(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at October 29, 2021 | |||||||
Class A Common Stock, $0.001 par value per share | ||||||||
Class B Common Stock, $0.001 par value per share |
Page | ||||||||
September 30, 2021 | December 31, 2020 | |||||||||||||
(in thousands, except share and per share data) | ||||||||||||||
Assets: | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Short-term investments | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Other non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders' Deficit: | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 5) | ||||||||||||||
Stockholders’ deficit: | ||||||||||||||
Convertible preferred stock, $ | ||||||||||||||
Class A common stock, par value $ | ||||||||||||||
Class B common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders’ deficit | ( | ( | ||||||||||||
Total liabilities and stockholders’ deficit | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of goods sold | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Customer service and merchant fees | ||||||||||||||||||||||||||
Advertising | ||||||||||||||||||||||||||
Selling, operations, technology, general and administrative | ||||||||||||||||||||||||||
Customer service center impairment and other charges | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
(Loss) income from operations | ( | |||||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (expense), net | ( | ( | ( | |||||||||||||||||||||||
(Loss) income before income taxes | ( | |||||||||||||||||||||||||
Provision (benefit) for income taxes, net | ( | |||||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | $ | |||||||||||||||||||||
(Loss) earnings per share: | ||||||||||||||||||||||||||
Basic | $ | ( | $ | $ | $ | |||||||||||||||||||||
Diluted | $ | ( | $ | $ | $ | |||||||||||||||||||||
Weighted-average number of shares of common stock outstanding used in computing per share amounts: | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | $ | |||||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | ( | ||||||||||||||||||||||
Net unrealized gain (loss) on available-for-sale investments | ( | ( | ||||||||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ | $ |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
Class A and Class B Common Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Shares issued upon conversion of convertible notes | — | — | ||||||||||||||||||||||||||||||||||||
Reacquisition of equity component from repurchases and conversions of convertible notes, net of taxes | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Equity component of issuance of convertible notes, net (Note 4) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Shares issued upon conversion of convertible notes (Note 4) | — | — | — | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | ( | $ | ( | $ | ( |
Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
Class A and Class B Common Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Shares issued upon conversion of convertible notes | — | — | ||||||||||||||||||||||||||||||||||||
Reacquisition of equity component from repurchases and conversions of convertible notes, net of taxes | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Equity component of issuance of convertible notes, net of premium paid on capped calls | — | — | — | — | ||||||||||||||||||||||||||||||||||
— | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Exercise of options to purchase common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Shares issued upon conversion of convertible notes (Note 4) | — | — | ||||||||||||||||||||||||||||||||||||
— | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | ( | $ | ( | $ | ( |
Nine months ended September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Equity-based compensation | ||||||||||||||
Amortization of discount and issuance costs on convertible notes | ||||||||||||||
Loss on impairment | ||||||||||||||
Other non-cash adjustments | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable, net | ( | ( | ||||||||||||
Inventories | ( | |||||||||||||
Prepaid expenses and other current assets | ( | ( | ||||||||||||
Other assets | ||||||||||||||
Accounts payable and other current liabilities | ( | |||||||||||||
Other liabilities | ( | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchase of short- and long-term investments | ( | ( | ||||||||||||
Sale and maturities of short- and long-term investments | ||||||||||||||
Purchase of property and equipment | ( | ( | ||||||||||||
Site and software development costs | ( | ( | ||||||||||||
Other investing activities, net | ( | |||||||||||||
Net cash (for) from investing activities | ( | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||
Proceeds from borrowings | ||||||||||||||
Repayment of borrowings | ( | |||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | ||||||||||||||
Premiums paid for capped call confirmations | ( | |||||||||||||
Payments to extinguish convertible debt | ( | |||||||||||||
Other financing activities, net | ( | |||||||||||||
Net cash (for) from financing activities | ( | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||
Net (decrease) increase in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents: | ||||||||||||||
Beginning of period | ||||||||||||||
End of period | $ | $ | ||||||||||||
Supplemental cash flow information: | ||||||||||||||
Cash paid for interest on long-term debt | $ | $ | ||||||||||||
Issuance of common stock for conversion of convertible debt | $ | $ | ||||||||||||
Purchase of property and equipment included in accounts payable and accrued expenses and in other liabilities | $ | $ |
January 1, 2021 | Adoption of ASU 2020-06 | December 31, 2020 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance sheet line item: | ||||||||||||||||||||
Long-term debt | $ | $ | $ | |||||||||||||||||
Other non-current liabilities | $ | $ | ( | $ | ||||||||||||||||
Additional paid-in capital | $ | $ | ( | $ | ||||||||||||||||
Accumulated deficit | $ | ( | $ | $ | ( |
Under ASU 2020-06 | Difference | Under Legacy Accounting | ||||||||||||||||||
Loss per share: | ||||||||||||||||||||
Basic | $ | ( | $ | $ | ( | |||||||||||||||
Diluted | $ | ( | $ | $ | ( |
Under ASU 2020-06 | Difference | Under Legacy Accounting | ||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||
Basic | $ | $ | $ | ( | ||||||||||||||||
Diluted | $ | $ | $ | ( |
September 30, 2021 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Short-term: | ||||||||||||||||||||||||||
Investment securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Short-term: | ||||||||||||||||||||||||||
Investment securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Cash | $ | $ | $ | $ | ||||||||||||||||||||||
Cash equivalents | ||||||||||||||||||||||||||
Total cash and cash equivalents | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2020 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Cash | $ | $ | $ | $ | ||||||||||||||||||||||
Cash equivalents | ||||||||||||||||||||||||||
Total cash and cash equivalents | ||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Other non-current assets: | ||||||||||||||||||||||||||
Certificate of deposit | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
Debt Instrument | Principal Amount | Unamortized Debt Discount | Net Carrying Amount | Principal Amount | Unamortized Debt Discount | Net Carrying Amount | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
2022 Notes | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
2024 Notes | ( | ( | ||||||||||||||||||||||||||||||||||||
2026 Notes | ( | ( | ||||||||||||||||||||||||||||||||||||
2025 Notes | ( | ( | ||||||||||||||||||||||||||||||||||||
2025 Accreting Notes | ( | ( | ||||||||||||||||||||||||||||||||||||
Total Debt | $ | $ | ||||||||||||||||||||||||||||||||||||
Short-term debt | $ | $ | ||||||||||||||||||||||||||||||||||||
Long-term debt | $ | $ | ||||||||||||||||||||||||||||||||||||
Convertible Non-Accreting Notes | Maturity Date | Annual Coupon Rate | Annual Effective Interest Rate | Payment Dates for Semi-Annual Interest Payments in Arrears | ||||||||||||||||||||||
2022 Notes | September 1, 2022 | March 1 and September 1 | ||||||||||||||||||||||||
2024 Notes | November 1, 2024 | May 1 and November 1 | ||||||||||||||||||||||||
2026 Notes | August 15, 2026 | February 15 and August 15 | ||||||||||||||||||||||||
2025 Notes | October 1, 2025 | April 1 and October 1 |
Convertible Notes | Maturity Date | Free Convertibility Date | Initial Conversion Rate per $1,000 Principal | Initial Conversion Price | Redemption Date | |||||||||||||||||||||||||||
2022 Notes | September 1, 2022 | June 1, 2022 | 9.6100 | $ | September 8, 2020 | |||||||||||||||||||||||||||
2024 Notes | November 1, 2024 | August 1, 2024 | 8.5910 | $ | May 8, 2022 | |||||||||||||||||||||||||||
2026 Notes | August 15, 2026 | May 15, 2026 | 6.7349 | $ | August 20, 2023 | |||||||||||||||||||||||||||
2025 Notes | October 1, 2025 | July 1, 2025 | 2.3972 | $ | October 4, 2022 | |||||||||||||||||||||||||||
2025 Accreting Notes | April 1, 2025 | - | 13.7931 | $ | May 9, 2023 |
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||
Convertible Notes | Contractual Interest Expense | Debt Discount Amortization | Total Interest Expense | Contractual Interest Expense | Debt Discount Amortization | Total Interest Expense | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
2022 Notes | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
2024 Notes | ||||||||||||||||||||||||||||||||||||||
2026 Notes | ||||||||||||||||||||||||||||||||||||||
2025 Notes | ||||||||||||||||||||||||||||||||||||||
2025 Accreting Notes | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||
Convertible Notes | Contractual Interest Expense | Debt Discount Amortization | Total Interest Expense | Contractual Interest Expense | Debt Discount Amortization | Total Interest Expense | ||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
2022 Notes | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
2024 Notes | ||||||||||||||||||||||||||||||||||||||
2026 Notes | ||||||||||||||||||||||||||||||||||||||
2025 Notes | ||||||||||||||||||||||||||||||||||||||
2025 Accreting Notes | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Capped Calls | Maturity Date | Initial Cap Price | Cap Price Premium | |||||||||||||||||
2022 Capped Calls | September 1, 2022 | $ | ||||||||||||||||||
2024 Capped Calls | November 1, 2024 | $ | ||||||||||||||||||
2026 Capped Calls | August 15, 2026 | $ | ||||||||||||||||||
2025 Capped Calls | October 1, 2025 | $ |
Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | ||||||||||||||||||
Outstanding at December 31, 2020 | $ | |||||||||||||||||||
Options exercised | ( | $ | ||||||||||||||||||
Options forfeited/canceled | ( | $ | ||||||||||||||||||
Outstanding and exercisable at September 30, 2021 | $ |
Shares | Weighted- Average Grant Date Fair Value | |||||||||||||
Unvested at December 31, 2020 | $ | |||||||||||||
RSUs granted | $ | |||||||||||||
RSUs vested | ( | $ | ||||||||||||
RSUs forfeited/canceled | ( | $ | ||||||||||||
Outstanding as of September 30, 2021 | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||
Numerator for basic EPS - Net (loss) income | $ | ( | $ | $ | $ | |||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Interest expense (income) associated with convertible debt instruments | ( | |||||||||||||||||||||||||
Numerator for diluted EPS - net (loss) income available to common stockholders after the effect of dilutive securities | $ | ( | $ | $ | $ | |||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||
Denominator for basic EPS - weighted-average number of shares of common stock outstanding | ||||||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Employee stock options | ||||||||||||||||||||||||||
Restricted stock units | ||||||||||||||||||||||||||
Convertible debt instruments | ||||||||||||||||||||||||||
Dilutive potential common shares | ||||||||||||||||||||||||||
Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities | ||||||||||||||||||||||||||
(Loss) Earnings per Share: | ||||||||||||||||||||||||||
Basic | $ | ( | $ | $ | $ | |||||||||||||||||||||
Diluted | $ | ( | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Unvested restricted stock units | ||||||||||||||||||||||||||
Shares related to convertible debt instruments | ||||||||||||||||||||||||||
Total |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. net revenue | $ | $ | $ | $ | ||||||||||||||||||||||
International net revenue | ||||||||||||||||||||||||||
Total net revenue | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Adjusted EBITDA: | ||||||||||||||||||||||||||
U.S. | $ | $ | $ | $ | ||||||||||||||||||||||
International | ( | ( | ( | ( | ||||||||||||||||||||||
Total reportable segments Adjusted EBITDA | ||||||||||||||||||||||||||
Less: reconciling items (1) | ( | ( | ( | ( | ||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||
Equity-based compensation and related taxes | ||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||
Other (income) expense, net | ( | |||||||||||||||||||||||||
Provision (benefit) for income taxes, net | ( | |||||||||||||||||||||||||
Other (a) | ||||||||||||||||||||||||||
Total reconciling items | $ | $ | $ | $ | ||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except LTM Net Revenue per Active Customer, Average Order Value and per share data) | ||||||||||||||||||||||||||
Key Financial Statement Metrics: | ||||||||||||||||||||||||||
Net revenue | $ | 3,121,083 | $ | 3,839,570 | $ | 10,456,227 | $ | 10,474,305 | ||||||||||||||||||
Gross profit | $ | 882,728 | $ | 1,147,428 | $ | 3,013,815 | $ | 3,047,581 | ||||||||||||||||||
(Loss) income from operations | $ | (69,798) | $ | 221,854 | $ | 101,751 | $ | 259,784 | ||||||||||||||||||
Net (loss) income | $ | (78,021) | $ | 173,166 | $ | 70,641 | $ | 161,178 | ||||||||||||||||||
(Loss) earnings per share: | ||||||||||||||||||||||||||
Basic | $ | (0.75) | $ | 1.82 | $ | 0.68 | $ | 1.70 | ||||||||||||||||||
Diluted | $ | (0.75) | $ | 1.67 | $ | 0.65 | $ | 1.64 | ||||||||||||||||||
Net cash (for) from operating activities | $ | (130,848) | $ | 331,027 | $ | 321,187 | $ | 1,209,988 | ||||||||||||||||||
Key Operating Metrics: | ||||||||||||||||||||||||||
Active customers (1) | 29,213 | 28,783 | 29,213 | 28,783 | ||||||||||||||||||||||
LTM net revenue per active customer (2) | $ | 484 | $ | 451 | $ | 484 | $ | 451 | ||||||||||||||||||
Orders delivered (3) | 11,016 | 15,758 | 39,597 | 44,526 | ||||||||||||||||||||||
Average order value (4) | $ | 283 | $ | 243 | $ | 264 | $ | 235 | ||||||||||||||||||
Non-GAAP Financial Measures: | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 101,051 | $ | 371,112 | $ | 617,658 | $ | 683,648 | ||||||||||||||||||
Free Cash Flow | $ | (203,167) | $ | 255,028 | $ | 114,960 | $ | 954,007 | ||||||||||||||||||
Adjusted Diluted Earnings per Share (5) | $ | 0.14 | $ | 2.30 | $ | 3.08 | $ | 3.77 | ||||||||||||||||||
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
U.S. net revenue | $ | 2,594,964 | $ | 3,274,872 | (20.8) | % | ||||||||||||||
International net revenue | 526,119 | 564,698 | (6.8) | % | ||||||||||||||||
Net revenue | $ | 3,121,083 | $ | 3,839,570 | (18.7) | % |
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost of goods sold | $ | 2,238,355 | $ | 2,692,142 | (16.9) | % | ||||||||||||||
As a percentage of net revenue | 71.7 | % | 70.1 | % | ||||||||||||||||
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees (1) | $ | 139,931 | $ | 139,589 | 0.2 | % | ||||||||||||||
Advertising | 315,024 | 344,025 | (8.4) | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 497,571 | 441,960 | 12.6 | % | ||||||||||||||||
Total operating expenses | $ | 952,526 | $ | 925,574 | 2.9 | % | ||||||||||||||
As a percentage of net revenue: | ||||||||||||||||||||
Customer service and merchant fees (1) | 4.5 | % | 3.6 | % | ||||||||||||||||
Advertising | 10.1 | % | 9.0 | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 15.9 | % | 11.5 | % | ||||||||||||||||
30.5 | % | 24.1 | % |
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees | $ | 6,879 | $ | 4,477 | ||||||||||||||||
Selling, operations, technology, general and administrative | $ | 79,200 | $ | 69,361 |
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||
Customer service and merchant fees | 4.3% | 3.5% | ||||||||||||||||||
Selling, operations, technology, general and administrative | 13.4% | 9.7% | ||||||||||||||||||
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Interest expense, net | $ | (8,406) | $ | (36,315) | (76.9) | % |
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Other income (expense), net | $ | 3,889 | $ | (13,584) | (128.6) | % |
Three months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Provision (benefit) for income taxes, net | $ | 3,706 | $ | (1,211) | (406.0) | % |
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
U.S. net revenue | $ | 8,513,807 | $ | 8,901,559 | (4.4) | % | ||||||||||||||
International net revenue | 1,942,420 | 1,572,746 | 23.5 | % | ||||||||||||||||
Net revenue | $ | 10,456,227 | $ | 10,474,305 | (0.2) | % |
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost of goods sold | $ | 7,442,412 | $ | 7,426,724 | 0.2 | % | ||||||||||||||
As a percentage of net revenue | 71.2 | % | 70.9 | % | ||||||||||||||||
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees (1) | $ | 431,802 | $ | 372,825 | 15.8 | % | ||||||||||||||
Advertising | 1,032,662 | 1,037,562 | (0.5) | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 1,435,388 | 1,377,410 | 4.2 | % | ||||||||||||||||
Customer service center impairment and other charges | 12,212 | — | — | |||||||||||||||||
Total operating expenses | $ | 2,912,064 | $ | 2,787,797 | 4.5 | % | ||||||||||||||
As a percentage of net revenue: | ||||||||||||||||||||
Customer service and merchant fees (1) | 4.1 | % | 3.6 | % | ||||||||||||||||
Advertising | 9.9 | % | 9.9 | % | ||||||||||||||||
Selling, operations, technology, general and administrative (1) | 13.7 | % | 13.2 | % | ||||||||||||||||
Customer service center impairment and other charges | 0.1 | % | — | % | ||||||||||||||||
27.8 | % | 26.7 | % |
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Customer service and merchant fees | $ | 18,974 | $ | 10,909 | ||||||||||||||||
Selling, operations, technology, general and administrative | $ | 235,623 | $ | 193,541 |
Nine months ended September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
Customer service and merchant fees | 3.9 | % | 3.5 | % | ||||||||||
Selling, operations, technology, general and administrative | 11.5 | % | 11.3 | % | ||||||||||
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Interest expense, net | $ | (23,620) | $ | (87,472) | (73.0) | % |
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Other expense, net | $ | (1,657) | $ | (10,720) | (84.5) | % |
Nine months ended September 30, | ||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Provision for income taxes, net | $ | 5,833 | $ | 414 | 1,308.9 | % |
September 30, 2021 | December 31, 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Cash and cash equivalents | $ | 1,864,821 | $ | 2,129,440 | ||||||||||
Short-term investments | $ | 528,392 | $ | 461,698 | ||||||||||
Working capital | $ | 924,701 | $ | 880,208 | ||||||||||
Nine months ended September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 70,641 | $ | 161,178 | ||||||||||
Cash flows from operating activities | $ | 321,187 | $ | 1,209,988 | ||||||||||
Net cash (for) from investing activities | $ | (274,644) | $ | 190,211 | ||||||||||
Net cash (for) from financing activities | $ | (302,656) | $ | 452,529 | ||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Reconciliation of Adjusted EBITDA | ||||||||||||||||||||||||||
Net (loss) income | $ | (78,021) | $ | 173,166 | $ | 70,641 | $ | 161,178 | ||||||||||||||||||
Depreciation and amortization | 81,917 | 72,575 | 240,154 | 208,532 | ||||||||||||||||||||||
Equity-based compensation and related taxes | 88,932 | 76,683 | 263,541 | 211,376 | ||||||||||||||||||||||
Interest expense, net | 8,406 | 36,315 | 23,620 | 87,472 | ||||||||||||||||||||||
Other (income) expense, net | (3,889) | 13,584 | 1,657 | 10,720 | ||||||||||||||||||||||
Provision (benefit) for income taxes, net | 3,706 | (1,211) | 5,833 | 414 | ||||||||||||||||||||||
Other (1) | — | — | 12,212 | 3,956 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 101,051 | $ | 371,112 | $ | 617,658 | $ | 683,648 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Net cash (for) from operating activities | $ | (130,848) | $ | 331,027 | $ | 321,187 | $ | 1,209,988 | ||||||||||||||||||
Purchase of property and equipment | (28,521) | (41,493) | (77,593) | (146,303) | ||||||||||||||||||||||
Site and software development costs | (43,798) | (34,506) | (128,634) | (109,678) | ||||||||||||||||||||||
Free Cash Flow | $ | (203,167) | $ | 255,028 | $ | 114,960 | $ | 954,007 | ||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||
Net (loss) income | $ | (78,021) | $ | 173,166 | $ | 70,641 | $ | 161,178 | ||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Interest expense (income) associated with convertible debt instruments | — | 9,136 | (1,568) | — | ||||||||||||||||||||||
Numerator for diluted EPS - net (loss) income available to common stockholders after the effect of dilutive securities | (78,021) | 182,302 | 69,073 | 161,178 | ||||||||||||||||||||||
Adjustments to net (loss) income: | ||||||||||||||||||||||||||
Interest expense associated with convertible debt instruments | — | 19,919 | 25,483 | 10,819 | ||||||||||||||||||||||
Equity-based compensation and related taxes | 88,932 | 76,683 | 263,541 | 211,376 | ||||||||||||||||||||||
Provision (benefit) for income taxes, net | 3,706 | (1,211) | 5,833 | 414 | ||||||||||||||||||||||
Other | — | — | 12,212 | 3,956 | ||||||||||||||||||||||
Numerator for Adjusted Diluted EPS - Adjusted net income | $ | 14,617 | $ | 277,693 | $ | 376,142 | $ | 387,743 | ||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||
Denominator for basic EPS - weighted-average number of shares of common stock outstanding | 104,054 | 95,373 | 103,579 | 94,767 | ||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Employee stock options | — | 24 | 6 | 32 | ||||||||||||||||||||||
Restricted stock units | — | 4,123 | 2,785 | 3,222 | ||||||||||||||||||||||
Convertible debt instruments | — | 9,680 | 230 | — | ||||||||||||||||||||||
Dilutive potential common shares | — | 13,827 | 3,021 | 3,254 | ||||||||||||||||||||||
Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities | 104,054 | 109,200 | 106,600 | 98,021 | ||||||||||||||||||||||
Adjustments to effect of dilutive securities: | ||||||||||||||||||||||||||
Restricted stock units | 2,011 | — | — | — | ||||||||||||||||||||||
Convertible debt instruments | — | 11,330 | 15,551 | 4,740 | ||||||||||||||||||||||
Denominator for Adjusted Diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities | 106,065 | 120,530 | 122,151 | 102,761 | ||||||||||||||||||||||
Diluted (Loss) Earnings per Share | $ | (0.75) | $ | 1.67 | $ | 0.65 | $ | 1.64 | ||||||||||||||||||
Adjusted Diluted Earnings per Share | $ | 0.14 | $ | 2.30 | $ | 3.08 | $ | 3.77 | ||||||||||||||||||
Incorporated by Reference | |||||||||||||||||||||||
Exhibit Number | Exhibit Description | Filed Herewith | Form | File No. | Filing Date | Exhibit Number | |||||||||||||||||
31.1 | X | ||||||||||||||||||||||
31.2 | X | ||||||||||||||||||||||
32.1# | X | ||||||||||||||||||||||
32.2# | X | ||||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | |||||||||||||||||||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | X | |||||||||||||||||||||
101.DEF | XBRL Taxonomy Definition Linkbase Document | X | |||||||||||||||||||||
101.LAB | XBRL Taxonomy Labels Linkbase Document | X | |||||||||||||||||||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | X | |||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) | X |
+ | Indicates a management contract or compensatory plan | |||||||
# | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act. |
WAYFAIR INC. | ||||||||
Date: November 4, 2021 | By: | /s/ NIRAJ SHAH | ||||||
Niraj Shah | ||||||||
Chief Executive Officer and President | ||||||||
(Principal Executive Officer) | ||||||||
Date: November 4, 2021 | By: | /s/ MICHAEL FLEISHER | ||||||
Michael Fleisher | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Date: November 4, 2021 | /s/ NIRAJ SHAH | |||||||
Niraj Shah | ||||||||
Chief Executive Officer and President |
Date: November 4, 2021 | /s/ MICHAEL FLEISHER | |||||||
Michael Fleisher | ||||||||
Chief Financial Officer |
Date: November 4, 2021 | /s/ NIRAJ SHAH | |||||||
Niraj Shah | ||||||||
Chief Executive Officer and President |
Date: November 4, 2021 | /s/ MICHAEL FLEISHER | |||||||
Michael Fleisher | ||||||||
Chief Financial Officer |
CONSOLIDATED AND CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Convertible redeemable preferred units, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible redeemable preferred units, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Convertible redeemable preferred units, shares issued (in shares) | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 77,666,738 | 72,980,490 |
Common stock, shares outstanding (in shares) | 77,666,738 | 72,980,490 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 164,000,000 | 164,000,000 |
Common stock, shares issued (in shares) | 26,563,761 | 26,564,234 |
Common stock, shares outstanding (in shares) | 26,563,761 | 26,564,234 |
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Statement [Abstract] | ||||
Net revenue | $ 3,121,083 | $ 3,839,570 | $ 10,456,227 | $ 10,474,305 |
Cost of goods sold | 2,238,355 | 2,692,142 | 7,442,412 | 7,426,724 |
Gross profit | 882,728 | 1,147,428 | 3,013,815 | 3,047,581 |
Operating expenses: | ||||
Customer service and merchant fees | 139,931 | 139,589 | 431,802 | 372,825 |
Advertising | 315,024 | 344,025 | 1,032,662 | 1,037,562 |
Selling, operations, technology, general and administrative | 497,571 | 441,960 | 1,435,388 | 1,377,410 |
Customer service center impairment and other charges | 0 | 0 | 12,212 | 0 |
Total operating expenses | 952,526 | 925,574 | 2,912,064 | 2,787,797 |
(Loss) income from operations | (69,798) | 221,854 | 101,751 | 259,784 |
Interest expense, net | (8,406) | (36,315) | (23,620) | (87,472) |
Other income (expense), net | 3,889 | (13,584) | (1,657) | (10,720) |
(Loss) income before income taxes | (74,315) | 171,955 | 76,474 | 161,592 |
Provision (benefit) for income taxes, net | 3,706 | (1,211) | 5,833 | 414 |
Net (loss) income | $ (78,021) | $ 173,166 | $ 70,641 | $ 161,178 |
(Loss) earnings per share: | ||||
Basic (in usd per share) | $ (0.75) | $ 1.82 | $ 0.68 | $ 1.70 |
Diluted (in usd per share) | $ (0.75) | $ 1.67 | $ 0.65 | $ 1.64 |
Weighted-average number of shares of common stock outstanding used in computing per share amounts: | ||||
Basic (in shares) | 104,054 | 95,373 | 103,579 | 94,767 |
Diluted (in shares) | 104,054 | 109,200 | 106,600 | 98,021 |
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (78,021) | $ 173,166 | $ 70,641 | $ 161,178 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (248) | (895) | (345) | (665) |
Net unrealized gain (loss) on available-for-sale investments | 39 | (606) | (14) | 67 |
Comprehensive (loss) income | $ (78,230) | $ 171,665 | $ 70,282 | $ 160,580 |
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated and condensed financial statements contained in this Quarterly Report on Form 10-Q are those of Wayfair Inc. and its wholly-owned subsidiaries. Unless the context indicates otherwise, references to “we,” “us” and “our” refer to Wayfair Inc. and its subsidiaries. In our opinion, the accompanying unaudited consolidated and condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of the interim periods presented. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. Furthermore, interim results are not necessarily indicative of the results for the full year ended December 31, 2021 or future periods. Wayfair believes that other than the adoption of new accounting pronouncements that follow, there have been no significant changes during the three and nine months ended September 30, 2021 to the items disclosed in Note 1, Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2020. Adoption of New Accounting Pronouncements Convertible Debt Wayfair adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") on January 1, 2021 using the modified retrospective approach for all financial instruments that are outstanding as of the adoption date. The new standard eliminates the cash conversion and beneficial conversion feature models that previously required separate accounting for conversion features. Entities that had those conversion features will report less interest expense as those conversion features were recorded as debt discounts which were amortized over the term of the debt. In addition, this ASU requires the application of the if-converted method when calculating diluted earnings per share. Under the new standard, the conversion of debt that is accounted for as a liability in its entirety will not result in any gain or loss if the conversion feature is exercised according to the original conversion terms. If those terms allowed the issuer to include cash as part of the settlement of the conversion feature, the issuer will first reduce the carrying amount of the convertible debt, including any unamortized premium, discount or issuance costs, by the value of the cash or other assets transferred and then recognize the remaining carrying value of the debt in the capital accounts. The adoption of ASU 2020-06 resulted in the following adjustments to the consolidated and condensed balance sheets:
The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted loss per share for the three months ended September 30, 2021:
The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted earnings (loss) per share for the nine months ended September 30, 2021:
The adoption of ASU 2020-06 did not materially impact our cash flows or compliance with debt covenants. Income Taxes Wayfair adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) on January 1, 2021, using the modified retrospective approach. This ASU simplifies the accounting for income taxes, removes certain exceptions to the general principles in Topic 740, and clarifies and amends existing guidance to improve consistent application. The effect of adoption of the new guidance was not material to our consolidated financial statements. Investments Wayfair classifies investments in certificates of deposits and marketable securities with original maturities of greater than three months as short-term investments and long-term investments on our consolidated balance sheets. Short-term investments mature in less than twelve months from the balance sheet date. We determine the cost basis of an investment sold using the specific identification method. To the extent the amortized cost basis of the available-for-sale debt securities exceeds the fair value, management assesses the debt securities for credit loss. However, management considers the risk of credit loss to be minimized by Wayfair’s policy of investing in financial instruments issued by highly-rated financial institutions. When assessing the risk of credit loss, management considers factors such as the severity and the reason of the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management’s intended holding period and time horizon for selling. From time to time, Wayfair may enter into equity investments that align with our organizational strategies and growth initiatives. Equity investments in companies for which we do not have the ability to exercise significant influence are accounted for at estimated fair value, with adjustments for observable changes in prices or impairments, and are classified as other non-current assets on our consolidated and condensed balance sheets with adjustments recognized in other income (expense), net on our consolidated and condensed statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether each investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales or acquisitions of the investee securities and other readily observable information. If the investment is impaired, we write it down to its estimated fair value. Equity investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control, over an investee, and we classify equity-method investments as other non-current assets on our consolidated and condensed balance sheets. Our share of the earnings or losses as reported by equity-method investees, amortization of basis differences, related gains or losses, and impairments, if any, are recognized in our consolidated and condensed statements of operations. Each reporting period, we evaluate whether declines in fair value below carrying value are other-than-temporary and if so, we write down the investment to its estimated fair value.
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Supplemental Financial Statement Disclosures |
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Sep. 30, 2021 | |
Supplemental Financial Statement Disclosures [Abstract] | |
Supplemental Financial Statement Disclosures | 2. Supplemental Financial Statement Disclosures Accounts Receivable, Net As of September 30, 2021, we reported accounts receivable of $166.5 million, net of allowance for credit losses of $18.6 million. As of December 31, 2020, we reported accounts receivable of $110.3 million, net of allowance for credit losses of $21.4 million. The changes in the allowance for credit losses were not material for the three and nine months ended September 30, 2021. Management believes credit risk is mitigated since approximately 99% of the net revenue recognized for the three and nine months ended September 30, 2021 was collected in advance of recognition. Contractual Liabilities Contractual liabilities included in other current liabilities was $287.6 million at September 30, 2021 and $298.1 million at December 31, 2020. During the nine months ended September 30, 2021, Wayfair recognized $239.4 million of net revenue that was included in other current liabilities as of December 31, 2020. Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing, and uncertainty of net revenue and cash flows are affected by economic factors. Refer to Note 10, Segment and Geographic Information, for additional detail. Customer Service Center Impairment and Other Charges In the first quarter of 2021, Wayfair enacted a plan to consolidate certain customer service centers in identified U.S. locations to transition toward virtual service models. Factors that influenced our decision were our ability to utilize a greater use of remote and home office applications and our ability to provide superior customer care. As a result, we recorded a charge of $12.2 million during the first quarter of 2021, which included $6.3 million for the non-cash impairment of right-of-use (“ROU”) assets, $5.0 million for the non-cash accelerated depreciation of fixed assets and the remainder for other items. The impairment of ROU assets represents the excess of estimated future remaining call center lease commitments over expected future sublease income in certain affected facilities.
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Cash and Cash Equivalents, Investments, and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents, Investments, and Fair Value Measurements | 3. Cash and Cash Equivalents, Investments and Fair Value Measurements Investments As of September 30, 2021 and December 31, 2020, all of Wayfair’s marketable securities, which primarily consisted of corporate bonds and other government obligations that are priced at fair value, were classified as available-for-sale investments. Wayfair did not have any realized gains nor losses during the three and nine months ended September 30, 2021 or during the three months ended September 30, 2020. During the nine months ended September 30, 2020, Wayfair collected $161.3 million of proceeds from the sale of long-term investments and recognized a realized gain of $0.8 million. During the three and nine months ended September 30, 2021 and September 30, 2020, Wayfair did not recognize any credit losses related to its available-for-sale debt securities. Further, as of September 30, 2021 and December 31, 2020, Wayfair did not record an allowance for credit losses related to its available-for-sale debt securities. In the second quarter of 2021, Wayfair entered into an agreement with a vendor in which Wayfair received warrants to acquire shares of the vendor’s common stock. In the third quarter of 2021, the vendor completed an initial public offering of its common stock. As of September 30, 2021, these warrants, which vest over a five-year period, were valued at approximately $7.6 million and were classified in other non-current assets. We recorded an increase in the fair value of the warrants in the three and nine months ended September 30, 2021 of $1.8 million in other income (expense), net on our consolidated and condensed statements of operations. Furthermore, we have committed to make $20.0 million of other equity investments in connection with our impact investment initiatives. In the third quarter of 2021, Wayfair made a $5.0 million initial investment which was accounted for under the equity method. The following tables present details of Wayfair’s investment securities as of September 30, 2021 and December 31, 2020:
Fair Value Measurements Wayfair's financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The three levels of inputs used to measure fair value are as follows: ▪Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities ▪Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability ▪Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability This hierarchy requires Wayfair to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. We classify our cash equivalents and certificate of deposits within Level 1 because we value these investments using quoted market prices. The fair value of our Level 1 financial assets is based on quoted market prices of the identical underlying security. We classify short-term investments within Level 2 because unadjusted quoted prices for identical or similar assets in markets are not active. None of our cash and cash equivalents or investments are classified as Level 3. The following tables set forth the fair value of Wayfair’s financial assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020:
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Debt and Other Financing |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Other Financing | 4. Debt and Other Financing The following table presents the outstanding principal amount and carrying value of debt and other financing as of the dates presented:
Revolving Credit Facility On March 24, 2021, Wayfair and certain of its subsidiaries (together, the “Guarantors”) and Wayfair LLC, a wholly-owned subsidiary of Wayfair, as borrower (the “Borrower”), entered into a new credit agreement (the “Credit Agreement”) with the lending institutions from time-to-time parties thereto and Citibank, N.A., in its capacity as administrative agent, collateral agent, swingline lender and a letter of credit issuer. The Credit Agreement provides for a $600 million senior secured revolving credit facility that matures on March 24, 2026 (the “Revolver”). The Revolver replaced our previous $200 million senior secured revolving credit facility (the “Previous Revolver”), which was set to mature on February 21, 2022. Wayfair paid all amounts owed under the Previous Revolver and terminated all lending commitments thereunder. Debt issuance costs for the Revolver are included in other non-current assets and are amortized to interest expense over the Revolver’s term. As of September 30, 2021, there were no revolving loans outstanding under the Revolver. Under the Credit Agreement, the Borrower may, from time to time, request letters of credit, which reduce the availability of credit under the Revolver. Wayfair had approximately $59.7 million outstanding letters of credit as of September 30, 2021, primarily as security for lease agreements, which reduced the availability of credit under the Revolver. Any amounts outstanding under the Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the Credit Agreement, the Borrower is required to make certain mandatory prepayments prior to maturity. The proceeds of the Revolver may be used to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. The Borrower’s obligations under the Revolver are guaranteed by the Guarantors. The obligations of the Borrower and the Guarantors are secured by first-priority liens on substantially all of the assets of the Borrower and the Guarantors, including, with certain exceptions, all of the capital stock of Wayfair’s domestic subsidiaries and 65% of the capital stock of Wayfair’s first-tier foreign subsidiaries. Revolver borrowings bear interest through maturity at a variable rate based upon, at the Borrower’s option, either the LIBOR rate or the base rate (which is the highest of (x) the prime rate, (y) one-half of 1.00% in excess of the federal funds effective rate and (z) 1.00% in excess of the one-month LIBOR rate), plus, in each case an applicable margin. As of September 30, 2021, the applicable margin for LIBOR loans is 1.25% per annum and the applicable margin for base rate loans is 0.25% per annum. The applicable margin is subject to specified changes depending on Wayfair’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio, as defined in the Credit Agreement. The Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict the ability of the Borrower and the Guarantors, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, or change the nature of their businesses. The Revolver also contains customary events of default, subject to thresholds and grace periods, including, among others, payment default, covenant default, cross default to other material indebtedness and judgment default. In addition, the Credit Agreement requires Wayfair to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the Credit Agreement) of 4.0 to 1.0, subject to a 0.5 step-up following certain permitted acquisitions. We do not expect any of these restrictions to affect or limit our ability to conduct business in the ordinary course. As of September 30, 2021, we were in compliance with all covenants. Convertible Non-Accreting Notes The following table summarizes certain terms related to our outstanding non-accreting convertible notes (collectively, the “Non-Accreting Notes” and together with the 2025 Accreting Notes, the “Notes”):
Convertible Accreting Notes No cash interest is payable on the 2025 Accreting Notes. Instead, the 2025 Accreting Notes accrue interest at a rate of 2.50% per annum, which accretes to the principal amount on April 1 and October 1 of each year. The 2025 Accreting Notes will mature on April 1, 2025, unless earlier purchased, redeemed or converted. The annual effective interest rate of the 2025 Accreting Notes is 2.7%. Conversion and Redemption Terms of the Notes Wayfair's Notes will mature at their maturity date unless earlier purchased, redeemed or converted. The Notes’ initial conversion terms are summarized below:
The conversion rate is subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of Wayfair’s Class A common stock, but will not be adjusted for accrued and unpaid interest. Wayfair will settle any conversions of the Non-Accreting Notes in cash, shares of Wayfair’s Class A common stock or a combination thereof, with the form of consideration determined at Wayfair’s election. The holders of the Non-Accreting Notes may convert all or a portion of the notes prior to certain conversion dates (the “Free Convertibility Date”) under the following circumstances (in each case, as applicable to each series of Non-Accreting Notes): •during any calendar quarter (and only during such calendar quarter), if the last reported sale price of Wayfair’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; •during the business day period after any consecutive trading day period (the “measurement period") in which the trading price (as defined in the applicable indenture) per $1,000 principal amount of the notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Wayfair’s Class A common stock and the conversion rate on each such trading day; •if Wayfair calls the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and •upon the occurrence of specified corporate events (as set forth in the applicable indenture). On or after the applicable Free Convertibility Date until the close of business on the second scheduled trading day immediately preceding the applicable maturity date, holders of the Non-Accreting Notes may convert their Non-Accreting Notes at any time. The following Non-Accreting Notes are convertible during the calendar quarter ended December 31, 2021: the 2022 Notes, the 2024 Notes and the 2026 Notes. The 2025 Notes are not convertible during the fourth quarter of 2021. The holders of the 2025 Accreting Notes may convert all or a portion of their 2025 Accreting Notes at any time prior to the second business day immediately preceding the maturity date. Wayfair will settle any conversion of 2025 Accreting Notes with a number of shares of Wayfair’s Class A common stock per $1,000 original principal amount of 2025 Accreting Notes equal to the accreted principal amount of such original principal amount of 2025 Accreting Notes divided by the conversion price. Upon the occurrence of a fundamental change (as defined in the applicable indenture), holders of the Notes may require Wayfair to repurchase all or a portion of the Notes for cash at a price equal to 100% of the principal amount (or accreted principal amount) of the Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date (such interest to be included in the accreted principal amount for the 2025 Accreting Notes). Holders of the Non-Accreting Notes who convert their respective notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the indenture) may be entitled to a premium in the form of an increase in the conversion rate of the respective notes. Holders of the 2025 Accreting Notes who convert in connection with a make-whole fundamental change (as defined in the applicable indenture) may be entitled to a premium in the form of an increase in the conversion rate. Wayfair may not redeem the Notes prior to certain dates (the “Redemption Date”). On or after the applicable Redemption Date, Wayfair may redeem for cash all or part of the applicable series of Notes if the last reported sale price of Wayfair’s Class A common stock equals or exceeds 130% (Non-Accreting Notes) or 276% (2025 Accreting Notes) of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which Wayfair provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which Wayfair provides notice of the redemption. The redemption price will be either 100% of the principal amount (or accreted principal amount) of the notes to be redeemed, plus accrued and unpaid interest, if any, or the if-converted value holder elects to convert their Notes upon receiving notice of redemption. Conversions of Notes In the three months ended September 30, 2021, holders of the 2022 Notes and 2026 Notes converted $0.4 million of aggregate principal and received 3,934 shares of Wayfair’s Class A common stock. During the nine months ended September 30, 2021, holders of the 2022 Notes and 2026 Notes converted $15.3 million of aggregate principal and received 147,374 shares of Wayfair’s Class A common stock. During the nine months ended September 30, 2021, GHEP VII Aggregator, L.P. (“Great Hill”) converted $253.1 million of accreted principal of the 2025 Accreting Notes and received 3,490,175 shares of Wayfair's Class A common stock. In aggregate, these conversions increased additional paid-in capital by $0.4 million and $265.2 million for the three and nine months ended September 30, 2021. Interest Expense The following tables present total interest expense recognized for the Notes for the three and nine months ended September 30, 2021 and 2020, which included the reversal of interest expense we recorded in 2020 for a portion of interest accretion for the 2025 Accreting Notes that was not realized in 2021:
Fair Value of Notes The estimated fair value of the 2022 Notes, 2024 Notes, 2026 Notes, 2025 Notes and 2025 Accreting Notes was $6.6 million, $1.3 billion, $1.8 billion, $1.5 billion and $126.4 million, respectively, as of September 30, 2021. The estimated fair value of the Non-Accreting Notes was determined through consideration of quoted market prices. The estimated fair value of the 2025 Accreting Notes was determined through an option pricing model using Level 3 inputs. The fair values of the Non-Accreting Notes and the 2025 Accreting Notes are classified as Level 2 and Level 3, respectively, as defined in Note 3, Cash and Cash Equivalents, Investments and Fair Value Measurements. The if-converted value of the 2022 Notes, 2024 Notes, 2026 Notes and 2025 Accreting Notes exceeded the principal value by $3.9 million, $687.2 million, $683.9 million and $90.5 million, respectively, as of September 30, 2021. The if-converted value of the 2025 Notes did not exceed the principal value as of September 30, 2021. Capped Calls The 2022 Capped Calls, 2024 Capped Calls, 2026 Capped Calls and 2025 Capped Calls (collectively, the "Capped Calls") are expected generally to reduce the potential dilution and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Non-Accreting Notes upon conversion of the Non-Accreting Notes if the market price per share of Wayfair’s Class A common stock is greater than the strike price of the applicable Capped Call (which correspond to the initial conversion price of the applicable Non-Accreting Notes and is subject to certain adjustments under the terms of the applicable Capped Call), with such reduction and/or offset subject to a cap based on the cap price of the applicable Capped Calls (the "Initial Cap Price"). The Capped Calls can, at Wayfair’s option, remain outstanding until their maturity date, even if all or a portion of the Non-Accreting Notes are converted, repurchased or redeemed prior to such date. Each of the Capped Calls has an initial cap price per share of Wayfair’s Class A common stock, which represented a premium over the last reported sale price (or, with respect to the 2025 Capped Calls, the volume-weighted average price) of Wayfair’s Class A common stock on the date the corresponding Non-Accreting Notes were priced (the "Cap Price Premium"), and is subject to certain adjustments under the terms of the corresponding agreements. Collectively, the Capped Calls cover, initially, the number of shares of Wayfair’s Class A common stock underlying the Non-Accreting Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Non-Accreting Notes. The initial terms for the Capped Calls are presented below: The Capped Calls are separate transactions from the Non-Accreting Notes, are not subject to the terms of the Non-Accreting Notes and will not affect any holder’s rights under the Non-Accreting Notes. Similarly, holders of the Non-Accreting Notes do not have any rights with respect to the Capped Calls. The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to Wayfair's stock. The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ deficit when they were entered.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Legal Matters From time to time, Wayfair is involved in claims that arise during the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, Wayfair does not currently believe that the outcome of any of these other legal matters will have a material adverse effect on Wayfair's results of operation or financial condition. Regardless of the outcome, litigation can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting Wayfair's overall operations. In addition, Wayfair may also find itself at greater risk to outside party claims as it increases its operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable, or unclear. On November 18, 2020, certain of our present and former directors, along with Great Hill Partners, L.P., Great Hill, Charlesbank Capital Partners, LLC and CBEP Investments, LLC (“Charlesbank”), were named as defendants in a shareholder derivative lawsuit filed in the Court of Chancery of the State of Delaware by the Equity-League Pension Trust Fund. Wayfair is named as a nominal defendant. The derivative complaint primarily alleges that the director defendants breached their fiduciary duties with respect to Wayfair’s issuance of the 2025 Accreting Notes, and further alleges that the non-director defendants were unjustly enriched on the basis of the issuance. The complaint asserts causes of action for breach of fiduciary duty and unjust enrichment and seeks disgorgement of proceeds received as a result of the issuance, other equitable relief and damages and attorneys’ fees and costs. On February 16, 2021, the named director defendants and Wayfair filed motions to dismiss the complaint with prejudice and Great Hill and Charlesbank each filed separate motions to dismiss the complaint. The motions were fully briefed as of May 11, 2021. Oral argument on the motions was held on August 23, 2021 and the parties are awaiting a decision from the court. At this time, based on available information regarding this litigation, we are unable to reasonably assess the ultimate outcome of this case or determine an estimate, or a range of estimates, of potential losses.
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Stockholders' Deficit |
9 Months Ended |
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Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Deficit | 6. Stockholders’ Deficit Preferred Stock Wayfair authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value per share, for future issuance. As of September 30, 2021, Wayfair had no shares of undesignated preferred stock issued or outstanding. Common Stock Wayfair authorized 500,000,000 shares of Class A common stock, $0.001 par value per share, and 164,000,000 shares of Class B common stock, $0.001 par value per share, of which 77,666,738 and 72,980,490 shares of Class A common stock and 26,563,761 and 26,564,234 shares of Class B common stock were outstanding as of September 30, 2021 and December 31, 2020. The rights of the holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate number of shares of the then outstanding Class A common stock and Class B common stock, or in the event of the affirmative vote or written consent of holders of at least 66 2/3% of the outstanding shares of Class B common stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to receive dividends out of funds legally available if the board of directors (the “Board”), in its discretion, determines to issue dividends and then only at the times and in the amounts that the Board may determine. Since Wayfair's initial public offering through September 30, 2021, 55,474,653 shares of Class B common stock were converted to Class A common stock. Stock Repurchase Program On August 21, 2020, the Board authorized the repurchase of up to $700.0 million of Wayfair’s Class A common stock in the open market, through privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan (the “2020 Repurchase Program”). On August 10, 2021, the Board authorized a new $1.0 billion share repurchase program on the same terms (the “2021 Repurchase Program”). There is no stated expiration for the share repurchase programs.Wayfair will begin repurchasing shares under the 2021 Repurchase Program upon the completion of the 2020 Repurchase Program. During the three months ended September 30, 2021, Wayfair did not repurchase any shares of Class A common stock. During the nine months ended September 30, 2021, Wayfair repurchased $300.2 million under the 2020 Repurchase Program at an average price of $305.43 per share of Class A common stock. During the three and nine months ended September 30, 2020, Wayfair repurchased $280.2 million under authorized stock repurchase programs at an average price of $331.65 per share of Class A common stock.
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Equity-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Compensation | 7. Equity-Based Compensation The Board adopted the 2014 Incentive Award Plan ("2014 Plan") to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The 2014 Plan is administered by the Board for awards to non-employee directors and by the compensation committee of the Board for other participants and provides for the issuance of stock options, SARs, restricted common stock, restricted stock units ("RSUs"), performance shares, stock payments, cash payments, dividend awards and other incentives. Prior to the adoption of the 2014 Plan, Wayfair LLC issued certain equity awards pursuant to the Wayfair LLC Amended and Restated Common Unit Plan (the "2010 Plan"), which was administered by the Board of Wayfair LLC. Awards issued under the 2010 Plan that remain outstanding currently represent Class A or Class B common stock of Wayfair Inc. The 2014 Plan initially made 8,603,066 shares of Class A common stock available for future award grants. The 2014 Plan also contains an evergreen provision whereby the shares available for future grants are increased on the first day of each calendar year from January 1, 2016 through and including January 1, 2024. As of January 1, 2021, 6,224,792 shares of Class A common stock were available for future grant under the 2014 Plan. Shares or RSUs forfeited, withheld for minimum statutory tax obligations, and unexercised stock option lapses from the 2010 and 2014 Plans are available for future grant under the 2014 Plan. The following table presents activity relating to stock options for the nine months ended September 30, 2021:
The intrinsic value of stock options exercised was $5.9 million and $4.4 million for the nine months ended September 30, 2021 and 2020. The following table presents activity relating to RSUs for the nine months ended September 30, 2021:
The intrinsic value of RSUs vested was $583.7 million and $342.9 million for the nine months ended September 30, 2021 and 2020. The aggregate intrinsic value of RSUs unvested is $1.1 billion as of September 30, 2021. Unrecognized equity-based compensation expense related to RSUs expected to vest over time is $753.8 million with a weighted-average remaining vesting term of 1.2 years as of September 30, 2021.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The provision (benefit) for income taxes, net recorded in the three and nine months ended September 30, 2021 is primarily related to income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes, as well as related changes in our valuation allowance on deferred tax assets, offset by a discrete tax benefit related to excess tax benefits on equity awards for U.S. employees. Wayfair had no material unrecognized tax benefits as of September 30, 2021 and December 31, 2020.
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(Loss) Earnings per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) Earnings per Share | 9. (Loss) Earnings per Share The following table presents the calculation of basic and diluted (loss) earnings per share:
The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted (loss) earnings per share were as follows:
Wayfair may settle conversions of the Non-Accreting Notes in cash, shares of Wayfair’s Class A common stock or any combination thereof at its election. Wayfair will settle conversions of the 2025 Accreting Notes in shares. The Capped Calls are generally expected to reduce the potential dilution of Wayfair's Class A common stock upon any conversion of the Notes and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Notes upon conversion of the Notes to the extent the market price per share of Wayfair’s Class A common stock is greater than the strike price of the Capped Calls (which corresponds to the initial conversion prices of the Non-Accreting Notes, subject to certain adjustments under the terms of the Capped Calls), with such reduction and/or offset capped at the Initial Cap Price. As of September 30, 2021, the number of shares of Wayfair's Class A common stock potentially issuable at the respective conversion prices of the 2022 Notes, 2024 Notes, 2026 Notes, 2025 Notes and 2025 Accreting Notes is 25,985 shares, 4,939,825 shares, 6,389,696 shares, 3,638,950 shares and 494,733 shares. Under the Capped Calls outstanding as of September 30, 2021, the maximum cash value obtainable of the 2022 Capped Calls, 2024 Capped Calls, 2026 Capped Calls and 2025 Capped Calls, if exercised at maturity, is $207.6 million, $509.9 million, $841.3 million and $1.3 billion. For more information on the structure of the Notes and the Capped Calls, see Note 4, Debt and Other Financing.
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Segment and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information | 10. 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. Wayfair’s CODM is its Chief Executive Officer. Wayfair's operating and reportable segments are the U.S. and International. These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA. Adjusted EBITDA is defined as net (loss) income before depreciation and amortization, equity-based compensation and related taxes, interest expense, net, other income (expense), net, provision (benefit) 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. Wayfair 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, as well as interest expense, net, other income (expense), net, and provision (benefit) for income taxes, net. There are no net revenue transactions between Wayfair's reportable segments. U.S. The U.S. segment primarily consists of amounts earned through product sales through Wayfair's family of sites in the U.S. International The International segment primarily consists of amounts earned through product sales through Wayfair'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. The following tables present net revenues and Adjusted EBITDA attributable to Wayfair's reportable segments for the periods presented:
(1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net (loss) income: (a) In the nine months ended September 30, 2021, we recorded $12.2 million of customer service center impairment and other charges related to our plan to consolidate customer service centers. During the nine months ended September 30, 2020, we recorded $4.0 million in selling, operations, technology, general and administrative expenses for severance costs associated with February 2020 workforce reductions.
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Related Party Transactions |
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Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions As discussed in Note 6, Debt and Other Financing, included in Part II, Item 8, Financial Statements and Supplementary Data, of Wayfair’s Annual Report on Form 10-K for the year ended December 31, 2020, in April 2020, pursuant to the terms of the amended and restated purchase agreement, dated April 7, 2020 (the "Purchase Agreement"), Wayfair issued $535.0 million in aggregate original principal amount of 2025 Accreting Notes. The issuance of the 2025 Accreting Notes constitutes a related party transaction because of Michael W. Choe's positions as a director of Wayfair (as of May 12, 2020) and Managing Director and Chief Executive Officer of Charlesbank Capital Partners, LLC, the sole owner of the ultimate general partner of Charlesbank, a party to the Purchase Agreement; Michael Kumin's positions as a director of Wayfair and a Managing Partner at Great Hill Partners, LP, Manager of the ultimate general partner of Great Hill, a party to the Purchase Agreement; and the limited partnership interests held by Niraj Shah and Steve Conine, Wayfair's co-founders and co-chairmen, in affiliates of Great Hill and Charlesbank.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated and condensed financial statements contained in this Quarterly Report on Form 10-Q are those of Wayfair Inc. and its wholly-owned subsidiaries. Unless the context indicates otherwise, references to “we,” “us” and “our” refer to Wayfair Inc. and its subsidiaries. In our opinion, the accompanying unaudited consolidated and condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of the interim periods presented. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. Furthermore, interim results are not necessarily indicative of the results for the full year ended December 31, 2021 or future periods. Wayfair believes that other than the adoption of new accounting pronouncements that follow, there have been no significant changes during the three and nine months ended September 30, 2021 to the items disclosed in Note 1, Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2020.
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Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements Convertible Debt Wayfair adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") on January 1, 2021 using the modified retrospective approach for all financial instruments that are outstanding as of the adoption date. The new standard eliminates the cash conversion and beneficial conversion feature models that previously required separate accounting for conversion features. Entities that had those conversion features will report less interest expense as those conversion features were recorded as debt discounts which were amortized over the term of the debt. In addition, this ASU requires the application of the if-converted method when calculating diluted earnings per share. Under the new standard, the conversion of debt that is accounted for as a liability in its entirety will not result in any gain or loss if the conversion feature is exercised according to the original conversion terms. If those terms allowed the issuer to include cash as part of the settlement of the conversion feature, the issuer will first reduce the carrying amount of the convertible debt, including any unamortized premium, discount or issuance costs, by the value of the cash or other assets transferred and then recognize the remaining carrying value of the debt in the capital accounts. The adoption of ASU 2020-06 resulted in the following adjustments to the consolidated and condensed balance sheets:
The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted loss per share for the three months ended September 30, 2021:
The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted earnings (loss) per share for the nine months ended September 30, 2021:
The adoption of ASU 2020-06 did not materially impact our cash flows or compliance with debt covenants. Income Taxes Wayfair adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) on January 1, 2021, using the modified retrospective approach. This ASU simplifies the accounting for income taxes, removes certain exceptions to the general principles in Topic 740, and clarifies and amends existing guidance to improve consistent application. The effect of adoption of the new guidance was not material to our consolidated financial statements. Investments Wayfair classifies investments in certificates of deposits and marketable securities with original maturities of greater than three months as short-term investments and long-term investments on our consolidated balance sheets. Short-term investments mature in less than twelve months from the balance sheet date. We determine the cost basis of an investment sold using the specific identification method. To the extent the amortized cost basis of the available-for-sale debt securities exceeds the fair value, management assesses the debt securities for credit loss. However, management considers the risk of credit loss to be minimized by Wayfair’s policy of investing in financial instruments issued by highly-rated financial institutions. When assessing the risk of credit loss, management considers factors such as the severity and the reason of the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management’s intended holding period and time horizon for selling. From time to time, Wayfair may enter into equity investments that align with our organizational strategies and growth initiatives. Equity investments in companies for which we do not have the ability to exercise significant influence are accounted for at estimated fair value, with adjustments for observable changes in prices or impairments, and are classified as other non-current assets on our consolidated and condensed balance sheets with adjustments recognized in other income (expense), net on our consolidated and condensed statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether each investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales or acquisitions of the investee securities and other readily observable information. If the investment is impaired, we write it down to its estimated fair value. Equity investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control, over an investee, and we classify equity-method investments as other non-current assets on our consolidated and condensed balance sheets. Our share of the earnings or losses as reported by equity-method investees, amortization of basis differences, related gains or losses, and impairments, if any, are recognized in our consolidated and condensed statements of operations. Each reporting period, we evaluate whether declines in fair value below carrying value are other-than-temporary and if so, we write down the investment to its estimated fair value.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Adoption of ASU 2020-06 | The adoption of ASU 2020-06 resulted in the following adjustments to the consolidated and condensed balance sheets:
The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted loss per share for the three months ended September 30, 2021:
The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted earnings (loss) per share for the nine months ended September 30, 2021:
The adoption of ASU 2020-06 did not materially impact our cash flows or compliance with debt covenants.
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Cash and Cash Equivalents, Investments, and Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The following tables present details of Wayfair’s investment securities as of September 30, 2021 and December 31, 2020:
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Schedule of the Fair Value of the Company's Financial Assets Measured at Fair Value on a Recurring Basis Based on the Three-Tier Value Hierarchy | The following tables set forth the fair value of Wayfair’s financial assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020:
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Debt and Other Financing (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Principal and Carrying Value | The following table presents the outstanding principal amount and carrying value of debt and other financing as of the dates presented:
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Schedule of Convertible Notes | The following table summarizes certain terms related to our outstanding non-accreting convertible notes (collectively, the “Non-Accreting Notes” and together with the 2025 Accreting Notes, the “Notes”):
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Schedule of Interest Expense Related to Notes | The following tables present total interest expense recognized for the Notes for the three and nine months ended September 30, 2021 and 2020, which included the reversal of interest expense we recorded in 2020 for a portion of interest accretion for the 2025 Accreting Notes that was not realized in 2021:
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Schedule of Initial Terms for Capped Calls | The initial terms for the Capped Calls are presented below:
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Equity-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity Relating to Stock Options | The following table presents activity relating to stock options for the nine months ended September 30, 2021:
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Schedule of Activity Relating to Restricted Stock Units | The following table presents activity relating to RSUs for the nine months ended September 30, 2021:
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(Loss) Earnings per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Basic and Diluted Net (Loss) Income Per Share | The following table presents the calculation of basic and diluted (loss) earnings per share:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted (loss) earnings per share were as follows:
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Segment and Geographic Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity Related to Net Revenue and Adjusted EBITDA | The following tables present net revenues and Adjusted EBITDA attributable to Wayfair's reportable segments for the periods presented:
(1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net (loss) income: (a) In the nine months ended September 30, 2021, we recorded $12.2 million of customer service center impairment and other charges related to our plan to consolidate customer service centers. During the nine months ended September 30, 2020, we recorded $4.0 million in selling, operations, technology, general and administrative expenses for severance costs associated with February 2020 workforce reductions.
|
Summary of Significant Accounting Policies - Adoption of ASU 2020-06 (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Jan. 01, 2021 |
Dec. 31, 2020 |
|
Balance sheet line item: | ||||||
Long-term debt | $ 3,049,475 | $ 3,049,475 | $ 3,310,065 | $ 2,659,243 | ||
Other non-current liabilities | 48,736 | 48,736 | 46,413 | 67,031 | ||
Additional paid-in capital | 221,733 | 221,733 | 0 | 698,482 | ||
Accumulated deficit | $ (1,747,030) | $ (1,747,030) | $ (1,817,671) | (1,885,950) | ||
Loss per share: | ||||||
Basic (in usd per share) | $ (0.75) | $ 1.82 | $ 0.68 | $ 1.70 | ||
Diluted (in usd per share) | (0.75) | $ 1.67 | 0.65 | $ 1.64 | ||
Difference | ||||||
Loss per share: | ||||||
Basic (in usd per share) | 0.28 | 1.04 | ||||
Diluted (in usd per share) | 0.28 | 1.01 | ||||
Under Legacy Accounting | ||||||
Loss per share: | ||||||
Basic (in usd per share) | (1.03) | (0.36) | ||||
Diluted (in usd per share) | $ (1.03) | $ (0.36) | ||||
Adoption of ASU 2020-06 | ||||||
Balance sheet line item: | ||||||
Long-term debt | 650,822 | |||||
Other non-current liabilities | (20,618) | |||||
Additional paid-in capital | (698,482) | |||||
Accumulated deficit | $ 68,279 |
Supplemental Financial Statement Disclosures - Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Supplemental Financial Statement Disclosures [Abstract] | |||
Accounts receivable, net | $ 166,497 | $ 166,497 | $ 110,299 |
Accounts receivable allowance for credit losses | $ 18,600 | $ 18,600 | $ 21,400 |
Revenue, collection in advance of recognition (in percentage) | 99.00% | 99.00% |
Supplemental Financial Statement Disclosures - Contractual Liabilities (Details) - Other current liabilities - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Other Current Liabilities | ||
Contract liabilities | $ 287.6 | $ 298.1 |
Revenue recognized that was included in deferred revenue | $ 239.4 |
Supplemental Financial Statement Disclosures - Customer Service Center Impairment and Other Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Supplemental Financial Statement Disclosures [Abstract] | |||||
Customer service center impairment and other charges | $ 0 | $ 12,200 | $ 0 | $ 12,212 | $ 0 |
Impairment of right-of-use (“ROU”) assets | 6,300 | ||||
Accelerated depreciation of fixed assets | $ 5,000 |
Cash and Cash Equivalents, Investments, and Fair Value Measurements - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||||
Realized gains or losses | $ 0 | $ 0 | $ 0 | $ 0 | |
Debt securities, available-for-sale, realized gain | 800,000 | ||||
Credit losses recognized | 0 | $ 0 | 0 | 0 | |
Allowance for credit losses | 0 | 0 | $ 0 | ||
Other equity investments | 20,000,000 | 20,000,000 | |||
Equity method investments | $ 5,000,000 | 5,000,000 | |||
Long-term Investment securities | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||||
Proceeds from sale of investments | $ 161,300,000 | ||||
Warrants | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||||
Vesting period | 5 years | ||||
Payments to acquire other investments | $ 7,600,000 | ||||
Change in the value of the warrants | $ 1,800,000 | $ 1,800,000 |
Cash and Cash Equivalents, Investments, and Fair Value Measurements - Schedule of Marketable Securities (Details) - Short-term Investment securities - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair value measurements | ||
Amortized Cost | $ 528,391 | $ 461,683 |
Gross Unrealized Gains | 31 | 20 |
Gross Unrealized Losses | (30) | (5) |
Estimated Fair Value | $ 528,392 | $ 461,698 |
Debt and Other Financing - Convertible Non-Accreting Notes (Details) - Convertible Debt |
Sep. 30, 2021 |
---|---|
2022 Notes | |
Debt Instrument | |
Annual coupon rate (in percentage) | 0.375% |
Annual effective interest rate (in percentage) | 0.90% |
2024 Notes | |
Debt Instrument | |
Annual coupon rate (in percentage) | 1.125% |
Annual effective interest rate (in percentage) | 1.50% |
2026 Notes | |
Debt Instrument | |
Annual coupon rate (in percentage) | 1.00% |
Annual effective interest rate (in percentage) | 1.20% |
2025 Notes | |
Debt Instrument | |
Annual coupon rate (in percentage) | 0.625% |
Annual effective interest rate (in percentage) | 0.90% |
Debt and Other Financing - Conversion and Redemption Terms of the Notes (Details) - Convertible Debt |
9 Months Ended |
---|---|
Sep. 30, 2021
$ / shares
| |
2022 Notes | |
Debt Instrument | |
Debt instrument, convertible, conversion ratio | 0.00961 |
Initial Conversion Price (in usd per share) | $ 104.06 |
2024 Notes | |
Debt Instrument | |
Debt instrument, convertible, conversion ratio | 0.008591 |
Initial Conversion Price (in usd per share) | $ 116.4 |
2026 Notes | |
Debt Instrument | |
Debt instrument, convertible, conversion ratio | 0.0067349 |
Initial Conversion Price (in usd per share) | $ 148.48 |
2025 Notes | |
Debt Instrument | |
Debt instrument, convertible, conversion ratio | 0.0023972 |
Initial Conversion Price (in usd per share) | $ 417.15 |
2025 Accreting Notes | |
Debt Instrument | |
Debt instrument, convertible, conversion ratio | 0.0137931 |
Initial Conversion Price (in usd per share) | $ 72.5 |
Debt and Other Financing - Schedule of Interest Expense Related to Notes (Details) - Convertible Debt - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Debt Instrument | ||||
Contractual Interest Expense | $ 6,589 | $ 8,762 | $ 18,045 | $ 20,689 |
Debt Discount Amortization | 1,903 | 28,470 | 5,873 | 71,712 |
Total Interest Expense | 8,492 | 37,232 | 23,918 | 92,401 |
2022 Notes | ||||
Debt Instrument | ||||
Contractual Interest Expense | 3 | 224 | 26 | 1,033 |
Debt Discount Amortization | 5 | 2,970 | 42 | 13,471 |
Total Interest Expense | 8 | 3,194 | 68 | 14,504 |
2024 Notes | ||||
Debt Instrument | ||||
Contractual Interest Expense | 1,617 | 1,617 | 4,851 | 4,852 |
Debt Discount Amortization | 543 | 7,172 | 1,621 | 21,075 |
Total Interest Expense | 2,160 | 8,789 | 6,472 | 25,927 |
2026 Notes | ||||
Debt Instrument | ||||
Contractual Interest Expense | 2,372 | 2,372 | 6,984 | 7,063 |
Debt Discount Amortization | 478 | 8,759 | 1,561 | 25,912 |
Total Interest Expense | 2,850 | 11,131 | 8,545 | 32,975 |
2025 Notes | ||||
Debt Instrument | ||||
Contractual Interest Expense | 2,372 | 1,239 | 7,116 | 1,239 |
Debt Discount Amortization | 852 | 6,937 | 2,548 | 6,937 |
Total Interest Expense | 3,224 | 8,176 | 9,664 | 8,176 |
2025 Accreting Notes | ||||
Debt Instrument | ||||
Contractual Interest Expense | 225 | 3,310 | (932) | 6,502 |
Debt Discount Amortization | 25 | 2,632 | 101 | 4,317 |
Total Interest Expense | $ 250 | $ 5,942 | $ (831) | $ 10,819 |
Debt and Other Financing - Schedule of Initial Terms for Capped Calls (Details) - Convertible Debt - Class A common stock |
9 Months Ended |
---|---|
Sep. 30, 2021
$ / shares
| |
2022 Capped Calls | |
Debt Instrument | |
Initial Cap Price (usd dollars per share) | $ 154.16 |
Cap Price Premium (as percentage) | 100.00% |
2024 Capped Calls | |
Debt Instrument | |
Initial Cap Price (usd dollars per share) | $ 219.63 |
Cap Price Premium (as percentage) | 150.00% |
2026 Capped Calls | |
Debt Instrument | |
Initial Cap Price (usd dollars per share) | $ 280.15 |
Cap Price Premium (as percentage) | 150.00% |
2025 Capped Calls | |
Debt Instrument | |
Initial Cap Price (usd dollars per share) | $ 787.08 |
Cap Price Premium (as percentage) | 150.00% |
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Jan. 01, 2021 |
Dec. 31, 2014 |
|
Employee stock options | ||||
Equity based compensation | ||||
Intrinsic value of stock options exercised | $ 5.9 | $ 4.4 | ||
Restricted stock units | ||||
Equity based compensation | ||||
Intrinsic value of stock vested | 583.7 | $ 342.9 | ||
Aggregate intrinsic value of stock unvested | 1,100.0 | |||
Unrecognized equity-based compensation | $ 753.8 | |||
Weighted average remaining vesting term | 1 year 2 months 12 days | |||
2014 Plan | ||||
Equity based compensation | ||||
Number of shares available for future grant (in shares) | 6,224,792 | 8,603,066 |
Equity-Based Compensation - Summary of Activity Relating to Stock Options (Details) - Employee stock options - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Shares | ||
Outstanding at the beginning of the period (in shares) | 19,046 | |
Options exercised (in shares) | (19,026) | |
Options forfeited/canceled (in shares) | (20) | |
Outstanding at the end of the period (in shares) | 0 | 19,046 |
Exercisable at the end of the period (in shares) | 0 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 2.99 | |
Options exercised (in dollars per share) | 2.98 | |
Options forfeited/canceled (in dollars per share) | 3.42 | |
Outstanding at the end of the period (in dollars per share) | 0 | $ 2.99 |
Exercisable at the end of the period (in dollars per share) | $ 0 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding | 0 days | 6 months |
Exercisable | 0 days |
Equity-Based Compensation - Summary of Activity Relating to Restricted Stock (Details) - Restricted stock units |
9 Months Ended |
---|---|
Sep. 30, 2021
$ / shares
shares
| |
Shares | |
Unvested at the beginning of the period (in shares) | shares | 5,975,299 |
RSUs granted (in shares) | shares | 1,329,322 |
RSUs vested (in shares) | shares | (2,011,898) |
RSUs forfeited/canceled (in shares) | shares | (800,851) |
Unvested at the end of the period (in shares) | shares | 4,491,872 |
Weighted- Average Grant Date Fair Value | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 134.03 |
RSUs granted (in dollars per share) | $ / shares | 304.15 |
RSUs vested (in dollars per share) | $ / shares | 122.34 |
RSUs forfeited/canceled (in dollars per share) | $ / shares | 153.21 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 186.30 |
Income Taxes (Details) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
(Loss) Earnings per Share - Antidilutive Securities (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares) | 19,977 | 13,344 | 15,869 | 20,742 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares) | 4,492 | 116 | 318 | 510 |
Shares related to convertible debt instruments | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares) | 15,485 | 13,228 | 15,551 | 20,232 |
Segment and Geographic Information - Net Revenues and Adjusted EBITDA (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Segment Reporting Information | |||||
Net revenue | $ 3,121,083 | $ 3,839,570 | $ 10,456,227 | $ 10,474,305 | |
Adjusted EBITDA | 101,051 | 371,112 | 617,658 | 683,648 | |
Less: reconciling items | (179,072) | (197,946) | (547,017) | (522,470) | |
Net (loss) income | (78,021) | 173,166 | 70,641 | 161,178 | |
Depreciation and amortization | 81,917 | 72,575 | 240,154 | 208,532 | |
Equity-based compensation and related taxes | 88,932 | 76,683 | 263,541 | 211,376 | |
Interest expense, net | 8,406 | 36,315 | 23,620 | 87,472 | |
Other (income) expense, net | (3,889) | 13,584 | 1,657 | 10,720 | |
Provision (benefit) for income taxes, net | 3,706 | (1,211) | 5,833 | 414 | |
Other | 0 | 0 | 12,212 | 3,956 | |
Total reconciling items | 179,072 | 197,946 | 547,017 | 522,470 | |
Customer service center impairment and other charges | 0 | $ 12,200 | 0 | 12,212 | 0 |
Selling, operations, technology, general and administrative | 497,571 | 441,960 | 1,435,388 | 1,377,410 | |
Employee Severance | |||||
Segment Reporting Information | |||||
Selling, operations, technology, general and administrative | 4,000 | ||||
U.S. | |||||
Segment Reporting Information | |||||
Net revenue | 2,594,964 | 3,274,872 | 8,513,807 | 8,901,559 | |
Adjusted EBITDA | 167,091 | 377,007 | 716,887 | 766,486 | |
International | |||||
Segment Reporting Information | |||||
Net revenue | 526,119 | 564,698 | 1,942,420 | 1,572,746 | |
Adjusted EBITDA | $ (66,040) | $ (5,895) | $ (99,229) | $ (82,838) |
Related Party Transactions (Details) - 2025 Accreting Notes - Convertible Debt - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
Apr. 07, 2020 |
---|---|---|---|
Related Party Transaction | |||
Principal Amount | $ 35,868,000 | $ 288,464,000 | |
Director | |||
Related Party Transaction | |||
Principal Amount | $ 535,000,000 |
Label | Element | Value |
---|---|---|
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |
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