Shutterfly (SFLY) Inactive 10-Q10 May 182018 Q1 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	May 07, 2018
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		33,160,496
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 419,371	$ 489,894
Short-term investments	120,107	178,021
Accounts receivable, net	54,142	82,317
Inventories	10,150	11,019
Prepaid expenses and other current assets	56,351	41,383
Total current assets	660,121	802,634
Long-term investments	4,941	9,242
Property and equipment, net	259,951	266,860
Intangible assets, net	27,618	29,671
Goodwill	408,975	408,975
Other assets	17,622	17,418
Total assets	1,379,228	1,534,800
Current liabilities:
Current portion of long-term debt	301,004	297,054
Accounts payable	17,210	91,473
Accrued liabilities	76,881	159,248
Deferred revenue	22,049	24,649
Total current liabilities	417,144	572,424
Long-term debt	291,879	292,457
Other liabilities	114,607	119,195
Total liabilities	823,630	984,076
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.0001 par value; 100,000 shares authorized; 33,122 and 32,297 shares issued and outstanding on March 31, 2018 and December 31, 2017, respectively	3	3
Additional paid-in capital	1,022,091	996,301
Accumulated other comprehensive income	3,826	1,778
Accumulated deficit	(470,322)	(447,358)
Total stockholders' equity	555,598	550,724
Total liabilities and stockholders' equity	$ 1,379,228	$ 1,534,800

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
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)	33,122,000	32,297,000
Common stock, shares outstanding (in shares)	33,122,000	32,297,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Net revenues	$ 199,725	$ 191,972
Cost of net revenues	126,046	116,119
Restructuring	0	1,240
Gross profit	73,679	74,613
Operating expenses:
Technology and development	38,504	45,955
Sales and marketing	37,720	42,887
General and administrative	31,565	27,795
Restructuring	0	7,736
Total operating expenses	107,789	124,373
Loss from operations	(34,110)	(49,760)
Interest expense	(9,633)	(5,964)
Interest and other income, net	1,749	189
Loss before income taxes	(41,994)	(55,535)
Benefit from income taxes	14,829	22,341
Net loss	$ (27,165)	$ (33,194)
Net loss per share - basic and diluted (in dollars per share)	$ (0.83)	$ (0.98)
Weighted-average shares outstanding - basic and diluted (in shares)	32,702	33,712
Stock-based compensation	$ 11,692	$ 12,319
Cost of net revenues
Stock-based compensation	999	1,169
Technology and development
Stock-based compensation	2,429	2,696
Sales and marketing
Stock-based compensation	3,504	3,173
General and administrative
Stock-based compensation	4,760	4,467
Restructuring
Stock-based compensation	$ 0	$ 814

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (27,165)	$ (33,194)
Other comprehensive income (loss), net of reclassification adjustments:
Unrealized losses on investments, net	(30)	(13)
Tax benefit on unrealized losses on investments, net	7	10
Unrealized gains on cash flow hedges	2,770	0
Tax expense on unrealized gains on cash flow hedges	(699)	0
Other comprehensive income (loss), net of tax	2,048	(3)
Comprehensive loss	$ (25,117)	$ (33,197)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (27,165)	$ (33,194)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	22,564	23,024
Amortization of intangible assets	2,334	4,340
Amortization of debt discount and issuance costs	4,122	3,735
Stock-based compensation	11,692	11,505
Loss on disposal of property and equipment	225	172
Deferred income taxes	4,264	2,358
Restructuring	0	7,868
Changes in operating assets and liabilities:
Accounts receivable	28,174	24,122
Inventories	869	847
Prepaid expenses and other assets	(15,642)	(11,577)
Accounts payable	(73,773)	(44,655)
Accrued and other liabilities	(81,996)	(60,931)
Net cash used in operating activities	(124,332)	(72,386)
Cash flows from investing activities:
Purchases of property and equipment	(8,075)	(3,517)
Capitalization of software and website development costs	(8,584)	(7,602)
Purchases of investments	(9,523)	(26,304)
Proceeds from the maturities of investments	72,068	6,214
Proceeds from sale of property and equipment	649	70
Net cash provided by (used in) investing activities	46,535	(31,139)
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options	13,775	117
Repurchases of common stock	0	(20,000)
Principal payments of capital lease and financing obligations	(4,643)	(4,301)
Principal payments of borrowings	(750)	0
Payment of debt issuance costs	(1,108)	0
Net cash provided by (used in) financing activities	7,274	(24,184)
Net decrease in cash and cash equivalents	(70,523)	(127,709)
Cash and cash equivalents, beginning of period	489,894	289,224
Cash and cash equivalents, end of period	419,371	161,515
Supplemental schedule of non-cash investing / financing activities:
Net decrease in accrued purchases of property and equipment	(3,780)	(1,848)
Net increase in accrued capitalized software and website development costs	357	124
Stock-based compensation capitalized with software and website development costs	323	258
Property and equipment acquired under capital leases	$ 2,969	$ 0

The Company and Summary of Sign

The Company and Summary of Significant Accounting Policies	3 Months Ended
The Company and Summary of Significant Accounting Policies	Mar. 31, 2018
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") is the leading digital retailer and manufacturer of high-quality personalized products and services. Founded and incorporated in the state of Delaware in 1999, Shutterfly brings your photos to life in photo books, gifts, and cards and stationery - through its flagship Shutterfly products, premium offerings in its Tiny Prints boutique, as well as wedding invitations and stationery for every step of the wedding planning process; BorrowLenses, the premier online marketplace for photographic and video equipment rentals; and Groovebook, an iOS and Android app and subscription service that prints up to 100 mobile device photos in a Groovebook and mails it to customers every month. Shutterfly, Inc. also operates Shutterfly Business Solutions (“SBS”), delivering high quality digital printing services to the enterprise market. 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, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 , or for any other period. The December 31, 2017 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, 2017 included in the Company’s Annual Report on Form 10-K. Recently Adopted Accounting Pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606 ) (“ASC 606”). This new standard replaces all current GAAP guidance on this topic and eliminates 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 of those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. Refer to Note 2 - Revenues for further details. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. The Company adopted ASU 2016-15 as of January 1, 2018 on a retrospective basis with no material impact to the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017. Recent Accounting Pronouncements Pending Adoption In February 2018, the FASB issued ASU No. 2018-02, Income Statement, Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows a reclassification of stranded tax effects from accumulated other comprehensive income to retained earnings, as a result of the Tax Cuts and Jobs Act (“Tax Act”). ASU 2018-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted and can be applied either in the period of adoption or retrospectively to all applicable periods. The Company does not expect that the pending adoption of ASU 2018-02 will have a material impact on the consolidated financial statements. 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 of adopting this new accounting guidance on the consolidated 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 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.

Revenues

Revenues	3 Months Ended
Revenues	Mar. 31, 2018
Revenue from Contract with Customer [Abstract]
Revenues	Revenues Adoption of ASC 606, Revenue from Contracts with Customers The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. Under the modified retrospective method, ASC 606 is only applied to contracts that were not complete as of the adoption date. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. As a result of the adoption of ASC 606, the Company identified an impact related to timing and measurement of breakage revenue for the consumer business and for one of the Company's significant multiple-element arrangements in connection with the SBS business. Upon adoption of ASC 606, the Company recognizes the expected breakage amounts as revenue in proportion to the pattern of rights exercised by the customer, rather than the previous method of recognizing breakage revenue when the Company believed the redemption was remote. As it relates to timing and measurement of one of the Company's multiple-element arrangements in connection with the SBS business, deferred revenue was previously recognized over the stated term of the contract. Upon adoption of ASC 606, deferred revenue for this particular arrangement is now recognized ratably over a period of time that is shorter than the stated contract term, as this arrangement does not contain substantive termination penalties after a certain initial number of years within the contractual term. The cumulative impact of the adoption of ASC 606 resulted in a decrease to opening accumulated deficit of $4.2 million as of January 1, 2018 which consisted of a decrease in total liabilities of $5.1 million primarily related to deferred revenue and a decrease in total assets of $0.9 million primarily related to deferred costs. The impact as a result of applying ASC 606 was an increase of $0.5 million to revenues for the three months ended March 31, 2018 and a decrease to deferred revenue of $6.8 million and deferred costs of $0.7 million as of March 31, 2018 . The impact to other accounts is not significant as of March 31, 2018 and for the three months ended March 31, 2018 . Revenue Recognition Policy The Company derives its revenues primarily from Consumer and SBS product sales, net of applicable sales tax and allowances for returns. Revenues are recognized when control of the promised products or services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those products or services. Shipping charged to its customers is recognized upon shipment and the related shipping costs are recognized as cost of net revenues. Consumer. The Company’s Consumer revenues are primarily derived from the sale of products such as, professionally-bound photo books, cards and stationery, custom home décor products and unique photo gifts, calendars and prints, etc. Customers place Consumer product orders through the Company’s website or mobile apps and pay primarily using credit cards. The credit card payments are charged, and revenue is recognized upon shipment of the fulfilled orders, which generally occurs upon delivering to the carrier. If multiple products are ordered together, each product is a separate performance obligation, and the transaction price is allocated to each performance obligation based upon standalone selling price as each performance obligation is satisfied. The Company generally determines the standalone selling prices based on the prices charged to its customers or using expected cost plus margin. For flash deal promotions through group buying websites, the Company recognizes revenue on a gross basis, as it is the primary obligor, when redeemed items are shipped. Revenues from sales of flash deal promotions are deferred until shipment of fulfilled orders or until unredeemed flash deal promotions are recognized as breakage revenue. The Company recognizes the expected breakage amounts as revenue in proportion to the pattern of rights exercised by the customer. The Company periodically provides incentive offers to its new customers in exchange for setting up an account as well as to its existing customers to encourage purchases. These incentive offers are readily available to all of its customers. Therefore, these do not represent a performance obligation as its customers are not required to enter into any enforceable commitment by receiving these incentive offers. The discounts are treated as a price reduction when accepted and used by customers. Production costs related to free products are included in cost of revenues upon redemption. SBS. The Company’s SBS revenues are derived from personalized direct marketing and other end-consumer communications as well as just-in-time, inventory-free printing for its business customers. The services that the Company promises to its SBS customers are typically composed of a series of services that are performed over time. The Company accounts for these series of services as one performance obligation which represents a series of distinct services that are substantially the same and have the same pattern of transfer. The Company recognizes revenues from the satisfaction of performance obligations when it invoices its customers (that is, when it has the contractual right to bill under the contract). The Company has the contractual right to consideration from its customers in an amount that corresponds directly with the value to the customer of the services it has performed to date. For contracts that do not contain a significant non-refundable up-front fee, the Company applies the “right to invoice” practical expedient as it has the right to consideration from its customers in an amount that corresponds directly with the value to the customer of the services it has performed to date. For contracts that contain a significant non-refundable up-front fee, the Company considers whether these fees are related to the transfer of a promised good or service to the customer, and therefore represent a performance obligation. When the up-front fees do not represent a distinct performance obligation, the Company recognizes revenue ratably over the period for which there is a significant termination contractual penalty. The Company's incremental direct costs of obtaining a contract consist of SBS sales commissions. The Company does not defer such incremental direct costs as the related performance obligations are satisfied within a short period of time and the Company elected to apply the practical expedient per ASC 340-40-25-4 related to expensing contract acquisition costs with the amortization period of less than one year. The Company does not provide any financing service to its customer as payment term. Deferred Revenues The Company records deferred revenue when cash payments are received in advance of our performance and primarily relate to flash deal promotions and gift cards as well as up-front fees received from an SBS customer. The decrease of $7.9 million in deferred revenue balance during the three months ended March 31, 2018 is primarily driven by the aforementioned impact of ASC 606 adoption and $2.4 million of revenues recognized that were included in deferred revenue balance as of December 31, 2017 , offset by cash payments received in advance of our performance obligations during the three months ended March 31, 2018 . The remaining deferred revenue balance for the aforementioned up-front fees received from an SBS customer during a previous year is $3.6 million and it will be recognized primarily within the next 12 months. Revenues by Brand The following table disaggregates the Company’s revenue by brand for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in thousands) Consumer net revenues: Shutterfly brand $ 142,664 $ 123,903 Tiny Prints Boutique [1] 2,103 — Tiny Prints [1] — 10,465 Wedding Paper Divas [2] — 14,290 MyPublisher [3] — 4,936 Other 7,292 7,051 Total Consumer net revenues 152,059 160,645 Total Shutterfly Business Solutions net revenues 47,666 31,327 Total net revenues $ 199,725 $ 191,972 [1] On June 28, 2017, the Company created a Tiny Prints boutique on a dedicated tab on Shutterfly.com and shut down the legacy Tiny Prints website. [2] On September 13, 2017, the Company launched the new Shutterfly Wedding Shop and shut down the Wedding Paper Divas legacy website. [3] The MyPublisher brand was retired on May 15, 2017.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
Stock-Based Compensation	Mar. 31, 2018
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, 2018 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, 2017 1,529 $ 46.77 Granted 228 76.73 Exercised (299 ) 46.15 Forfeited, cancelled or expired (2 ) 53.77 Balance as of March 31, 2018 1,456 $ 51.58 5.6 $ 43,219 Options vested and expected to vest as of March 31, 2018 1,331 $ 50.99 5.5 $ 40,269 Options vested as of March 31, 2018 277 $ 46.48 4.9 $ 9,645 During the three months ended March 31, 2018 , the Company granted options to purchase an aggregate of approximately 228,000 shares of common stock with an estimated weighted-average grant-date fair value of $23.57 . The total intrinsic value of options exercised during the three months ended March 31, 2018 and 2017 was $7.9 million and $0.1 million , respectively. Net cash proceeds from the exercise of stock options for the three months ended March 31, 2018 and 2017 were $13.8 million and $0.1 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 has 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, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 2017 Dividend yield — — Annual risk-free rate of return 2.6 % 2.0 % Expected volatility 33.7 % 29.7 % Expected term (years) 4.1 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 Equity Incentive 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, 2018 , is as follows (share numbers in thousands): Number of Units Outstanding Weighted Average Grant Date Fair Value Awarded and unvested as of December 31, 2017 2,293 $ 44.64 Granted 554 75.42 Vested (525 ) 44.04 Forfeited (35 ) 45.27 Awarded and unvested as of March 31, 2018 2,287 $ 52.22 RSUs expected to vest as of March 31, 2018 1,905 Employee stock-based compensation expense recognized in the three months ended March 31, 2018 and 2017 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, 2018 , the Company had $94.1 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 two years.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
Net Loss Per Share	Mar. 31, 2018
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, 2018 and 2017 is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2018 2017 Net loss per share: Numerator Net loss $ (27,165 ) $ (33,194 ) Denominator for basic and diluted net loss per share Weighted-average common shares outstanding 32,702 33,712 Net loss per share - basic and diluted $ (0.83 ) $ (0.98 ) 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, 2018 2017 Stock options and restricted stock units 3,687 3,961 With respect to the convertible senior notes issued in 2013 as described in Note 8 - Debt , the Company has determined that it has the ability and intent to settle the principal of the convertible senior notes in cash. The Company intends to settle the conversion spread, excess conversion value over the principal, in stock which is approximately 373,000 shares as of March 31, 2018. The potential conversion impact was excluded from the computation of diluted net loss per common share for the current quarter presented because including it would have had an anti-dilutive effect.

Investments

Investments	3 Months Ended
Investments	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Investments	Investments At March 31, 2018 and December 31, 2017 , the estimated fair value of short-term and long-term investments classified as available-for-sale were as follows (in thousands): March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 43,723 $ — $ (73 ) $ 43,650 Agency securities 9,927 — (20 ) 9,907 Commercial paper 55,191 — — 55,191 U.S. Government securities 11,371 — (12 ) 11,359 Total short-term investments $ 120,212 $ — $ (105 ) $ 120,107 Long-term investments Corporate debt securities $ 3,114 $ — $ (24 ) $ 3,090 Agency securities 1,370 — (15 ) 1,355 U.S. Government securities 499 — (3 ) 496 Total long-term investments $ 4,983 $ — $ (42 ) $ 4,941 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 54,911 $ 3 $ (52 ) $ 54,862 Agency securities 10,781 — (14 ) 10,767 Commercial paper 101,546 — — 101,546 U.S. Government securities 10,857 — (11 ) 10,846 Total short-term investments $ 178,095 $ 3 $ (77 ) $ 178,021 Long-term investments Corporate debt securities $ 6,287 $ — $ (25 ) $ 6,262 Agency securities 2,000 — (17 ) 1,983 U.S. Government securities 998 — (1 ) 997 Total long-term investments $ 9,285 $ — $ (43 ) $ 9,242 The Company had no available-for-sale investments with a significant unrealized loss that have been in a continuous unrealized loss position for more than 12 months as of March 31, 2018 , and no impairments were recorded during the three months ended March 31, 2018 and 2017 . The Company had no material realized gains or losses during the three months ended March 31, 2018 and 2017 . The following table summarizes the contractual maturities of the Company's investments as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 One year or less $ 120,107 $ 178,021 One year through three years 4,941 9,242 $ 125,048 $ 187,263 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.

Fair Value Measurement

Fair Value Measurement	3 Months Ended
Fair Value Measurement	Mar. 31, 2018
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, 2018 and December 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, 2018 December 31, 2017 Cash Equivalents Investments Cash Equivalents Investments Level 1 Securities: Money market funds $ 150,008 $ — $ 151,071 $ — Level 2 Securities: Corporate debt securities 525 46,740 21,592 61,124 Agency securities — 11,262 6,444 12,750 Commercial Paper 7,847 55,191 85,599 101,546 U.S. Government securities — 11,855 — 11,843 Total cash equivalents and investments $ 158,380 $ 125,048 $ 264,706 $ 187,263 Derivative Assets As of March 31, 2018 and December 31, 2017 , the fair value of the interest-rate swap agreements, which were determined based on an income-based valuation model that takes into account the contract terms as well as multiple observable market inputs such as LIBOR-based yield curves, futures, volatilities and basis spreads (Level 2), were as follows (in thousands): Total Estimated Fair Value as of March 31, 2018 December 31, 2017 Derivative assets $ 5,749 $ 2,979 Borrowings As of March 31, 2018 and December 31, 2017 , the fair value of the Company's borrowings, 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 the Company's stock price, interest rates and credit spread (Level 2) were as follows (in thousands): Total Estimated Fair Value as of March 31, 2018 December 31, 2017 Convertible senior notes $ 278,742 $ 296,550 Term Loan 301,875 300,000 As of March 31, 2018 and December 31, 2017 , 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
Balance Sheet Components	Mar. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Balance Sheet Components Prepaid Expenses and Other Current Assets March 31, 2018 December 31, 2017 (in thousands) Intra-period deferred tax asset $ 19,099 $ — Prepaid service contracts – current portion 14,364 12,861 Prepaid postage 5,860 3,274 Manufacturing partners receivable 1,188 6,322 Other prepaid expenses and current assets 15,840 18,926 $ 56,351 $ 41,383 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, 2018 December 31, 2017 (in thousands) Manufacturing equipment $ 195,116 $ 192,494 Computer equipment and software 164,298 188,593 Capitalized software and website development costs 139,959 134,585 Buildings under build-to-suit leases 56,468 56,468 Leasehold improvements 24,601 22,145 Rental equipment 18,533 19,208 Furniture and fixtures 7,788 8,255 606,763 621,748 Less: Accumulated depreciation and amortization (346,812 ) (354,888 ) Property and equipment, net $ 259,951 $ 266,860 Included within manufacturing equipment is approximately $92.9 million and $89.9 million of capital lease obligations for various pieces of manufacturing facility equipment as of March 31, 2018 and December 31, 2017 , respectively. Accumulated depreciation of assets under capital leases totaled $36.2 million and $32.4 million at March 31, 2018 and December 31, 2017 , respectively. 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 $22.6 million and 23.0 million for the three months ended March 31, 2018 and 2017 , respectively. Included in property and equipment is approximately $11.2 million and $15.8 million of assets in construction as of March 31, 2018 and December 31, 2017 , respectively, the majority of which relates to capitalized software and website development costs. Accrued Liabilities March 31, 2018 December 31, 2017 (in thousands) Accrued compensation $ 19,679 $ 31,331 Capital lease obligations, current portion 17,019 16,859 Accrued production costs 11,591 37,552 Accrued marketing expenses 7,769 22,874 Accrued income, sales and other taxes 3,912 21,745 Accrued other 16,911 28,887 $ 76,881 $ 159,248 Other Liabilities March 31, 2018 December 31, 2017 (in thousands) Financing obligations $ 53,226 $ 53,682 Capital lease obligations, non-current portion 47,174 48,620 Deferred tax liability 4,302 1,012 Other liabilities 9,905 15,881 $ 114,607 $ 119,195 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.

Debt

Debt	3 Months Ended
Debt	Mar. 31, 2018
Debt Disclosure [Abstract]
Debt	Debt 2017 Syndicated Credit Facility On August 17, 2017 (“Closing Date”), the Company entered into a credit agreement (“Credit Agreement”) with certain lenders and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent. The Credit Agreement provides for (a) a secured revolving loan facility in an aggregate principal amount of up to $200.0 million (“Revolving Loan Facility”) and (b) a secured delayed draw term loan facility (“Initial Term Loan”) in an aggregate principal amount of up to $300.0 million . The Credit Agreement permits the Company to add one or more incremental term loan facilities and/or increase the commitments for revolving loans subject to certain conditions. In October 2017, the Company fully drew the $300.0 million Initial Term Loan under the Credit Agreement. The proceeds of the Initial Term Loan will be used (1) to settle the Company's existing 0.25% Convertible Senior Notes due May 15, 2018 and (2) for working capital and general corporate purposes. On April 2, 2018 , the Company entered into an amendment under the Credit Agreement for an incremental term loan in an aggregate principal amount of $825.0 million ("Incremental Term Loan") to finance the acquisition of Lifetouch, Inc. The full amount of the $200.0 million Revolving Loan Facility remains undrawn as of March 31, 2018 . Upon funding of the Initial Term Loan, the Company elected to bear interest rate of one-month LIBOR, subject to a floor of 0.0% , plus an applicable margin of 2.50% per annum. The effective interest rate for the unhedged portion of the Initial Term Loan during the three months ended March 31, 2018 was 4.10% . Upon funding of the Incremental Term Loan, the Company elected to bear interest rate of one-month LIBOR, subject to a floor of 0.0% , plus an applicable margin of 2.75% per annum. The applicable margin of 2.75% for the Incremental Term Loan is determined based on a secured leverage ratio as defined by the Incremental Term Loan Amendment dated April 2, 2018. The revolving loans under the Credit Agreement bear interest, at the election of the Company, at either (a) the base rate (the "Base Rate"), which is defined as a fluctuating rate per annum equal to the greatest of (1) the prime rate then in effect, (2) the federal funds rate then in effect, plus 0.50% , and (3) an adjusted LIBOR rate determined on the basis of a one-month interest period, plus 1.0% or (b) an adjusted LIBOR Rate, subject to a floor of 0.0% (the "LIBOR Rate"), in each case, plus an applicable margin of (1) initially, 0.75% per annum in the case of Base Rate loans and 1.75% per annum in the case of LIBOR Rate loans or (2) following the Company’s delivery of financial statements for the first full fiscal quarter following the Closing Date, 0.50% to 0.75% per annum in the case of Base Rate loans and 1.50% to 1.75% per annum in the case of LIBOR Rate loans, in each case based on the Company’s consolidated secured net leverage ratio, measured as of the end of the most recently ended fiscal quarter. In connection with the Credit Agreement, the Company is also required to pay commitment fees, closing fees, arrangement fees, ticking fees and administration fees, and other customary fees and costs. Both the Initial Term Loan and the Incremental Term Loan have a maturity date of August 17, 2024 . Commencing on the respective last day of the first full fiscal quarter following the Company's respective borrowings of the Initial Term Loan and the Incremental Term Loan, the respective Initial Term loan and Incremental Term Loan will amortize in equal quarterly installments of 0.25% of the original principal for each loan, with the remaining respective principal balances payable on the maturity date. Amounts drawn on the Revolving Loan Facility, if any, mature on August 17, 2022. Further, the Company has the right to prepay its borrowings under the Credit Agreement in whole or in part at any time without a premium or penalty, subject to certain limitations and a 1.0% repricing premium applicable during the first six months for the Initial Term Loan and/or the Incremental Term Loan. The Credit Agreement also contains certain customary mandatory prepayments under certain conditions as set forth in the Credit Agreement. The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, undergo certain fundamental changes, dispose of assets, make investments, enter into transactions with affiliates, and make certain restricted payments, in each case subject to limitations and exceptions set forth in the Credit Agreement. The Company is also required to maintain compliance, measured as of the end of each fiscal quarter, with a consolidated secured net leverage ratio and a consolidated interest expense coverage ratio. As of March 31, 2018 , the Company is in compliance with these covenants. In August 2017, the Company entered into certain interest-rate swap agreements with an effective date of October 18, 2017 that have the economic effect of modifying a portion of the variable interest-rate obligations associated with the secured delayed draw Initial Term Loan so that the interest payable on such portion become fixed (refer to Note 13 - Derivative Financial Instruments for further details regarding the interest-rate swap agreements). The Company incurred $5.6 million in credit facility origination costs during the year ended December 31, 2017 related to the Credit Agreement. The origination costs attributable to the Revolving Loan Facility were capitalized within prepaid expenses for the current portion and other assets for the non-current portion. The origination costs attributable to the Initial Term Loan are presented as a reduction to the carrying value of the debt in the consolidated balance sheet. Fees attributable to the Revolving Loan Facility of $0.8 million are being amortized over five years and fees attributable to the Initial Term Loan of $4.8 million are being amortized over seven years, both as a component of interest expense. The Initial Term Loan consist of the following (in thousands): March 31, 2018 December 31, 2017 Liability component: Principal borrowing $ 300,000 $ 300,000 Less: principal payments (750 ) — Less: debt issuance costs, net of amortization (4,371 ) (4,543 ) Net carrying amount $ 294,879 $ 295,457 Term loan, current 3,000 3,000 Term loan, non-current 291,879 292,457 The following table sets forth the total interest expense recognized related to the Initial Term Loan for the three months ended March 31, 2018 (in thousands). The Initial Term Loan was drawn in October 2017. Therefore, there was no interest expense for the three months ended March 31, 2017 associated with the Initial Term Loan. Three Months Ended March 31, 2018 2017 Floating interest (including the effects of cash flow hedges) 3,279 — Amortization of debt issuance costs 172 — 3,451 — 0.25% Convertible Senior Notes Due May 15, 2018 In May 2013, the Company issued $300 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, 2018 , the Notes are convertible. As of March 31, 2018, if the Notes were converted, the if-converted value would exceed its principal amount by $79.9 million . 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, 2018 December 31, 2017 Liability component: Principal $ 300,000 $ 300,000 Less: debt issuance costs, debt discount, net of amortization (1,996 ) (5,946 ) Net carrying amount (classified as current) $ 298,004 $ 294,054 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, 2018 2017 0.25% coupon $ 187 $ 187 Amortization of debt issuance costs 361 341 Amortization of debt discount 3,589 3,394 $ 4,137 $ 3,922 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.

Segment Reporting

Segment Reporting	3 Months Ended
Segment Reporting	Mar. 31, 2018
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 incurred to produce personalized products for all of the Company's brands. These costs include 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 (primarily digital printing presses and binders) and manufacturing facilities. Cost of net revenues also includes amortization of capitalized website and software development costs, primarily related to adding features and functionality to the Company's website and apps to facilitate product purchases and improve the customer shopping experience. These costs include amortization of third-party software and acquired developed technology as well as patent royalties. Cost of net revenues also includes inventory markdowns that are part of 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 cards and stationery, professionally-bound photo books, home décor, personalized gifts, high quality prints, and other photo-based merchandise, and 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 from personalized direct marketing and other end-consumer communications as well as just-in-time, inventory-free printing for the Company's business customers. 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, 2018 and 2017 were as follows (dollars in thousands): Three Months Ended March 31, 2018 2017 Consumer Net revenues $ 152,059 $ 160,645 Cost of net revenues 84,845 89,854 Restructuring — 1,240 Gross profit $ 67,214 $ 69,551 Gross profit as a percentage of net revenues 44 % 43 % Shutterfly Business Solutions (SBS) Net revenues $ 47,666 $ 31,327 Cost of net revenues 39,910 23,838 Gross profit $ 7,756 $ 7,489 Gross profit as a percentage of net revenues 16 % 24 % Corporate Net revenues $ — $ — Cost of net revenues 1,291 2,427 Gross profit $ (1,291 ) $ (2,427 ) Consolidated Net revenues $ 199,725 $ 191,972 Cost of net revenues 126,046 116,119 Restructuring — 1,240 Gross profit $ 73,679 $ 74,613 Gross profit as a percentage of net revenues 37 % 39 %

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2018
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. 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 the Company's business or other developments rendering them, in the Company's judgment, no longer material to the Company's 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 us 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. Taylor v. Shutterfly, Inc. On December 12, 2017, Megan Taylor filed a purported class action complaint on behalf of herself and other customers in the U.S. District Court for the Northern District of California. Taylor alleges that the Company misrepresents a deal it currently offers through Groupon because it does not allow purchasers of the Groupon offer to combine or “stack” it with other promotional codes offered by the Company. The Company believes the suit is without merit and intends to vigorously defend against it. Vigilant v Meek et al. On March 1, 2018, a purported class action complaint was filed against several directors of Lifetouch, Inc. (which became a direct wholly-owned subsidiary of Shutterfly on April 2, 2018) and the trustee of the Lifetouch Employee Stock Ownership Plan (the “ESOP”) in the U.S. District Court for the District of Minnesota. On April 2, 2018, the complaint was amended to include the prior ESOP trustees and plan sponsor (Lifetouch) as additional named defendants. The complaint alleges violations of the Employee Retirement Income Security Act, including that the ESOP should not have been permitted to continue investing in Lifetouch stock during a period in which the Lifetouch stock price was declining. Lifetouch believes this 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.

Share Repurchase Program

Share Repurchase Program	3 Months Ended
Share Repurchase Program	Mar. 31, 2018
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, 2018, the Company's Board of Directors had 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. • On April 18, 2017, the Company's Board of Directors approved an increase of $140.0 million in addition to any amounts repurchased as of that date. The Company suspended its share repurchase program as of December 31, 2017 and we have publicly committed to maintaining a BB rating profile, and repaying acquisition debt, accordingly. 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 the 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 2016 , 2017 , and 2018 : Period (1) Total Number of Shares Purchased Average Price Paid per Share Total Dollar Value Spent on Repurchases (in thousands) 2016 Repurchases 2,524,752 $44.55 $112,488 2017 Repurchases 2,325,825 $47.29 $110,000 2018 Repurchases — — — (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.

Restructuring

Restructuring	3 Months Ended
Restructuring	Mar. 31, 2018
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 following actions were taken: • During the second quarter of 2017, the Company reinvested in Tiny Prints as its premium cards & stationery brand and created a Tiny Prints boutique on a dedicated tab on Shutterfly.com; • During the second quarter of 2017, the MyPublisher brand was retired in favor of the industry leading Shutterfly Photo Books category; and • During the third quarter of 2017, the Company launched the new Shutterfly Wedding Shop and shut down the Wedding Paper Divas legacy website Actions pursuant to the 2017 Restructuring Plan were substantially complete as of the the third quarter of 2017. 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 payments made during the three months ended March 31, 2018 (in thousands): 2017 Restructuring 2015 Restructuring Property and equipment Employee costs Other costs Other costs Total Balance as of December 31, 2017 [1] 1,050 379 417 1,393 3,239 Cash payments (162 ) (298 ) (417 ) (38 ) (915 ) Balances as of March 31, 2018 [1] 888 81 — 1,355 2,324 [1] The balances as of December 31, 2017 and March 31, 2018 are recorded in accrued liabilities and other non-current liabilities.

Derivative Financial Instrument

Derivative Financial Instruments	3 Months Ended
Derivative Financial Instruments	Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Derivative Financial Instruments In August 2017, the Company entered into certain interest-rate swap agreements (“Swap Agreements”) with an aggregate notional amount of $150.0 million and an effective date of October 18, 2017. The Swap Agreements have the economic effect of modifying a portion of the variable interest-rate obligations associated with the Company’s secured delayed draw Initial Term Loan drawn in October 2017 so that the interest payable on such portion of the Initial Term Loan become fixed at a rate of 4.27% (refer to Note 8 - Debt for further details regarding the term loan facility). The Swap Agreements have a maturity date of August 17, 2023 as compared to August 17, 2024 for the Initial Term Loan. Further, the Initial Term Loan has an interest-rate floor, whereas the Swap Agreements do not include a floor. All other critical terms of the Swap Agreements correspond to the Initial Term Loan, including interest-rate reset dates and underlying market indices. The Company fully drew the Initial Term Loan on October 18, 2017 which is also the effective date of the Swap Agreements. The Company has asserted that it is probable that it will have sufficient outstanding debt throughout the life of the Swap Agreements. The Company has designated the aforementioned Swap Agreements as qualifying hedging instruments and is accounting for them as cash flow hedges pursuant to ASC 815 (as amended by ASU 2017-12). The fair value of the Swap Agreements were $5.7 million and $3.0 million as of March 31, 2018 and December 31, 2017 , respectively, and was classified as other assets in the balance sheet. The unrealized gains recognized in other comprehensive income (loss) were $2.8 million and the amounts reclassified from other comprehensive income (loss) to interest expense during the three months ended March 31, 2018 were insignificant. Amounts expected to be reclassified from other comprehensive income into interest expense in the coming 12 months is $0.5 million . Interest expense (including the effects of the cash flow hedges) related to the portion of the Initial Term Loan subject to the aforementioned interest-rate swap agreements was $1.7 million for the three months ended March 31, 2018 . The Company does not use derivative financial instruments for trading purposes.

Subsequent Events

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On January 30, 2018, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Lifetouch, Inc. (“Lifetouch”) and Lifetouch Inc. Employee Stock Ownership Trust (the “Seller”). On April 2, 2018, pursuant to the Purchase Agreement, the Company completed the acquisition of 100% of the issued and outstanding shares of common stock of Lifetouch from the Seller. Under the terms of the Purchase Agreement, the consideration for the acquisition consisted of an all-cash purchase price of $825.0 million subject to certain adjustments based on a determination of closing net working capital, transaction expenses, cash and indebtedness. The Company financed the all-cash purchase price with an incremental $825.0 million term loan issuance under our existing credit agreement, which closed simultaneous with the acquisition. Lifetouch provides the Company with a highly complementary business. The Company expects to gain access to many Lifetouch customers as Shutterfly customers, where they will benefit from Shutterfly’s leading cloud-photo management service, product creation capabilities, mobile apps, and broad product range. Lifetouch will be able to offer Shutterfly’s broader product range to Lifetouch customers, as well as to accelerate the development of Lifetouch’s online order-taking platform. The Company also expects to realize significant supply chain, manufacturing, and fulfillment synergies over time. The Company elected to treat the acquisition of Lifetouch as an asset acquisition under section 338(h)(10) of the U.S. Internal Revenue Service tax code. As such, we expect the goodwill that we will recognize as part of the Lifetouch acquisition will be deductible for income tax purposes. The initial allocation of the purchase price for the acquisition of Lifetouch is pending the completion of various analyses and finalization of estimates. Accordingly, such disclosures related to this business combination could not be made at the time these financial statements were issued.

The Company and Summary of Si21

The Company and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation	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, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 , or for any other period. The December 31, 2017 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, 2017 included in the Company’s Annual Report on Form 10-K.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606 ) (“ASC 606”). This new standard replaces all current GAAP guidance on this topic and eliminates 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 of those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. Refer to Note 2 - Revenues for further details. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. The Company adopted ASU 2016-15 as of January 1, 2018 on a retrospective basis with no material impact to the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017. Recent Accounting Pronouncements Pending Adoption In February 2018, the FASB issued ASU No. 2018-02, Income Statement, Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows a reclassification of stranded tax effects from accumulated other comprehensive income to retained earnings, as a result of the Tax Cuts and Jobs Act (“Tax Act”). ASU 2018-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted and can be applied either in the period of adoption or retrospectively to all applicable periods. The Company does not expect that the pending adoption of ASU 2018-02 will have a material impact on the consolidated financial statements. 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 of adopting this new accounting guidance on the consolidated 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 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.
Revenue Recognition Policy	Revenue Recognition Policy The Company derives its revenues primarily from Consumer and SBS product sales, net of applicable sales tax and allowances for returns. Revenues are recognized when control of the promised products or services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those products or services. Shipping charged to its customers is recognized upon shipment and the related shipping costs are recognized as cost of net revenues. Consumer. The Company’s Consumer revenues are primarily derived from the sale of products such as, professionally-bound photo books, cards and stationery, custom home décor products and unique photo gifts, calendars and prints, etc. Customers place Consumer product orders through the Company’s website or mobile apps and pay primarily using credit cards. The credit card payments are charged, and revenue is recognized upon shipment of the fulfilled orders, which generally occurs upon delivering to the carrier. If multiple products are ordered together, each product is a separate performance obligation, and the transaction price is allocated to each performance obligation based upon standalone selling price as each performance obligation is satisfied. The Company generally determines the standalone selling prices based on the prices charged to its customers or using expected cost plus margin. For flash deal promotions through group buying websites, the Company recognizes revenue on a gross basis, as it is the primary obligor, when redeemed items are shipped. Revenues from sales of flash deal promotions are deferred until shipment of fulfilled orders or until unredeemed flash deal promotions are recognized as breakage revenue. The Company recognizes the expected breakage amounts as revenue in proportion to the pattern of rights exercised by the customer. The Company periodically provides incentive offers to its new customers in exchange for setting up an account as well as to its existing customers to encourage purchases. These incentive offers are readily available to all of its customers. Therefore, these do not represent a performance obligation as its customers are not required to enter into any enforceable commitment by receiving these incentive offers. The discounts are treated as a price reduction when accepted and used by customers. Production costs related to free products are included in cost of revenues upon redemption. SBS. The Company’s SBS revenues are derived from personalized direct marketing and other end-consumer communications as well as just-in-time, inventory-free printing for its business customers. The services that the Company promises to its SBS customers are typically composed of a series of services that are performed over time. The Company accounts for these series of services as one performance obligation which represents a series of distinct services that are substantially the same and have the same pattern of transfer. The Company recognizes revenues from the satisfaction of performance obligations when it invoices its customers (that is, when it has the contractual right to bill under the contract). The Company has the contractual right to consideration from its customers in an amount that corresponds directly with the value to the customer of the services it has performed to date. For contracts that do not contain a significant non-refundable up-front fee, the Company applies the “right to invoice” practical expedient as it has the right to consideration from its customers in an amount that corresponds directly with the value to the customer of the services it has performed to date. For contracts that contain a significant non-refundable up-front fee, the Company considers whether these fees are related to the transfer of a promised good or service to the customer, and therefore represent a performance obligation. When the up-front fees do not represent a distinct performance obligation, the Company recognizes revenue ratably over the period for which there is a significant termination contractual penalty. The Company's incremental direct costs of obtaining a contract consist of SBS sales commissions. The Company does not defer such incremental direct costs as the related performance obligations are satisfied within a short period of time and the Company elected to apply the practical expedient per ASC 340-40-25-4 related to expensing contract acquisition costs with the amortization period of less than one year. The Company does not provide any financing service to its customer as payment term.
Deferred Revenues	Deferred Revenues The Company records deferred revenue when cash payments are received in advance of our performance and primarily relate to flash deal promotions and gift cards as well as up-front fees received from an SBS customer.

Revenues (Tables)

Revenues (Tables)	3 Months Ended
Revenues (Tables)	Mar. 31, 2018
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	The following table disaggregates the Company’s revenue by brand for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 (in thousands) Consumer net revenues: Shutterfly brand $ 142,664 $ 123,903 Tiny Prints Boutique [1] 2,103 — Tiny Prints [1] — 10,465 Wedding Paper Divas [2] — 14,290 MyPublisher [3] — 4,936 Other 7,292 7,051 Total Consumer net revenues 152,059 160,645 Total Shutterfly Business Solutions net revenues 47,666 31,327 Total net revenues $ 199,725 $ 191,972 [1] On June 28, 2017, the Company created a Tiny Prints boutique on a dedicated tab on Shutterfly.com and shut down the legacy Tiny Prints website. [2] On September 13, 2017, the Company launched the new Shutterfly Wedding Shop and shut down the Wedding Paper Divas legacy website. [3] The MyPublisher brand was retired on May 15, 2017.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
Stock-Based Compensation (Tables)	Mar. 31, 2018
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, 2018 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, 2017 1,529 $ 46.77 Granted 228 76.73 Exercised (299 ) 46.15 Forfeited, cancelled or expired (2 ) 53.77 Balance as of March 31, 2018 1,456 $ 51.58 5.6 $ 43,219 Options vested and expected to vest as of March 31, 2018 1,331 $ 50.99 5.5 $ 40,269 Options vested as of March 31, 2018 277 $ 46.48 4.9 $ 9,645
Summary of valuation assumptions for stock options	The assumptions used to value options granted during the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 2017 Dividend yield — — Annual risk-free rate of return 2.6 % 2.0 % Expected volatility 33.7 % 29.7 % Expected term (years) 4.1 4.1
Summary of company restricted stock unit activity	A summary of the Company’s RSU activity for the three months ended March 31, 2018 , is as follows (share numbers in thousands): Number of Units Outstanding Weighted Average Grant Date Fair Value Awarded and unvested as of December 31, 2017 2,293 $ 44.64 Granted 554 75.42 Vested (525 ) 44.04 Forfeited (35 ) 45.27 Awarded and unvested as of March 31, 2018 2,287 $ 52.22 RSUs expected to vest as of March 31, 2018 1,905

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
Net Loss Per Share (Tables)	Mar. 31, 2018
Earnings Per Share [Abstract]
Summary of the net loss per share	A summary of the net loss per share for the three months ended March 31, 2018 and 2017 is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2018 2017 Net loss per share: Numerator Net loss $ (27,165 ) $ (33,194 ) Denominator for basic and diluted net loss per share Weighted-average common shares outstanding 32,702 33,712 Net loss per share - basic and diluted $ (0.83 ) $ (0.98 )
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, 2018 2017 Stock options and restricted stock units 3,687 3,961

Investments (Tables)

Investments (Tables)	3 Months Ended
Investments (Tables)	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Fair value of short and long-term investments classified as available for sale	At March 31, 2018 and December 31, 2017 , the estimated fair value of short-term and long-term investments classified as available-for-sale were as follows (in thousands): March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 43,723 $ — $ (73 ) $ 43,650 Agency securities 9,927 — (20 ) 9,907 Commercial paper 55,191 — — 55,191 U.S. Government securities 11,371 — (12 ) 11,359 Total short-term investments $ 120,212 $ — $ (105 ) $ 120,107 Long-term investments Corporate debt securities $ 3,114 $ — $ (24 ) $ 3,090 Agency securities 1,370 — (15 ) 1,355 U.S. Government securities 499 — (3 ) 496 Total long-term investments $ 4,983 $ — $ (42 ) $ 4,941 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments Corporate debt securities $ 54,911 $ 3 $ (52 ) $ 54,862 Agency securities 10,781 — (14 ) 10,767 Commercial paper 101,546 — — 101,546 U.S. Government securities 10,857 — (11 ) 10,846 Total short-term investments $ 178,095 $ 3 $ (77 ) $ 178,021 Long-term investments Corporate debt securities $ 6,287 $ — $ (25 ) $ 6,262 Agency securities 2,000 — (17 ) 1,983 U.S. Government securities 998 — (1 ) 997 Total long-term investments $ 9,285 $ — $ (43 ) $ 9,242
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, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 One year or less $ 120,107 $ 178,021 One year through three years 4,941 9,242 $ 125,048 $ 187,263

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	3 Months Ended
Fair Value Measurement (Tables)	Mar. 31, 2018
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, 2018 December 31, 2017 Cash Equivalents Investments Cash Equivalents Investments Level 1 Securities: Money market funds $ 150,008 $ — $ 151,071 $ — Level 2 Securities: Corporate debt securities 525 46,740 21,592 61,124 Agency securities — 11,262 6,444 12,750 Commercial Paper 7,847 55,191 85,599 101,546 U.S. Government securities — 11,855 — 11,843 Total cash equivalents and investments $ 158,380 $ 125,048 $ 264,706 $ 187,263
Fair value, derivative assets	As of March 31, 2018 and December 31, 2017 , the fair value of the interest-rate swap agreements, which were determined based on an income-based valuation model that takes into account the contract terms as well as multiple observable market inputs such as LIBOR-based yield curves, futures, volatilities and basis spreads (Level 2), were as follows (in thousands): Total Estimated Fair Value as of March 31, 2018 December 31, 2017 Derivative assets $ 5,749 $ 2,979
Fair value, liabilities measured on a recurring basis	As of March 31, 2018 and December 31, 2017 , the fair value of the Company's borrowings, 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 the Company's stock price, interest rates and credit spread (Level 2) were as follows (in thousands): Total Estimated Fair Value as of March 31, 2018 December 31, 2017 Convertible senior notes $ 278,742 $ 296,550 Term Loan 301,875 300,000

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
Balance Sheet Components (Tables)	Mar. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Schedule of prepaid expenses and other current assets	Prepaid Expenses and Other Current Assets March 31, 2018 December 31, 2017 (in thousands) Intra-period deferred tax asset $ 19,099 $ — Prepaid service contracts – current portion 14,364 12,861 Prepaid postage 5,860 3,274 Manufacturing partners receivable 1,188 6,322 Other prepaid expenses and current assets 15,840 18,926 $ 56,351 $ 41,383
Schedule of property and equipment	Property and Equipment, Net March 31, 2018 December 31, 2017 (in thousands) Manufacturing equipment $ 195,116 $ 192,494 Computer equipment and software 164,298 188,593 Capitalized software and website development costs 139,959 134,585 Buildings under build-to-suit leases 56,468 56,468 Leasehold improvements 24,601 22,145 Rental equipment 18,533 19,208 Furniture and fixtures 7,788 8,255 606,763 621,748 Less: Accumulated depreciation and amortization (346,812 ) (354,888 ) Property and equipment, net $ 259,951 $ 266,860
Schedule of accrued liabilities	Accrued Liabilities March 31, 2018 December 31, 2017 (in thousands) Accrued compensation $ 19,679 $ 31,331 Capital lease obligations, current portion 17,019 16,859 Accrued production costs 11,591 37,552 Accrued marketing expenses 7,769 22,874 Accrued income, sales and other taxes 3,912 21,745 Accrued other 16,911 28,887 $ 76,881 $ 159,248
Schedule of other liabilities	Other Liabilities March 31, 2018 December 31, 2017 (in thousands) Financing obligations $ 53,226 $ 53,682 Capital lease obligations, non-current portion 47,174 48,620 Deferred tax liability 4,302 1,012 Other liabilities 9,905 15,881 $ 114,607 $ 119,195

Debt (Tables)

Debt (Tables)	3 Months Ended
Debt (Tables)	Mar. 31, 2018
Debt Disclosure [Abstract]
Schedule of long-term debt instruments	The Notes consist of the following (in thousands): March 31, 2018 December 31, 2017 Liability component: Principal $ 300,000 $ 300,000 Less: debt issuance costs, debt discount, net of amortization (1,996 ) (5,946 ) Net carrying amount (classified as current) $ 298,004 $ 294,054 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 Initial Term Loan consist of the following (in thousands): March 31, 2018 December 31, 2017 Liability component: Principal borrowing $ 300,000 $ 300,000 Less: principal payments (750 ) — Less: debt issuance costs, net of amortization (4,371 ) (4,543 ) Net carrying amount $ 294,879 $ 295,457 Term loan, current 3,000 3,000 Term loan, non-current 291,879 292,457
Interest expense related to convertible senior notes	The following table sets forth the total interest expense recognized related to the Initial Term Loan for the three months ended March 31, 2018 (in thousands). The Initial Term Loan was drawn in October 2017. Therefore, there was no interest expense for the three months ended March 31, 2017 associated with the Initial Term Loan. Three Months Ended March 31, 2018 2017 Floating interest (including the effects of cash flow hedges) 3,279 — Amortization of debt issuance costs 172 — 3,451 — The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, 2018 2017 0.25% coupon $ 187 $ 187 Amortization of debt issuance costs 361 341 Amortization of debt discount 3,589 3,394 $ 4,137 $ 3,922

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
Segment Reporting (Tables)	Mar. 31, 2018
Segment Reporting [Abstract]
Segment reporting information	The Company’s segment results for the three months ended March 31, 2018 and 2017 were as follows (dollars in thousands): Three Months Ended March 31, 2018 2017 Consumer Net revenues $ 152,059 $ 160,645 Cost of net revenues 84,845 89,854 Restructuring — 1,240 Gross profit $ 67,214 $ 69,551 Gross profit as a percentage of net revenues 44 % 43 % Shutterfly Business Solutions (SBS) Net revenues $ 47,666 $ 31,327 Cost of net revenues 39,910 23,838 Gross profit $ 7,756 $ 7,489 Gross profit as a percentage of net revenues 16 % 24 % Corporate Net revenues $ — $ — Cost of net revenues 1,291 2,427 Gross profit $ (1,291 ) $ (2,427 ) Consolidated Net revenues $ 199,725 $ 191,972 Cost of net revenues 126,046 116,119 Restructuring — 1,240 Gross profit $ 73,679 $ 74,613 Gross profit as a percentage of net revenues 37 % 39 %

Share Repurchase Program (Table

Share Repurchase Program (Tables)	3 Months Ended
Share Repurchase Program (Tables)	Mar. 31, 2018
Share Repurchase Program [Abstract]
Schedule of share repurchase program	The following table provides information about our repurchase of shares of our common stock for fiscal years 2016 , 2017 , and 2018 : Period (1) Total Number of Shares Purchased Average Price Paid per Share Total Dollar Value Spent on Repurchases (in thousands) 2016 Repurchases 2,524,752 $44.55 $112,488 2017 Repurchases 2,325,825 $47.29 $110,000 2018 Repurchases — — — (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.

Restructuring (Tables)

Restructuring (Tables)	3 Months Ended
Restructuring (Tables)	Mar. 31, 2018
Restructuring and Related Activities [Abstract]
Schedule of restructuring and related costs	The following table summarizes the restructuring payments made during the three months ended March 31, 2018 (in thousands): 2017 Restructuring 2015 Restructuring Property and equipment Employee costs Other costs Other costs Total Balance as of December 31, 2017 [1] 1,050 379 417 1,393 3,239 Cash payments (162 ) (298 ) (417 ) (38 ) (915 ) Balances as of March 31, 2018 [1] 888 81 — 1,355 2,324 [1] The balances as of December 31, 2017 and March 31, 2018 are recorded in accrued liabilities and other non-current liabilities.

Revenues - Impact of Adoption o

Revenues - Impact of Adoption of ASC 606 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accumulated deficit	$ (470,322)			$ (447,358)
Total liabilities	823,630			984,076
Total assets	1,379,228			$ 1,534,800
Revenues	199,725	$ 191,972
ASC 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Deferred revenue	(7,900)
Difference between Revenue Guidance in Effect before and after Topic 606 \| ASC 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accumulated deficit			$ 4,200
Total liabilities			(5,100)
Total assets			$ (900)
Revenues	500
Deferred revenue	(6,800)
Deferred costs	$ (700)

Revenues - Deferred Revenues (D

Revenues - Deferred Revenues (Details) $ in Millions	3 Months Ended
Revenues - Deferred Revenues (Details) $ in Millions	Mar. 31, 2018USD ($)
Revenue from Contract with Customer [Abstract]
Revenues recognized that were included in deferred revenue	$ 2.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue to be recognized ratably	$ 3.6
Period revenue to be recognized	12 months
ASC 606
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue	$ (7.9)

Revenues - Consumer Revenues by

Revenues - Consumer Revenues by Brand (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disaggregation of Revenue [Line Items]
Total net revenues	$ 199,725	$ 191,972
Operating Segments \| Consumer
Disaggregation of Revenue [Line Items]
Total net revenues	152,059	160,645
Operating Segments \| Consumer \| Shutterfly brand
Disaggregation of Revenue [Line Items]
Total net revenues	142,664	123,903
Operating Segments \| Consumer \| Tiny Prints Boutique
Disaggregation of Revenue [Line Items]
Total net revenues	2,103	0
Operating Segments \| Consumer \| Tiny Prints
Disaggregation of Revenue [Line Items]
Total net revenues	0	10,465
Operating Segments \| Consumer \| Wedding Paper Divas
Disaggregation of Revenue [Line Items]
Total net revenues	0	14,290
Operating Segments \| Consumer \| MyPublisher
Disaggregation of Revenue [Line Items]
Total net revenues	0	4,936
Operating Segments \| Consumer \| Other
Disaggregation of Revenue [Line Items]
Total net revenues	7,292	7,051
Operating Segments \| Shutterfly Business Solutions (SBS)
Disaggregation of Revenue [Line Items]
Total net revenues	$ 47,666	$ 31,327

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Aggregate Intrinsic Value
Net cash proceeds from the exercise of stock options	$ 13,775	$ 117
Employee Stock Option
Share-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 7,900	100
Number of Options Outstanding
Balances (in shares)	1,529
Granted (in shares)	228
Exercised (in shares)	(299)
Forfeited, cancelled or expired (in shares)	(2)
Balances (in shares)	1,456
Options vested and expected to vest (in shares)	1,331
Options vested (in shares)	277
Weighted Average Exercise Price
Balances (in dollars per share)	$ 46.77
Granted (in dollars per share)	76.73
Exercised (in dollars per share)	46.15
Forfeited, cancelled or expired (in dollars per share)	53.77
Balances (in dollars per share)	51.58
Options vested and expected to vest (in dollars per share)	50.99
Options vested (in dollars per share)	$ 46.48
Weighted Average Remaining Contractual Term (Years)
Term at end of period	5 years 7 months 6 days
Options vested and expected to vest	5 years 6 months
Options vested	4 years 10 months 24 days
Aggregate Intrinsic Value
Value at end of period	$ 43,219
Options vested and expected to vest	40,269
Options vested	9,645
Net cash proceeds from the exercise of stock options	$ 13,800	$ 100

Stock-Based Compensation - St36

Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation
Net cash proceeds from the exercise of stock options	$ 13,775	$ 117
Unrecognized compensation expense	$ 94,100
Weighted average period of unrecognized compensation expense (in years)	2 years
Employee Stock Option
Share-based Compensation
Options granted to purchase (in shares)	228
Estimated weighted-average grant-date fair value (usd per share)	$ 23.57
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 7,900	100
Net cash proceeds from the exercise of stock options	$ 13,800	$ 100
Restricted Stock Units (RSUs) \| 2015 Equity Incentive Plan
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, 2018	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Dividend yield	0.00%	0.00%
Annual risk-free rate of return	2.60%	2.00%
Expected volatility	33.70%	29.70%
Expected term (years)	4 years 1 month 6 days	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, 2018$ / sharesshares
Number of Units Outstanding
Awarded and unvested, beginning of period (in shares)	2,293
Granted (in shares)	554
Vested (in shares)	(525)
Forfeited (in shares)	(35)
Awarded and unvested, ending period (in shares)	2,287
Restricted stock units expected to vest, ending period (in shares)	1,905
Weighted Average Grant Date Fair Value
Awarded and unvested, beginning period (in dollars per share) \| $ / shares	$ 44.64
Granted (in dollars per share) \| $ / shares	75.42
Vested (in dollars per share) \| $ / shares	44.04
Forfeited (in dollars per share) \| $ / shares	45.27
Awarded and unvested, ending period (in dollars per share) \| $ / shares	$ 52.22

Net Loss Per Share (Details)

Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator
Net loss	$ (27,165)	$ (33,194)
Denominator for basic and diluted net loss per share
Weighted-average shares outstanding - basic and diluted (in shares)	32,702	33,712
Net loss per share - basic and diluted (in dollars per share)	$ (0.83)	$ (0.98)
Antidilutive securities excluded from computation of earnings per share (in shares)	3,687	3,961
Conversion of debt, stock issued (in shares)	373

Investments - Schedule of Estim

Investments - Schedule of Estimated Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Available-for-sale Securities
Estimated Fair Value	$ 125,048		$ 187,263
Impairments recorded on available-for-sale investments	0	$ 0
Short-term investments
Available-for-sale Securities
Amortized Cost	120,212		178,095
Gross Unrealized Gains	0		3
Gross Unrealized Losses	(105)		(77)
Estimated Fair Value	120,107		178,021
Short-term investments \| Corporate debt securities
Available-for-sale Securities
Amortized Cost	43,723		54,911
Gross Unrealized Gains	0		3
Gross Unrealized Losses	(73)		(52)
Estimated Fair Value	43,650		54,862
Short-term investments \| Agency securities
Available-for-sale Securities
Amortized Cost	9,927		10,781
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(20)		(14)
Estimated Fair Value	9,907		10,767
Short-term investments \| Commercial Paper
Available-for-sale Securities
Amortized Cost	55,191		101,546
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Estimated Fair Value	55,191		101,546
Short-term investments \| U.S. Government securities
Available-for-sale Securities
Amortized Cost	11,371		10,857
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(12)		(11)
Estimated Fair Value	11,359		10,846
Long-term investments
Available-for-sale Securities
Amortized Cost	4,983		9,285
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(42)		(43)
Estimated Fair Value	4,941		9,242
Long-term investments \| Corporate debt securities
Available-for-sale Securities
Amortized Cost	3,114		6,287
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(24)		(25)
Estimated Fair Value	3,090		6,262
Long-term investments \| Agency securities
Available-for-sale Securities
Amortized Cost	1,370		2,000
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(15)		(17)
Estimated Fair Value	1,355		1,983
Long-term investments \| U.S. Government securities
Available-for-sale Securities
Amortized Cost	499		998
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(3)		(1)
Estimated Fair Value	$ 496		$ 997

Investments - Summary of Contra

Investments - Summary of Contractual Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
One year or less	$ 120,107	$ 178,021
One year through three years	4,941	9,242
Available-for-sale securities	$ 125,048	$ 187,263

Fair Value Measurement - Cash E

Fair Value Measurement - Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities
Cash Equivalents	$ 158,380	$ 264,706
Investments	125,048	187,263
Money market funds \| Level 1 Securities
Fair Value, Assets and Liabilities
Cash Equivalents	150,008	151,071
Investments	0	0
Corporate debt securities \| Level 2 Securities
Fair Value, Assets and Liabilities
Cash Equivalents	525	21,592
Investments	46,740	61,124
Agency securities \| Level 2 Securities
Fair Value, Assets and Liabilities
Cash Equivalents	0	6,444
Investments	11,262	12,750
Commercial Paper \| Level 2 Securities
Fair Value, Assets and Liabilities
Cash Equivalents	7,847	85,599
Investments	55,191	101,546
U.S. Government securities \| Level 2 Securities
Fair Value, Assets and Liabilities
Cash Equivalents	0	0
Investments	$ 11,855	$ 11,843

Fair Value Measurement - Deriva

Fair Value Measurement - Derivative Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities
Derivative assets	$ 5,749	$ 2,979

Fair Value Measurement - Borrow

Fair Value Measurement - Borrowings (Details) - Estimate of Fair Value Measurement - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities
Convertible senior notes	$ 278,742	$ 296,550
Term Loan	$ 301,875	$ 300,000

Balance Sheet Components - Prep

Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Prepaid Expense and Other Assets, Current [Abstract]
Intra-period deferred tax asset	$ 19,099	$ 0
Prepaid service contracts – current portion	14,364	12,861
Prepaid postage	5,860	3,274
Manufacturing partners receivable	1,188	6,322
Other prepaid expenses and current assets	15,840	18,926
Total prepaid expenses and other current assets	$ 56,351	$ 41,383

Balance Sheet Components - Prop

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Property and Equipment
Gross property and equipment	$ 606,763		$ 621,748
Less: Accumulated depreciation and amortization	(346,812)		(354,888)
Property and equipment, net	259,951		266,860
Depreciation and amortization expense	22,564	$ 23,024
Assets in construction	11,200		15,800
Manufacturing equipment
Property and Equipment
Gross property and equipment	195,116		192,494
Capital lease obligations	92,900		89,900
Accumulated depreciation of assets under capital leases	36,200		32,400
Computer equipment and software
Property and Equipment
Gross property and equipment	164,298		188,593
Capitalized software and website development costs
Property and Equipment
Gross property and equipment	139,959		134,585
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	24,601		22,145
Rental equipment
Property and Equipment
Gross property and equipment	18,533		19,208
Furniture and fixtures
Property and Equipment
Gross property and equipment	$ 7,788		$ 8,255

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued Liabilities, Current [Abstract]
Accrued compensation	$ 19,679	$ 31,331
Capital lease obligations, current portion	17,019	16,859
Accrued production costs	11,591	37,552
Accrued marketing expenses	7,769	22,874
Accrued income, sales and other taxes	3,912	21,745
Accrued other	16,911	28,887
Total accrued liabilities	$ 76,881	$ 159,248

Balance Sheet Components - Othe

Balance Sheet Components - Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Other Liabilities, Noncurrent [Abstract]
Financing obligations	$ 53,226	$ 53,682
Capital lease obligations, non-current portion	47,174	48,620
Deferred tax liability	4,302	1,012
Other liabilities	9,905	15,881
Other liabilities	$ 114,607	$ 119,195

Debt - Narrative (Details)

Debt - Narrative (Details)	Apr. 02, 2018USD ($)	Oct. 18, 2017	Aug. 17, 2017USD ($)	May 31, 2013USD ($)day$ / sharesshares	Mar. 31, 2018USD ($)shares	Dec. 31, 2017USD ($)shares	Dec. 31, 2016USD ($)shares	Oct. 31, 2017USD ($)
Debt Instrument
Total number of shares repurchased (in shares) \| shares				600,000	0	2,325,825	2,524,752
Total dollar value of shares repurchased				$ 30,000,000	$ 0	$ 110,000,000	$ 112,488,000
Strike price of warrants (usd per share) \| $ / shares				$ 83.18
Proceeds from issuance of warrants				$ 43,600,000
Designated as Hedging Instrument
Debt Instrument
Note hedge, aggregate amount				63,500,000
Line of credit
Debt Instrument
Credit facility origination costs						5,600,000
Line of credit \| Initial Term Loan
Debt Instrument
Credit facility origination costs						4,800,000
Amortization period of credit facility origination fees					7 years
Line of credit \| Revolving credit facility
Debt Instrument
Amount of credit facility undrawn					$ 200,000,000
Credit facility origination costs						800,000
Amortization period of credit facility origination fees					5 years
Line of credit \| Revolving credit facility \| LIBOR
Debt Instrument
Basis spread			1.75%
Line of credit \| Revolving credit facility \| LIBOR \| Minimum
Debt Instrument
Basis spread			1.50%
Line of credit \| Revolving credit facility \| LIBOR \| Maximum
Debt Instrument
Basis spread			1.75%
Line of credit \| Revolving credit facility \| Base rate
Debt Instrument
Basis spread			0.75%
Line of credit \| Revolving credit facility \| Base rate \| Minimum
Debt Instrument
Basis spread			0.50%
Line of credit \| Revolving credit facility \| Base rate \| Maximum
Debt Instrument
Basis spread			0.75%
Convertible Senior Notes
Debt Instrument
Loan principal					$ 300,000,000	300,000,000
Deferred tax assets				$ 600,000
Convertible Senior Notes \| Convertible Senior Notes 0.25% Due May 15, 2018
Debt Instrument
Contractual interest rate				0.25%	0.25%
Loan principal				$ 300,000,000
Conversion rate				0.0155847
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 \| day				30
Holders of notes conversion percentage of conversion price				130.00%
Notes trading price percentage				98.00%
Amount if converted in excess of principal					$ 79,900,000
Debt issuance costs attributable to the liability component				$ 6,400,000
Debt issuance costs attributable to the equity component				$ 1,700,000
Term Loan
Debt Instrument
Maximum borrowing capacity			$ 300,000,000
Amortization of principal, percentage of original principal			0.25%
Repricing premium			1.00%
Term Loan \| Initial Term Loan
Debt Instrument
Amount of draw on term loan facility								$ 300,000,000
Fixed rate on Term Loan					4.10%
Loan principal					$ 300,000,000	$ 300,000,000
Term Loan \| LIBOR \| Initial Term Loan
Debt Instrument
Interest rate floor		0.01%
Basis spread		2.50%
Term Loan \| LIBOR Rate option \| LIBOR
Debt Instrument
Interest rate floor			0.00%
Term Loan \| Credit Agreement, Base Rate Option \| Federal funds rate
Debt Instrument
Basis spread			0.50%
Term Loan \| Credit Agreement, Base Rate Option \| LIBOR
Debt Instrument
Basis spread			1.00%
Subsequent event \| Term Loan \| Incremental Term Loan
Debt Instrument
Amount of draw on term loan facility	$ 825,000,000
Subsequent event \| Term Loan \| LIBOR \| Incremental Term Loan
Debt Instrument
Interest rate floor	0.00%
Basis spread	2.75%

Debt - Schedule of Term Loan De

Debt - Schedule of Term Loan Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument
Current portion of long-term debt	$ 301,004	$ 297,054
Term loan, non-current	291,879	292,457
Term Loan \| Initial Term Loan
Debt Instrument
Principal	300,000	300,000
Less: principal payments	(750)	0
Less: debt issuance costs, debt discount, net of amortization	(4,371)	(4,543)
Net carrying amount	294,879	295,457
Current portion of long-term debt	3,000	3,000
Term loan, non-current	$ 291,879	$ 292,457

Debt - Schedule of Convertible

Debt - Schedule of Convertible Note Debt (Details) - USD ($) $ in Thousands	1 Months Ended
	May 31, 2013	Mar. 31, 2018	Dec. 31, 2017
Short-term Debt [Line Items]
Net carrying amount (classified as current)		$ 301,004	$ 297,054
Convertible Senior Notes
Short-term Debt [Line Items]
Principal		300,000	300,000
Less: debt issuance costs, debt discount, net of amortization		(1,996)	(5,946)
Net carrying amount (classified as current)		298,004	294,054
Equity component		$ 63,510	$ 63,510
Convertible Senior Notes 0.25% Due May 15, 2018 \| Convertible Senior Notes
Short-term Debt [Line Items]
Principal	$ 300,000
Debt issuance costs attributable to the equity component	$ 1,700

Debt - Schedule of Interest Exp

Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	May 31, 2013
Term Loan \| Initial Term Loan
Debt Instrument
Floating interest (including the effects of cash flow hedges)	$ 3,279	$ 0
Amortization of debt issuance costs	172	0
Interest expense, convertible notes	3,451	0
Convertible Senior Notes \| Convertible Senior Notes 0.25% Due May 15, 2018
Debt Instrument
0.25% coupon	187	187
Amortization of debt issuance costs	361	341
Amortization of debt discount	3,589	3,394
Interest expense, convertible notes	$ 4,137	$ 3,922
Contractual interest rate	0.25%		0.25%

Segment Reporting (Details)

Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended
Segment Reporting (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information
Net revenues	$ 199,725	$ 191,972
Total net revenues	199,725	191,972
Cost of net revenues	126,046	116,119
Restructuring	0	1,240
Gross profit	$ 73,679	$ 74,613
Gross profit as a percentage of net revenues	37.00%	39.00%
Operating Segments \| Consumer
Segment Reporting Information
Net revenues	$ 152,059	$ 160,645
Total net revenues	152,059	160,645
Cost of net revenues	84,845	89,854
Restructuring	0	1,240
Gross profit	$ 67,214	$ 69,551
Gross profit as a percentage of net revenues	44.00%	43.00%
Operating Segments \| Shutterfly Business Solutions (SBS)
Segment Reporting Information
Total net revenues	$ 47,666	$ 31,327
Cost of net revenues	39,910	23,838
Gross profit	$ 7,756	$ 7,489
Gross profit as a percentage of net revenues	16.00%	24.00%
Corporate
Segment Reporting Information
Net revenues	$ 0	$ 0
Cost of net revenues	1,291	2,427
Gross profit	$ (1,291)	$ (2,427)

Share Repurchase Program - Narr

Share Repurchase Program - Narrative (Details) - USD ($)	Apr. 18, 2017	Apr. 21, 2016	Feb. 09, 2015	Feb. 06, 2014	Oct. 24, 2012
Share Repurchase Program [Abstract]
Stock repurchase program, authorized amount	$ 140,000,000	$ 100,000,000	$ 300,000,000	$ 100,000,000	$ 60,000,000

Share Repurchase Program - Sche

Share Repurchase Program - Schedule of Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	May 31, 2013	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share Repurchase Program [Abstract]
Total Number of Shares Purchased	600,000	0	2,325,825	2,524,752
Average Price Paid per Share (usd per share)		$ 0	$ 47.29	$ 44.55
Total Dollar Value Spent on Repurchases	$ 30,000	$ 0	$ 110,000	$ 112,488

Restructuring (Details)

Restructuring (Details) $ in Thousands	3 Months Ended
Restructuring (Details) $ in Thousands	Mar. 31, 2018USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 3,239
Cash payments	(915)
Ending balance	2,324
2017 Restructuring \| Property and equipment
Restructuring Reserve [Roll Forward]
Beginning balance	1,050
Cash payments	(162)
Ending balance	888
2017 Restructuring \| Employee costs
Restructuring Reserve [Roll Forward]
Beginning balance	379
Cash payments	(298)
Ending balance	81
2017 Restructuring \| Other costs
Restructuring Reserve [Roll Forward]
Beginning balance	417
Cash payments	(417)
Ending balance	0
2015 Restructuring \| Other costs
Restructuring Reserve [Roll Forward]
Beginning balance	1,393
Cash payments	(38)
Ending balance	$ 1,355

Derivative Financial Instrume57

Derivative Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Aug. 31, 2017
Derivative [Line Items]
Unrealized gains recognized in other comprehensive income (loss)	$ 2,770	$ 0
Amounts expected to be reclassified from other comprehensive income into interest expense in coming 12 months	500
Interest expense	$ 9,633	$ 5,964
Term Loan facility
Derivative [Line Items]
Fixed rate on Term Loan	4.27%
Interest rate swap agreement \| Designated as Hedging Instrument \| Cash flow hedge
Derivative [Line Items]
Aggregate notional amount				$ 150,000
Interest expense	$ 1,700
Estimate of Fair Value Measurement
Derivative [Line Items]
Derivative assets	$ 5,749		$ 2,979

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent event - Lifetouch, Inc.	Apr. 02, 2018USD ($)
Subsequent Event [Line Items]
Percentage of issued and outstanding shares of common stock acquired	100.00%
Consideration for the acquisition	$ 825,000,000
Term Loan
Subsequent Event [Line Items]
Loan principal	$ 825,000,000