015, Arthur and Barbara Sheridan filed separate class action suits against the Company in the federal district courts for the Northern District of California and the District of New Jersey. The complaints allege a variety of violations of common law and state copyright statutes, common law misappropriation, unfair competition, conversion, unjust enrichment and violation of rights of publicity arising from allegations that we owe royalties for the public performance of sound recordings recorded prior to February 15, 1972. The actions in California and New Jersey are currently stayed pending the Ninth Circuit's decision in Flo & Eddie, Inc. v. Pandora Media, Inc. On September 7, 2016, Ponderosa Twins Plus One et al. filed a class action suit against the Company alleging claims similar to that of Flo & Eddie, Inc. v. Pandora Media Inc. The action is currently stayed in the Northern District of California pending the Ninth Circuit’s decision in Flo & Eddie, Inc. v. Pandora Media, Inc. The outcome of any litigation is inherently uncertain. Except as noted above, we do not believe it is probable that the final outcome of the matters discussed above will, individually or in the aggregate, have a material adverse effect on our business, financial position, results of operations or cash flows; however, in light of the uncertainties involved in such matters, there can be no assurance that the outcome of each case or the costs of litigation, regardless of outcome, will not have a material adverse effect on our business. Indemnification Agreements, Guarantees and Contingencies In the ordinary course of business and in connection with the sale of Ticketfly, we are party to certain contractual agreements under which we may provide indemnifications of varying scope, terms and duration to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. Such indemnification provisions, other than the Ticketfly indemnifications, are accounted for in accordance with guarantor’s accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others. In connection with the sale of Ticketfly, we have accrued approximately $5.1 million related to these indemnifications, which is the probable indemnification liability as estimated in accordance with the accounting guidance for loss contingencies. Other than this amount, to date, we have not incurred, do not anticipate incurring and therefore have not accrued for, any costs related to such indemnification provisions. |
Dispositions |
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Dispositions | Dispositions Ticketfly On September 1, 2017, we completed the sale of Ticketfly, our ticketing service segment, to Eventbrite Inc. ("Eventbrite") for an aggregate unadjusted purchase price of $200.0 million. The aggregate unadjusted purchase price consists of $150.0 million in cash and a $50.0 million Convertible Promissory Note, which were paid and issued at the closing of the transaction. The Convertible Promissory Note was recorded at its fair value at the date of sale, which resulted in a discount of $13.8 million. The aggregate purchase price was further reduced by $4.9 million in costs to sell and $8.6 million in working capital adjustments and certain indemnification provisions, for a net purchase price of $172.7 million. Refer to Note 8 "Convertible Promissory Note Receivable" in the Notes to Condensed Consolidated Financial Statements for further details on the Convertible Promissory Note. In the three months ended June 30, 2017, the assets and liabilities of Ticketfly were classified as held for sale, and we recognized a goodwill impairment charge of $131.7 million. The impairment charge was based on the fair value of the net assets as implied by the estimated purchase price of $184.5 million as of June 30, 2017. We consider the fair value of these net assets to be classified as Level 2 within the fair value hierarchy because Ticketfly is not a publicly traded company. Instead, the fair value was based on other observable inputs, such as the selling price, which represents an exit price. In the three months ended September 30, 2017, we recognized a loss on sale of $9.4 million in the general and administrative line item on our Condensed Consolidated Statements of Operations, which was based on an adjusted net purchase price of $172.7 million as of September 1, 2017. Net cash proceeds from the sale of Ticketfly were $125.2 million and consisted of the cash purchase price of $150.0 million, less cash held for sale of $22.2 million and cash purchase price adjustments of $2.6 million. Prior to the sale of Ticketfly, we operated in two reportable segments. Subsequent to the sale of Ticketfly, we operate in one reportable segment. The revenues and expenses of Ticketfly are included in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2017 through the disposition date of September 1, 2017. The following table provides Ticketfly’s loss before benefit from (provision for) income taxes for the three and nine months ended September 30, 2016 and 2017:
The sale of Ticketfly did not represent a strategic shift in our business, and therefore we have not classified the operations of Ticketfly as discontinued operations in our Condensed Consolidated Statements of Operations. KXMZ On August 31, 2017, we completed the sale of KXMZ, an FM radio station based in Rapid City, South Dakota. Net cash proceeds from the sale of KXMZ were $0.2 million. The sale did not result in a material impact to our condensed consolidated financial statements. Disposal of Assets and Liabilities The following table provides the carrying amounts of the major classes of assets and liabilities of Ticketfly and KXMZ that were disposed of in the three months ended September 30, 2017.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets During the three months ended September 30, 2017, we completed the sale of both Ticketfly and KXMZ. In the three months ended June 30, 2017, we recognized a goodwill impairment of $131.7 million related to the Ticketfly sale. The impairment charge was based on the fair value of Ticketfly's net assets as implied by the estimated purchase price of $184.5 million as of June 30, 2017. As a result of the KXMZ agreement, we recognized a goodwill impairment of $0.3 million in the three months ended June 30, 2017, which was based on the fair value of these net assets as implied by the estimated purchase price. The changes in the carrying amount of goodwill in each of our reporting segments for the nine months ended September 30, 2017, are as follows:
The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets.
Amortization expense of intangible assets was $5.1 million and $1.9 million for the three months ended September 30, 2016 and 2017. Amortization expense of intangible assets was $15.4 million and $11.2 million for the nine months ended September 30, 2016 and 2017. The following is a schedule of future amortization expense related to finite-lived intangible assets as of September 30, 2017.
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Convertible Promissory Note Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||
Convertible Promissory Note Receivable | Convertible Promissory Note Receivable On September 1, 2017, we completed the sale of Ticketfly, our ticketing service segment, to Eventbrite for an aggregate unadjusted purchase price of $200.0 million. The aggregate unadjusted purchase price consists of $150.0 million in cash and a $50.0 million Convertible Promissory Note, which were paid and issued at the closing of the transaction. The Convertible Promissory Note will be due five years from its issuance date (the "Convertible Promissory Note Maturity Date") and will accrue interest at a rate of 6.5% per annum, payable quarterly in cash or in-kind for the first year at the discretion of Eventbrite, and in cash thereafter. Prior to the Convertible Promissory Note Maturity Date, the Convertible Promissory Note is convertible at our option into shares of Eventbrite’s common stock. The Convertible Promissory Note may be prepaid at any time. The Convertible Promissory Note was recorded at its fair value of $36.2 million as of the issuance date of September 1, 2017, which resulted in a discount of $13.8 million. The note was further reduced by $2.5 million in purchase price adjustments. As of September 30, 2017, the balance of the Convertible Promissory Note also included $0.3 million in interest receivable and $0.2 million in accretion of the discount, for a total balance of $34.1 million. The fair value of the Convertible Promissory Note was based on a methodology that combines inputs based on comparable debt instruments and market-corroborated inputs with quantitative pricing models. At issuance, our Convertible Promissory Note was classified as Level 3 within the fair value hierarchy because the fair value was based on unobservable inputs in an inactive market. However, our Convertible Promissory Note will not be remeasured at each reporting date. The discount on the Convertible Promissory Note is being amortized to interest income using the effective interest method over the period from the date of issuance through the Convertible Promissory Note Maturity Date. The following table outlines the effective interest rate, contractually stated interest income and amortization of the discount for the Convertible Promissory Note:
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Debt Instruments |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments | Debt Instruments Long-term debt, net consisted of the following:
Convertible Debt Offering On December 9, 2015, we completed an unregistered Rule 144A offering for the issuance of $345.0 million aggregate principal amount of our 1.75% Convertible Senior Notes due 2020 (the "Notes"). In connection with the issuance of the Notes, we entered into capped call transactions with the initial purchaser of the Notes and an additional financial institution ("capped call transactions"). The net proceeds from the sale of the Notes were approximately $336.5 million, after deducting the initial purchasers' fees and other estimated expenses. We used approximately $43.2 million of the net proceeds to pay the cost of the capped call transactions. The Notes are unsecured, senior obligations of Pandora, and interest is payable semi-annually at a rate of 1.75% per annum. The Notes will mature on December 1, 2020, unless earlier repurchased or redeemed by Pandora or converted in accordance with their terms prior to such date. Prior to July 1, 2020, the Notes are convertible at the option of holders only upon the occurrence of specified events or during certain periods as further described in Note 7 "Debt Instruments" in our Annual Report on Form 10-K for the year ended December 31, 2016; thereafter, until the second scheduled trading day prior to maturity, the Notes will be convertible at the option of holders at any time. The Notes were separated into debt and equity components and assigned a fair value. The value assigned to the debt component is the estimated fair value as of the issuance date of similar debt without the conversion feature. The difference between the cash proceeds and this estimated fair value represents the value which has been assigned to the equity component and recorded as a debt discount. The debt discount is being amortized using the effective interest method over the period from the date of issuance through the December 1, 2020 maturity date. The valuation of the Notes is further described in Note 7 "Debt Instruments" in our Annual Report on Form 10-K for the year ended December 31, 2016. The following table outlines the effective interest rate, contractually stated interest expense and costs related to the amortization of the discount for the Notes:
The total estimated fair value of the Notes as of September 30, 2017 was $323.8 million. The fair value was determined using a methodology that combines direct market observations with quantitative pricing models to generate evaluated prices. We consider the fair value of the Notes to be a Level 2 measurement due to the limited trading activity of the Notes. The closing price of our common stock was $7.70 on September 30, 2017, which was less than the initial conversion price for the Notes of approximately $16.42 per share. As such, the if-converted value of the Notes was less than the principal amount of $345.0 million. Credit Facility We are party to a $120.0 million credit facility with a syndicate of financial institutions, which expires on September 12, 2018. In September 2016, we borrowed $90.0 million from the credit facility to enhance our working capital position. This amount was repaid in full in September 2017. As of September 30, 2017, we had no outstanding borrowings, $1.2 million in letters of credit outstanding and $118.8 million of available borrowing capacity under the credit facility. We are in compliance with all financial covenants associated with the credit facility as of September 30, 2017. |
Redeemable Convertible Preferred Stock |
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Temporary Equity Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock In June 2017, we entered into an agreement with Sirius XM Radio, Inc. ("Sirius XM") to sell 480,000 shares of Series A redeemable convertible preferred stock ("Series A") for $1,000 per share, with gross proceeds of $480.0 million. The Series A shares were issued in two rounds: an initial closing of 172,500 shares for $172.5 million that occurred on June 9, 2017 upon signing the agreement with Sirius XM, and an additional closing of 307,500 shares for $307.5 million that occurred on September 22, 2017 upon the receipt of antitrust clearance and the completion of other customary closing conditions. In the three and nine months ended September 30, 2017, total proceeds from the initial and additional closing, net of preferred stock issuance costs of $15.3 million and $29.3 million, were $292.2 million and $450.7 million, respectively. Conversion Feature Holders of the Series A shares have the option to convert their shares plus any accrued dividends into common stock. We have the right to settle the conversion in cash, common stock or a combination thereof. The conversion rate for the Series A is initially 95.2381 shares of common stock per each share of Series A, which is equivalent to an initial conversion price of approximately $10.50 per share of our common stock, and is subject to adjustment in certain circumstances. Dividends on the Series A will accrue on a daily basis, whether or not declared, and will be payable on a quarterly basis at a rate of 6% per year. We have the option to pay dividends in cash when authorized by the Board and declared by the Company or accumulate dividends in lieu of paying cash. Dividends accumulated in lieu of paying cash will continue to accrue and accumulate at rate of 6% per year. Redemption Feature Under certain circumstances, we will have the right to redeem the Series A on or after the date which is three years after the additional closing. The Series A holders will have the right to require us to redeem the Series A on or after the date which is five years after the additional closing. Any optional redemption of the Series A will be at a redemption price equal to 100% of the liquidation preference, plus accrued and unpaid dividends to, but excluding, the redemption date. We have the option to redeem the Series A in cash, common stock or a combination thereof. Fundamental Changes If certain fundamental changes involving the Company occur, including change in control or liquidation, the Series A will be redeemed subject to certain adjustments, as determined by the date of the fundamental change. The change in control amount is the greater of the redemption value of 100% of the liquidation preference, plus all accrued dividends unpaid through the fifth anniversary of the additional closing, assuming the shares would have remained outstanding through that date, or the price that common stockholders would receive if the Series A shares had been redeemed immediately prior to the announcement of the change in control. Recognition Since the redemption of the Series A is contingently or optionally redeemable and therefore not certain to occur, the Series A is not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity. As the Series A is redeemable at the option of the holders and is redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company's control, we have classified the Series A in the redeemable convertible preferred stock line item in our condensed consolidated balance sheets. We did not identify any embedded features that would require bifurcation from the equity-like host instrument. We have elected to recognize the Series A at the redemption value at each period end, and have recorded the issuance costs through retained earnings as a deemed preferred stock dividend. In addition, we have elected to account for the 6% dividend at the stated rate. As of September 30, 2017, redeemable convertible preferred stock consisted of the following:
Contract Termination Fees |
Stock-based Compensation Plans and Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Plans and Awards | Stock-based Compensation Plans and Awards ESPP The ESPP allows eligible employees to purchase shares of our common stock through payroll deductions of up to 15% of their eligible compensation. The ESPP provides for six-month offering periods, commencing in February and August of each year. We estimate the fair value of shares to be issued under the ESPP on the first day of the offering period using the Black-Scholes valuation model. The determination of the fair value is affected by our stock price on the first date of the offering period, as well as other assumptions including the risk-free interest rate, the estimated volatility of our stock price over the term of the offering period, the expected term of the offering period and the expected dividend rate. Stock-based compensation expense related to the ESPP is recognized on a straight-line basis over the offering period. Forfeitures are recognized as they occur. The following assumptions for the Black-Scholes option pricing model were used to determine the per-share fair value of shares to be granted under the ESPP:
During the three months ended September 30, 2016 and 2017, we withheld $2.6 million and $1.9 million in contributions from employees and recognized $0.9 million and $1.0 million of stock-based compensation expense related to the ESPP, respectively. During the nine months ended September 30, 2016 and 2017, we withheld $6.4 million and $8.0 million in contributions from employees and recognized $2.3 million and $2.9 million of stock-based compensation expense related to the ESPP, respectively. In the three months ended September 30, 2016 and 2017, 643,562 and 739,922 shares of common stock were issued under the ESPP. In the nine months ended September 30, 2016 and 2017, 1,254,910 and 1,287,687 shares of common stock were issued under the ESPP. Employee Stock-Based Awards Our 2011 Equity Incentive Plan (the "2011 Plan") provides for the issuance of stock options, restricted stock units and other stock-based awards to our employees. The 2011 Plan is administered by the compensation committee of our board of directors. Stock options We measure stock-based compensation expense for stock options at the grant date fair value of the award and recognize expense on a straight-line basis over the requisite service period, which is generally the vesting period. We estimate the fair value of stock options using the Black-Scholes option-pricing model. During the three months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from stock options of approximately $2.2 million and $0.9 million. During the nine months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from stock options of approximately $11.3 million and $6.9 million. The per-share fair value of each stock option was determined on the grant date using the Black-Scholes option pricing model using the following assumptions:
There were no options granted in the three and nine months ended September 30, 2016. RSUs The fair value of RSUs is expensed ratably over the vesting period. RSUs typically have an initial annual cliff vest and then vest quarterly thereafter over the service period, which is generally three to four years. During the three months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from RSUs of approximately $28.2 million and $27.7 million. During the nine months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from RSUs of approximately $87.2 million and $86.5 million. MSUs In March 2015, the compensation committee of the board of directors granted performance awards consisting of market stock units to certain key executives under our 2011 Plan. MSUs granted in March 2015 are earned as a function of Pandora’s TSR performance measured against that of the Russell 2000 Index across three performance periods:
For each performance period, a "performance multiplier" is calculated by comparing Pandora’s TSR for the period to the Russell 2000 Index TSR for the same period, using the average adjusted closing stock price of Pandora stock, and the Russell 2000 Index, for ninety calendar days prior to the beginning of the performance period and the last ninety calendar days of the performance period. In each period, the target number of shares will vest if the Pandora TSR is equal to the Russell 2000 Index TSR. For each percentage point that the Pandora TSR falls below the Russell 2000 Index TSR for the period, the performance multiplier is decreased by three percentage points. The performance multiplier is capped at 100% for the One-Year and Two-Year Performance Periods. However, the full award is eligible for a payout up to 200% of target, less any shares earned in prior periods, in the Three-Year Performance Period. Specifically, for each percentage point that the Pandora TSR exceeds the Russell 2000 Index TSR for the Three-Year Performance Period, the performance multiplier is increased by 2%. As such, the ability to exceed the target number of shares is determined exclusively with respect to Pandora's three-year TSR during the term of the award. We have determined the grant-date fair value of the MSUs using a Monte Carlo simulation performed by a third-party valuation firm. We recognize stock-based compensation for the MSUs over the requisite service period, which is approximately three years, using the accelerated attribution method. There were no MSUs granted in the three and nine months ended September 30, 2016 or 2017. During the three months ended September 30, 2016 and 2017, we recorded approximately $0.2 million and $0.1 million in stock-based compensation expense from MSUs. During the nine months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from MSUs of approximately $0.6 million and $0.3 million. In February 2016 and January 2017, the compensation committee of the board of directors certified the results of the One-Year Performance Period and Two-Year Performance Period of the 2015 MSU grant, which concluded December 31, 2015 and 2016. During the One-Year Performance Period, our relative TSR declined 26 percentage points relative to the Russell 2000 Index TSR for the period, which resulted in the vesting of the One-Year Performance Period at 22% of the one-third vesting opportunity for the period. During the Two-Year Performance Period, our relative TSR declined 48 percentage points relative to the Russell 2000 Index TSR for the period, which resulted in vesting of the Two-Year Performance Period at 0% of the one-third vesting opportunity for the period. PSUs In April and October 2016, the compensation committee of the board of directors granted 2016 Performance Awards consisting of stock-settled performance-based RSUs to certain key executives under our 2011 Plan. PSUs granted in April and October 2016 have a vesting period that includes a four-year service period, during which one fourth of the awards will vest after one year and the remainder will vest quarterly thereafter. The PSUs are earned when our trailing average ninety-day stock price is equal to or greater than $20.00. If the trailing average ninety-day stock price does not equal or exceed $20.00 on the applicable vesting date, then the portion of the award that was scheduled to vest on such vesting date shall not vest but shall vest on the next vesting date on which the trailing average ninety-day stock price equals or exceeds $20.00. Any portion of the award that remains unvested as of the final vesting date shall be canceled and forfeited. We have determined the grant-date fair value of the PSUs granted in April and October 2016 using a Monte Carlo simulation performed by a third-party valuation firm. We recognize stock-based compensation for the PSUs over the requisite service period, which is approximately four years, using the accelerated attribution method. During the nine months ended September 30, 2016 we granted 1,725,000 PSUs at a total grant-date fair value of $8.7 million. There were no PSUs granted in the three and nine months ended September 30, 2017. During the three months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from PSUs of approximately $1.3 million and $0.3 million. During the nine months ended September 30, 2016 and 2017, we recorded stock-based compensation expense from PSUs of approximately $2.4 million and $1.7 million. Stock-based Compensation Expense Stock-based compensation expense related to all employee and non-employee stock-based awards was as follows:
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by giving effect to all potential shares of common stock, including stock options, restricted stock units, market stock units, performance-based RSUs, potential ESPP shares and instruments convertible into common stock, to the extent dilutive. Basic and diluted net loss per common share were the same for the three and nine months ended September 30, 2016 and 2017, as the inclusion of all potential common shares outstanding would have been anti-dilutive. The following table sets forth the computation of historical basic and diluted net loss per common share:
The following potential common shares outstanding were excluded from the computation of diluted net loss per common share because including them would have been anti-dilutive:
On June 9, 2017, we entered into an agreement with Sirius XM to sell 480,000 shares of Series A, of which 307,500 shares and 480,000 shares were issued in the three and nine months ended September 30, 2017. Under the treasury stock method, the Series A will generally have a dilutive impact on earnings per share if our average stock price for the period exceeds approximately $10.50 per share of our common stock, the conversion price of the Series A. For the period from the issuance of the offering through September 30, 2017, the conversion feature of the Series A was anti-dilutive, as our average stock price was less than the conversion price. On December 9, 2015, we completed an offering of our 1.75% convertible senior notes due 2020. Under the treasury stock method, the Notes will generally have a dilutive impact on earnings per share if our average stock price for the period exceeds approximately $16.42 per share of our common stock, the conversion price of the Notes. For the period from the issuance of the offering of the Notes through September 30, 2017, the conversion feature of the Notes was anti-dilutive, as our average stock price was less than the conversion price. |
Restructuring Charges |
9 Months Ended |
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Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges Reduction in Force On January 12, 2017, we announced a reduction in force plan affecting approximately 7% of our U.S. employee base, excluding Ticketfly. In the nine months ended September 30, 2017, we incurred approximately $6.0 million of cash expenditures, substantially all of which were related to employee severance and benefits costs. In the nine months ended September 30, 2017, total reduction in force expenses were $5.6 million, which was lower than cash reduction in force costs due to a credit related to non-cash stock-based compensation expense reversals for unvested equity awards. The reduction in force plan was completed and all amounts were paid in the nine months ended September 30, 2017. Australia and New Zealand Exit Costs |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The interim unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") along with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission ("SEC") Regulation S-X, and include the accounts of Pandora and our wholly owned subsidiaries. |
Consolidation | All intercompany balances and transactions have been eliminated in consolidation. In the opinion of our management, the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position for the periods presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period and should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016. |
Reclassification | Certain changes in presentation have been made to conform the prior period presentation to current period reporting. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates are used in several areas including, but not limited to determining accrued content acquisition costs, amortization of minimum guarantees under content acquisition agreements, selling prices for elements sold in multiple-element arrangements, the allowance for doubtful accounts, the fair value of stock options, market stock units ("MSUs"), stock-settled performance-based restricted stock units ("PSUs"), the Employee Stock Purchase Plan ("ESPP"), the benefit from (provision for) income taxes, the fair value of the convertible subordinated promissory note ("Convertible Promissory Note"), the fair value of acquired property and equipment, intangible assets and goodwill and the useful lives of acquired intangible assets. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements could be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. |
Stock-Based Compensation—Restricted Stock Units and Stock Options | Stock-based awards granted to employees, including grants of restricted stock units ("RSUs") and stock options, are recognized as expense in our statements of operations based on their grant date fair value. We recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally three to four years. We estimate the fair value of RSUs at our stock price on the grant date. We generally estimate the grant date fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model is affected by our stock price on the date of grant, the expected stock price volatility over the expected term of the award, which is based on projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award and expected dividends. Stock-based compensation expense is recorded in the statement of operations for only those stock-based awards that will vest. In the first quarter of 2017 we adopted new accounting guidance from the Financial Accounting Standards Board ("FASB") on stock compensation, or ASU 2016-09, as described in "Recently Adopted Accounting Standards" below and have elected to account for forfeitures as they occur, rather than estimating expected forfeitures. In addition, we recognize all income tax effects of awards in the income statement when the awards vest or are settled as required by ASU 2016-09. |
Net Loss per Common Share | Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by giving effect to all potential shares of common stock, including stock options, restricted stock units, market stock units, performance-based RSUs, potential ESPP shares and instruments convertible into common stock, to the extent dilutive. Basic and diluted net loss per common share were the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. |
Concentration of Credit Risk | For the three and nine months ended September 30, 2016 and 2017, we had no customers that accounted for more than 10% of our total revenue. As of December 31, 2016 and September 30, 2017, we had no customers that accounted for more than 10% of our total accounts receivable. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which amends the existing accounting standards for revenue recognition. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue. Under the guidance, revenue is recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard is effective for public entities with annual and interim reporting periods beginning after December 15, 2017. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt the guidance. We expect to adopt ASU 2014-09 as of January 1, 2018 using the modified retrospective method. We have completed our initial assessment and do not believe there will be a material impact to our condensed consolidated financial statements for the majority of our advertising and subscription revenue arrangements. We are finalizing the impact of ASU 2014-09 and are continuing to evaluate the expected impact on our business processes, systems and controls. We expect to complete our assessment of the effects of adopting ASU 2014-09 during the fourth quarter of 2017, and we will continue our evaluation of ASU 2014-09, including how it may impact new arrangements we enter into as well as new or emerging interpretations of the standard, through the date of adoption. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires lessees to put most leases on their balance sheets and recognize expenses on their income statements and also eliminates the real estate-specific provisions for all entities. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We have completed our initial assessment and expect to adopt ASU 2016-02 as of January 1, 2019 using the modified retrospective method. We expect the potential impact of adopting ASU 2016-02 to be material to our lease liabilities and assets on our consolidated balance sheets. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Credit Losses—Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 will replace today’s incurred loss approach with an expected loss model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within that fiscal year, although early adoption is permitted. We are currently evaluating the impact that this standard update will have on our condensed consolidated financial statements. In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance is effective prospectively for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. We do not expect the adoption of ASU 2017-09 will have a material impact on our financial statements. Recently Adopted Accounting Standards In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718) ("ASU 2016-09"). ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. Additionally, it allows an employer to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. We adopted this guidance in the first quarter of 2017 using the modified retrospective transition method. Upon adoption, we recognized the previously unrecognized excess tax benefits as of January 1, 2017 through retained earnings. The previously unrecognized excess tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance. As a result, the net impact resulted in no effect on net deferred tax assets or our accumulated deficit as of January 1, 2017. Without the valuation allowance, the Company’s net deferred tax assets would have increased by approximately $142.0 million. Additionally, we elected to account for forfeitures as they occur, rather than estimating expected forfeitures. The net cumulative effect of this change was an increase to additional paid in capital as of January 1, 2017 of $1.2 million. |
Commitments and Contingencies | We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Our management periodically evaluates developments that could affect the amount, if any, of liability that we have previously accrued and make adjustments as appropriate. Determining both the likelihood and the estimated amount of a loss requires significant judgment, and management’s judgment may be incorrect. |
Cash, Cash Equivalents and Investments (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash, cash equivalents and investments | Cash, cash equivalents and investments consisted of the following:
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Summary of available-for-sale securities' adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category | The following tables summarize our available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of December 31, 2016 and September 30, 2017.
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Schedule of available-for-sale investments by contractual maturity date | The following table presents available-for-sale securities by contractual maturity date as of December 31, 2016 and September 30, 2017.
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Summary of available-for-sale securities' fair value and gross unrealized losses | The following tables summarize our available-for-sale securities’ fair value and gross unrealized losses aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position as of December 31, 2016 and September 30, 2017.
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Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of financial assets and liabilities inputs | The following fair value hierarchy tables categorize information regarding our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and September 30, 2017:
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Dispositions (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying amounts of major classes of assets and liabilities and loss before income taxes | The following table provides the carrying amounts of the major classes of assets and liabilities of Ticketfly and KXMZ that were disposed of in the three months ended September 30, 2017.
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill in each of our reporting segments for the nine months ended September 30, 2017, are as follows:
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Summary of gross carrying amounts and accumulated amortization of intangible assets - finite lived | The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets.
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Summary of gross carrying amounts of intangible assets - indefinite lived | The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets.
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Schedule of future amortization expense related to finite-lived intangible assets | The following is a schedule of future amortization expense related to finite-lived intangible assets as of September 30, 2017.
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Convertible Promissory Note Receivable (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Interest Rates And Amortization Discount | The following table outlines the effective interest rate, contractually stated interest income and amortization of the discount for the Convertible Promissory Note:
|
Debt Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Long-term debt, net consisted of the following:
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Summary of the effective interest rate, contractually stated interest expense and costs related to amortization of discount for the Notes | The following table outlines the effective interest rate, contractually stated interest expense and costs related to the amortization of the discount for the Notes:
|
Redeemable Convertible Preferred Stock (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of redeemable convertible preferred stock | As of September 30, 2017, redeemable convertible preferred stock consisted of the following:
|
Stock-based Compensation Plans and Awards (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used for determining the per-share fair value of shares granted under the ESPP | The per-share fair value of each stock option was determined on the grant date using the Black-Scholes option pricing model using the following assumptions:
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Schedule of stock-based compensation expenses related to all employee and non-employee stock-based awards | Stock-based compensation expense related to all employee and non-employee stock-based awards was as follows:
|
Net Loss Per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the computation of historical basic and diluted net loss per share | The following table sets forth the computation of historical basic and diluted net loss per common share:
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Schedule of potential common shares outstanding excluded from the computation of diluted net loss per share | The following potential common shares outstanding were excluded from the computation of diluted net loss per common share because including them would have been anti-dilutive:
|
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Jan. 01, 2017 |
|
ASU 2016-09 | Additional Paid-in Capital | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cumulative effect | $ 1.2 | |
ASU 2016-09 | Pro Forma | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred tax asset | $ 142.0 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Requisite service period | 3 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Requisite service period | 4 years |
Cash, Cash Equivalents and Investments - Schedule of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Cash, Cash Equivalents and Investments | ||||
Cash and cash equivalents | $ 493,181 | $ 199,944 | $ 207,695 | $ 334,667 |
Short-term investments | 6,249 | 37,109 | ||
Long-term investments | 0 | 6,252 | ||
Cash, cash equivalents and investments | 499,430 | 243,305 | ||
Cash | ||||
Cash, Cash Equivalents and Investments | ||||
Cash and cash equivalents | 405,677 | 144,192 | ||
Money market funds | ||||
Cash, Cash Equivalents and Investments | ||||
Cash and cash equivalents | 87,504 | 55,752 | ||
Corporate debt securities | ||||
Cash, Cash Equivalents and Investments | ||||
Short-term investments | 6,249 | 37,109 | ||
Long-term investments | $ 0 | $ 6,252 |
Cash, Cash Equivalents and Investments - Summary of Available-for-sale Securities' Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value by Significant Investment Category (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | $ 93,755 | $ 99,165 |
Unrealized Gains | 0 | 3 |
Unrealized Losses | (2) | (55) |
Fair Value | 93,753 | 99,113 |
Money market funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 87,504 | 55,752 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 87,504 | 55,752 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 6,251 | 43,413 |
Unrealized Gains | 0 | 3 |
Unrealized Losses | (2) | (55) |
Fair Value | $ 6,249 | $ 43,361 |
Cash, Cash Equivalents and Investments - Schedule of Available-for-sale Investments by Contractual Maturity Date (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Adjusted Cost | ||
Due in one year or less | $ 93,755 | $ 92,914 |
Due after one year through three years | 6,251 | |
Total | 93,755 | 99,165 |
Fair Value | ||
Due in one year or less | 93,753 | 92,861 |
Due after one year through three years | 6,252 | |
Total | $ 93,753 | $ 99,113 |
Cash, Cash Equivalents and Investments - Summary of Available-for-sale Securities' Fair Value and Gross Unrealized Losses (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value | ||
Twelve Months or Less | $ 6,249 | $ 34,257 |
More than Twelve Months | 0 | 4,099 |
Total | 6,249 | 38,356 |
Gross Unrealized Losses | ||
Twelve Months or Less | (2) | (52) |
More than Twelve Months | 0 | (3) |
Total | (2) | (55) |
Corporate debt securities | ||
Fair Value | ||
Twelve Months or Less | 6,249 | 34,257 |
More than Twelve Months | 0 | 4,099 |
Total | 6,249 | 38,356 |
Gross Unrealized Losses | ||
Twelve Months or Less | (2) | (52) |
More than Twelve Months | 0 | (3) |
Total | $ (2) | $ (55) |
Cash, Cash Equivalents and Investments - Narrative (Details) |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017
USD ($)
security
|
Sep. 30, 2017
USD ($)
security
|
|
Cash and Cash Equivalents [Abstract] | ||
Number of owned securities that were in an unrealized loss position | security | 3 | 3 |
Other-than-temporary investment losses | $ 0 | |
Unrealized losses deemed to be other-than-temporary, recognized | $ 0 | $ 0 |
Fair Value - Schedule of Fair Value of Financial Assets and Liabilities Inputs (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets: | ||
Total assets measured at fair value | $ 6,249 | $ 43,361 |
Corporate debt securities | ||
Assets: | ||
Total assets measured at fair value | 6,249 | 43,361 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Corporate debt securities | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets measured at fair value | 6,249 | 43,361 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Assets: | ||
Total assets measured at fair value | $ 6,249 | $ 43,361 |
Fair Value - Narrative (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 6,249,000 | $ 43,361,000 |
Money market funds | Fair value measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value | 87,500,000 | 55,800,000 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Liabilities measured at fair value | $ 0 | $ 0 |
Commitments and Contingencies - Narrative (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||
Content acquisition costs | $ 111.5 | $ 257.3 |
Amortization of prepaid content acquisition costs | 31.3 | 177.2 |
Total future minimum guarantee payments | 472.5 | 472.5 |
Future minimum guarantee commitments to be paid this year | 65.0 | 65.0 |
Indemnification agreement | ||
Loss Contingencies [Line Items] | ||
Accrued indemnification liabilities | $ 5.1 | $ 5.1 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Goodwill [Line Items] | |||||
Goodwill impairment | $ 0 | $ 0 | $ 131,997 | $ 0 | |
Amortization expense of intangible assets | $ 1,900 | $ 5,100 | $ 11,200 | $ 15,400 | |
Sold | Ticketfly | |||||
Goodwill [Line Items] | |||||
Asset Impairment Charges | $ 131,700 | ||||
Fair value of net assets | 184,500 | ||||
Sold | KXMZ | |||||
Goodwill [Line Items] | |||||
Goodwill impairment | $ 300 |
Goodwill and Intangible Assets - Schedule of Future Amortization Expense Related to Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2017 | $ 1,896 | |
2018 | 6,066 | |
2019 | 5,546 | |
2020 | 5,251 | |
2021 | 727 | |
Thereafter | 1,818 | |
Net Carrying Value | $ 21,304 | $ 90,232 |
Convertible Promissory Note Receivable - Narrative (Details) - USD ($) $ in Thousands |
Sep. 01, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Convertible promissory note receivable | $ 34,132 | $ 0 | |
Convertible promissory note | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amortization of discount | 171 | ||
Convertible promissory note | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Convertible promissory note receivable | $ 36,200 | 34,100 | |
Cash price adjustments | 2,500 | ||
Interest receivable | $ 300 | ||
Ticketfly | Sold | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total purchase price | 200,000 | ||
Cash portion of purchase price | 150,000 | ||
Convertible subordinated promissory note | 50,000 | ||
Unamortized discount | (13,800) | ||
Cash price adjustments | $ 2,600 | ||
Ticketfly | Sold | Convertible promissory note | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Note term | 5 years | ||
Stated interest rate | 6.50% |
Convertible Promissory Note Receivable - Schedule of Interest Rates And Amortization Discount (Details) - Convertible promissory note $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Effective interest rate | 14.73% |
Contractually stated interest income | $ 258 |
Amortization of discount | $ 171 |
Debt Instruments - Schedule of Long-Term Debt (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
Dec. 09, 2015 |
---|---|---|---|
Debt Instrument [Line Items] | |||
1.75% convertible senior notes due 2020 | $ 0 | ||
Unamortized discount and deferred issuance costs | (77,604,000) | $ (92,753,000) | |
Long-term debt, net | 267,396,000 | 342,247,000 | |
Line of credit | |||
Debt Instrument [Line Items] | |||
Credit facility | 0 | 90,000,000 | |
Convertible debt | 1.75% convertible senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
1.75% convertible senior notes due 2020 | $ 345,000,000 | $ 345,000,000 | |
Unrealized gain | 1.75% | 1.75% |
Debt Instruments - Convertible Debt Offering (Details) - USD ($) |
Dec. 09, 2015 |
Sep. 30, 2017 |
---|---|---|
Debt Instruments | ||
Closing price of common stock (in dollars per share) | $ 7.70 | |
Convertible debt | Notes | ||
Debt Instruments | ||
Aggregate principal amount | $ 345,000,000.0 | |
Unrealized gain | 1.75% | 1.75% |
Net proceeds from sale of debt | $ 336,500,000 | |
Payments for capped call transactions | $ 43,200,000 | |
Debt instrument, conversion price (in dollars per share) | $ 16.42 | |
Value of debt | $ 323,800,000 |
Debt Instruments - Summary of the Effective Interest Rate, Contractually Stated Interest Expense and Costs Related to Amortization of Discount for the Notes (Details) - Convertible debt - Notes - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Debt Instrument [Line Items] | ||||
Effective interest rate | 10.18% | 10.18% | 10.18% | 10.18% |
Contractually stated interest expense | $ 1,509 | $ 1,505 | $ 4,511 | $ 4,536 |
Amortization of discount | $ 5,135 | $ 4,649 | $ 14,934 | $ 13,587 |
Debt Instruments - Credit Facility (Details) - USD ($) |
1 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2017 |
|
Debt Instruments | ||
Outstanding borrowings | $ 0 | |
Line of credit | ||
Debt Instruments | ||
Maximum borrowings available | 120,000,000.0 | |
Credit facility | $ 90,000,000.0 | |
Available borrowing capacity | 118,800,000 | |
Letter of credit | ||
Debt Instruments | ||
Outstanding amount | $ 1,200,000 |
Redeemable Convertible Preferred Stock - Schedule of Redeemable Convertible Preferred Stock (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Temporary Equity [Line Items] | ||
Accretion of issuance costs | $ 29,259 | $ 0 |
Series A convertible preferred stock | ||
Temporary Equity [Line Items] | ||
Series A redeemable convertible preferred stock | 480,000 | |
Issuance costs | (29,259) | |
Accretion of issuance costs | 29,259 | |
Stock dividend payable to preferred stockholders | 3,588 | |
Redeemable convertible preferred stock | $ 483,588 |
Stock-based Compensation Plans and Awards - ESPP narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 30,101 | $ 32,754 | $ 98,327 | $ 103,841 |
Employee stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of eligible compensation to purchase common stock through payroll deductions (as a percent) | 15.00% | 15.00% | ||
Offering period | 6 months | |||
Contributions from employees withheld | $ 1,900 | 2,600 | $ 8,000 | 6,400 |
Stock-based compensation expense | $ 1,000 | $ 900 | $ 2,900 | $ 2,300 |
Common stock issued (in shares) | 739,922 | 643,562 | 1,287,687 | 1,254,910 |
Stock-based Compensation Plans and Awards - Stock options narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 30,101 | $ 32,754 | $ 98,327 | $ 103,841 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 900 | $ 2,200 | $ 6,900 | $ 11,300 |
Common stock issued (in shares) | 0 | 0 |
Stock-based Compensation Plans and Awards - RSUs Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 30,101 | $ 32,754 | $ 98,327 | $ 103,841 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 27,700 | $ 28,200 | $ 86,500 | $ 87,200 |
RSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
RSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years |
Net Loss Per Common Share - Schedule of the Computation of Historical Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Numerator | ||||
Net loss | $ (66,243) | $ (61,534) | $ (473,646) | $ (252,969) |
Less: Stock dividend payable and transaction costs | 18,319 | 0 | 32,847 | 0 |
Net loss available to common stockholders | $ (84,562) | $ (61,534) | $ (506,493) | $ (252,969) |
Denominator | ||||
Weighted-average basic and diluted common shares | 245,810 | 232,139 | 241,579 | 229,524 |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.34) | $ (0.27) | $ (2.10) | $ (1.10) |
Net Loss Per Common Share - Schedule of Potential Common Shares Outstanding Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Anti-dilutive securities | ||
Total common stock equivalents (in shares) | 29,541 | 36,123 |
Options to purchase common stock | ||
Anti-dilutive securities | ||
Total common stock equivalents (in shares) | 6,206 | 9,665 |
Restricted stock units | ||
Anti-dilutive securities | ||
Total common stock equivalents (in shares) | 20,990 | 23,554 |
Performance awards | ||
Anti-dilutive securities | ||
Total common stock equivalents (in shares) | 1,486 | 2,315 |
Employee stock | ||
Anti-dilutive securities | ||
Total common stock equivalents (in shares) | 859 | 589 |
Net Loss Per Common Share - Narrative (Details) - $ / shares |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Jun. 09, 2017 |
Dec. 09, 2015 |
|
1.75% convertible senior notes due 2020 | Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, conversion price (in dollars per share) | $ 16.42 | ||||
Unrealized gain | 1.75% | 1.75% | 1.75% | ||
Series A convertible preferred stock | |||||
Debt Instrument [Line Items] | |||||
Agreement to sell shares (in shares) | 480,000 | 480,000 | |||
Shares issued, shares | 307,500 | 480,000 | |||
Conversion price (in dollars per share) | $ 10.50 | $ 10.50 | |||
Series A convertible preferred stock | Initial closing | |||||
Debt Instrument [Line Items] | |||||
Agreement to sell shares (in shares) | 172,500 |
Restructuring Charges (Details) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Jun. 27, 2017
employee
|
Jan. 12, 2017 |
Sep. 30, 2017
USD ($)
|
|
Restructuring and Related Activities [Abstract] | |||
Reduction in force | 7.00% | ||
Restructuring Cost and Reserve [Line Items] | |||
Reduction of headcount, employees | employee | 50 | ||
Employee severance and benefits costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected cash expenditures | $ 6.0 | ||
Total reduction in force expenses | $ 5.6 |
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