Segment and Geographic Information

3 Months Ended

Mar. 31, 2020

11. Segment and Geographic Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its chief executive officer.

The Company's operating and reportable segments are the U.S. and International. These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA. Adjusted EBITDA is defined as loss before depreciation and amortization, equity-based compensation and related taxes, interest (expense), net, other (expense) income, net, provision for income taxes, net, non-recurring items, and other items not indicative of our ongoing operating performance. These charges are excluded from evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis as these costs may vary independent of business performance.

The Company allocates certain operating expenses to the operating and reportable segments, including customer service and merchant fees and selling, operations, technology, general and administrative based on the usage and relative contribution provided to the segments. It excludes from the allocations certain operating expense lines, including depreciation and amortization, equity-based compensation and related taxes, interest (expense), net, other (expense) income, net, and provision for income taxes, net. There are no net revenue transactions between the Company's reportable segments.

U.S.

The U.S. segment primarily consists of amounts earned through product sales through the Company's family of sites in the U.S. and through websites operated by third parties in the U.S. The U.S. net revenue for the three months ended March 31, 2019 includes $13.6 million of net revenue previously classified as other net revenue.

International

The International segment primarily consists of amounts earned through product sales through the Company's international sites.

Net revenue from external customers for each group of similar products and services are not reported to the CODM. Separate identification of this information for purposes of segment disclosure is impractical, as it is not readily available and the cost to develop it would be excessive. No individual country outside of the U.S. provided greater than 10% of consolidated net revenue.

The following tables present net revenues and Adjusted EBITDA attributable to the Company's reportable segments for the periods presented:



	Three months ended March 31,
	2020		2019
	(in thousands)
U.S. net revenue	$	1,974,983	$	1,657,698
International net revenue	355,080		287,131
Total net revenue	$	2,330,063	$	1,944,829



	Three months ended March 31,
	2020			2019
	(in thousands)
Adjusted EBITDA:
U.S.	$	(45,095	)	$	(27,782	)
International	(82,182		)	(74,436		)
Total reportable segments Adjusted EBITDA	(127,277		)	(102,218		)
Less: reconciling items (1)	(158,588		)	(98,171		)
Net loss	$	(285,865	)	$	(200,389	)

(1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net loss:



	Three months ended March 31,
	2020		2019
	(in thousands)
Depreciation and amortization	$	66,843	$	39,583
Equity-based compensation and related taxes	63,992		51,833
Interest expense, net	22,218		9,238
Other expense (income), net	246		(3,078		)
Provision for income taxes, net	1,333		595
Other (1)	3,956		—
Total reconciling items	$	158,588	$	98,171

(1) The Company recorded $4.0 million in the three months ended March 31, 2020 in selling, operations, technology, general and administrative expenses in the Consolidated and Condensed Statements of Operations related to severance costs associated with February 2020 workforce reductions.