Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of April 30, ~~2021,~~2023, the number of shares of the registrant’s Class A common stock outstanding was ~~505 million and the number of shares of the registrant’s Class B common stock outstanding was 114 million.~~23,564 thousand.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, ~~("Securities Act"),~~ and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), which statements involve substantial risks and uncertainties. Forward-looking statements include all statements that are not historical facts such as information concerning our possible or assumed future results of operations and expenses, new or planned features or services, management strategies and plans, competitive position, business environment and potential growth strategies and opportunities. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “foresees,” “forecasts,” “intends,” “goals,” “may,” “might,” “outlook,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Those risks include those described in Part II, Item 1A. “~~Risk Factors~~”“Risk Factors” in this Quarterly Report on Form 10-Q, as well as in our condensed consolidated financial statements, related notes, and the other information appearing elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2022 and our other filings with the Securities and Exchange ~~Commission.~~Commission (“SEC”). The inclusion of forward-looking information should not be regarded as a representation by us, our management or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. Given these uncertainties, you should not place undue reliance on any forward-looking statements in this Quarterly Report on Form 10-Q.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant ~~subject.~~subject, including, but not limited to, statements regarding future financial performance; implementation and execution of business strategies, including turnaround and restructuring plans; implementation and execution of marketing and promotional strategies, including promotional events and rebrand efforts; the extent and impact of our announced share repurchase program; our future liquidity and operating expenditures; the impact of the 1-to-30 reverse stock split; compliance with Nasdaq continued listing requirements; CEO transition; financial condition and results of operations; our future market position, technological advances, and competitive changes in the marketplace; expected consumer behavior; the outcome of ongoing litigation; our expected tax rate; the effect of changes in or the application of new or revised tax laws; the effect of new accounting pronouncements; and other characterizations of future events or circumstances. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the ~~Securities and Exchange Commission~~SEC as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

The accompanying notes are an integral part of these condensed consolidated financial statements.

There have been no changes to the Company’s significant accounting policies described in its ~~Annual Report on~~2022 Form 10-K, ~~for the year ended December 31, 2020,~~ filed with the SEC on ~~March 25, 2021,~~February 27, 2023, that have had a material impact on its condensed consolidated financial statements.

NOTE 3. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

The Company’s financial instruments consist of cash equivalents, marketable securities, funds receivable, derivative instruments, accounts payable, accrued liabilities and merchants payable. Cash equivalents’ carrying value approximates fair value at the balance sheet dates, due to the short period of time to maturity. Marketable securities and derivative instruments are recognized at fair value. Funds receivable, accounts payable, accrued liabilities and merchants payable carrying values approximate fair value due to the short time to the expected receipt or payment date.

Assets and liabilities recognized at fair value on a recurring basis in the condensed consolidated balance sheets consisting of cash equivalents, marketable securities and derivative instruments are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows:


	March 31, 2021								March 31, 2023
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)								(in millions)
Financial assets:
Cash equivalents:
Money market funds	$	97	$	97	$	—	$	—	$	47	$	47	$	—	$	—
Marketable securities:
U.S. Treasury bills	$	35	$	—	$	35	$	—	$	194	$	—	$	194	$	—
Commercial paper		62		—		62		—		26		—		26		—
Corporate bonds		52		—		52		—		33		—		33		—
Non-US government		5		—		5		—
U.S. government agency										3		—		3		—
Total marketable securities	$	154	$	—	$	154	$	—	$	256	$	—	$	256	$	—
Prepaid and other current assets:
Derivative assets									$	1	$	—	$	1	$	—
Total financial assets	$	251	$	97	$	154	$	—	$	304	$	47	$	257	$	—
Financial liabilities:
Accrued liabilities:
Derivative liabilities	$	2	$	—	$	2	$	—	$	2	$	—	$	2	$	—
Total financial liabilities	$	2	$	—	$	2	$	—	$	2	$	—	$	2	$	—


	December 31, 2022
	Total		Level 1		Level 2		Level 3
	(in millions)
Financial assets:
Cash equivalents:
Money market funds	$	50	$	50	$	—	$	—
Corporate bonds		2		—		2	$	—
Total cash equivalents	$	52	$	50	$	2	$	—
Marketable securities:
U.S. Treasury bills	$	173	$	—	$	173	$	—
Commercial paper		7		—		7		—
Corporate bonds		29		—		29		—
Non-U.S. government		4		—		4		—
Total marketable securities	$	213	$	—	$	213	$	—
Prepaid and other current assets:
Derivative assets	$	6	$	—	$	6	$	—
Total financial assets	$	271	$	50	$	221	$	—
Financial liabilities:
Accrued liabilities:
Derivative liabilities	$	2	$	—	$	2	$	—
Total financial liabilities	$	2	$	—	$	2	$	—

The Company classifies cash equivalents and marketable securities within Level 1 or Level 2 because the Company uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The derivative asset and liability related to the Company’s foreign currency derivative contracts are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, including currency spot and forward rates.

The following table summarizes the contractual maturities of the Company’s marketable securities:

All of the Company’s available-for-sale marketable securities are subject to a periodic evaluation for a credit loss allowance and impairment review. The Company did not identify any of its available-for-sale marketable securities requiring an allowance for credit loss or as other-than-temporarily impaired in any of the periods presented. Additionally, the unrealized net gain and net loss on available-for-sale marketable securities as of March 31, ~~2021~~2023 and December 31, ~~2020~~2022 were immaterial.

The Company conducts business in certain foreign currencies throughout its worldwide operations, and various entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, the Company is exposed to foreign exchange gains or losses which impact the Company’s operating results. The Company bills its users ~~based on~~in their local currencies, primarily in U.S. dollars and Euros, and the Company makes payments to ~~the~~ merchants ~~in China~~ for products sold on the ~~Wish platform~~Company’s platforms in ~~Renminbi,~~various currencies through third party payment service providers, which creates exposure to currency rate fluctuations. The Company hedges these ~~cash flow~~ exposures to reduce the risk that its earnings and cash flows will be adversely affected by changes in exchange rates. As part of the Company’s foreign currency risk mitigation strategy, the Company enters into derivative contracts and foreign exchange forward contracts with up to twelve months in duration to hedge exposures for variability in U.S.-dollar equivalent of non-U.S.-dollar denominated cash flows associated with its forecasted revenue related transactions.

The Company’s derivatives transactions are not collateralized and do not include collateralization agreements with counterparties. The Company does not use derivative financial instruments for speculative or trading purposes.

The Company recognizes changes in fair value of the cash flow hedges of foreign currency denominated merchants payable in accumulated other comprehensive loss in its condensed consolidated balance sheets until the forecasted transaction occurs. When the forecasted transaction affects earnings, the Company reclassifies the related gain or loss on the cash flow hedge to core marketplace revenue. All amounts in other comprehensive ~~income~~loss at period end are expected to be reclassified to earnings within 12 months. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company reclassifies the gain or loss on the related cash flow hedge from accumulated other comprehensive loss to core marketplace revenue. For the three months ended March 31, ~~2021,~~2023 and 2022, there were 0no net gains or losses recognized in core marketplace revenue relating to hedges of forecasted transactions that did not occur. ~~The Company did not have a hedging program during the three months ended March 31, 2020.~~

The Company classifies cash flows related to its cash flow hedges as operating activities in its condensed consolidated statements of cash flows.

The net gains on the change in fair value of the Company’s foreign exchange forward contracts ~~not~~not designated as hedging instruments were ~~approximately $4~~insignificant for the three months ended March 31, 2023 and $1 million for the three months ended March 31, ~~2021~~2022, and were recognized in other income, ~~(expense),~~ net in the condensed consolidated ~~statement~~statements of operations. ~~The Company did not have a hedging program during the three months ended March 31, 2020.~~

The Company classifies cash flows related to its non-designated hedging instruments as operating activities in its condensed consolidated statements of cash flows.

In November 2020, the Company entered into a five-year ~~$280~~ $280 million senior secured revolving credit facility (the “Revolving Credit Facility”) ~~to, among other things, permit the Company to increase its aggregate commitments by up to $100 million, if an accordion option is exercised and provided~~. If the Company is able to secure additional lender commitments and satisfy certain other conditions, ~~and~~the aggregate facility commitments can be increased by up to ~~enter~~$100 million through an accordion option. The Company also enters into letters of credit from time to time, which reduces its borrowing capacity under the Revolving Credit Facility. Interest on any borrowings under the Revolving Credit Facility accrues at either adjusted LIBOR plus ~~1.50%~~1.50% or at an alternative base rate plus ~~0.50%~~0.50%, at the Company’s election, and the Company is required to pay a commitment fee that accrues at ~~0.25%~~0.25% per annum on the unused portion of the aggregate commitments under the Revolving Credit Facility. The Company is required to pay a fee that accrues at ~~1.50%~~1.50% per annum on the average daily amount available to be drawn under any letters of credit outstanding under the Revolving Credit Facility.

The Revolving Credit Facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the Company’s ability (and the ability of certain of the Company’s subsidiaries) to incur indebtedness, grant liens, make certain fundamental changes and asset sales, make distributions to stockholders, make investments or engage in transactions with affiliates. It also contains a minimum liquidity financial covenant of ~~$350~~$350 million, which includes unrestricted cash and any available borrowing capacity under the Revolving Credit Facility. The obligations under the Revolving Credit Facility are secured by liens on substantially all of the Company’s domestic assets and are guaranteed by any material domestic subsidiaries, subject to customary exceptions. A standby letter of credit in the amount of approximately ~~$10~~$7 million has been issued under the Revolving Credit Facility in conjunction with the lease of the Company’s headquarters in San Francisco, California. As of March 31, ~~2021,~~2023, the Company had 0tnot made any borrowings under the Revolving Credit Facility and it was in compliance with the related financial covenants.

~~During 2019, the Company amended a marketing arrangement which increased the total commitment~~ Fees incurred under the ~~agreement and extended~~Revolving Credit Facility were insignificant for the ~~arrangement to July 31, 2021. As of~~three months ended March 31, ~~2021, the remaining commitment under the amended agreement was $5 million, which is payable in 2021.~~2023 and 2022.

Effective September 1, ~~2019,~~2022, the Company entered into an amendment to a colocation and cloud services arrangement committing the Company to make payments of ~~$120~~$85 million for services over 3 years. As of March 31, ~~2021,~~2023, the remaining commitment under this amended agreement was approximately ~~$35~~$64 million and is payable within the next ~~two~~three years.

Beginning in May 2021, four putative class action lawsuits were filed in the U.S. District Court for the Northern District of California against the Company, its directors, certain of its officers and the underwriters named in its initial public offering (“IPO”) registration statement alleging violations of securities laws based on statements made in its registration statement on Form S-1 filed with the SEC in connection with its IPO and seeking monetary damages. One of these cases has since been dismissed by the plaintiff and the remaining three have been coordinated and consolidated. In May 2022, the Court appointed lead plaintiffs, who subsequently filed an amended consolidated class action complaint pursuant to Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act. On April 10, 2023, the plaintiffs filed an amended complaint and assert only claims made under Sections 11 and 15 of the Securities Act. The Company believes these lawsuits are without merit and intends to vigorously defend them. Based on the preliminary nature of the proceedings in these cases, the Company cannot estimate a range of potential losses at this point in time.

In August 2021, a shareholder derivative action purportedly brought on behalf of the Company, Patel v. Szulczewski, was filed in the U.S. District Court for the Northern District of California alleging that the Company’s directors and officers made or caused the Company to make false and/or misleading statements about the Company’s business operations and financial prospects in various public filings. Plaintiff asserts claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, violations of Section 14(a) of the Exchange Act, and for contribution under Sections 10(b) and 21D of the Exchange Act and is seeking monetary damages. This matter is currently stayed. The Company believes this lawsuit is without merit and it intends to vigorously defend it. Based on the preliminary nature of the proceedings in these cases, the Company cannot estimate a range of potential losses at this time.

In November 2021, France’s Directorate General for Competition, Consumer Affairs and Repression of Fraud (“DGCCRF”) issued an injunction delisting the Wish “App” from Google Play and the Apple App Store, and blocking Wish from appearing in Google, Bing and Qwant search results on the premise that unsafe products or products of poor quality are available for purchase on Wish. On March 10, 2023, the DGCCRF determined that the Company is in compliance with the injunction and applicable regulatory requirements, and lifted the injunction. As a result, the Company has been relisted and has returned to the application stores, such as Google Play and the Apple App Store, and search engines, such as Google, Bing and Qwant, in France. Although the underlying case reviewing the legal question of whether the agency has the power to delist any company remains pending, the Company no longer believes there is a reasonable possibility of a material loss.

In December 2021, the Company became aware that authorities in France charged Wish with legal violations relating to the Company’s former practice and use of strikethrough pricing in France, the Company’s previous failure to translate into French listings and product details on the Company’s app and website, and the Company’s anti-counterfeiting policies and practices. The Company reached a monetary settlement with DGCCRF on this matter and on March 10, 2023, the Court approved an immaterial settlement assessed to the Company and the Company's former Chief Executive Officer, Piotr Szulczewski and dismissed the case against both the Company and Mr. Szulczewski.

As of March 31, ~~2021 and December 31, 2020,~~2023, in the opinion of management, there were no other legal contingency matters that arose in the ordinary course of business, either individually or in aggregate, that would have a material adverse effect on the financial position, results of operations, or cash flows of the Company. Given the unpredictable nature of legal proceedings, the Company bases its estimate on the information available at the time of the assessment. As additional information becomes available, the Company ~~reassesses~~will reassess the potential liability and may revise the estimate.

NOTE 8. EQUITY Award activity and STOCK-based compensation

Equity Award Activity

A summary of activity under the equity plans and related information is as follows:

Options Outstanding

RSUs Outstanding

Number of
Options

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term (In
Years)

Number of
RSUs

(in millions)

(in millions)

Balances at December 31, 2020

75

$
0.234

3.2

30

Granted

—

$
—

1

Vested⁽¹⁾

—

$
—

(3
)
Exercised

(2
)

$
0.154

—

Balances at March 31, 2021⁽²⁾

73

$
0.236

3.0

28


	Options Outstanding						RSUs Outstanding
	Number of Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)		Number of RSUs
	(in thousands)						(in thousands)
Balances at December 31, 2022		67	$	31.17	9.5			2,399
Granted		299	$	15.03				914
Vested								(320	)
Forfeited or cancelled		—						(257	)
Balances at March 31, 2023		366	$	18.00		9.8		2,736

~~(1)~~

For the three months ended March 31, 2021, approximately 3 million RSUs vested upon satisfying both the service and liquidity vesting conditions. The shares remained unreleased as of March 31, 2021 due to the lock-up provisions related to the Company’s IPO.

~~(2)~~

~~Outstanding RSUs as of March 31, 2021 include 10 million units of CEO Performance Award.~~

The weighted-average grant date fair value of ~~restricted stock units (“RSUs”)~~RSUs granted during the three months ended March 31, ~~2021~~2023 and 2022 was ~~$22.01~~$25.92 and $55.80 per ~~share.~~share, respectively. As of March 31, 2023, 2,149 thousand shares remained available for grant under the Company’s equity incentive plans.

CEO Transition

In February 2023, the Board appointed Jun Yan as the Company's CEO, who was then serving as the Company's interim CEO. According to the terms of his new employment agreement, Mr. Yan was granted (i) 167 thousand RSUs with an aggregate grant date fair value of $3 million and (ii) options to purchase 299 thousand shares of the Company's common stock at an exercise price $15.03 per share with an aggregate grant date fair value of $3 million. These RSUs and options will become vested and exercisable, respectively, in periodic installments over a 2-year term, subject to the CEO's continued service with the Company. The option award has a term of 10 years. Mr. Yan's equity awards granted under his previous employment agreement as interim CEO will continue to vest according to the terms of that agreement.

Stock Option Valuation

The fair value of options was estimated using the Black-Scholes option pricing model which takes into account inputs such as the exercise price, the value of the underlying shares as of the grant date, expected term, expected volatility, risk free interest rate, and dividend yield. The fair value of the options was determined using the methods and assumptions discussed below:

•

The expected term of the options was determined using the “simplified” method as prescribed in the SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data.

•

The risk-free interest rate was based on the interest rate payable on the U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term.

•

The expected volatility was based on the historical volatility of the publicly traded common stock of peer group companies blended with the limited historical volatility of the Company’s own common stock weighted to reflect the trading period of the Company’s stock since its IPO in December 2020.

•

The expected dividend yield was zero because the Company has not historically paid and does not expect to pay a dividend on its ordinary shares in the foreseeable future.

A summary of the assumptions used in the Black-Scholes option pricing model to determine the fair value of the options is as follows:


	Three months ended March 31,
	2023			2022
Expected term (in years)		5.55			6.10
Risk free interest rate		4.15	%		1.70	%
Volatility		91.51	%		73.20	%
Dividend yield		—			—
Estimated fair value per share	$	11.27		$	56.10

Stock-Based Compensation Expense

Total stock-based compensation expense included in the condensed consolidated statements of operations is as follows:


	Three Months Ended
	March 31,
	2023		2022
	(in millions)
Cost of revenue	$	1	$	(1	)
Sales and marketing		1		1
Product development		16		14
General and administrative		8		(16	)
Total stock-based compensation(1)	$	26	$	(2	)

Three Months Ended

March 31,

2021

2020

(in millions)

Cost of revenue

$
5

$
—

Sales and marketing

3

—

Product development

15

—

General and administrative

14

—

Total stock-based compensation

$
37

$
—

(1)

Total stock-based compensation for the three months ended March 31, 2023 increased by $28 million compared to the three months ended March 31, 2022 primarily due to (i) accelerated vesting of the Company's former Chief Product Officer and Chief Administrative Officer's RSUs upon their departures in accordance to their separation agreements during the first quarter of 2023, and (ii) forfeitures originating from the resignation of the Company’s former CEO, and modifications to the Company’s former Executive Chair’s equity awards during the first quarter of 2022.

The Company will recognize the remaining ~~$134~~$4 million and ~~$72~~$140 million of unrecognized stock-based compensation expense over a weighted-average period of approximately ~~1.32~~1.7 years and ~~3.84~~2.5 years related to options and RSUs, ~~and CEO Performance Award,~~ respectively.

~~Employee Stock Purchase Plan~~

The Company’s Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 15% of eligible compensation, subject to caps of $25,000 in any calendar year and 2,500 shares on any purchase date. The ESPP provides for 24-month offering periods, generally beginning in November and May of each year, and each offering period consists of four six-month purchase periods. The initial offering period began on January 1, 2021 and will end in November 2022. The first purchase under the ESPP will be in May 2021.

On each purchase date, participating employees will purchase Class A common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the first trading day of the applicable offering period and (2) the last trading day of each purchase period in the applicable offering period. If the stock price of the Company's Class A common stock on any purchase date in an offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period.

The Company uses the Black-Scholes option pricing model to determine the fair value of shares to be purchased under the 2020 Employee Stock Purchase Plan (“ESPP”) with the following assumptions on the date of grant:

	~~Three Months Ended~~
	~~March 31, 2021~~
~~Expected term (in years)~~	~~0.38 to 1.88~~
~~Risk free interest rate~~	~~0.09% to 0.13%~~
~~Volatility~~	~~46.45% to 62.28%~~
~~Dividend yield~~		—
~~Estimated fair value per ESPP share~~	~~$4.14 to $8.05~~

NOTE 9. INCOME TAXES

The Company’s tax provision for the interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company assesses its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in the period of change.

The Company’s quarterly tax provision and the estimate of the annual effective tax rate is subject to fluctuation due to several factors, including variability in pre-tax earnings, the geographic distribution of the pre-tax earnings, tax law

changes, non-deductible expenses, such as stock-based compensation, and changes in the estimate of the valuation allowance.

The provision for income taxes was ~~$2 million for the three months ended March 31, 2021 and was~~ insignificant for the three months ended March 31, ~~2020.~~2023 and 2022, respectively. The year-over-year ~~increase~~decrease in provision for income taxes was primarily related to a decrease in pre-tax earnings of the Company’s international operations. The Company continues to maintain a valuation allowance on its domestic net deferred tax assets which is excluded from the annual effective tax rate estimate.

The Company had ~~immaterial~~$11 million and $9 million of unrecognized tax benefits as of March 31, ~~2021~~2023 and December 31, ~~2020, fully offset by a valuation allowance.~~2022, respectively. These unrecognized tax benefits, if recognized, would 0t affect the effective tax rate. ~~NaN~~The interest orand penalties ~~were incurred during~~associated with the ~~years~~unrecognized tax benefits for the three months ended March 31, ~~2021~~2023 and ~~2020.~~2022 were immaterial.

The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits. Certain tax years are subject to foreign income tax examinations by tax authorities until the statute of limitations expire.

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect:

The Company believes it is relevant to disclose geographical revenue information on both a demand basis, determined by the ship-to address of the user, and on a supply basis, determined by the location of the merchants’ operations.

China accounted for substantially all of marketplace and logistics revenue during the three months ended March 31, ~~2021~~2023 and ~~2020~~2022 based on the location of the merchants’ operations. Marketplace and logistics revenue from merchants based in the United States was immaterial in both periods presented.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition, results of operations and cash flows should be read in conjunction with (1) the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and (2) the audited ~~condensed~~ consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, ~~2020~~2022 included in our Annual Report on Form 10-K ~~filed on March 25, 2021. This~~for the year ended December 31, 2022 (the "2022 Form 10-K"). Unless otherwise indicated, all results presented are prepared in a manner that complies, in all material respects, with U.S. GAAP. Additionally, unless otherwise indicated, all changes identified for the current-period results represent comparisons to results for the prior corresponding fiscal period. Our discussion ~~contains~~and analysis may contain forward-looking statements ~~based upon current expectations~~ that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of ~~various~~certain factors, including those set forth under ~~the heading "Risk Factors"~~“Risk Factors” in ~~Part I,~~ Item 1A of our ~~Annual~~2022 Form 10-K, as updated and supplemented by our Quarterly Reports on Form 10-Q, including in Part 2, Item 1A, the Special Note Regarding Forward-Looking Statements in this Quarterly Report on Form ~~10-K for our year ended December 31, 2020. See also "Special Note Regarding Forward-Looking Statements" above.~~10-Q, and elsewhere in this Quarterly Report on Form 10-Q.

As of March 31, ~~2021,~~2023, we had an accumulated deficit of ~~$2.3~~$3.0 billion. We expect losses from operations to continue for the foreseeable future as we incur costs and expenses related to brand development, expansion of market share, and continued development of our mobile shopping marketplace ~~infrastructure and development of other businesses.~~infrastructure.

~~The outbreak of coronavirus disease 2019 (“COVID-19”) has affected businesses worldwide, as of~~We are monitoring the date of filing of this Quarterly Report, and continues to impact the major markets in which we operate. The COVID-19 pandemic has resulted in significant governmental measures being implemented to control the spread of the virus, and our operations as well as the operations of our third-party merchants and users have been and will continue to be disrupted by varying individual and governmental responses to COVID-19 around the world, such as business shutdowns, stay-at-home directives, travel restrictions, border closures, and other travel or health-related restrictions as well as by absenteeism, quarantines, self-isolations, office and factory closures, delays on deliveries, and disruptions to ports and other freight infrastructure. These restrictions may cause consumers and businesses to reduce their activities and their spending, have caused a slowdownrecent volatility in the global ~~economy~~financial markets, including inflation, instability in the banking sector, and ~~have had, and may~~rising interest rates. These developments could continue to ~~have, a negative~~negatively impact onglobal economic activity and consumer behavior, which may adversely affect our business and our results of operations. IfAs our customers react to these global economic conditions, ~~continue, sales volumes may decrease and~~ we may ~~among other issues, experience~~take additional precautionary measures to limit or ~~continue~~delay expenditures and preserve capital and liquidity.

In January 2023, we announced a plan to ~~experience delays~~further reduce our workforce by up to an additional 150 employees, representing approximately 17% of our then global workforce. The reduction in ~~product development, a decreased ability~~workforce ("RIF") is intended to refocus our operations to support our ~~merchants, disruptions in sales, delivery~~ongoing business prioritization efforts, better align resources, and ~~logistics, each~~improve operational efficiencies. In connection with the RIF, we incurred a one-time charge of ~~which could have a negative impact on our ability to meet shipment commitments~~approximately $3 million consisting of severance and ~~on our revenue and profitability.~~other personnel reduction costs. We expect that the implementation of the RIF will be substantially complete by the end of the second quarter of 2023.

Our business benefits from powerful network effects, fueled by our data advantage and ~~massive~~ scale. As more users join Wish, attracted by our affordable value proposition and personalized shopping ~~experience,~~experiences, we ~~are able to~~can increase revenue potential for our merchants. AsThe successes of our merchants can then attract more merchants ~~succeed~~and broaden the product selection on ~~Wish,~~Wish’s platform, which further improves user experiences. As users and merchants grow, we can generate more ~~merchants join the platform and grow their businesses with Wish, broadening our product selection,~~data, which, in turn, ~~improves user experience.~~refines our algorithm and strengthens our data advantage. By ~~developing a strategy focused~~focusing on users and merchants, we align ~~user and merchant~~their success with our own.

The economics of the ~~success of our financial model. The growth in users and merchants generates more data, further strengthens our data advantage and creates an even better experience for everyone on our~~Wish platform ~~in turn attracting more users and high-quality merchants.~~

~~Our model relies~~rely on cost-effectively adding new users, converting those users into buyers, and improving engagement and monetization of those buyers ~~on Wish~~ over time as well as ~~adding~~acquiring new merchants ~~delivering economic success for those merchants,~~ and ~~having those merchants use more of our~~monetizing the end-to-end ~~platform.~~services that we provide to them.

In addition to the measures presented in our condensed consolidated financial statements, we monitor the following key metrics and other financial information to measure our performance, identify trends affecting our business, and make strategic decisions.

We define MAUs as the number of unique users that visited the Wish platform, either on our mobile app, mobile web, or on a desktop, during the month. MAUs for a given reporting period equal the average of the MAUs for that period. An active user is identified by a unique email-address; a single person can have multiple user accounts via multiple email addresses. The change in MAUs in a reported period captures both the inflow of new users as well as the outflow of existing users who did not visit the platform in a given month. We view the number of MAUs as a key driver of revenue growth as well as a key indicator of user engagement and ~~awareness of our brand.~~brand awareness.

MAUs decreased approximately 7%48% from the three months ended March 31, ~~2020~~2023 compared to the three months ended March 31, ~~2021,~~2022. We believe this decline was primarily driven by ~~the~~our decision to de-emphasize user acquisition in some emerging markets outside of Europe and North America where we faced logistical challenges due to the pandemic and to emphasize higher LTV users within the same value-conscious consumer category in many of the more developed markets.significantly reduce our digital advertising expenditures.

As of the last date of each reported period, we determine our number of unique last-twelve-months active buyers ("LTM active buyers") by counting the total number of individual users who have placed at least one order on the Wish platform, either on our mobile app, mobile web, or on a desktop, during the preceding 12 months. We, however, exclude from the computation those buyers whose order is ~~cancelled~~canceled before the item is shipped and the purchase price is refunded. The number of ~~Active Buyers~~LTM active buyers is an indicator of our ability to attract and monetize a large user base to our platform and of our ability to convert visits into purchases. We believe that increasing our ~~Active Buyers~~LTM active buyers will be a significant driver to our future revenue growth.

LTM Active Buyers decreased approximately 3%57% from the three months ended March 31, ~~2020~~2023 compared to the three months ended March 31, ~~2021,~~2022. We believe this decline was primarily ~~due to our actions to de-emphasize low value items,~~driven by lower MAUs which ~~tend to have high conversion rates but unfavorable economics.~~was driven by reduced digital advertising expenditures.

The numbers for some of our metrics, including MAUs, are calculated and tracked with internal tools, which are not independently verified by any third party. We use these metrics to assess the growth and health of our overall business. While these numbers are based on what we believe to be reasonable estimates of our user or merchant base for the applicable period of measurement, there are inherent challenges in measurement as the methodologies used require significant judgment and may be susceptible to algorithm or other technical errors. In addition, we regularly review and adjust our processes for calculating metrics to improve their accuracy, and our estimates may change due to improvements or changes in technology or our methodology.

We provide Adjusted EBITDA, a non-GAAP financial measure that represents our ~~net income (loss) adjusted to exclude;~~loss before interest and other income, ~~(expense),~~ net (which includes foreign exchange gain or loss ~~foreign exchange forward contracts gain or loss~~ and ~~gain or loss on one-time~~ other non-operating ~~transactions); provision or benefit for~~ income ~~taxes;~~and expenses), income tax expense, and depreciation and ~~amortization;~~amortization, adjusted to eliminate stock-based compensation expense, lease termination and impairment related ~~payroll taxes; remeasurement of redeemable convertible preferred stock warrant liability~~expenses, restructuring and other discrete charges, and to add back certain recurring other items. Additionally, we provide Adjusted EBITDA Margin, a non-GAAP financial measure that represents Adjusted EBITDA divided by revenue. Below is a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA and Adjusted EBITDA Margin in this report because they are key measures used by our management and ~~board of directors~~the Board to understand and evaluate our operating performance and trends and how we are allocating internal resources, to prepare and approve our annual budget and to develop short- and long-term operating plans. We also believe that the exclusion of certain items in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business as it removes the impact of non-cash items and certain variable charges.

Adjusted EBITDA has limitations as an analytical measure, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, including various cash flow metrics, net ~~income (loss)~~loss and our other U.S. GAAP results.

The following table reflects the reconciliation of net loss to Adjusted EBITDA and net loss as a percentage of revenue to Adjusted EBITDA margin for each of the periods indicated:

We also provide Free Cash Flow, a non-GAAP financial measure that represents net cash ~~provided by (used in)~~used in operating activities less purchases of property and ~~equipment.~~ equipment and development of internal-use software. We believe that Free Cash Flow is an important measure since we use third parties to host our services and therefore, we do not incur significant capital expenditures to support revenue generating activities.

Free Cash Flow has limitations as an analytical measure, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

Because of these limitations, you should consider Free Cash Flow alongside other financial performance measures, such as net cash ~~provided by (used in)~~used in operating activities, net ~~income (loss)~~loss and our other GAAP results.

The following table reflects the reconciliation of net cash ~~provided by (used in)~~used in operating activities to Free Cash Flow for each of the periods indicated:

The following ~~table shows~~tables show our results of operations for the periods presented and express the relationship of certain line items as a percentage of revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

The following table presents the components of our condensed consolidated statements of operations as a percentage of revenue:

(1)

Core marketplace revenue for the three months ended March 31, ~~2020~~

~~Revenue~~

Three Months Ended
March 31,

Change

2021

2020

$

%

(in millions)

Core marketplace revenue⁽¹⁾

$
477

$
340

$
137

40
%
ProductBoost revenue

50

44

6

14
%
Marketplace revenue

527

384

143

37
%
Logistics revenue

245

56

189

338
%
Revenue

$
772

$
440

$
332

75
%
2023 and 2022 included approximately $2 million net gains for both periods, from our cash flow hedging program.

~~(1)~~

Core marketplace revenue for the three months ended March 31, 2021 included approximately $9 million net gains from our cash flow hedging program. We did not have a hedging program during the three months ended March 31, 2020.

Revenue ~~increased $332~~decreased $93 million, or ~~75%~~49%, to ~~$772~~$96 million for the three months ended March 31, ~~2021~~2023 as compared to ~~$440~~$189 million for the three months ended March 31, ~~2020.~~2022. This ~~increase~~decrease was attributable to ~~both increased~~decreased marketplace and logistics ~~revenue.~~revenue, as noted below.

Marketplace revenue ~~increased $143~~decreased $68 million, or ~~37%~~65% to ~~$527~~$36 million for the three months ended March 31, ~~2021,~~2023, as compared to ~~$384~~$104 million for the three months ended March 31, ~~2020.~~2022. This ~~increase~~decrease was primarily ~~due~~driven by lower order volumes associated with reduced MAUs and LTM Active Buyers and to a lesser extent, revisions to our ~~efforts to improve buyer monetization and~~pricing strategy, which resulted in lower ~~refunds. This increase was also partially driven by increased merchant utilization~~marketplace revenue per order during the first quarter of ~~our ProductBoost service.~~2023.

Logistics revenue ~~increased $189~~decreased $25 million, or ~~338%~~29% to ~~$245~~$60 million for the three months ended March 31, ~~2021,~~2023, as compared to ~~$56~~$85 million for the three months ended March 31, ~~2020. This increase~~2022. Like marketplace revenue, the decrease was primarily due to accelerated merchant adoption of our logistics offerings, as well as the expansion of our A+ program, in which Wish manages first mile collection from merchants to warehousing operations all the way to last mile delivery to the buyer.driven by lower order volumes.

Cost of Revenue and Gross Margin


	Three Months Ended March 31,						Change					Three Months Ended March 31,						Change
	2021			2020			$		%			2023			2022			$			%
	(in millions)											($ in millions, except percentages)
Cost of revenue	$	335		$	156		$	179		115	%	$	76		$	125		$	(49	)		(39	)%
Percentage of revenue		43	%		35	%							79	%		66	%
Gross Margin		57	%		65	%							21	%		34	%

Cost of revenue ~~increased $179~~decreased $49 million, or ~~115%~~39%, to ~~$335~~$76 million for the three months ended March 31, ~~2021,~~2023, as compared to ~~$156~~$125 million for the three months ended March 31, ~~2020,~~2022, primarily due to costs related to the increased volume of logistics services provided and increased headcount. The increase was also driven by a $6 million stock-based compensation expense and related employer payroll taxes that we recognized in connection with the settlement of vested RSUs for our employees involved in infrastructure, merchant support,lower marketplace and logistics ~~functions.~~related costs as a result of lower order volumes.

The gross margin decreased to ~~57%~~21% for the three months ended March 31, ~~2021~~2023 from ~~65%~~34% for the three months ended March 31, ~~2020,~~2022, primarily ~~due to increased volume~~driven by a greater percentage of lower margin logistics services ~~provided~~making up overall revenue during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022, and ~~the fact that logistics gross margin was at significantly lower rate than marketplace gross margin.~~revisions to our pricing strategy.

Sales and Marketing


	Three Months Ended March 31,						Change					Three Months Ended March 31,						Change
	2021			2020			$		%			2023			2022			$			%
	(in millions)											($ in millions, except percentages)
Sales and marketing	$	470		$	295		$	175		59	%	$	37		$	45		$	(8	)		(18	)%
Percentage of revenue		61	%		67	%							39	%		24	%

Sales and marketing expense ~~increased $175~~decreased $8 million, or ~~59%~~18%, to ~~$470~~$37 million for the three months ended March 31, ~~2021,~~2023, compared to ~~$295~~$45 million for the three months ended March 31, ~~2020. The~~2022, primarily due to a $3 million reduction in advertising expenditures, $2 million reduction in customer support costs services as a result of lower order volumes, and a $4 million reduction of employee-related costs due to lower headcount. These decreases were offset by an increase of $1 million in other sales and marketing expenses consisted primarily of incremental digital advertising spend associated with increased pricing from our largest vendors. To a lesser extent, the increase was also driven by a $4 million stock-based compensation expense and related employer payroll taxes that we recognized in connection with the settlement of vested RSUs, for our employees involved in marketing, user support, and business development functions. We anticipate that sales and marketing expenses will continue to be our most significant operating expense in the future and our overall profitability will depend on the success of our investments in sales and marketing.costs.

Product Development


	Three Months Ended March 31,						Change					Three Months Ended March 31,						Change
	2021			2020			$		%			2023			2022			$			%
	(in millions)											($ in millions, except percentages)
Product development	$	51		$	25		$	26		104	%	$	51		$	66		$	(15	)		(23	)%
Percentage of revenue		7	%		6	%							53	%		35	%

Product development expense ~~increased $26~~decreased $15 million, or ~~104%~~23%, to $51 million for the three months ended March 31, ~~2021,~~2023, as compared to $66 million for the three months ended March 31, 2022, primarily due to a $9 million decrease in employee-related costs driven by lower headcount during the first quarter of 2023 compared to the same period in 2022, a $9 million one-time discretionary bonus paid to select product development employees during the first quarter of 2022 to help cover their tax obligations triggered by the settlement of their RSUs that vested upon the Company’s IPO, and a $4 million reduction in expenses associated with data analytics during the first quarter of 2023 compared to the same period in 2022. These decreases were partially offset by $6 million of share-based compensation expense recognized in connection with accelerated vesting of the Company's former Chief Product Officer's RSUs upon his departure from the Company in accordance with his separation agreement during the first quarter of 2023 and a $1 million increase in other product development costs.

General and Administrative


	Three Months Ended March 31,						Change
	2023			2022			$		%
	($ in millions, except percentages)
General and administrative	$	25		$	15		$	10		67	%
Percentage of revenue		26	%		8	%

General and administrative expense increased $10 million, or 67%, to $25 million for the three months ended March 31, ~~2020, primarily~~2023, as ~~a result of an increase in~~

employee-related costs driven by increased headcount and an $18 million stock-based compensation expense and related employer payroll taxes that we recognized in connection with the settlement of vested RSUs, for our employees involved in product development activities. The increase was also,compared to ~~a lesser extent, driven by expenses associated with data warehousing, processing and analytics.~~

~~General and Administrative~~

Three Months Ended
March 31,

Change

2021

2020

$

%

(in millions)

General and administrative

$
42

$
18

$
24

133
%
Percentage of revenue

6
%

4
%

~~General and administrative expense increased $24 million, or 133%, to $42~~$15 million for the three months ended March 31, ~~2021,~~2022. The increase was primarily due to a one-time reversal of $21 million of stock-based compensation during the first quarter of 2022 in connection with the resignation of Mr. Szulczewski from his former position as ~~compared~~CEO, and $2 million share-based compensation expense recognized in connection with accelerated vesting of the Company's former Chief Administrative Officer's RSUs upon his departure from the Company in accordance with his separation agreement during the first quarter of 2023. These increases were partially offset by $4 million of reduced employee-related costs during the first quarter of 2023 due to ~~$18~~lower headcount, a $4 million decrease in impairment charges of the Company's lease assets and related property and equipment, and a $5 million decrease consisting primarily of insurance and legal-related expenses.

Interest and Other Income, net


	Three Months Ended March 31,						Change
	2023			2022			$		%
	($ in millions, except percentages)
Interest and other income, net	$	4		$	2		$	2		100	%
Percentage of revenue		4	%		1	%

Interest and other income, net increased $2 million, or 100%, to $4 million for the three months ended March 31, ~~2020. The increase was primarily related~~2023, as compared to a $16 million stock-based compensation expense and related employer payroll taxes that we recognized in connection with the settlement of vested RSUs and increases in expenses associated with being a publicly listed company.

~~Remeasurement of Redeemable Convertible Preferred Stock Warrant Liability~~

Three Months Ended
March 31,

Change

2021

2020

$

%

(in millions)

Remeasurement of redeemable convertible preferred stock warrant liability

$
—

$
(15
)

$
15

(100
)%
Percentage of revenue

—

(3
)%

The $15 million expense that we recognized during the three months ended March 31, 2020 was related to the change in fair value of the redeemable convertible preferred stock warrant liability. There was no remeasurement charge recognized during the three months ended March 31, 2021 because immediately prior to the completion of our IPO in December 2020, the outstanding redeemable convertible preferred stock warrant was net exercised. The fair value of the warrant at the time of exercise was reclassified into the Company’s Class A common stock and additional paid-in capital.

~~Provision for Income Taxes~~

Three Months Ended
March 31,

Change

2021

2020

$

%

(in millions)

Provision for income taxes

$
2

$
—

$
2

—

Percentage of revenue

—

—

~~Provision for income taxes increased~~ $2 million for the three months ended March 31, ~~2021 compared to the three months ended March 31, 2020.~~2022. The ~~change in provision for income taxes~~increase was ~~due primarily~~attributable to an increase ~~of taxes for our international operations.~~in interest income due to higher interest rates.

Liquidity and Capital Resources

As of March 31, ~~2021,~~2023, we had cash, cash equivalents and marketable securities of ~~$1.8 billion,~~$627 million, a majority of which were held in cash deposits and money market funds and were held for working capital purposes. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our anticipated cash needs for at least the next 12 ~~months. Additional future~~months, though we may require additional financing ~~may be necessary to fund~~or capital resources in the future.

Our material cash requirements include $151 million in accounts and merchants payable, $64 million remaining on a colocation and cloud services purchase commitment, and $20 million of facility lease obligations, of which $8 million is due within the next 12 months.

While we maintain our ~~operations~~cash and short-term investments with a diverse group of large national financial institutions and our limited deposits at Silicon Valley Bank were backstopped by the U.S. government, there can be no assurance that ~~if needed,~~any of our other deposits in excess of the Federal Deposit Insurance Corporation or other comparable insurance limits will be backstopped by the U.S. or that any bank or financial institution with which we do business will be able to ~~secure additional debt~~obtain needed liquidity from other banks, government institutions or ~~equity financing on terms acceptable~~by acquisition in the event of a failure or liquidity crisis.

Sources of Liquidity

In December 2020, we completed our IPO of common stock and received net proceeds of approximately $1.1 billion after deducting underwriting discounts and commissions of approximately $52 million, but before deducting offering costs, net of reimbursements, of approximately $6 million.

Share Repurchase Program

On April 20, 2023, we announced that our board of directors authorized us to ~~us or at all, especially in light~~repurchase up to $50 million of the Company’s common stock, effective through December 31, 2023. Under this Program, we may repurchase our common stock through open market ~~volatility~~transactions, in privately negotiated transactions, or by other means, including through the use of trading plans, each in accordance with applicable securities laws and ~~uncertainty as a result~~other restrictions. The manner, timing, and amount of ~~the COVID-19 pandemic. Although we believe we have adequate sources~~any purchase will be based on an assessment of ~~liquidity over the long term, the success of our operations, the global~~business, economic ~~outlook,~~ and ~~the pace of~~

~~sustainable growth in our markets, in each case, in light of the~~ market ~~volatility~~conditions, corporate and ~~uncertainty as a result of the COVID-19 pandemic, among~~regulatory requirements, prevailing stock prices, and other ~~factors, could impact our business and liquidity.~~considerations. The repurchase program may be suspended, terminated, or modified at any time for any reason.

November 2020 Credit Facility

In November 2020, we entered into the Revolving Credit Facility which enables us to borrow up to $280 million. The Revolving Credit Facility contains an accordion option which, if exercised and provided we are able to secure additional lender commitments and satisfy certain other conditions, would allow us to increase the aggregate commitments by up to $100 million. As of March 31, ~~2021,~~2023, we had not made any borrowings under the Revolving Credit Facility. Refer to Note 7 to our condensed consolidated financial statements in Item 1 of Part I, “Financial Information” for additional details related to the Revolving Credit Facility.

Cash Flows

	Three Months Ended March 31,
	2021			2020			Three Months Ended March 31,
	(in millions)						2023			2022
Cash provided by (used in):
							(in millions)
Cash used in:
Operating activities	$	(354	)	$	(129	)	$	(92	)	$	(146	)
Investing activities		14			59			(40	)		(105	)
Financing activities		(5	)		1			(3	)		—

Net Cash ~~Provided by (Used in)~~Used in Operating Activities

Our cash flows from operations are largely dependent on the amount of revenue we generate. Net cash ~~provided by~~used in operating activities in each period presented has been influenced by changes in funds receivable, prepaid expenses, and other current and noncurrent assets, accounts payable, merchants payable, accrued and refund liabilities, lease liabilities, and other current and noncurrent liabilities.

Net cash used in our operating activities for the three months ended March 31, ~~2021~~2023 was ~~$354~~$92 million. This was primarily driven by our net loss of ~~$128~~$89 million and ~~$266~~$27 million unfavorable ~~net working capital~~ changes in our operating assets and liabilities, which was partially offset by non-cash expenses ~~such as stock-based compensation expense~~ of ~~$37~~$24 million. Unfavorable working capital movement was mainly driven by reductions in accounts payable, merchants payable and ~~merchants payable.~~accrued and refund liabilities. Accounts payable, merchants payable and accrued and refund liabilities decreased by ~~$143~~$38 million primarily due to ~~shorter vendor payment terms. Due to the COVID-19 pandemic, we were able to negotiate favorable payment terms with certain key~~lower order volumes and reduced digital advertising partners (45 days and 60 days). The payment terms with these key digital advertising partners reverted back to 30 days when the favorable terms expired on December 31, 2020. Merchants payable decreased by $73 million primarily driven by lower volumes in the first quarter of 2021 compared to the fourth quarter of 2020 due to seasonality and higher percentage of shipments through our A+ program which accelerated the payment of merchants payable due to higher delivery confirmation rates. Other decreases in unfavorable working capital movement were driven by refunds and accrued liabilities.expenditures.

Net cash used in our operating activities for the three months ended March 31, ~~2020~~2022 was ~~$129~~$146 million. This was ~~primarily~~ driven by our net loss of ~~$66~~$60 million and ~~a $122~~$97 million ~~decrease~~unfavorable changes in ~~merchants payable,~~our operating assets and liabilities, which was partially offset by non-cash expenses ~~such as the remeasurement~~ of ~~redeemable convertible preferred stock warrant liability of $15 million, which~~$11 million. Unfavorable working capital movement was ~~further offset~~mainly driven by ~~a $31 million increase~~reductions in accounts ~~payable.~~payable, merchants payable and accrued and refund liabilities. Accounts payable, merchants payable and accrued and refund liabilities decreased by $95 million primarily due to lower order volumes and reduced digital advertising expenditures.

Net Cash ~~Provided by (Used in)~~Used in Investing Activities

Our primary investing activities have consisted of investing excess cash balances in marketable securities.

Net cash ~~provided by~~used in investing activities was ~~$14~~$40 million for the three months ended March 31, ~~2021.~~2023. This was primarily due to ~~$67~~$125 million ~~of maturities~~in purchases of marketable securities, partially offset by ~~$53~~$85 million ~~purchases~~ of maturities in marketable securities.

Net cash ~~generated from~~used in investing activities was ~~$59~~$105 million for the three months ended March 31, ~~2020.~~2022. This was primarily due to ~~$132~~$153 million ~~maturities~~in purchases of marketable securities and $2 million in capital expenditures, partially offset by ~~$73~~$50 million ~~purchases~~ of maturities in marketable securities.

Net Cash ~~Provided by (Used in)~~Used in Financing Activities

Net cash used in our financing activities was $5$3 million for the three months ended March 31, ~~2021~~2023 primarily due to tax payments related to RSU settlement.

~~Net cash provided by~~Cash flow from our financing activities was ~~$1 million~~insignificant for the three months ended March 31, ~~2020 and was related to proceeds from stock option exercises.~~2022.

Off Balance Sheet Arrangements

For the three months ended March 31, ~~2021~~2023 and ~~2020,~~2022, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

~~Contingencies~~

We are involved in claims, lawsuits, government investigations, and proceedings arising from the ordinary course of our business. We record a provision for a liability when we believe that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. Such legal proceedings are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those listed below. We base our estimates on historical facts and various other assumptions that we believe to be reasonable at the time the estimates are made. Actual results could differ from those estimates.

~~Our critical accounting policies are as follows:~~

•

~~Revenue recognition;~~

•

~~Operating lease obligations;~~

•

~~Stock-based compensation; and~~

•

~~Income taxes.~~

Our critical accounting policies are important to the portrayal of our financial condition and results of operations, and require us to make judgments and estimates about matters that are inherently uncertain.

There have been no material changes to our critical accounting policies and estimates as compared to those described in our ~~Annual Report on~~2022 Form 10-K, ~~for the year ended December 31, 2020,~~ filed with the SEC on ~~March 25, 2021.~~February 27, 2023.

Recent Accounting Pronouncements

See Note 1 of Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.

28~~pronouncements.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We have operations both within the ~~U.S.~~United States and internationally, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes and foreign currency fluctuations. Information relating to quantitative and qualitative disclosures about these market risks is described below.

Interest Rate Sensitivity

Cash, cash equivalents and marketable securities as of March 31, ~~2021~~2023 were held primarily in cash deposits, treasuries, and, ~~money market funds.~~to a lesser extent, corporate bonds and commercial paper. The fair value of our cash, cash equivalents, and investments would not be ~~significantly~~materially affected by either an increase or decrease in interest rates of 100 basis points due mainly to the short-term nature of these ~~instruments. A 100 basis point increase or decrease~~instruments and that the Company’s policy is to hold investments to maturity except in cases of non-compliance with our ~~current interest rates would have increased or decreased our interest income by $18 million for the three months ended March 31, 2021.~~investment policy.

Foreign Currency Risk

We transact business in various foreign countries and are, therefore, subject to risk of foreign currency exchange rate fluctuations. We have established a foreign currency risk management policy to provide ~~process~~processes and procedures for managing this risk. We use natural hedging techniques first to net off existing foreign currency exposures. For the remaining exposure, we may enter into short term foreign currency derivative contracts, including forward contracts to hedge exposures associated with monetary assets and liabilities, mainly merchants payable, and cash flows denominated in non-functional currencies.

The credit risk of our foreign ~~currency~~exchange derivative contracts is minimized since contracts are not concentrated with any one financial institution and all contracts are only placed with large financial institutions. The gains and losses on foreign currency derivative contracts generally offset the losses and gains on the assets, liabilities and transactions hedged. The fair value of ~~currency~~foreign exchange derivative contracts is reported in the ~~condensed~~ consolidated balance sheets. The majority of these foreign exchange contracts expire in less than three months and all expire within one year. Refer to Note 5 to our condensed consolidated financial statements in Item 1 of Part I, “Financial Statements” for more information related to our derivative financial instruments.

Based on our overall currency rate exposures as of March 31, ~~2021,~~2023, including the derivative financial instruments intended to hedge the nonfunctional currency-denominated monetary assets, liabilities and cash flows, and other factors, a 10% appreciation or depreciation of the U.S. dollar from its cross-functional rates would not be expected, in the aggregate, to have a material effect on our financial position, results of operations and cash flows in the near-term.

Inflation Risk

WeAs of the date of filing of this Quarterly Report, we do not believe that inflation has had a material effect on our business, financial condition, or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through increases in revenue as increases in core inflation rates may also affect consumers’ willingness to make discretionary purchases on our platforms. Our inability or failure to do so could harm the Company’s business, financial condition, and results of operations.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

~~Under~~Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the ~~supervision~~Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and ~~with~~reported within the ~~participation~~time periods specified in the rules and forms of ~~our~~the Securities and Exchange Commission (“SEC”) and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive ~~officer~~ and ~~principal~~ financial ~~officer, we conducted an evaluation~~officers, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with assistance from other members of management, have evaluated the effectiveness ~~of the design and operation~~ of our disclosure controls and procedures as ~~defined in Rules 13a-15(e)~~of March 31, 2023, and ~~15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based~~based on ~~management’s~~their evaluation, ~~our principal executive officer and principal financial officer~~have concluded that our disclosure controls and procedures were not effective as of such date due to material weaknesses in internal control over financial reporting, described below.

Previously Reported Material Weaknesses in Internal Control Over Financial Reporting

As disclosed in Item 9A, "Controls and Procedures" within our 2022 Form 10-K, which was filed with the SEC on February 27, 2023, the following material weaknesses were identified and remain outstanding as of March 31, 2023:

•

The Company did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, the Company did not (i) provide sufficient management oversight and ownership over the internal control evaluation process or (ii) hire and train sufficient competent personnel to support the Company’s internal control objectives. This material weakness contributed to the following additional material weakness:

•

The Company did not design and maintain effective controls over information technology general controls (“ITGCs”) for information systems and applications that are ~~effective at~~relevant to the preparation of the consolidated financial statements. Specifically, the Company did not design and maintain: (i) sufficient user access controls to ensure appropriate segregation of duties and adequately restrict user and privileged access to financial applications, programs and data to appropriate Company personnel; (ii) program change management controls to ensure that information technology program and data changes affecting financial information technology applications and underlying accounting records are identified, tested, authorized and implemented appropriately; and (iii) computer operations controls to ensure that critical batch and interface jobs are monitored, privileges are appropriately granted, and data backups are authorized and monitored.

None of the material weaknesses described above resulted in a ~~reasonable assurance level.~~material misstatement to our annual or interim consolidated financial statements. However, the material weaknesses described above could result in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

In After giving full consideration to these material weaknesses, and the additional analyses and other procedures we performed to ensure that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with U.S. GAAP, our management has concluded that our condensed consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.

Management’s Plan to Remediate the Material Weaknesses

Our remediation efforts are ongoing and we will continue our initiatives to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively.

The remediation measures we have taken to date include:

hiring and continuing to hire additional qualified accounting, financial reporting, tax and information technology personnel as well as increasing third-party consultants with public company and internal control over financial reporting experience including a new Chief Executive Officer with a deep understanding of ecommerce and cross border business, a technical project manager to assist with communicating, documenting, and assisting with the remediation of deficiencies, and additional resources to test internal controls;

ii.

providing additional training for our personnel including the appropriate level of documentation to be maintained to support internal control over financial reporting;

iii.

holding periodic SOX Steering Committee meetings which are comprised of all the top Executives of the Company and whose purpose is to provide oversight of the Company’s SOX program on behalf of the CEO, CFO and management responsible for SOX Compliance, including monitoring progress of the identified deficiencies and their remediation efforts;

iv.

designing and ~~evaluating~~implementing controls to formalize roles and review responsibilities to align with the staff’s skills and experience and to ensure proper internal control over financial reporting;

continuing to enhance processes to monitor critical batch and interface jobs;

vi.

holding periodic meetings with the Audit Committee to communicate deficiencies, discuss the overall remediation plan, and discuss progress made against the approved plan;

vii.

performed a comprehensive reassessment of financial reporting risks relevant to our ~~disclosure~~consolidated financial statements, including identification of financially relevant systems and business processes at the financial statement assertion level, to facilitate the design and implementation or enhancement of existing controls to address the identified risks;

viii.

enhanced the oversight and review of non-recurring transactions to include consistent communication between functional areas, support consistent documentation of conclusions reached, and retention of evidence supporting the operation of control activities;

ix.

enhancing our IT governance processes, including automating components of our change management and logical access processes, enhancing role-based access and logging capabilities, implementing automated controls, enhancing testing and approval controls for program development, and implementing more robust IT policies and procedures over change management ~~recognizes that any disclosure~~and computer operations;

continuing to enhance and standardize user access reviews and monitoring controls to improve segregation of duties, and ~~procedures, no matter how well designed~~more comprehensively review user and ~~operated, can provide only reasonable assurance of achieving the desired control objectives. In addition,~~privileged access to financial applications, programs and data to appropriate Company personnel; and;

xi.

continuing to enhance the design of ~~disclosure~~computer operations controls related to the monitoring of critical batch and interface jobs.

We are committed to continuing to implement a strong system of controls and ~~procedures must reflect~~believe that our ongoing remediation efforts will result in significant improvements to our internal control over financial reporting and will remediate the ~~fact~~material weaknesses. However, material weaknesses are not considered remediated until the new controls have been operational for a sufficient period of time, are tested, and management concludes that ~~there~~these controls are ~~resource constraints~~operating effectively. This remediation process will require resources and time to implement, and remediation efforts could continue beyond the fiscal year ending December 31, 2023. We will continue to monitor the effectiveness of these remediation measures, and we will make any changes to the design of this plan and take such other actions that ~~management is required to apply its judgment in evaluating~~we deem appropriate given the ~~benefits of possible controls and procedures relative to their costs.~~circumstances.

Changes in Internal Control ~~over~~Over Financial Reporting

There were no material changes in our internal control over financial reporting ~~identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred~~ during the ~~three months~~quarter ended March 31, ~~2021~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Disclosure Controls and Procedures

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

~~Information with respect to this item may be found in~~The information set forth under Note 7, Commitments and Contingencies, in ~~our~~ Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q, ~~which information~~ is incorporated herein by reference.

Item 1A. Risk Factors.

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described under the heading "Risk Factors" in Part I, Item 1A of our ~~Annual Report on~~2022 Form 10-K, ~~for the year ended December 31, 2020 (the "2020 Form 10-K"),~~ together with all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes, before making a decision to invest in our Class A common stock. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect our business. These risk factors could materially and adversely affect our business, financial condition and results of operations, and the market price of our ~~ordinary shares~~Class A common stock could decline. These risk factors do not identify all risks that we face – our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. ~~There~~Other than the risk factors noted below, there have been no additional material changes from the ~~risks and uncertainties~~risk factors previously disclosed under the heading "Risk Factors" ~~section~~ in Part I, Item 1A of our ~~2020~~2022 Form 10-K.

Risks Related to Our Business and Industry

We may be involved in litigation matters or other legal proceedings that are expensive and time consuming.

We may become involved in litigation matters, including class action lawsuits, relating to intellectual property, product liability, and consumer practices, whether for our own products or those offered by merchants, as well as other commercial disputes. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation, loss of rights, or adverse changes to our offerings or business practices. Any of these results could adversely affect our business. In addition, defending claims is costly and can impose a significant burden on our management.

Additionally, the market price of our Class A common stock has been and may continue to be volatile. As a result, we have been named in lawsuits, and may be subject to both ongoing litigation and other requests related to our stock price/performance and/or Board performance and independence. Beginning in May 2021, four putative class action lawsuits were filed in the U.S. District Court for the Northern District of California against the Company, its directors, certain of its officers and the underwriters named in its initial public offering (“IPO”) registration statement alleging violations of securities laws based on statements made in its registration statement on Form S-1 filed with the SEC in connection with its IPO and seeking monetary damages. One of these cases has since been dismissed by the plaintiff and the remaining three have been coordinated and consolidated (the “IPO Case”). In May 2022, the Court appointed lead plaintiffs, who subsequently filed an amended consolidated class action complaint pursuant to Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act. On April 10, 2023, the plaintiffs filed an amended complaint and assert only claims made under Sections 11 and 15 of the Securities Act. In August 2021, a shareholder derivative action purportedly brought on behalf of the Company, Patel v. Szulczewski, was filed in the U.S. federal court alleging that the Company’s directors and officers made or caused the Company to make false and/or misleading statements about the Company’s business operations and financial prospects in various public filings. This matter is stayed pending certain motion practice in the IPO Case. We may continue to be the target of securities litigations, and/or may receive other civil and regulator inquiries and requests, in the future. Securities litigation or inquiries or investigations against us could result in substantial costs and divert our management’s attention from other business concerns, which could adversely affect our business.

From time to time, we are subject to investigations, demands, litigation and other proceedings involving consumer protection, product safety, and data protection authorities or other regulatory agencies, including, in particular, in Denmark, France, Hungary, Italy, the Netherlands, and the United States. These proceedings can result, and in one case have resulted, in civil and/or criminal penalties, large fines, other penalties, and/or remediation efforts and/or injunctive relief that could limit or restrict our ability to do business either in a given jurisdiction within a product class. For example, we agreed pay a fee to settle with France’s Directorate General for Competition, Consumer Affairs and Repression of Fraud in connection with charges relating to consumer protection. Separately, at the initial outbreak of COVID-19, consumer protection authorities demanded rapid and decisive changes in the way that we screen and handle product listings that potentially violate various laws, including emergency price caps on certain items. Implementing these requests or defending against any associated fines could prove expensive and time consuming and negatively affect our results of operations and financial condition. While we may dispute the charges or cases, novel interpretations of the law or enforcement efforts could subject us to litigation and/or time consuming and costly remediation measures or otherwise impair business operations in a jurisdiction.

Bank failures or other events affecting financial institutions could materially adversely affect our operations, liquidity and financial performance.

We maintain domestic cash deposits in Federal Deposit Insurance Corporation (“FDIC”) insured banks, which exceed the FDIC insurance limits, and any deposits beyond these limits could be lost. We also maintain cash deposits in foreign banks where we operate, some of which are not insured or are only partially insured by the FDIC or other similar agencies. The failure of a bank, or events involving limited liquidity, defaults, non-performance or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, or concerns or rumors about such events, may lead to disruptions in access to our bank deposits or otherwise adversely impact our liquidity and financial performance. While we maintain our cash and short-term investments with a diverse group of large national financial institutions and our limited deposits at Silicon Valley Bank were backstopped by the U.S. government, there can be no assurance that any of our other deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis.

In addition, instability, liquidity constraints or other distress in the financial markets, including the effects of bank failures, defaults, non-performance or other adverse developments that affect financial institutions, could impair the ability of one or more of the banks participating in our credit agreement or any future credit agreement from honoring their commitments. This could have a material adverse effect on our business if we were not able to replace those commitments or to locate other sources of liquidity on acceptable terms.

Risks Related to Our International Operations

Our international operations are subject to increased risks.

There are inherent risks in doing business internationally, including:

•

expenses associated with localizing our products and services and user data, including offering our users and merchants the ability to transact business in the local currency and language, and adapting our platform to local preferences;

•

challenges to enforceability in some foreign jurisdictions of so-called “clickwrap” contracts with our customers, merchants and Wish Local retailers;

•

trade barriers and changes in trade regulations;

•

difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language, and cultural differences;

•

stringent local labor laws and regulations;

•

credit risk and higher levels of payment fraud;

•

laws or regulations related to the import or export of goods alleged to violate third-party intellectual property rights;

•

political or social unrest, economic instability, repression, or human rights issues;

•

geopolitical events, including natural disasters, public health issues, acts of war, and terrorism;

•

compliance with U.S. laws such as the Foreign Corrupt Practices Act ("FCPA") and foreign laws prohibiting corruption, U.S. and foreign economic and trade sanctions laws, and U.S. and foreign laws designed to combat money laundering and the financing of terrorist activities;

•

antitrust and competition regulations;

•

potentially adverse tax developments and consequences;

•

economic uncertainties relating to sovereign and other debt;

•

different, uncertain, or more stringent user protection, data protection, data collection, privacy, payments, advertising, pricing, and other laws;

•

limitations by governmental authorities on transmission of privacy information and other data between countries, whether from the U.S. or other jurisdictions;

•

national and regional laws, regulations and directives and norms, in the EU, EEA, and UK, regarding content moderation and intermediary liability, transparency, product safety and conformity marking, consumer deception, and forced labor;

•

restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices;

•

risks related to other government regulation or required compliance with local laws;

•

national or regional differences in macroeconomic growth rates; and

•

local licensing and reporting obligations.

Violations of the complex foreign and U.S. laws and regulations that apply to our international operations may result in litigation, fines, criminal actions, or sanctions against us, our officers, or our employees; restrictions on the operations of our business; and damage to our reputation. Although we have implemented policies and procedures designed to promote compliance with these laws, there can be no assurance that our employees, contractors, or agents will not violate our policies. These risks inherent in our international operations and expansion increase our costs of doing business internationally and could harm our business.

Risks Related to Network and Infrastructure

We are subject to governmental regulation and other legal obligations related to privacy, data protection, information security, and consumer protection. If we are unable to comply with these, we may be subject to governmental enforcement actions, litigation, fines and penalties, or adverse publicity.

We collect personally identifiable information and other data from users and prospective users. We use this information to provide services and relevant products to our users, to support, expand and improve our business, and to tailor our marketing and advertising efforts. We may also share users’ personal data with certain third parties as authorized by the user or as described in our privacy policy.

As a result, we are subject to governmental regulation and other legal obligations related to the protection of confidential and sensitive data (including personally identifiable information and personal data), privacy, information security and consumer protection in certain countries where we do business and there has been and will continue to be a significant increase globally in such laws that restrict or control the use of personal data.

In Europe, where the data privacy and information security regime underwent a significant change in 2018, the legal environment related to personal data continues to evolve and companies like us that process personal data from large numbers of individuals are subject to increasing regulatory scrutiny. The General Data Protection Regulation (“GDPR”) implemented more stringent operational requirements for our use of personal data. These more stringent requirements include expanded disclosures to tell our users about how we may use their personal data, increased controls on profiling users and increased rights for users to access, control and delete their personal data. In addition, there are mandatory data breach notification requirements and significantly increased penalties of the greater of €20 million or 4% of global turnover for the preceding financial year.

Although there are legal mechanisms to allow for the transfer of personal data from the United Kingdom ("U.K."), EEA and Switzerland to the U.S., uncertainty about compliance with such data protection laws remains and such mechanisms may not be available or applicable with respect to the personal data processing activities necessary to research, develop and market our products and services. For example, legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the EEA to the United States could result in further limitations on the ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S. and Swiss-U.S. Privacy Shield Frameworks. Specifically, on July 16, 2020, the Court of Justice of the European Union invalidated Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S. Privacy Shield Framework (“Schrems II” decision). To the extent that we or our service providers were to rely on the EU-U.S. Privacy Shield Framework, we may not be able to do so in the future, which could increase our costs and limit our ability to process personal data from the European Union. The Schrems II decision also cast doubt on the ability to use one of the primary alternatives to the Privacy Shield, namely, the European Commission’s Standard Contractual Clauses, to lawfully transfer personal data from Europe to the U.S. and most other countries. In November 2020, the European Commission released a draft of revised Standard Contractual Clauses, and, in January 2021, the European Data Protection Board and the European Data Protection Supervisor issued a joint opinion regarding these revised Standard Contractual Clauses. These revised Standard Contractual Clauses and related developments, opinions, and guidance from European regulators may significantly increase our liability under, and compliance costs related to, cross-border data transfers and the GDPR, and may impact our ability to operate and deliver services in the EEA.

Following its exit from the EU in January 2020, the U.K. implemented legislation referred to as the “U.K.-GDPR” which substantially aligns with requirements and penalties under the EU GDPR. We may face similar costs, risks, and operational impacts in complying with the U.K.-GDPR as we face in complying with the EU GDPR.

In recent years, U.S. and European lawmakers and regulators have expressed concern over the use of third-party cookies and similar technologies for online behavioral advertising, and laws in this area are also under reform. In the EU current national laws that implement the ePrivacy Directive will be replaced by an EU regulation known as the ePrivacy Regulation. The draft ePrivacy Regulation retains existing informed consent conditions and also imposes the strict opt-in marketing rules on direct marketing that is “presented” on a web page rather than sent by email, alters rules on third-party cookies and similar technology and significantly increases penalties for breach of the rules. Regulation of cookies and similar technologies may lead to broader restrictions on our marketing and personalization activities and may negatively impact the effectiveness of our marketing. Such regulations may also increase regulatory scrutiny and increase potential civil liability under data protection or consumer protection laws. The ePrivacy Regulations draft also advocates the development of browsers that block cookies by default. These developments could impair our ability to collect user information, including personal data and usage information, that helps us provide more targeted advertising to our current and prospective users, which could adversely affect our business, given our use of cookies and similar technologies to target our marketing and personalize the user experience. We may incur liabilities, expenses, costs, and other operational losses under GDPR and applicable EU Member States and the U.K. privacy laws in connection with any measures we take to comply with them.

As interpretation of both the ePrivacy Regulation and GDPR develop, we could incur substantial costs to comply with these regulations. The changes could require significant systems changes, limit the effectiveness of our marketing activities, adversely affect our margins, increase costs and subject us to additional liabilities.

In the U.S., federal and various state governments have adopted or are considering, laws, guidelines or rules for the collection, distribution, use and storage of information collected from or about users or their devices. For example, California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020 and introduced substantial changes to privacy law for businesses that collect personal information from California residents. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. And on November 3, 2020, California passed the California Privacy Rights Act (the “CPRA”). The CPRA, which will not be fully in effect until January 1, 2023, amends and expands the CCPA, including the introduction of sensitive personal information as a new regulated dataset in California that is subject to new disclosure and purpose limitation requirements. Additionally, the Virginia Consumer Data Protection Act (the “VCDPA”) will become effective on January 1, 2023. The Colorado Privacy Act and the Connecticut Data Privacy Act will become effective on July 1, 2023, and the Utah Consumer Privacy Act will become effective on December 31, 2023. Other states may decide to adopt similar laws in the future. Additionally, the U.S. Federal Trade Commission and many state attorneys general are applying federal and state consumer protection laws, to impose standards for the online collection, use and dissemination of data. Furthermore, these obligations may be interpreted and applied inconsistently from one jurisdiction to another and may conflict with other requirements or our practices.

Additionally, new platform liability laws, potential amendments to existing laws, and ongoing regulatory and judicial interpretation of these laws imparting liability for conduct by users of a platform may create costs and uncertainty for our platform at its users. In the U.S., the United States Supreme Court recently agreed to review a matter in which the scope of protections available to online platforms under Section 230 of the Communications Decency Act, or CDA, is at issue. In parallel, there have also been various Executive and Congressional efforts to restrict the scope of protections available to online platforms under Section 230 of the CDA, and our current protections from liability for third-party content posted on our platform in the United States could decrease or change depending on judicial interpretation and/or content-related legislation. We could incur significant costs investigating and defending such claims and, if we are found liable, significant damages.

In September 2021 and November 2021, the PRC made effective its new Data Security Law and Personal Information Protection Law, respectively. While there are many aspects of these laws that are still yet-to-be-defined, they impose complex and far-reaching requirements related to cybersecurity and the processing of personal data, both within China and extraterritorially. Potential penalties under the Personal Information Protection Law are severe, at up to the greater of 5% of global revenue or $7.7 million. The precise scope and impact of these laws is still unclear but they could significantly increase our compliance costs, cause us to suffer monetary penalties, or otherwise adversely impact our business and operations.

Many data protection regimes apply based on where a user is located, and as we expand our platform and new laws are enacted or existing laws change, we may be subject to new laws, regulations or standards or new interpretations of existing laws, regulations or standards, including those in the areas of data security, data privacy and regulation of email providers and those that require localization of certain data, which could require us to incur additional costs and restrict our business operations. Any failure or perceived failure by us to comply with rapidly evolving privacy or security laws policies (including our own stated privacy policies), legal obligations or industry standards or any security incident that results in the unauthorized release or transfer of personally identifiable information or other user data may result in governmental enforcement actions, litigation (including user class actions), fines and penalties or adverse publicity and could cause our users to lose trust in us, which could have a material adverse effect on our business, results of operations, financial condition, and prospects.

Risks Related to Our Class A Common Stock

We completed a reverse stock split in order to regain compliance with the listing requirements of the Nasdaq Global Select Market, but there is no assurance that the reverse stock split will result in us remaining compliant with such listing requirements.

Our Class A common stock is listed on the Nasdaq Global Select Market and, in order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards including, without limitation, that our closing bid price be at least $1.00 per share (the “Minimum Bid Price Requirement”).

On April 10, 2023, following stockholder approval, our Board of Directors approved a 1-for-30 reverse stock split of our issued and outstanding shares of common stock. On April 12, 2023, our common stock began trading on a split-adjusted basis on the Nasdaq Global Select Market.

Although as of April 26, 2023, we regained compliance with the Minimum Bid Price Requirement, there can be no assurance that we will remain in compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing rules.

We completed a 1-for-30 reverse stock split of our shares of common stock, which may reduce and limit the market trading liquidity of the shares due to the reduced number of shares outstanding.

Effective April 11, 2023, we completed a reverse stock split of our common stock by a ratio of 1-for-30. As a result, the liquidity of our Class A common stock may be adversely affected by the reverse stock split due to the reduced number of shares outstanding following such reverse stock split. Absent other factors, reducing the number of outstanding shares of our common stock through the reverse stock split is intended to increase the per-share market price of our Class A common stock. However, a reduction in the liquidity of our Class A common stock as well as other factors, including our financial and operating results, strategic direction, market conditions, and market perception may adversely affect the market price of our Class A common stock. As such, there can be no assurance that the reverse stock split will result in an increase in the market price of our Class A common stock, and such market price may also decrease in the future.

We cannot guarantee that our share repurchase program will be fully implemented or that it will result in an increase in the market price of our Class A common stock. To the extent we repurchase any shares, such repurchases could affect the price of our Class A common stock, increase the volatility of the trading price, and would diminish our cash reserves.

In April 2023, our Board of Directors authorized a share repurchase program to repurchase up to $50 million of our outstanding Class A common stock through the end of 2023 (the “Program”). Under the Program, repurchases may be made through open market purchases, privately negotiated transactions, or by other means, and are subject to market and business conditions, liquidity, alternative cash requirements, and other relevant factors. The actual timing and amount of repurchases remain subject to a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements, market and economic conditions, and general business considerations.

The Program may be modified, suspended, or terminated at any time, which may result in a decrease in the price of our Class A common stock, and we cannot guarantee that the Program will be fully implemented or that it will result in an increase in the market price of our Class A common stock. The Program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.

To the extent we make repurchases under the Program, such repurchases will decrease the number of outstanding shares of our Class A common stock and could affect the trading price of our Class A common stock and increase its volatility. The implementation of our Program could also cause the price of our Class A common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our stock. Additionally, repurchases under the Program would diminish our cash reserves or marketable securities, which could impact our ability to further develop our business.

In August 2022, President Joseph R. Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law. The IRA includes a 1% excise tax on certain stock repurchases, which certain U.S. officials have proposed raising to 4%. We will continue to evaluate the impacts of the excise tax on the Program, but we do not currently expect the IRA to have a material impact on our operating results.

The price of our Class A common stock has been and continues to be volatile. Declines in the price of our Class A common stock has resulted in and could subject us to future litigation.

The market price of our Class A common stock has fluctuated and declined and may continue to fluctuate or decline substantially. Further, the trading prices of the securities of technology companies have historically been highly volatile. Accordingly, the price of our Class A common stock has been subject to wide fluctuations and could continue to be subject to wide fluctuations for many reasons, many of which are beyond our control, including those described in this “Risk Factors” section and others such as:

•

variations in our operating results and other financial and operational metrics, including the key financial and operating metrics disclosed in this report, as well as how those results and metrics compare to analyst and investor expectations;

•

speculation about our operating results in the absence of our own financial projections;

•

failure of analysts to initiate or maintain coverage of our company, changes in their estimates of our operating results or changes in recommendations by analysts that follow our Class A common stock;

•

announcements of new services or enhancements, strategic alliances or significant agreements or other developments by us or our competitors;

•

announcements by us or our competitors of mergers or acquisitions or rumors of such transactions involving us or our competitors;

•

changes in our senior management or other key personnel;

•

disruptions in our platform due to hardware, software or network problems, security breaches or other issues;

•

the strength of the global economy or the economy in the jurisdictions in which we operate, and market conditions in our industry and those affecting our merchants and users;

•

trading activity by our principal stockholders and other market participants, in whom ownership of our Class A common stock may be concentrated following our IPO;

•

changes in legal or regulatory requirements relating to our business;

•

litigation or other claims against us;

•

the impact or perceived impact of our 30-for-1 reverse stock split;

•

announcements about any share repurchase program and purchases under the program;

•

the number of shares of our Class A common stock that are available for public trading; and

•

any other factors discussed in this report.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the price of our Class A common stock could decline for reasons unrelated to our business, results of operations or financial condition. The price of our Class A common stock might also decline in reaction to events that affect other companies, even if those events do not directly affect us. We have been named in lawsuits and may be subject to both ongoing litigation and other requests related to our stock price/performance and/or Board performance and independence. This could result in securities litigation. If we are the subject of additional securities class actions, it could result in substantial costs and could divert our management’s attention and resources, which could adversely affect our business. Additionally, the price of our Class A common stock may be volatile and may decline regardless of our operating performance and you may lose all or part of your investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~(a) Unregistered Sales~~(c)Issuer Purchases of Equity Securities

~~None~~

~~(b) Use~~On April 20, 2023, we announced that our board of ~~Proceeds~~

~~Our IPO~~directors authorized us to repurchase up to $50 million of ~~Class A~~our common stock, ~~was effected~~effective through ~~a Registration Statement on Form S-1 (File Nos. 333-250531), which was declared~~December 31, 2023. Under the share repurchase program, we may repurchase shares of our common stock through open market transactions, in privately negotiated transactions, or ~~became effective on December 15, 2020. There has been no material change in~~by other means, including through the use of ~~proceeds from our IPO as described~~trading plans, each in ~~our final prospectus dated December 15, 2020 filed~~accordance with applicable securities laws and other restrictions. The manner, timing, and amount of any purchase will be based on an assessment of business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The repurchase program may be suspended, terminated, or modified at any time for any reason.

We have not made any repurchases for the ~~Securities and Exchange Commission, or SEC, pursuant to Rule 424(b) of the Securities Act of 1933, as amended, or the Securities Act.~~three months ended March 31, 2023.

Item 6. Exhibits.


Exhibit Number		Description
31.13.1		Restated Certificate of Incorporation, as amended through April 11, 2023
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

SIGNATURES

~~Filed herewith.~~

**	~~Furnished herewith.~~

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ContextLogic Inc.

Date: May ~~12, 2021~~4, 2023	By:	/s/ ~~Rajat Bahri~~Jun Yan
		~~Rajat Bahri~~Jun Yan
		Chief ~~Financial Offer~~Executive Officer and Director
		(Principal Executive Officer)

	By:	/s/ Vivian Liu
		Vivian Liu
		Chief Financial Officer and Chief Operating Officer
		(Principal Financial Officer)

2941


Delaware	27-2930953
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Sansome Street 40^th33rd Floor San Francisco, CA	94104
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	WISH	Nasdaq Global Select Market

	As of March 31,			As of December 31,
	2021			2020
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,620		$	1,965
Marketable securities		154			164
Funds receivable		65			83
Prepaid expenses and other current assets		88			102
Total current assets		1,927			2,314
Property and equipment, net		23			25
Right-of-use assets		39			43
Marketable securities		—			4
Other assets		10			11
Total assets	$	1,999		$	2,397
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	291		$	434
Merchants payable		381			454
Refunds liability		54			77
Accrued liabilities		309			367
Total current liabilities		1,035			1,332
Lease liabilities, non-current		34			38
Total liabilities		1,069			1,370
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value: 100 shares authorized as of March 31, 2021 and December 31, 2020; NaN shares issued and outstanding as of March 31, 2021 and December 31, 2020		—			—
Common stock, $0.0001 par value: 3,500 (3,000 Class A, 500 Class B) shares authorized as of March 31, 2021 and December 31, 2020; 618 (501 Class A, 117 Class B) and 587 (478 Class A, 109 Class B) shares issued and outstanding as of March 31, 2021 and December 31, 2020		—			—
Additional paid-in capital		3,243			3,210
Accumulated other comprehensive income (loss)		(1	)		1
Accumulated deficit		(2,312	)		(2,184	)
Total stockholders’ equity		930			1,027
Total liabilities and stockholders’ equity	$	1,999		$	2,397


	As of March 31,			As of December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	371		$	506
Marketable securities		256			213
Funds receivable		5			14
Prepaid expenses and other current assets		39			44
Total current assets		671			777
Property and equipment, net		10			9
Right-of-use assets		8			9
Other assets		4			4
Total assets	$	693		$	799
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	41		$	53
Merchants payable		110			120
Refunds liability		5			6
Accrued liabilities		115			130
Total current liabilities		271			309
Lease liabilities, non-current		11			13
Total liabilities		282			322
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value: 100,000 shares authorized as of March 31, 2023 and December 31, 2022; No shares issued and outstanding as of March 31, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value: 3,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 23,341 and 23,164 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		3,434			3,411
Accumulated other comprehensive loss		(5	)		(5	)
Accumulated deficit		(3,018	)		(2,929	)
Total stockholders’ equity		411			477
Total liabilities and stockholders’ equity	$	693		$	799


	Three Months Ended
	March 31,
	2023			2022
Net loss	$	(89	)	$	(60	)
Other comprehensive loss:
Unrealized holding losses on derivatives and marketable securities, net of tax		—			(1	)
Comprehensive loss	$	(89	)	$	(61	)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Large accelerated filer~~	☐	~~Accelerated filer~~	☐

~~Non-accelerated filer~~	☒	~~Smaller reporting company~~	☐
Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐


		Page
	Special Note Regarding Forward-Looking Statements	ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1819
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2629
Item 4.	Controls and Procedures	2730
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	2833
Item 1A.	Risk Factors	2833
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2839
Item 6.	Exhibits	2840
Signatures		2941


	Three Months Ended March 31, 2023
	Common Stock
	Shares			Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity

Balances as of December 31, 2022		23,164		$	—	$	3,411		$	(5	)	$	(2,929	)	$	477
Issuance of common stock upon settlement of restricted stock units		320			—		—			—			—			—
Shares withheld related to net share settlement		(143	)		—		(3	)		—			—			(3	)
Stock-based compensation		—			—		26			—			—			26
Net loss		—			—		—			—			(89	)		(89	)
Balances as of March 31, 2023		23,341		$	—	$	3,434		$	(5	)	$	(3,018	)	$	411


	Three Months Ended March 31, 2022
	Common Stock
	Shares		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total Stockholders' Equity

Balances as of December 31, 2021		21,949	$	—	$	3,360		$	3		$	(2,545	)	$	818
Issuance of common stock upon exercise of options for cash		38		—		—			—			—			—
Issuance of common stock upon settlement of restricted stock units		140		—		—			—			—			—
Stock-based compensation		—		—		(2	)		—			—			(2	)
Other comprehensive loss, net		—		—		—			(1	)		—			(1	)
Net loss		—		—		—			—			(60	)		(60	)
Balances as of March 31, 2022		22,127	$	—	$	3,358		$	2		$	(2,605	)	$	755

	Three Months Ended March 31, 2021
	Common Stock				Additional Paid-in			Accumulated Other			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Comprehensive Income			Deficit			Equity

Balances as of December 31, 2020		587	$	—	$	3,210		$	1		$	(2,184	)	$	1,027
Issuance of common stock upon exercise of options for cash		2		—		1			—			—			1
Issuance of common stock upon settlement of restricted stock units, net of tax		29		—		(5	)		—			—			(5	)
Stock-based compensation		—		—		37			—			—			37
Other comprehensive loss, net		—		—		—			(2	)		—			(2	)
Net loss		—		—		—			—			(128	)		(128	)
Balances as of March 31, 2021		618	$	—	$	3,243		$	(1	)	$	(2,312	)	$	930

	Three Months Ended March 31, 2020
	Redeemable Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit

Balances as of December 31, 2019		422	$	1,536		103	$	—	$	—	$	(1,439	)	$	(1,439	)
Issuance of common stock upon exercise of options for cash		—		—		3		—		1		—			1
Net loss and comprehensive loss		—		—		—		—		—		(66	)		(66	)
Balances as of March 31, 2020		422	$	1,536		106	$	—	$	1	$	(1,505	)	$	(1,504	)


	March 31,			December 31,			March 31,			December 31,
	2021			2020			2023			2022
PSP 1		61	%		56	%		63	%		32	%
PSP 2		27	%		27	%		28	%		56	%

	December 31, 2020
	Total		Level 1		Level 2		Level 3
	(in millions)
Financial assets:
Cash equivalents:
Money market funds	$	35	$	35	$	—	$	—
U.S. Treasury bills		30		—		30		—
Commercial paper		9		—		9		—
Total cash equivalents	$	74	$	35	$	39	$	—
Marketable securities:
U.S. Treasury bills	$	38	$	—	$	38	$	—
Commercial paper		49		—		49		—
Corporate bonds		81		—		81		—
Total marketable securities	$	168	$	—	$	168	$	—
Prepaid and other current assets:
Derivative assets	$	3	$	—	$	3	$	—
Total financial assets	$	245	$	35	$	210	$	—
Financial liabilities:
Accrued liabilities:
Derivative liabilities	$	4	$	—	$	4	$	—
Total financial liabilities	$	4	$	—	$	4	$	—


	March 31, 2021		December 31, 2020		March 31, 2023		December 31, 2022
	(in millions)				(in millions)
Cash flow hedges	$	250	$	600	$	166	$	168
Non-designated hedges		219		422		10		11
Total	$	469	$	1,022	$	176	$	179

	As of March 31, 2021			As of December 31, 2020
	(in millions)						March 31, 2023			December 31, 2022
Balance beginning of the period	$	2		$	—
							(in millions)
Balance at the beginning of the period							$	2		$	2
Other comprehensive income before reclassifications		7			9			—			(6	)
Amounts recognized in core marketplace revenue and reclassified out of accumulated other comprehensive income		(9	)		(7	)
Amounts recognized in core marketplace revenue and reclassified out of accumulated other comprehensive loss								(2	)		6
Balance at the end of the period	$	—		$	2		$	—		$	2


	March 31,
	2023
Year ending December 31,	(in millions)
2023 (remaining nine months)	$	6
2024		8
2025		4
2026		1
2027		1
Total lease payments		20
Less: imputed interest		(2	)
Present value of lease liabilities	$	18