Shutterfly (SFLY) 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 03, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	SHUTTERFLY INC
Entity Central Index Key	1,125,920
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		33,764,721
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 161,515	$ 289,224
Short-term investments	45,005	26,352
Accounts receivable, net	33,243	57,365
Inventories	9,664	11,751
Prepaid expenses and other current assets	59,941	48,084
Total current assets	309,368	432,776
Long-term investments	15,903	14,479
Property and equipment, net	266,844	284,110
Intangible assets, net	39,378	43,420
Goodwill	408,975	408,975
Other assets	11,597	11,816
Total assets	1,052,065	1,195,576
Current liabilities:
Accounts payable	14,067	58,790
Accrued liabilities	79,217	138,869
Deferred revenue, current portion	22,225	22,929
Total current liabilities	115,509	220,588
Convertible senior notes, net	282,527	278,792
Other liabilities	112,217	137,035
Total liabilities	510,253	636,415
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock, $0.0001 par value; 100,000 shares authorized; 33,729 and 33,637 shares issued and outstanding on March 31, 2017 and December 31, 2016, respectively	3	3
Additional paid-in capital	962,558	949,864
Accumulated other comprehensive loss	(35)	(32)
Accumulated deficit	(420,714)	(390,674)
Total stockholders' equity	541,812	559,161
Total liabilities and stockholders' equity	$ 1,052,065	$ 1,195,576

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	33,729,000	33,637,000
Common stock, shares outstanding (in shares)	33,729,000	33,637,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Net revenues	$ 191,972	$ 181,709
Cost of net revenues	116,119	108,723
Restructuring	1,240	0
Gross profit	74,613	72,986
Operating expenses:
Technology and development	45,955	38,269
Sales and marketing	42,887	45,842
General and administrative	27,795	30,689
Restructuring	7,736	0
Total operating expenses	124,373	114,800
Loss from operations	(49,760)	(41,814)
Interest expense	(5,964)	(5,675)
Interest and other income, net	189	121
Loss before income taxes	(55,535)	(47,368)
Benefit from income taxes	22,341	17,932
Net loss	$ (33,194)	$ (29,436)
Net loss per share - basic and diluted (in dollars per share)	$ (0.98)	$ (0.85)
Weighted-average shares outstanding - basic and diluted (in shares)	33,712	34,596
Stock-based compensation	$ 12,319	$ 10,150
Cost of net revenues
Stock-based compensation	1,169	1,224
Technology and development
Stock-based compensation	2,696	459
Sales and marketing
Stock-based compensation	3,173	4,279
General and administrative
Stock-based compensation	4,467	4,188
Restructuring
Stock-based compensation	$ 814	$ 0

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (33,194)	$ (29,436)
Unrealized gains (losses) on investments, net	(13)	177
Tax benefit (expense) on unrealized gain (loss) on investments, net	10	(69)
Other comprehensive income (loss), net of tax	(3)	108
Comprehensive loss	$ (33,197)	$ (29,328)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (33,194)	$ (29,436)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	23,024	22,995
Amortization of intangible assets	4,340	6,119
Amortization of debt discount and issuance costs	3,735	3,532
Stock-based compensation	11,505	10,150
Loss on disposal of property and equipment	172	218
Deferred income taxes	2,358	3,637
Tax benefit from stock-based compensation	0	5,638
Excess tax benefits from stock-based compensation	0	(6,859)
Restructuring	7,868	0
Changes in operating assets and liabilities:
Accounts receivable	24,122	25,137
Inventories	847	1,457
Prepaid expenses and other assets	(11,577)	(26,607)
Accounts payable	(44,655)	(17,080)
Accrued and other liabilities	(60,931)	(81,511)
Net cash used in operating activities	(72,386)	(82,610)
Cash flows from investing activities:
Purchases of property and equipment	(3,517)	(10,131)
Capitalization of software and website development costs	(7,602)	(8,639)
Purchases of investments	(26,304)	(8,026)
Proceeds from the maturities of investments	6,214	11,615
Proceeds from sale of property and equipment	70	39
Net cash used in investing activities	(31,139)	(15,142)
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options	117	491
Repurchases of common stock	(20,000)	(47,461)
Excess tax benefits from stock-based compensation	0	6,859
Principal payments of capital lease and financing obligations	(4,301)	(3,772)
Payment for contingent consideration liabilities	0	(1,313)
Net cash used in financing activities	(24,184)	(45,196)
Net decrease in cash and cash equivalents	(127,709)	(142,948)
Cash and cash equivalents, beginning of period	289,224	288,863
Cash and cash equivalents, end of period	161,515	145,915
Supplemental schedule of non-cash investing / financing activities:
Net decrease in accrued purchases of property and equipment	(1,848)	(4,634)
Net increase (decrease) in accrued capitalized software and website development costs	124	(471)
Stock-based compensation capitalized with software and website development costs	$ 258	$ 537

The Company and Summary of Sign

The Company and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
The Company and Summary of Significant Accounting Policies	The Company and Summary of Significant Accounting Policies Shutterfly, Inc., (the “Company” or “Shutterfly”) was incorporated in the state of Delaware in 1999 and began its services in December 1999. The Company is the leading online manufacturer and digital retailer of high-quality personalized products and services offered through a family of lifestyle brands. The Company provides customers a full range of products and services to organize and archive digital images; share pictures; order prints and create an assortment of personalized items such as professionally-bound photo books, greeting cards and stationery and calendars. Shutterfly also operates a premier online marketplace for high-quality photographic and video equipment rentals. The Company provides Enterprise services: printing and shipping of variable data print products and formats. The Company's Enterprise brand is called Shutterfly Business Solutions ("SBS") and is referred to as such in this document. The Company is headquartered in Redwood City, California. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and, accordingly, do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements include the accounts of Shutterfly, Inc. and its wholly owned subsidiaries. In the opinion of management, all adjustments, consisting primarily of normal recurring accruals, considered necessary for a fair statement of the Company’s results of operations for the interim periods reported and of its financial condition as of the date of the interim balance sheet have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 , or for any other period. The December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") . The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 beginning January 1, 2017 and the impact of adoption resulted in the following: • The Company recorded approximately $23.2 million of additional deferred tax assets with the corresponding decrease to accumulated deficit related to the prior years' unrecognized excess tax benefits (thus, adoption method was modified retrospective). • The Company recorded a tax benefit of $0.8 million as a discrete item within income tax benefit for the three months ended March 31, 2017 related to the excess tax benefit on stock options, restricted stock and performance share units. Prior to adoption this amount would have been recorded as a reduction of additional paid-in capital. This change could create volatility in the Company’s future effective tax rate. • The Company elected not to change its policy on accounting for forfeitures and will continue to estimate the total number of awards for which the requisite service period will not be rendered. • The Company no longer reclassifies the excess tax benefit from operating activities to financing activities in the statement of cash flows. The Company elected to apply this change in presentation prospectively and thus prior periods have not been adjusted. • The remaining provisions of ASU 2016-09 did not have a material impact on the accompanying condensed consolidated financial statements. In 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer, the application of identifying performance obligations, and the recognition of expected breakage amounts either proportionally in earnings as redemptions occur or when redemption is remote. As a result, the Company has engaged internal and external resources that are currently evaluating the impact of the new standard on timing and measurement of revenue recognition as well as how current systems and operations will be impacted. While the Company continues to assess all potential impacts of the standard, the Company currently believes there will be an impact related to timing and measurement of flash deal breakage revenue for the consumer business and multiple-element arrangements in connection with our enterprise business. The standard is required to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company has not yet selected the transition method. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 on a modified retrospective basis, and earlier adoption is permitted. The Company is evaluating the impact, if any, of adopting this new accounting guidance on its financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Earlier adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is evaluating the impact of adopting this new accounting guidance on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new guidance clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) . The updated guidance simplifies the measurement of goodwill impairment by removing step two of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard is effective for annual or any interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is evaluating the impact this new accounting guidance will have on the consolidated financial statements.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock Option Activity A summary of the Company’s stock option activity for the three months ended March 31, 2017 is as follows (share numbers and aggregate intrinsic values in thousands): Number of Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance as of December 31, 2016 950 $ 46.58 Granted 456 45.04 Exercised (5 ) 26.02 Forfeited, cancelled or expired — — Balance as of March 31, 2017 1,401 $ 46.17 6.2 $ 3,102 Options vested and expected to vest as of March 31, 2017 1,291 $ 46.26 6.1 $ 2,748 Options vested as of March 31, 2017 95 $ 32.39 3.1 $ 1,622 During the three months ended March 31, 2017 , the Company granted options to purchase an aggregate of 456,000 shares of common stock with an estimated weighted-average grant-date fair value of $12.05 . The total intrinsic value of options exercised during the three months ended March 31, 2017 and 2016 was $0.1 million and $0.4 million , respectively. Net cash proceeds from the exercise of stock options for the three months ended March 31, 2017 and 2016 were $0.1 million and $0.5 million , respectively. Valuation of Stock Options The Company estimates the fair value of each option award on the date of grant using the Black-Scholes option-pricing model. The Company calculates volatility using an average of its historical and implied volatilities as it had sufficient public trading history to cover the entire expected term. The expected term of options gives consideration to historical exercises, post-vest cancellations and the options contractual term. The risk-free rate for the expected term of the option is based on the U.S. Treasury Constant Maturity at the time of grant. The assumptions used to value options granted during the three months ended March 31, 2017 are as follows (there were no option awards granted during the three months ended March 31, 2016): Three Months Ended March 31, 2017 Dividend yield — Annual risk-free rate of return 2.0 % Expected volatility 29.7 % Expected term (years) 4.1 Restricted Stock Unit Activity The Company grants restricted stock units (“RSUs”) and performance-based restricted stock units ("PBRSUs") to its employees under the provisions of the 2015 Plan and inducement awards to certain new employees upon hire in accordance with NASDAQ Listing Rule 5635(c)(4). The cost of RSUs is determined using the fair value of the Company’s common stock on the date of grant. RSUs typically vest and are settled annually, based on a four -year total vesting term. Compensation cost associated with RSUs is amortized on a straight-line basis over the requisite service period. A summary of the Company’s RSU activity for the three months ended March 31, 2017 , is as follows (share numbers in thousands): Number of Units Outstanding Weighted Average Grant Date Fair Value Awarded and unvested as of December 31, 2016 2,834 $ 43.52 Granted 591 46.77 Vested (515 ) 42.91 Forfeited (124 ) 41.96 Awarded and unvested as of March 31, 2017 2,786 $ 44.39 RSUs expected to vest as of March 31, 2017 2,253 Employee stock-based compensation expense recognized in the three months ended March 31, 2017 and 2016 , was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. At March 31, 2017 , the Company had $94.7 million of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to stock options, RSUs and PBRSUs that will be recognized over a weighted-average period of approximately three years.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share Basic net loss per share attributed to common shares is computed by dividing the net loss attributable to common shares for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share attributed to common shares is computed by dividing the net loss attributable to common shares for the period by the weighted average number of common and potential common shares outstanding during the period, if the effect of each class of potential common shares is dilutive. Potential common shares include RSUs and incremental shares of common stock issuable upon the exercise of stock options, conversion of warrants, and the impact of convertible senior notes. A summary of the net loss per share for the three months ended March 31, 2017 and 2016 is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2017 2016 Net loss per share: Numerator Net loss $ (33,194 ) $ (29,436 ) Denominator for basic and diluted net loss per share Weighted-average common shares outstanding 33,712 34,596 Net loss per share - basic and diluted $ (0.98 ) $ (0.85 ) The following weighted-average outstanding stock options and restricted stock units were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended March 31, 2017 2016 Stock options and restricted stock units 3,961 3,649

Investments

Investments	3 Months Ended
	Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Investments	Investments At March 31, 2017 and December 31, 2016 , the estimated fair value of short-term and long-term investments classified as available-for-sale are as follows (in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 25,221 $ 3 $ (22 ) $ 25,202 Agency securities 7,658 1 (4 ) 7,655 Commercial paper 8,474 — — 8,474 U.S. Government securities 3,674 — — 3,674 Total short-term investments $ 45,027 $ 4 $ (26 ) $ 45,005 Long-term investments Corporate debt securities $ 9,383 $ 2 $ (13 ) $ 9,372 Agency securities 4,225 — (18 ) 4,207 U.S. Government securities 2,331 — (7 ) 2,324 Total long-term investments $ 15,939 $ 2 $ (38 ) $ 15,903 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 13,371 $ 2 $ (12 ) $ 13,361 Agency securities 7,957 6 — 7,963 Commercial paper 1,727 — — 1,727 U.S. Government securities 3,298 3 — 3,301 Total short-term investments $ 26,353 $ 11 $ (12 ) $ 26,352 Long-term investments Corporate debt securities $ 6,208 $ 1 $ (20 ) $ 6,189 Agency securities 5,359 — (20 ) 5,339 U.S. Government securities 2,956 1 (6 ) 2,951 Total long-term investments $ 14,523 $ 2 $ (46 ) $ 14,479 The Company had no short-term or long-term investments that have been in a continuous unrealized loss position for more than 12 months as of March 31, 2017 and no impairments were recorded in the period. The Company had no material realized gains or losses during the three months ended March 31, 2017 . The following table summarizes the contractual maturities of the Company's investments as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 One year or less $ 45,005 $ 26,352 One year through three years 15,903 14,479 $ 60,908 $ 40,831 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.

Fair Value Measurement

Fair Value Measurement	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurement	Fair Value Measurement Cash Equivalents and Investments The Company measures the fair value of money market funds and investments based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. The Company did not hold any cash equivalents or investments categorized as Level 3 as of March 31, 2017 . The following table summarizes, by major security type, the Company's cash equivalents and investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Total Estimated Fair Value as of March 31, 2017 December 31, 2016 Cash Equivalents Investments Cash Equivalents Investments Level 1 Securities: Money market funds $ 25,619 $ — $ 808 $ — Level 2 Securities: Corporate debt securities 1,000 34,574 2,309 19,550 Agency securities — 11,862 — 13,302 Commercial Paper 8,204 8,474 6,694 1,727 U.S. Government securities — 5,998 — 6,252 Total cash equivalents and investments $ 34,823 $ 60,908 $ 9,811 $ 40,831 Convertible Senior Notes As of March 31, 2017 , the fair value of the convertible senior notes, which was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price, interest rates and credit spread (Level 2) were as follows (in thousands): Total Estimated Fair Value as of March 31, 2017 December 31, 2016 Convertible senior notes $ 293,022 $ 290,436 The carrying value of other financial instruments, including accounts receivable, accounts payable and other payables, approximates fair value due to their short maturities.

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Balance Sheet Components Prepaid Expenses and Other Current Assets March 31, 2017 December 31, 2016 (in thousands) Intra-period income tax asset $ 24,683 $ — Prepaid service contracts - current portion 10,936 11,114 Manufacturing partners receivable 4,936 11,739 Other prepaid expenses and current assets 19,386 25,231 $ 59,941 $ 48,084 Intra-period income tax asset represents the cumulative income tax benefit recorded as of the balance sheet date, which will offset against taxes payable or become a component of deferred taxes on a full year basis. Property and Equipment, Net March 31, 2017 December 31, 2016 (in thousands) Manufacturing equipment $ 179,357 $ 182,484 Computer equipment and software 178,549 177,525 Capitalized software and website development costs 141,138 134,427 Buildings under build-to-suit leases 56,468 56,468 Leasehold improvements 22,144 22,007 Rental equipment 18,956 18,786 Furniture and fixtures 11,053 11,057 607,665 602,754 Less: Accumulated depreciation and amortization (340,821 ) (318,644 ) Net property and equipment $ 266,844 $ 284,110 Included within manufacturing equipment is approximately $89.9 million of capital lease obligations for various pieces of manufacturing facility equipment as of both March 31, 2017 and December 31, 2016 . Accumulated depreciation of assets under capital lease totaled $29.2 million at March 31, 2017 compared to $25.1 million at December 31, 2016 . Rental equipment includes camera lenses, camera bodies, video equipment and other camera peripherals which are rented through the BorrowLenses website. Depreciation and amortization expense totaled $23.0 million for both the three months ended March 31, 2017 and 2016 . Included in property and equipment is approximately $10.0 million and $14.3 million of assets in construction as of March 31, 2017 and December 31, 2016 , respectively, the majority of which relates to internal-use software. Accrued Liabilities March 31, 2017 December 31, 2016 (in thousands) Accrued compensation $ 21,443 $ 17,066 Capital lease obligations, current portion 16,168 16,092 Accrued production costs 13,363 38,755 Accrued marketing expenses 8,022 23,839 Accrued consulting 5,847 8,643 Accrued income and sales tax 3,761 19,846 Accrued other 10,613 14,628 $ 79,217 $ 138,869 Other Liabilities March 31, 2017 December 31, 2016 (in thousands) Financing obligations $ 54,966 $ 55,355 Capital lease obligations, non-current portion 46,164 50,213 Deferred tax liability — 20,446 Deferred revenue, non-current portion 6,882 7,303 Other liabilities 4,205 3,718 $ 112,217 $ 137,035 Financing obligations relate to the Company's build-to-suit leases for the Company's manufacturing facilities in Fort Mill, South Carolina; Shakopee, Minnesota; and Tempe, Arizona.

Convertible Senior Notes

Convertible Senior Notes	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Convertible Senior Notes	Convertible Senior Notes 0.25% Convertible Senior Notes Due May 15, 2018 In May 2013, the Company issued $300.0 million aggregate principal amount of 0.25% convertible senior notes (the "Notes") due May 15, 2018 , unless earlier purchased by the Company or converted. Interest is payable semiannually in arrears on May 15 and November 15 of each year, commencing on November 15, 2013. The Notes are governed by an Indenture between the Company, as issuer, and Wells Fargo Bank, National Association, as trustee. The Notes are unsecured and rank senior in right of payment to the Company's future indebtedness that is expressly subordinated in right of payment to the Notes and rank equal in right of payment to the Company's existing and future liabilities that are not so subordinated and are effectively subordinated in right of payment to any of the Company's cash equal to the principal amount of the Notes, and secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all existing and future indebtedness and liabilities incurred by the Company's subsidiaries. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the Company's election. The initial conversion rate is 15.5847 shares of common stock per $1,000 principal amount of Notes. The initial conversion price is $64.17 per share of common stock. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than cancelled, extinguished or forfeited. Holders may convert their Notes only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2013 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any ten consecutive trading day period (the “Notes Measurement Period”) in which the "trading price" (as the term is defined in the Indenture) per $1,000 principal amount of notes for each trading day of such Notes Measurement Period was less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on each such trading day; • upon the occurrence of specified corporate events; or • at any time on or after December 15, 2017 until the close of business on the second scheduled trading immediately preceding the maturity date. As of March 31, 2017 , the Notes are not yet convertible. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the face value of the Notes as a whole. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the Note issuance, the Company allocated the total amount incurred to the liability and equity components based on their relative values. Issuance costs attributable to the liability component, totaling $6.4 million , are being amortized to expense over the term of the Notes, and issuance costs attributable to the equity component, totaling $1.7 million , were netted with the equity component in stockholders' equity. Additionally, the Company recorded a deferred tax asset of $0.6 million on a portion of the equity component transaction costs which are deductible for tax purposes. Concurrently with the Note issuance, the Company repurchased 0.6 million shares of common stock for approximately $30.0 million . The Notes consist of the following (in thousands): March 31, 2017 December 31, 2016 Liability component: Principal $ 300,000 $ 300,000 Less: debt issuance costs, debt discount, net of amortization (17,473 ) (21,208 ) Net carrying amount $ 282,527 $ 278,792 Equity component (1) $ 63,510 $ 63,510 (1) Recorded in the consolidated balance sheets within additional paid-in capital, net of the $1.7 million of issuance costs in equity. The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, 2017 2016 0.25% coupon $ 187 $ 188 Amortization of debt issuance costs 341 323 Amortization of debt discount 3,394 3,209 $ 3,922 $ 3,720 Note Hedge To minimize the impact of potential economic dilution upon conversion of the Notes, the Company entered into convertible note hedge transactions with respect to its common stock (the “Note Hedge”). In May 2013, the Company paid an aggregate amount of $63.5 million for the Note Hedge. The Note Hedge will expire upon maturity of the Notes. The Note Hedge is intended to offset the potential dilution upon conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount upon conversion of the Notes in the event that the market value per share of the Company's common stock, as measured under the Notes, is greater than the strike price of the Note Hedge, which initially corresponds to the conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes. Warrant Separately, in May 2013, the Company entered into warrant transactions (the “Warrant”), whereby the Company sold warrants to acquire shares of the Company's common stock at a strike price of $83.18 per share. The Company received aggregate proceeds of $43.6 million from the sale of the Warrant. If the average market value per share of the Company's common stock for the reporting period, as measured under the Warrant, exceeds the strike price of the Warrant, the Warrant will have a dilutive effect on the Company's earnings per share. The Warrant is a separate transaction, entered into by the Company and is not part of the Notes or the Note Hedge, and has been accounted for as part of additional paid-in capital. Holders of the Notes and Note Hedge will not have any rights with respect to the Warrant.

Share Repurchase Program

Share Repurchase Program	3 Months Ended
	Mar. 31, 2017
Share Repurchase Program [Abstract]
Share Repurchase Program	Share Repurchase Program On October 24, 2012, the Company's Board of Directors conditionally authorized and the Audit Committee subsequently approved a share repurchase program for up to $60.0 million of the Company's common stock. As of March 31, 2017 , the Company's Board of Directors has approved increases to the program on the following dates: • On February 6, 2014, the Company's Board of Directors approved an increase of $100.0 million in addition to any amounts repurchased as of that date. • On February 9, 2015, the Company's Board of Directors approved an increase of $300.0 million in addition to any amounts repurchased as of that date. • On April 21, 2016, the Company's Board of Directors approved an increase of $100.0 million in addition to any amounts repurchased as of that date. The share repurchase program is subject to prevailing market conditions and other considerations; does not require the Company to repurchase any dollar amount or number of shares; and may be suspended or discontinued at any time. The share repurchase authorization, which was effective immediately, permits the Company to effect repurchases for cash from time to time through open market, privately negotiated or other transactions, including pursuant to trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, or by a combination of such methods. The following table provides information about our repurchase of shares of our common stock for fiscal years 2014, 2015 , 2016 , and 2017 : Period (1) Total Number of Shares Purchased Average Price Paid per Share Total Dollar Value Spent on Repurchases (in thousands) 2014 Repurchases 1,961,085 $45.29 $88,815 2015 Repurchases (2) 4,907,675 $43.99 $215,911 2016 Repurchases 2,524,752 $44.55 $112,488 2017 Repurchases to date (3) 429,583 $46.56 $20,000 (1) All shares were purchased pursuant to the publicly announced share repurchase program described above. Shares are reported in a period based on the settlement date of the applicable repurchase. All repurchased shares of common stock have been retired. (2) The Company entered into an accelerated share repurchase ("ASR") in the second quarter of 2015 under which a prepayment of $75.0 million was made. Final settlement of the ASR occurred on August 3, 2015, resulting in the delivery to the Company of 0.8 million shares of the Company’s common stock and a return of cash for the remaining amount not settled in shares of $38.2 million . In total, approximately 0.8 million shares of common stock were repurchased under the ASR for $36.8 million , resulting in an average price paid per share of $46.49 under the ASR. (3) Represents repurchases for the three months ended March 31, 2017 .

Segment Reporting

Segment Reporting	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segment Reporting	Segment Reporting The Company reports segment information based on its internal reporting used by management for making decisions and assessing performance as the source of its reportable segments. The Chief Operating Decision Maker ("CODM") function uses gross profit to evaluate the performance of the segments and allocate resources. Management considers gross margin to be the appropriate metric to evaluate and compare the ongoing performance of each reportable segment as it is the level at which direct costs associated with the performance of the segment are monitored. Cost of net revenues for the Consumer segment consists of costs directly attributable to the production of personalized products for all of our brands, including direct materials (the majority of which consists of paper, ink, and photo book covers), shipping charges, packing supplies, distribution and fulfillment activities, third-party costs for photo-based merchandise, payroll and related expenses for direct labor and customer service, rent for production facilities, and depreciation of production equipment and facilities where we are the deemed owner. Cost of net revenues also includes third-party software or patents licensed, as well as the amortization of acquired developed technology, capitalized website and software development costs, and patent royalties, when those costs are directly attributable to the production of products. Cost of net revenues also includes certain costs associated with inventory markdowns and restructuring activities. Cost of net revenues for the SBS segment consists of costs which are direct and incremental to the SBS business. These include production costs of SBS products, such as materials, labor and printing costs and costs associated with third-party production of goods. They also include shipping costs and indirect overhead. Due to the nature of the Company's operations, a majority of its assets are utilized across all segments. In addition, segment assets are not reported to, or used by, the CODM to allocate resources or assess performance of the Company's segments. Accordingly, the Company has not disclosed asset information by segment. The Company’s segments are determined based on the products and services it provides and how the CODM evaluates the business. The Company has the following reportable segments: Consumer - Includes sales from the Company's brands and are derived from the sale of a variety of products, such as greeting and stationery cards, professionally-bound photo books, personalized calendars, home décor, personalized gifts, high quality prints, and other photo-based merchandise, and the related shipping revenues as well as rental revenue from its BorrowLenses brand. Revenue from advertising displayed on the Company's websites is also included in Consumer revenues. SBS - Includes revenues generated from the printing and shipping of marketing and variable data print products and formats. In addition to the above reportable segments, the Company has a corporate category that includes activities that are not directly attributable or allocable to a specific segment. This category consists of stock-based compensation expense and amortization of intangible assets. The Company’s segment results for the three months ended March 31, 2017 and 2016 were as follows (dollars in thousands): Three Months Ended March 31, 2017 2016 Consumer Net revenues $ 160,645 $ 155,381 Cost of net revenues 89,854 86,337 Restructuring 1,240 — Gross profit $ 69,551 $ 69,044 Gross profit as a percentage of net revenues 43 % 44 % Shutterfly Business Solutions (SBS) Net revenues $ 31,327 $ 26,328 Cost of net revenues 23,838 19,710 Gross profit $ 7,489 $ 6,618 Gross profit as a percentage of net revenues 24 % 25 % Corporate Net revenues $ — $ — Cost of net revenues 2,427 2,676 Gross profit $ (2,427 ) $ (2,676 ) Consolidated Net revenues $ 191,972 $ 181,709 Cost of net revenues 116,119 108,723 Restructuring 1,240 — Gross profit $ 74,613 $ 72,986 Gross profit as a percentage of net revenues 39 % 40 %

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves future claims that may be made against the Company, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Syndicated Credit Facility On November 22, 2011, the Company entered into a credit agreement (“Credit Agreement”) with J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Fifth Third Bank, Silicon Valley Bank, U.S. Bank and Citibank, N.A. (“the Banks”). The Credit Agreement was subsequently amended on May 10, 2013. As part of the expansion in May 2013, Bank of America, N.A. and Morgan Stanley Bank, N.A. joined the syndicate. Details regarding the Credit Agreement is discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. On June 10, 2016, the Company renewed the Credit Agreement with the Banks. As part of this renewal, Fifth Third Bank, Silicon Valley Bank, U.S. Bank and Citibank, N.A. left the syndicate and SunTrust Bank and BMO Harris Bank N.A. joined the syndicate. The Credit Agreement is for five years and provides for a $200.0 million senior secured revolving credit facility. As part of the renewal, the Company amended the Credit Agreement by and among the Company and the Banks to increase the Leverage Ratio (as defined in the Credit Agreement) to be maintained by the Company to be at or below 3.50 to 1.00 for the fiscal quarter ended June 30, 2016 through March 31, 2017, at or below 3.25 to 1.00 for the fiscal quarter ending June 30, 2017 through March 31, 2018, and at or below 3.00 to 1.00 for the fiscal quarter ended June 30, 2018 and thereafter. Unchanged from the initial credit agreement, the Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. Also, the Company may not permit the ratio of its Consolidated EBITDA for any period of four consecutive fiscal quarters to its interest and rental expense and the amount of scheduled principal payments on long-term debt, for the same period, to be less than 2.50 to 1.00. As of March 31, 2017 , the Company is in compliance with these covenants. Amounts repaid under the Facility may be reborrowed. The revolving loan facility matures on the fifth anniversary of its closing and is payable in full upon maturity. The Company intends to use the new Facility from time to time for general corporate purposes, working capital and potential acquisitions. Legal Matters The Company is subject to the various legal proceedings and claims discussed below as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. Although adverse decisions (or settlements) may occur in one or more of these cases, it is not possible to estimate the possible loss or losses from each of these cases. The final resolution of these lawsuits, individually or in the aggregate, is not expected to have a material adverse effect on the Company's business, financial position or results of operations. Cases that previously were disclosed may no longer be described because of rulings in the case, settlements, changes in our business or other developments rendering them, in our judgment, no longer material to our business, financial position or results of operations. The State of Delaware v. Shutterfly, Inc. On May 1, 2014, the State of Delaware filed a complaint against Shutterfly for alleged violations of the Delaware False Claims and Reporting Act, 6 Del C. § 1203(b)(2). The complaint asserts that Shutterfly failed to report and remit to Delaware cash equal to the balances on unused gift cards under the Delaware Escheats Law, 12 Del. C. § 1101 et seq. The Company believes the suit is without merit. Monroy v. Shutterfly, Inc. On November 30 2016, Alejandro Monroy on behalf of himself and all others similarly situated, filed a complaint against the Company in the U.S. District Court for the Northern District of Illinois. The complaint asserts that the Company violated the Illinois Biometric Information Privacy Act by extracting his and others’ biometric identifiers from photographs and seeks statutory damages and an injunction. The Company believes the suit is without merit and intends to vigorously defend against it. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, the Company accrues for the amount, or if a range, the Company accrues the low end of the range as a component of legal expense. The Company monitors developments in these legal matters that could affect the estimate the Company had previously accrued. There are no amounts accrued which the Company believes would be material to its financial position and results of operations.

Restructuring

Restructuring	3 Months Ended
	Mar. 31, 2017
Restructuring and Related Activities [Abstract]
Restructuring	Restructuring 2017 Restructuring Plan During the first quarter of 2017, the Board of Directors approved, committed to and initiated a plan to significantly simplify the Consumer business during 2017 ("2017 Restructuring Plan"). As part of the plan, the Company is reinvesting in Tiny Prints as its premium cards & stationery brand and is creating a Tiny Prints boutique on a dedicated tab on Shutterfly.com. The new Shutterfly Wedding Store will be the focus of the Company’s wedding strategy, including a premium Wedding Paper Divas-branded stationery collection. The MyPublisher brand will be retired in favor of the industry leading Shutterfly Photo Books category and BorrowLenses will undertake a strategic review for possible sale. The Company expects these actions will be completed by the end of third quarter of 2017, and the Tiny Prints, Wedding Paper Divas, and MyPublisher legacy websites will shut down. The Company seeks to retain as many customers and as much revenue as possible while migrating customers from the legacy websites to Shutterfly.com. The total estimated restructuring costs associated with the 2017 Restructuring Plan will range from $15.0 to $20.0 million and will impact our cost of net revenues and operating expenses line items within our condensed consolidated statement of operations as these costs are incurred. Any changes to the estimates of executing the 2017 Restructuring Plan will be reflected in our future results of operations. 2015 Restructuring Plan During 2015, the Company decided to discontinue the Treat brand as well as close the manufacturing operations in Elmsford, New York as part of the Company's strategic initiatives ("2015 Restructuring Plan"). Actions pursuant to the 2015 Restructuring Plan were substantially complete as of the first quarter of 2016. Restructuring Activity The following table summarizes the restructuring costs recognized during the three months ended March 31, 2017: 2017 Restructuring 2015 Restructuring Property and equipment Employee costs Inventory Other costs Property and equipment Total Balance as of January 1, 2017 [1] $ — $ — $ — $ — $ 1,602 $ 1,602 Restructuring and other charges 3,638 3,798 1,240 119 181 8,976 Cash payments — (1,102 ) — (6 ) (157 ) (1,265 ) Non-cash adjustments [2] (3,638 ) (814 ) (1,240 ) (14 ) — (5,706 ) Balance as of March 31, 2017 [1] $ — $ 1,882 $ — $ 99 $ 1,626 $ 3,607 [1] The balances as of March 31, 2017 and December 31, 2016 are recorded in accrued liabilities. [2] Non-cash adjustments include depreciation and amortization of disposed property and equipment (primarily capitalized software development costs and manufacturing equipment) and intangible assets, inventory write-off, stock-based compensation, and other non-cash costs incurred as part of the restructuring.

Subsequent Event

Subsequent Event	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event On April 18, 2017, the Company's Board of Directors approved an increase to repurchase up to $140.0 million in addition to amounts authorized to date. The share repurchase authorization, which is effective immediately, permits the Company to effect repurchases for cash from time to time through open market, privately negotiated or other transactions, including pursuant to trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, or by a combination of such methods. The share repurchase program is subject to prevailing market conditions and other considerations; does not require Shutterfly to repurchase any dollar amount or number of shares; and may be suspended or discontinued at any time.

The Company and Summary of Si19

The Company and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Accounting	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and, accordingly, do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements include the accounts of Shutterfly, Inc. and its wholly owned subsidiaries. In the opinion of management, all adjustments, consisting primarily of normal recurring accruals, considered necessary for a fair statement of the Company’s results of operations for the interim periods reported and of its financial condition as of the date of the interim balance sheet have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 , or for any other period. The December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") . The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 beginning January 1, 2017 and the impact of adoption resulted in the following: • The Company recorded approximately $23.2 million of additional deferred tax assets with the corresponding decrease to accumulated deficit related to the prior years' unrecognized excess tax benefits (thus, adoption method was modified retrospective). • The Company recorded a tax benefit of $0.8 million as a discrete item within income tax benefit for the three months ended March 31, 2017 related to the excess tax benefit on stock options, restricted stock and performance share units. Prior to adoption this amount would have been recorded as a reduction of additional paid-in capital. This change could create volatility in the Company’s future effective tax rate. • The Company elected not to change its policy on accounting for forfeitures and will continue to estimate the total number of awards for which the requisite service period will not be rendered. • The Company no longer reclassifies the excess tax benefit from operating activities to financing activities in the statement of cash flows. The Company elected to apply this change in presentation prospectively and thus prior periods have not been adjusted. • The remaining provisions of ASU 2016-09 did not have a material impact on the accompanying condensed consolidated financial statements. In 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer, the application of identifying performance obligations, and the recognition of expected breakage amounts either proportionally in earnings as redemptions occur or when redemption is remote. As a result, the Company has engaged internal and external resources that are currently evaluating the impact of the new standard on timing and measurement of revenue recognition as well as how current systems and operations will be impacted. While the Company continues to assess all potential impacts of the standard, the Company currently believes there will be an impact related to timing and measurement of flash deal breakage revenue for the consumer business and multiple-element arrangements in connection with our enterprise business. The standard is required to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company has not yet selected the transition method. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 on a modified retrospective basis, and earlier adoption is permitted. The Company is evaluating the impact, if any, of adopting this new accounting guidance on its financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Earlier adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is evaluating the impact of adopting this new accounting guidance on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new guidance clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) . The updated guidance simplifies the measurement of goodwill impairment by removing step two of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard is effective for annual or any interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is evaluating the impact this new accounting guidance will have on the consolidated financial statements.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of the status of the company's stock option plan	A summary of the Company’s stock option activity for the three months ended March 31, 2017 is as follows (share numbers and aggregate intrinsic values in thousands): Number of Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance as of December 31, 2016 950 $ 46.58 Granted 456 45.04 Exercised (5 ) 26.02 Forfeited, cancelled or expired — — Balance as of March 31, 2017 1,401 $ 46.17 6.2 $ 3,102 Options vested and expected to vest as of March 31, 2017 1,291 $ 46.26 6.1 $ 2,748 Options vested as of March 31, 2017 95 $ 32.39 3.1 $ 1,622
Summary of valuation assumptions for stock options	The assumptions used to value options granted during the three months ended March 31, 2017 are as follows (there were no option awards granted during the three months ended March 31, 2016): Three Months Ended March 31, 2017 Dividend yield — Annual risk-free rate of return 2.0 % Expected volatility 29.7 % Expected term (years) 4.1
Summary of company restricted stock unit activity	A summary of the Company’s RSU activity for the three months ended March 31, 2017 , is as follows (share numbers in thousands): Number of Units Outstanding Weighted Average Grant Date Fair Value Awarded and unvested as of December 31, 2016 2,834 $ 43.52 Granted 591 46.77 Vested (515 ) 42.91 Forfeited (124 ) 41.96 Awarded and unvested as of March 31, 2017 2,786 $ 44.39 RSUs expected to vest as of March 31, 2017 2,253

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Net loss per share	A summary of the net loss per share for the three months ended March 31, 2017 and 2016 is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2017 2016 Net loss per share: Numerator Net loss $ (33,194 ) $ (29,436 ) Denominator for basic and diluted net loss per share Weighted-average common shares outstanding 33,712 34,596 Net loss per share - basic and diluted $ (0.98 ) $ (0.85 )
Schedule of antidilutive securities excluded from computation of earnings per share	The following weighted-average outstanding stock options and restricted stock units were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended March 31, 2017 2016 Stock options and restricted stock units 3,961 3,649

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Fair value of short and long-term investments classified as available for sale	At March 31, 2017 and December 31, 2016 , the estimated fair value of short-term and long-term investments classified as available-for-sale are as follows (in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 25,221 $ 3 $ (22 ) $ 25,202 Agency securities 7,658 1 (4 ) 7,655 Commercial paper 8,474 — — 8,474 U.S. Government securities 3,674 — — 3,674 Total short-term investments $ 45,027 $ 4 $ (26 ) $ 45,005 Long-term investments Corporate debt securities $ 9,383 $ 2 $ (13 ) $ 9,372 Agency securities 4,225 — (18 ) 4,207 U.S. Government securities 2,331 — (7 ) 2,324 Total long-term investments $ 15,939 $ 2 $ (38 ) $ 15,903 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 13,371 $ 2 $ (12 ) $ 13,361 Agency securities 7,957 6 — 7,963 Commercial paper 1,727 — — 1,727 U.S. Government securities 3,298 3 — 3,301 Total short-term investments $ 26,353 $ 11 $ (12 ) $ 26,352 Long-term investments Corporate debt securities $ 6,208 $ 1 $ (20 ) $ 6,189 Agency securities 5,359 — (20 ) 5,339 U.S. Government securities 2,956 1 (6 ) 2,951 Total long-term investments $ 14,523 $ 2 $ (46 ) $ 14,479
Estimated fair values of short and long-term investments classified by date of contractual maturity	The following table summarizes the contractual maturities of the Company's investments as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 One year or less $ 45,005 $ 26,352 One year through three years 15,903 14,479 $ 60,908 $ 40,831

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair value, assets measured on recurring basis	The following table summarizes, by major security type, the Company's cash equivalents and investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Total Estimated Fair Value as of March 31, 2017 December 31, 2016 Cash Equivalents Investments Cash Equivalents Investments Level 1 Securities: Money market funds $ 25,619 $ — $ 808 $ — Level 2 Securities: Corporate debt securities 1,000 34,574 2,309 19,550 Agency securities — 11,862 — 13,302 Commercial Paper 8,204 8,474 6,694 1,727 U.S. Government securities — 5,998 — 6,252 Total cash equivalents and investments $ 34,823 $ 60,908 $ 9,811 $ 40,831
Fair value, liabilities measured on a recurring basis	As of March 31, 2017 , the fair value of the convertible senior notes, which was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price, interest rates and credit spread (Level 2) were as follows (in thousands): Total Estimated Fair Value as of March 31, 2017 December 31, 2016 Convertible senior notes $ 293,022 $ 290,436

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Schedule of prepaid expenses and other current assets	Prepaid Expenses and Other Current Assets March 31, 2017 December 31, 2016 (in thousands) Intra-period income tax asset $ 24,683 $ — Prepaid service contracts - current portion 10,936 11,114 Manufacturing partners receivable 4,936 11,739 Other prepaid expenses and current assets 19,386 25,231 $ 59,941 $ 48,084
Schedule of property and equipment	Property and Equipment, Net March 31, 2017 December 31, 2016 (in thousands) Manufacturing equipment $ 179,357 $ 182,484 Computer equipment and software 178,549 177,525 Capitalized software and website development costs 141,138 134,427 Buildings under build-to-suit leases 56,468 56,468 Leasehold improvements 22,144 22,007 Rental equipment 18,956 18,786 Furniture and fixtures 11,053 11,057 607,665 602,754 Less: Accumulated depreciation and amortization (340,821 ) (318,644 ) Net property and equipment $ 266,844 $ 284,110
Schedule of accrued liabilities	Accrued Liabilities March 31, 2017 December 31, 2016 (in thousands) Accrued compensation $ 21,443 $ 17,066 Capital lease obligations, current portion 16,168 16,092 Accrued production costs 13,363 38,755 Accrued marketing expenses 8,022 23,839 Accrued consulting 5,847 8,643 Accrued income and sales tax 3,761 19,846 Accrued other 10,613 14,628 $ 79,217 $ 138,869
Schedule of other noncurrent liabilities	Other Liabilities March 31, 2017 December 31, 2016 (in thousands) Financing obligations $ 54,966 $ 55,355 Capital lease obligations, non-current portion 46,164 50,213 Deferred tax liability — 20,446 Deferred revenue, non-current portion 6,882 7,303 Other liabilities 4,205 3,718 $ 112,217 $ 137,035

Convertible Senior Notes (Table

Convertible Senior Notes (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of long-term debt instruments	The Notes consist of the following (in thousands): March 31, 2017 December 31, 2016 Liability component: Principal $ 300,000 $ 300,000 Less: debt issuance costs, debt discount, net of amortization (17,473 ) (21,208 ) Net carrying amount $ 282,527 $ 278,792 Equity component (1) $ 63,510 $ 63,510 (1) Recorded in the consolidated balance sheets within additional paid-in capital, net of the $1.7 million of issuance costs in equity.
Interest expense related to convertible senior notes	The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, 2017 2016 0.25% coupon $ 187 $ 188 Amortization of debt issuance costs 341 323 Amortization of debt discount 3,394 3,209 $ 3,922 $ 3,720

Share Repurchase Program (Table

Share Repurchase Program (Tables)	3 Months Ended
	Mar. 31, 2017
Share Repurchase Program [Abstract]
Share Repurchase Program	The following table provides information about our repurchase of shares of our common stock for fiscal years 2014, 2015 , 2016 , and 2017 : Period (1) Total Number of Shares Purchased Average Price Paid per Share Total Dollar Value Spent on Repurchases (in thousands) 2014 Repurchases 1,961,085 $45.29 $88,815 2015 Repurchases (2) 4,907,675 $43.99 $215,911 2016 Repurchases 2,524,752 $44.55 $112,488 2017 Repurchases to date (3) 429,583 $46.56 $20,000 (1) All shares were purchased pursuant to the publicly announced share repurchase program described above. Shares are reported in a period based on the settlement date of the applicable repurchase. All repurchased shares of common stock have been retired. (2) The Company entered into an accelerated share repurchase ("ASR") in the second quarter of 2015 under which a prepayment of $75.0 million was made. Final settlement of the ASR occurred on August 3, 2015, resulting in the delivery to the Company of 0.8 million shares of the Company’s common stock and a return of cash for the remaining amount not settled in shares of $38.2 million . In total, approximately 0.8 million shares of common stock were repurchased under the ASR for $36.8 million , resulting in an average price paid per share of $46.49 under the ASR. (3) Represents repurchases for the three months ended March 31, 2017 .

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segment Reporting Information	Three Months Ended March 31, 2017 2016 Consumer Net revenues $ 160,645 $ 155,381 Cost of net revenues 89,854 86,337 Restructuring 1,240 — Gross profit $ 69,551 $ 69,044 Gross profit as a percentage of net revenues 43 % 44 % Shutterfly Business Solutions (SBS) Net revenues $ 31,327 $ 26,328 Cost of net revenues 23,838 19,710 Gross profit $ 7,489 $ 6,618 Gross profit as a percentage of net revenues 24 % 25 % Corporate Net revenues $ — $ — Cost of net revenues 2,427 2,676 Gross profit $ (2,427 ) $ (2,676 ) Consolidated Net revenues $ 191,972 $ 181,709 Cost of net revenues 116,119 108,723 Restructuring 1,240 — Gross profit $ 74,613 $ 72,986 Gross profit as a percentage of net revenues 39 % 40 %

Restructuring (Tables)

Restructuring (Tables)	3 Months Ended
	Mar. 31, 2017
Restructuring and Related Activities [Abstract]
Restructuring and Related Costs	The following table summarizes the restructuring costs recognized during the three months ended March 31, 2017: 2017 Restructuring 2015 Restructuring Property and equipment Employee costs Inventory Other costs Property and equipment Total Balance as of January 1, 2017 [1] $ — $ — $ — $ — $ 1,602 $ 1,602 Restructuring and other charges 3,638 3,798 1,240 119 181 8,976 Cash payments — (1,102 ) — (6 ) (157 ) (1,265 ) Non-cash adjustments [2] (3,638 ) (814 ) (1,240 ) (14 ) — (5,706 ) Balance as of March 31, 2017 [1] $ — $ 1,882 $ — $ 99 $ 1,626 $ 3,607 [1] The balances as of March 31, 2017 and December 31, 2016 are recorded in accrued liabilities. [2] Non-cash adjustments include depreciation and amortization of disposed property and equipment (primarily capitalized software development costs and manufacturing equipment) and intangible assets, inventory write-off, stock-based compensation, and other non-cash costs incurred as part of the restructuring.

The Company and Summary of Si29

The Company and Summary of Significant Accounting Policies (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017USD ($)
New Accounting Pronouncements or Change in Accounting Principle
Tax benefit recorded as a discrete item	$ 0.8
Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle
Deferred tax assets	23.2
Retained earnings | Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle
Decrease to accumulated deficit	$ 23.2

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - Employee Stock Option $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)$ / sharesshares
Number of options outstanding [Roll forward]
Balances (in shares) | shares	950
Granted (in shares) | shares	456
Exercised (in shares) | shares	(5)
Forfeited, cancelled or expired (in shares) | shares	0
Balances (in shares) | shares	1,401
Options vested and expected to vest (in shares) | shares	1,291
Options vested (in shares) | shares	95
Weighted Average Exercise Price
Balances (in dollars per share) | $ / shares	$ 46.58
Granted (in dollars per share) | $ / shares	45.04
Exercised (in dollars per share) | $ / shares	26.02
Forfeited, cancelled or expired (in dollars per share) | $ / shares	0
Balances (in dollars per share) | $ / shares	46.17
Options vested and expected to vest (in dollars per share) | $ / shares	46.26
Options vested (in dollars per share) | $ / shares	$ 32.39
Weighted Average Remaining Contractual Term (Years)
Ending balance (in years)	6 years 2 months 12 days
Options vested and expected to vest at end of period (in years)	6 years 1 month 6 days
Options vested at end of period (in years)	3 years 1 month 16 days
Aggregate Intrinsic Value
Ending balance | $	$ 3,102
Options vested and expected to vest at end of period | $	2,748
Options vested at end of period | $	$ 1,622

Stock-Based Compensation - St31

Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation
Unrecognized compensation expense	$ 94.7
Weighted average period of unrecognized compensation expense (in years)	3 years
Employee Stock Option
Share-based Compensation
Options granted to purchase (in shares)	456
Granted (in dollars per share)	$ 45.04
Estimated weighted-average grant-date fair value (usd per share)	$ 12.05
Total intrinsic value of options exercised	$ 0.1	$ 0.4
Net cash proceeds from the exercise of stock options	$ 0.1	$ 0.5
Restricted Stock Units (RSUs)
Share-based Compensation
Granted (in shares)	591
2015 Equity Incentive Plan | Restricted Stock Units (RSUs)
Share-based Compensation
Vesting period of restricted stock	4 years

Stock-Based Compensation - Valu

Stock-Based Compensation - Valuation of Stock Options (Details)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Dividend yield	0.00%
Annual risk-free rate of return	2.00%
Expected volatility	29.70%
Expected term (years)	4 years 1 month 6 days

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands	3 Months Ended
	Mar. 31, 2017$ / sharesshares
Restricted Stock Units & Awards [Roll forward]
Awarded and unvested, beginning of period (in shares)	2,834
Granted (in shares)	591
Vested (in shares)	(515)
Forfeited (in shares)	(124)
Awarded and unvested, ending period (in shares)	2,786
Restricted stock units expected to vest, ending period (in shares)	2,253
Weighted Average Grant Date Fair Value]
Awarded and unvested, beginning period (in dollars per share) | $ / shares	$ 43.52
Granted (in dollars per share) | $ / shares	46.77
Vested (in dollars per share) | $ / shares	42.91
Forfeited (in dollars per share) | $ / shares	41.96
Awarded and unvested, ending period (in dollars per share) | $ / shares	$ 44.39

Net Loss Per Share (Details)

Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net loss	$ (33,194)	$ (29,436)
Weighted-average shares outstanding - basic and diluted (in shares)	33,712	34,596
Net loss per share - basic and diluted (in dollars per share)	$ (0.98)	$ (0.85)
Antidilutive securities excluded from computation of earnings per share (in shares)	3,961	3,649

Investments - Schedule of Estim

Investments - Schedule of Estimated Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Available-for-sale Securities
Estimated fair value	$ 60,908	$ 40,831
Short-term Investments
Available-for-sale Securities
Gross amortized cost	45,027	26,353
Gross unrealized gains	4	11
Gross unrealized losses	(26)	(12)
Estimated fair value	45,005	26,352
Short-term Investments | Corporate Debt Securities
Available-for-sale Securities
Gross amortized cost	25,221	13,371
Gross unrealized gains	3	2
Gross unrealized losses	(22)	(12)
Estimated fair value	25,202	13,361
Short-term Investments | Agency Securities
Available-for-sale Securities
Gross amortized cost	7,658	7,957
Gross unrealized gains	1	6
Gross unrealized losses	(4)	0
Estimated fair value	7,655	7,963
Short-term Investments | Commercial Paper
Available-for-sale Securities
Gross amortized cost	8,474	1,727
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Estimated fair value	8,474	1,727
Short-term Investments | US Treasury and Government
Available-for-sale Securities
Gross amortized cost	3,674	3,298
Gross unrealized gains	0	3
Gross unrealized losses	0	0
Estimated fair value	3,674	3,301
Long-term Investments
Available-for-sale Securities
Gross amortized cost	15,939	14,523
Gross unrealized gains	2	2
Gross unrealized losses	(38)	(46)
Estimated fair value	15,903	14,479
Long-term Investments | Corporate Debt Securities
Available-for-sale Securities
Gross amortized cost	9,383	6,208
Gross unrealized gains	2	1
Gross unrealized losses	(13)	(20)
Estimated fair value	9,372	6,189
Long-term Investments | Agency Securities
Available-for-sale Securities
Gross amortized cost	4,225	5,359
Gross unrealized gains	0	0
Gross unrealized losses	(18)	(20)
Estimated fair value	4,207	5,339
Long-term Investments | US Treasury and Government
Available-for-sale Securities
Gross amortized cost	2,331	2,956
Gross unrealized gains	0	1
Gross unrealized losses	(7)	(6)
Estimated fair value	$ 2,324	$ 2,951

Investments - Summary of Contra

Investments - Summary of Contractual Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Available-for-sale securities, less than one year	$ 45,005	$ 26,352
Available-for-sale securities, between one and three years	15,903	14,479
Available-for-sale securities	$ 60,908	$ 40,831

Fair Value Measurement - Fair V

Fair Value Measurement - Fair Value Measurement of Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities
Cash Equivalents, Fair Value	$ 34,823	$ 9,811
Investments, Fair Value	60,908	40,831
Money Market Funds | Level 1 Inputs
Fair Value, Assets and Liabilities
Cash Equivalents, Fair Value	25,619	808
Investments, Fair Value	0	0
Corporate Debt Securities | Level 2 Inputs
Fair Value, Assets and Liabilities
Cash Equivalents, Fair Value	1,000	2,309
Investments, Fair Value	34,574	19,550
Agency Securities | Level 2 Inputs
Fair Value, Assets and Liabilities
Cash Equivalents, Fair Value	0	0
Investments, Fair Value	11,862	13,302
Commercial Paper | Level 2 Inputs
Fair Value, Assets and Liabilities
Cash Equivalents, Fair Value	8,204	6,694
Investments, Fair Value	8,474	1,727
US Treasury and Government | Level 2 Inputs
Fair Value, Assets and Liabilities
Cash Equivalents, Fair Value	0	0
Investments, Fair Value	$ 5,998	$ 6,252

Fair Value Measurement - Fair38

Fair Value Measurement - Fair Value Measurement of Convertible Senior Notes (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities
Convertible senior notes, net	$ 293,022	$ 290,436

Balance Sheet Components - Prep

Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Prepaid Expense and Other Assets, Current [Abstract]
Intra-period income tax asset	$ 24,683	$ 0
Prepaid service contracts - current portion	10,936	11,114
Manufacturing Partners Receivable	4,936	11,739
Other prepaid expenses and current assets	19,386	25,231
Total prepaid expenses and other current assets	$ 59,941	$ 48,084

Balance Sheet Components - Prop

Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property and Equipment
Gross property and equipment	$ 607,665		$ 602,754
Less: Accumulated depreciation and amortization	(340,821)		(318,644)
Net property and equipment	266,844		284,110
Depreciation and amortization expense	23,024	$ 22,995
Assets in construction	10,000		14,300
Manufacturing Equipment
Property and Equipment
Gross property and equipment	179,357		182,484
Capital lease obligations	89,900		89,900
Accumulated depreciation of assets under capital leases	29,200		25,100
Computer Equipment and Software
Property and Equipment
Gross property and equipment	178,549		177,525
Capitalized Software And Website Development Costs
Property and Equipment
Gross property and equipment	141,138		134,427
Buildings Under Build-To-Suit Leases
Property and Equipment
Gross property and equipment	56,468		56,468
Leasehold Improvements
Property and Equipment
Gross property and equipment	22,144		22,007
Rental Equipment
Property and Equipment
Gross property and equipment	18,956		18,786
Furniture and Fixtures
Property and Equipment
Gross property and equipment	$ 11,053		$ 11,057

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accrued Liabilities, Current [Abstract]
Accrued compensation	$ 21,443	$ 17,066
Capital lease obligations, current portion	16,168	16,092
Accrued production costs	13,363	38,755
Accrued marketing expenses	8,022	23,839
Accrued consulting	5,847	8,643
Accrued income and sales taxes	3,761	19,846
Accrued other	10,613	14,628
Total accrued liabilities	$ 79,217	$ 138,869

Balance Sheet Components - Othe

Balance Sheet Components - Other Liabilities, Non-Current (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Other Liabilities, Noncurrent [Abstract]
Financing obligations	$ 54,966	$ 55,355
Capital lease obligations, non-current portion	46,164	50,213
Deferred tax liability	0	20,446
Deferred revenue, non-current portion	6,882	7,303
Other liabilities	4,205	3,718
Other liabilities	$ 112,217	$ 137,035

Convertible Senior Notes - Sche

Convertible Senior Notes - Schedule of Convertible Senior Notes (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	May 31, 2013
Debt Instrument
Net carrying amount	$ 282,527	$ 278,792
Convertible Senior Notes | Convertible Senior Notes 0.25% Due May 15, 2018
Debt Instrument
Principal	300,000	300,000	$ 300,000
Less: debt issuance costs, debt discount, net of amortization	(17,473)	(21,208)
Net carrying amount	282,527	278,792
Equity component	$ 63,510	$ 63,510

Convertible Senior Notes - Sc44

Convertible Senior Notes - Schedule of Interest Expense Related to Convertible Senior Notes (Details) - Convertible Senior Notes - Convertible Senior Notes 0.25% Due May 15, 2018 - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Debt Instrument
0.25% coupon	$ 187	$ 188
Amortization of debt issuance costs	341	323
Amortization of debt discount	3,394	3,209
Interest expense, convertible notes	$ 3,922	$ 3,720

Convertible Senior Notes - Addi

Convertible Senior Notes - Additional Information (Details)	1 Months Ended	3 Months Ended	12 Months Ended
	May 31, 2013USD ($)day$ / sharesshares	Mar. 31, 2017USD ($)shares	Dec. 31, 2016USD ($)shares	Dec. 31, 2015USD ($)shares	Dec. 31, 2014USD ($)shares
Schedule of Convertible Senior Notes
Stock repurchased and retired during period, shares | shares	600,000	429,583	2,524,752	4,907,675	1,961,085
Stock repurchased and retired during period, value	$ 30,000,000	$ 20,000,000	$ 112,488,000	$ 215,911,000	$ 88,815,000
Strike price of warrants (usd per share) | $ / shares	$ 83.18
Proceeds from issuance of warrants	$ 43,600,000
Designated as Hedging Instrument | Debt
Schedule of Convertible Senior Notes
Note hedge, aggregate amount	63,500,000
Convertible Senior Notes | Convertible Senior Notes 0.25% Due May 15, 2018
Schedule of Convertible Senior Notes
Convertible senior notes, face amount	$ 300,000,000	$ 300,000,000	$ 300,000,000
Contractual interest rate	0.25%
Maturity date		May 15, 2018
Conversion rate	15.5847
Denomination amount	$ 1,000
Conversion price (usd per share) | $ / shares	$ 64.17
Number of days out of thirty that common stock price exceeded conversion price | day	20
Number of consecutive trading days in period	30 days
Holders of notes conversion percentage of conversion price	130.00%
Notes trading price percentage	98.00%
Debt issuance costs attributable to the liability component	$ 6,400,000
Debt issuance costs attributable to the equity component	1,700,000
Deferred tax assets	$ 600,000

Share Repurchase Program (Detai

Share Repurchase Program (Details) - USD ($)	Aug. 03, 2015	May 31, 2013	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Apr. 21, 2016	Feb. 09, 2015	Feb. 06, 2014	Oct. 24, 2012
Equity, Class of Treasury Stock
Stock repurchase program, authorized amount									$ 100,000,000	$ 300,000,000	$ 100,000,000	$ 60,000,000
Prepayment of accelerated share repurchase					$ 75,000,000
Stock repurchased and retired during period, shares		600,000	429,583			2,524,752	4,907,675	1,961,085
Refund of accelerated share repurchase	$ 38,200,000
Repurchases of common stock			$ 20,000,000	$ 47,461,000
Stock repurchased and retired during period, average amount per share			$ 46.56			$ 44.55	$ 43.99	$ 45.29
Stock repurchased and retired during period, value		$ 30,000,000	$ 20,000,000			$ 112,488,000	$ 215,911,000	$ 88,815,000
Accelerated Share Repurchase Agreement [Member]
Equity, Class of Treasury Stock
Stock repurchased and retired during period, shares	800,000
Repurchases of common stock	$ 36,800,000
Stock repurchased and retired during period, average amount per share	$ 46.49

Segment Reporting (Details)

Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information
Net revenues	$ 191,972	$ 181,709
Cost of net revenues	116,119	108,723
Restructuring	1,240	0
Gross profit	$ 74,613	$ 72,986
Gross profit as percentage of net revenue	39.00%	40.00%
Operating Segments | Consumer
Segment Reporting Information
Net revenues	$ 160,645	$ 155,381
Cost of net revenues	89,854	86,337
Restructuring	1,240	0
Gross profit	$ 69,551	$ 69,044
Gross profit as percentage of net revenue	43.00%	44.00%
Operating Segments | Shutterfly Business Solutions
Segment Reporting Information
Net revenues	$ 31,327	$ 26,328
Cost of net revenues	23,838	19,710
Gross profit	$ 7,489	$ 6,618
Gross profit as percentage of net revenue	24.00%	25.00%
Corporate, Non-Segment | Corporate Segment
Segment Reporting Information
Net revenues	$ 0	$ 0
Cost of net revenues	2,427	2,676
Gross profit	$ (2,427)	$ (2,676)

Commitments and Contingencies -

Commitments and Contingencies - Syndicated Credit Facility (Details) $ in Millions	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017USD ($)
Line of Credit Facility
Credit agreement term			5 years
Revised senior secured revolving credit facility			$ 200
Maximum ratio of consolidated total indebtedness to EBITDA allowed to prevent default			3.50
Forecast
Line of Credit Facility
Maximum ratio of consolidated total indebtedness to EBITDA allowed to prevent default	3	3.25
Base Rate Loan | Line of Credit | Eurodollar Rate | Minimum
Line of Credit Facility
Debt Instrument, Debt Default Threshold, Ratio of EBITDA To Interest, Rent Expense, And Long-Term Debt Principal Payments			2.50

Restructuring - Narrative (Deta

Restructuring - Narrative (Details) - 2017 Restructuring Plan $ in Millions	Mar. 31, 2017USD ($)
Minimum
Restructuring Cost and Reserve [Line Items]
Total estimated restructuring costs	$ 15
Maximum
Restructuring Cost and Reserve [Line Items]
Total estimated restructuring costs	$ 20

Restructuring - Restructuring A

Restructuring - Restructuring Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Restructuring Cost and Reserve [Line Items]
Beginning balance	$ 3,607	$ 1,602
Restructuring and other charges	8,976
Cash payments	(1,265)
Non-cash adjustments	(5,706)
Ending balance	3,607
2017 Restructuring Plan | Property and equipment
Restructuring Cost and Reserve [Line Items]
Beginning balance	0	0
Restructuring and other charges	3,638
Cash payments	0
Non-cash adjustments	(3,638)
Ending balance	0
2017 Restructuring Plan | Employee costs
Restructuring Cost and Reserve [Line Items]
Beginning balance	1,882	0
Restructuring and other charges	3,798
Cash payments	(1,102)
Non-cash adjustments	(814)
Ending balance	1,882
2017 Restructuring Plan | Inventory
Restructuring Cost and Reserve [Line Items]
Beginning balance	0	0
Restructuring and other charges	1,240
Cash payments	0
Non-cash adjustments	(1,240)
Ending balance	0
2017 Restructuring Plan | Other costs
Restructuring Cost and Reserve [Line Items]
Beginning balance	99	0
Restructuring and other charges	119
Cash payments	(6)
Non-cash adjustments	(14)
Ending balance	99
2015 Restructuring Plan | Property and equipment
Restructuring Cost and Reserve [Line Items]
Beginning balance	1,626	$ 1,602
Restructuring and other charges	181
Cash payments	(157)
Non-cash adjustments	0
Ending balance	$ 1,626

Subsequent Event (Details)

Subsequent Event (Details) - USD ($)	Apr. 18, 2017	Apr. 21, 2016	Feb. 09, 2015	Feb. 06, 2014	Oct. 24, 2012
Subsequent Event [Line Items]
Stock repurchase program, authorized amount		$ 100,000,000	$ 300,000,000	$ 100,000,000	$ 60,000,000
Subsequent event
Subsequent Event [Line Items]
Stock repurchase program, authorized amount	$ 140,000,000