Shutterfly (SFLY) 10-Q 6 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 01, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	SHUTTERFLY INC
Entity Central Index Key	0001125920
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		34,199,981
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Entity Emerging Growth Company	false
Entity Small Business	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 156,337	$ 521,567
Short-term investments	24,439	34,011
Accounts receivable, net	56,735	87,023
Inventories	20,932	18,015
Prepaid expenses and other current assets	102,869	66,961
Total current assets	361,312	727,577
Long-term investments	6,082	10,808
Property and equipment, net	342,073	381,018
Intangible assets, net	303,526	316,154
Goodwill	843,628	843,607
Other assets	89,293	23,045
Total assets	1,945,914	2,302,209
Current liabilities:
Current portion of long-term debt	5,348	14,203
Accounts payable	41,569	105,407
Accrued liabilities	137,000	226,445
Operating lease liabilities, current portion	21,564
Deferred revenue, current portion	96,341	57,319
Total current liabilities	301,822	403,374
Long-term debt	900,145	1,090,442
Operating lease liabilities	60,701
Other liabilities	84,619	134,027
Total liabilities	1,347,287	1,627,843
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value; 100,000 shares authorized; 34,181 and 33,673 shares issued and outstanding on March 31, 2019 and December 31, 2018, respectively	3	3
Additional paid-in capital	1,077,922	1,065,531
Accumulated other comprehensive income	1,053	1,592
Accumulated deficit	(480,351)	(392,760)
Total stockholders' equity	598,627	674,366
Total liabilities and stockholders' equity	$ 1,945,914	$ 2,302,209

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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)	34,181,000	33,673,000
Balance, end of year (in shares)	34,181,000	33,673,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Net revenue	$ 324,681	$ 199,725
Cost of net revenue	210,399	126,046
Gross profit	114,282	73,679
Operating expenses:
Technology and development	48,332	38,504
Sales and marketing	119,370	37,720
General and administrative	48,388	31,565
Restructuring	3,973	0
Total operating expenses	220,063	107,789
Loss from operations	(105,781)	(34,110)
Interest expense	(18,253)	(9,633)
Interest and other income, net	1,178	1,749
Loss before income taxes	(122,856)	(41,994)
Benefit from income taxes	39,237	14,829
Net loss	$ (83,619)	$ (27,165)
Net loss per share - basic and diluted (in dollars per share)	$ (2.47)	$ (0.83)
Weighted-average shares outstanding - basic and diluted (in shares)	33,918	32,702

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (83,619)	$ (27,165)
Other comprehensive (loss) income, net of reclassification adjustments:
Foreign currency translation gains	382	0
Unrealized net gains (losses) on investments	100	(30)
Tax (expense) benefit on unrealized net gains (losses) on investments	(26)	7
Unrealized (losses) gains on cash flow hedges	(1,844)	2,770
Tax benefit (expense) on unrealized gains on cash flow hedges	473	(699)
Impact of adoption of new accounting standard	376	0
Other comprehensive (loss) income, net of tax	(539)	2,048
Comprehensive loss	$ (84,158)	$ (25,117)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (83,619)	$ (27,165)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	29,333	22,564
Amortization of intangible assets	12,825	2,334
Amortization of debt discount and issuance costs	4,660	4,122
Amortization of operating lease assets	5,504	0
Stock-based compensation	12,039	11,692
(Gain) loss on disposal of property and equipment	(465)	225
Deferred income taxes	2,420	4,264
Restructuring	1,347	0
Other	(37)	0
Changes in operating assets and liabilities:
Accounts receivable	30,294	28,174
Inventories	(2,959)	869
Prepaid expenses and other assets	(36,673)	(15,642)
Accounts payable	(65,277)	(73,773)
Accrued and other liabilities	(53,507)	(81,996)
Net cash used in operating activities	(144,115)	(124,332)
Cash flows from investing activities:
Purchases of property and equipment	(13,726)	(8,075)
Capitalization of software and website development costs	(13,927)	(8,584)
Purchases of investments	0	(9,523)
Proceeds from maturities of investments	14,444	72,068
Proceeds from sales of property and equipment	956	649
Net cash (used in) provided by investing activities	(12,253)	46,535
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options	60	13,775
Principal payments of borrowings	(203,891)	(750)
Payment of debt issuance costs	0	(1,108)
Principal payments of finance lease liabilities	(5,312)	(4,643)
Net cash (used in) provided by financing activities	(209,143)	7,274
Effect of exchange rate changes on cash and cash equivalents	281	0
Net decrease in cash and cash equivalents	(365,230)	(70,523)
Cash and cash equivalents, beginning of period	521,567	489,894
Cash and cash equivalents, end of period	156,337	419,371
Supplemental schedule of non-cash investing / financing activities:
Net decrease in accrued purchases of property and equipment	(1,420)	(3,780)
Net increase in accrued capitalized software and website development costs	1,920	357
Stock-based compensation capitalized with software and website development costs	292	323
Leased assets obtained in exchange for finance lease liabilities	$ 0	$ 2,969

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common stock (par value)	Additional paid-in capital	Accumulated other comprehensive income	Accumulated deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Impact of adoption of new accounting standards					$ 4,201
Balance, beginning of year at Dec. 31, 2017		$ 3	$ 996,301	$ 1,778	(447,358)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of options and vesting of restricted stock units		0
Issuance of common stock upon exercise of options and vesting of restricted stock units			13,775
Stock based compensation, net of forfeitures			12,015
Unrealized gain (loss) on investments, net of tax				(23)
Unrealized (loss) gain on cash flow hedges, net of tax				2,071
Net loss	$ (27,165)				(27,165)
Balance, ending of year at Mar. 31, 2018	555,598	$ 3	1,022,091	3,826	(470,322)
Balance, beginning of year (in shares) at Dec. 31, 2017		32,297
Number of shares
Issuance of common stock upon exercise of options and vesting of restricted stock units (in shares)		825
Balance, end of year (in shares) at Mar. 31, 2018		33,122
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Impact of adoption of new accounting standards				376	(3,972)
Balance, beginning of year at Dec. 31, 2018	674,366	$ 3	1,065,531	1,592	(392,760)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of options and vesting of restricted stock units		0
Issuance of common stock upon exercise of options and vesting of restricted stock units			60
Stock based compensation, net of forfeitures			12,331
Foreign currency translation gains				382
Unrealized gain (loss) on investments, net of tax				74
Unrealized (loss) gain on cash flow hedges, net of tax				(1,371)
Net loss	(83,619)				(83,619)
Balance, ending of year at Mar. 31, 2019	$ 598,627	$ 3	$ 1,077,922	$ 1,053	$ (480,351)
Balance, beginning of year (in shares) at Dec. 31, 2018	33,673	33,673
Number of shares
Issuance of common stock upon exercise of options and vesting of restricted stock units (in shares)		508
Balance, end of year (in shares) at Mar. 31, 2019	34,181	34,181

The Company and Summary of Sign

The Company and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
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 retailer and manufacturing platform for personalized products and communications. Founded and incorporated in the state of Delaware in 1999, Shutterfly has three segments: Shutterfly Consumer, Lifetouch, and Shutterfly Business Solutions ("SBS"). Shutterfly Consumer and Lifetouch help consumers capture, preserve, and share life’s important moments through professional and personal photography, and personalized products. The Shutterfly brand brings photos to life in photo books, gifts, home décor, and cards and stationery. Lifetouch is the national leader in school photography, built on the enduring tradition of “Picture Day,” and also serves families through portrait studios and other partnerships. SBS delivers digital printing services that enable efficient and effective customer engagement through personalized communications. The Company is headquartered in Redwood City, California. On April 2, 2018, the Company completed its acquisition of Lifetouch Inc. ("Lifetouch"). 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 including the financial results of Lifetouch which are included prospectively from the acquisition date of April 2, 2018. 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, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, or for any other period. The December 31, 2018 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, 2018 included in the Company’s Annual Report on Form 10-K. The Company has evaluated subsequent events through the date that the financial statements were issued. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to the significant accounting policies during the three months ended March 31, 2019 other than those noted below. Lease Accounting The Company determines if an arrangement is or contains a lease at inception. Lease right-of-use ("ROU") assets and lease liabilities for operating and finance leases are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Operating leases are included in other assets, current operating lease liabilities and operating lease liabilities in the condensed consolidated balance sheets. Finance leases are included in property and equipment, accrued liabilities and other liabilities in the condensed consolidated balance sheets. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. ROU assets also include any lease payments made and initial direct costs, and exclude lease incentives. Variable lease payments are excluded from the ROU assets and lease liabilities and recognized in the period in which the obligation for those payments is incurred. Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to terminate or purchase the leased asset. The Company’s lease agreements do not contain any material residual value guarantee or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term. The Company elected a short-term lease exception policy, permitting the Company not to apply the recognition requirements of Accounting Standard Codification 842, Leases , ("ASC 842") to short-term leases (i.e., leases with terms of 12 months or less). For all leases, the Company accounts for the lease and non-lease components as a single lease component. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , (“ASC 842”) which requires the recognition of ROU assets and corresponding lease liabilities on the balance sheet, measured at present value of the future lease payments. The most significant impact relates to the recognition of lease assets and liabilities for operating leases, while the accounting for finance leases remained unchanged except for recognition of lease assets and liabilities for fixed non-lease components. Accounting for leases by lessors is substantially unchanged from prior practice as lessors will continue to recognize lease revenue as earned. The Company adopted ASC 842 as of January 1, 2019 (the effective date), using the alternative modified retrospective transition method provided in ASU 2018-11, Leases (Topic 842 ): Targeted Improvements . Under this method, the Company recorded a cumulative-effect adjustment as of the effective date and prior comparative periods were not retrospectively presented in the consolidated financial statements. This adoption approach results in a balance sheet presentation that is not comparable to the prior year period in the first year of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance, which among other things allows companies to carry forward their historical lease classification. The Company did not elect the hindsight practical expedient, which permits the use of hindsight when determining the lease term and impairment of ROU assets. Adoption of ASC 842 resulted in the recording of additional net lease assets and lease liabilities of approximately $37.6 million and $42.4 million, respectively, as of January 1, 2019, for finance lease and operating leases including the impact of the reclassification of the Company's financing obligations related to build-to-suit arrangements to operating leases. The difference between the additional net lease assets and lease liabilities, net of deferred tax impact, was recorded as an adjustment to the opening balance of accumulated deficit. As of December 31, 2018, building assets of $48.4 million and financing obligations of $54.0 million related to build-to-suit arrangements. As of January 1, 2019, these balances were derecognized and these arrangements were accounted for as operating leases. The adoption of ASC 842 did not materially impact the Company’s consolidated net loss and had no impact on the consolidated statement of cash flows. 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. The Company adopted ASU 2018-02 as of January 1, 2019 using the prospective transition method, which resulted in an immaterial reclassification from accumulated other comprehensive income to the opening balance of accumulated deficit. The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“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. The cumulative impact of the adoption of ASC 606 resulted in a decrease to the opening balance of 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. Refer to Note 3 in the Company's Form 10-K for the year ended December 31, 2018 for further details. Recent Accounting Pronouncements Pending Adoption In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and earlier adoption is permitted including adoption in any interim period. 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. 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, with early adoption permitted beginning January 1, 2019. The Company is evaluating the impact of adopting this new accounting guidance on the consolidated financial statements.

Revenues

Revenues	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Revenues	Revenue Net Revenue by Brand The following table disaggregates the Company’s net revenue by brand for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (in thousands) Shutterfly Consumer net revenue: Shutterfly Brand Core $ 105,076 $ 111,668 Shutterfly Brand Personalized Gifts and Home Décor 34,585 30,965 Tiny Prints Boutique 1,695 2,134 Other 7,491 7,292 Shutterfly Consumer net revenue 148,847 152,059 Lifetouch net revenue ( 1 ) 129,307 — Shutterfly Business Solutions net revenue 46,527 47,666 Net revenue $ 324,681 $ 199,725 ( 1 ) The Company acquired Lifetouch on April 2, 2018. Deferred Revenue

Acquisition

Acquisition	3 Months Ended
	Mar. 31, 2019
Business Combinations [Abstract]
Acquisition	Acquisition On January 30, 2018, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Lifetouch and Lifetouch Inc. Employee Stock Ownership Trust (collectively, 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 Investments, and Closing Indebtedness, as defined in the Purchase Agreement. The Company financed the all-cash purchase price with an incremental $825.0 million term loan issuance under its existing credit agreement, which closed simultaneous with the acquisition (refer to Note 9 - Debt for further details). Lifetouch provides the Company with a highly complementary business. 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 expects to gain access to many Lifetouch customers as Shutterfly customers, where they will benefit from Shutterfly’s leading cloud-based photo management service, product creation capabilities, mobile apps, and broad product range. 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, the goodwill that the Company recognized as part of the Lifetouch acquisition will be deductible for U.S. income tax purposes. The goodwill recognized represents the assembled workforce of Lifetouch and the value of growth in revenue from future customers of Lifetouch. During the year ended December 31, 2018, the Company recorded approximately $15.5 million of direct and incremental costs associated with acquisition-related activities. These costs were incurred primarily for banking, legal, professional fees and personnel-related costs for transitional employees associated with the Lifetouch acquisition. These costs were recorded in general and administrative expenses in the consolidated statement of operations. During the three months ended March 31, 2019, Lifetouch contributed $129.3 million to net revenue and $48.6 million to gross profit. Under the terms of the Purchase Agreement, the amount of consideration that the Company paid 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 Investments, and Indebtedness, as defined by the Purchase Agreement. The total purchase consideration paid by the Company during the second quarter of 2018 was $982.0 million. The following table shows the calculation of how the purchase consideration paid by the Company was determined in accordance with the Purchase Agreement: (in thousands) Cash consideration at closing $ 825,000 Less: Closing indebtedness (1) (27,742) Less: Closing net working capital adjustment (1) (10,559) Less: Transaction expenses (1)(2) (17,614) Add: Closing cash and investments (1) 212,872 Purchase price adjustments 156,957 Total purchase consideration $ 981,957 (1) As defined in the Purchase Agreement. (2) Transaction expenses incurred by Lifetouch in connection with the transaction as defined by the Purchase Agreement. In accordance with ASC 805, Business Combinations , the Company has recorded the acquired assets (including identifiable intangible assets) and liabilities assumed at the acquisition date fair values. The purchase price allocation for the Lifetouch acquisition includes adjustments for additional information that existed as of the acquisition date but at that time was unknown and became known during the measurement period of 12 months from the acquisition date. As of March 31, 2019, the Company has completed the purchase price allocation of the Lifetouch acquisition. The following table shows the allocation of the total purchase price to the net assets acquired based on their estimated fair values as of April 2, 2018: (in thousands) Cash and cash equivalents $ 91,753 Investments 100,574 Accounts receivable 7,680 Inventories 19,857 Property and equipment 134,973 Intangible assets 326,300 Goodwill 434,862 Prepaid expenses and other assets 37,037 Accounts payable (9,388) Deferred revenue, current portion (31,334) Notes payable (9,102) Accrued and other liabilities (121,255) Total $ 981,957 The following table shows the valuation of the intangible assets acquired from Lifetouch along with their estimated useful lives: Approximate Fair Value (in thousands) Weighted Average Life (in years) Customer contracts and related relationships $ 200,400 10 Developed technology 68,000 5 Trade names / trademarks / domain name 57,600 5 Favorable/unfavorable leases 300 7 Total intangible assets $ 326,300 Identifiable Intangible Assets Customer contracts and related relationships. These assets primarily relate to the existing relationships that Lifetouch has developed with a number of schools and preschools. These relationships provide economic value to the Company and therefore were valued separately from goodwill. The Company valued these assets utilizing a form of the income approach known as the "Multi-Period Excess Earnings Method" ("MPEEM") since these customer assets were identified as the primary asset. Under the MPEEM, the value of these assets was estimated based on the expected future economic earnings attributable to the assets. The key assumptions used in the valuation of these assets include future revenue from existing customers and estimated expenses forecast, contributory asset charges (such as cash-free debt-free working capital, fixed assets, brand assets and assembled workforce), the discount rate, expected tax rate(s) and tax amortization benefit. Developed technology. Lifetouch has a number of developed technology platforms that are internally-used (e.g., field operations management and production management systems) and customer-facing (e.g., order management and yearbook design systems). These technologies will continue to be used by the Company. Given that the technologies are specific to Lifetouch and have minimal possibility of being licensed out to third parties, the "Cost to Recreate Method" under the cost approach was used to value these assets. The key assumptions used in the valuation of these assets include direct and indirect developer costs, developer's profit, and opportunity cost. Trade names / trademarks / domain name. Lifetouch is the leading provider of school photography services in the U.S. and has a number of registered trade names, trademarks and domain names that are recognized and well known in the marketplace. These brand names are expected to continue to be used, providing economic value to the Company, and therefore were valued separately from goodwill. The "Relief from Royalty Method" of the income approach was used in the valuation of trade names, trademarks and domain names. Unaudited Pro Forma Financial Information The following table summarizes the pro forma consolidated information for the Company assuming the acquisition of Lifetouch had occurred as of January 1, 2017. The unaudited pro forma information for the three months ended March 31, 2018 includes the business combination accounting effects resulting from the acquisition, including amortization for intangible assets acquired, depreciation expense for tangible assets acquired, interest expense for the additional indebtedness incurred to complete the acquisition, acquisition-related charges and the impact of adopting ASC 606. The impact of applying ASC 606 to Lifetouch’s historical results as presented below was not material. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2017. Three Months Ended March 31, (in thousands, except per share data) 2018 Total net revenue $ 334,059 Net loss $ (84,385) Net loss per share - basic and diluted $ (2.58)

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock-based Compensation Expense The Company's stock-based compensation expense is allocated as follows in its condensed consolidated statements of operations: Three Months Ended March 31, 2019 2018 (in thousands) Cost of net revenue $ 892 $ 999 Technology and development 2,298 2,429 Sales and marketing 3,466 3,504 General and administrative 5,383 4,760 Total stock-based compensation $ 12,039 $ 11,692 Stock Option Activity A summary of the Company’s stock option activity for the three months ended March 31, 2019 is as follows: Number of Options Outstanding (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2018 1,405 $ 53.44 Granted — $ — Exercised (2) $ 25.50 Forfeited, cancelled or expired — $ — Balance as of March 31, 2019 1,403 $ 53.49 3.1 $ 185 Options vested and expected to vest as of March 31, 2019 1,271 $ 53.10 3.1 $ 185 Options vested as of March 31, 2019 587 $ 50.49 2.2 $ 185 The total intrinsic value of options exercised during the three months ended March 31, 2019 was immaterial, and $7.9 million for the three months ended March 31, 2018. Net cash proceeds from the exercise of stock options for the three months ended March 31, 2019 and 2018 were $0.1 million and $13.8 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 are as follows (there were no option awards granted during the three months ended March 31, 2019): Three Months Ended March 31, 2018 Dividend yield — Annual risk-free rate of return 2.6 % Expected volatility 33.7 % Expected term (years) 4.1 Restricted Stock Unit Activity The Company grants restricted stock units (“RSUs”), performance-based restricted stock units ("PBRSUs"), and market-based restricted stock units ("MSUs") 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 and PBRSUs is determined using the fair value of the Company’s common stock on the date of grant. The cost of MSUs is determined using a Monte Carlo simulation model on the date of grant. RSUs typically vest and are settled annually, based on a four A summary of the Company’s RSU activity, including service-based awards, performance-based awards, and market-based awards for the three months ended March 31, 2019, is as follows: Number of Units Outstanding (in thousands) Weighted Average Grant Date Fair Value Awarded and unvested as of December 31, 2018 1,941 $ 56.91 Granted 991 $ 44.49 Vested (506) $ 51.57 Forfeited (48) $ 54.42 Awarded and unvested as of March 31, 2019 2,378 $ 52.91 RSUs expected to vest as of March 31, 2019 1,818 Included in the RSU grants for the three months ended March 31, 2019, are approximately 116,000 RSUs that have both performance criteria tied to the Company’s 2019 financial performance and a three Included in the RSU grants for the three months ended March 31, 2019, are approximately 116,000 RSUs that have both market criteria over a three three Employee stock-based compensation expense recognized in the three months ended March 31, 2019 and 2018 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, 2019, the Company had $88.8 million of total unrecognized stock-based compensation cost, net of estimated forfeitures, related to stock options, RSUs, PBRSUs, and MSUs that will be recognized over a weighted-average period of approximately 2.6 years.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2019
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, convertible senior notes and conversion of warrants. A summary of the net loss per share for the three months ended March 31, 2019 and 2018 is as follows: Three Months Ended March 31, (in thousands, except per share data) 2019 2018 Net loss per share: Numerator Net loss $ (83,619) $ (27,165) Denominator for basic and diluted net loss per share Weighted-average common shares outstanding 33,918 32,702 Net loss per share - basic and diluted $ (2.47) $ (0.83) The following weighted-average outstanding stock options and RSUs were excluded from the computation of diluted net loss per common share for the periods presented as the Company had a net loss in the period and including them would have had an anti-dilutive effect: Three Months Ended March 31, 2019 2018 (in thousands) Weighted average stock options and RSUs that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period 1,256 3,422 Weighted average stock options and RSUs that would have been excluded from the computation of dilutive common equivalent shares outstanding if net income had been reported due to their antidilutive effect 1,991 265 Total 3,247 3,687 With respect to the convertible senior notes issued in 2013 and settled in cash upon their maturity in May 2018, the potential conversion impact of approximately 373,000 shares as of March 31, 2018 were excluded from the computation of diluted net loss per common share because including it would have had an anti-dilutive effect in the three months ended March 31, 2018.

Investments

Investments	3 Months Ended
	Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Investments	InvestmentsAt March 31, 2019 and December 31, 2018, the estimated fair value of short-term and long-term debt securities investments, all of which are classified as available-for-sale, was as follows: March 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Short-term investments Corporate debt securities $ 17,354 $ 9 $ (7) $ 17,356 Agency securities 3,610 — (7) 3,603 U.S. government securities 3,484 — (4) 3,480 Total short-term investments $ 24,448 $ 9 $ (18) $ 24,439 Long-term investments Corporate debt securities $ 995 $ 5 $ — $ 1,000 Agency securities 2,117 1 (1) 2,117 U.S. government securities 2,964 1 — 2,965 Total long-term investments $ 6,076 $ 7 $ (1) $ 6,082 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Short-term investments Corporate debt securities $ 24,367 $ — $ (43) $ 24,324 Agency securities 5,728 — (19) 5,709 U.S. government securities 3,986 — (8) 3,978 Total short-term investments $ 34,081 $ — $ (70) $ 34,011 Long-term investments Corporate debt securities $ 4,283 $ — $ (13) $ 4,270 Agency securities 2,113 — (7) 2,106 U.S. government securities 4,445 — (13) 4,432 Total long-term investments $ 10,841 $ — $ (33) $ 10,808 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, 2019, and no impairments were recorded during the three months ended March 31, 2019 and 2018. The Company had no material realized gains or losses during the three months ended March 31, 2019 and 2018. The following table summarizes the contractual maturities of the Company's investments as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 (in thousands) One year or less $ 24,439 $ 34,011 One year through three years 6,082 10,808 $ 30,521 $ 44,819

Fair Value Measurement

Fair Value Measurement	3 Months Ended
	Mar. 31, 2019
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, 2019 and December 31, 2018. 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: Total Estimated Fair Value as of March 31, 2019 December 31, 2018 Cash Equivalents Investments Cash Equivalents Investments (in thousands) Level 1 Securities: Money market funds $ 81,418 $ — $ 116,212 $ — Level 2 Securities: Corporate debt securities — 18,356 — 28,594 Agency securities — 5,720 — 7,815 U.S. government securities — 6,445 — 8,410 Total cash equivalents and investments $ 81,418 $ 30,521 $ 116,212 $ 44,819 Derivative Assets As of March 31, 2019 and December 31, 2018, 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, volatility and basis spreads (Level 2), were as follows: Total Estimated Fair Value as of March 31, 2019 December 31, 2018 (in thousands) Derivative assets $ 2,360 $ 4,204 Borrowings As of March 31, 2019 and December 31, 2018, the fair value of the Company's Term Loan borrowings (as described in Note 9 - Debt ), 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: Total Estimated Fair Value as of March 31, 2019 December 31, 2018 (in thousands) Term Loans $ 904,508 $ 1,081,520 As of March 31, 2019 and December 31, 2018, the carrying value of other financial instruments, including accounts receivable, accounts payable and other payables, approximates fair value due to their short maturities.

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Balance Sheet Components Prepaid Expenses and Other Current Assets March 31, 2019 December 31, 2018 (in thousands) Intra-period income tax asset $ 41,445 $ — Restricted certificate of deposit 18,745 18,745 Prepaid service contracts – current portion 15,928 13,562 Other prepaid expenses and current assets 26,751 34,654 $ 102,869 $ 66,961 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, 2019 December 31, 2018 (in thousands) Computer equipment and software $ 367,053 $ 347,032 Plant and equipment 310,189 297,597 Land, buildings and building improvements 56,664 113,048 Leasehold improvements 27,079 27,011 Furniture, fixtures and other 11,586 11,498 772,571 796,186 Less: Accumulated depreciation and amortization (430,498) (415,168) Property and equipment, net $ 342,073 $ 381,018 Included within computer equipment and software is approximately $82.0 million and $75.3 million of capitalized software and website development costs, net of accumulated amortization at March 31, 2019 and December 31, 2018, respectively. Amortization of capitalized costs totaled approximately $9.5 million and $6.6 million for the three months ended March 31, 2019 and 2018, respectively. Plant and equipment includes manufacturing, photography, and rental equipment. Rental equipment includes camera lenses, camera bodies, video equipment and other camera peripherals which are rented through the BorrowLenses website. Included within plant and equipment is approximately $95.8 million and $92.5 million of ROU assets under finance leases for various pieces of manufacturing facility equipment as of March 31, 2019 and December 31, 2018, respectively. As a result of the adoption of ASC 842, the ROU assets under finance leases as of March 31, 2019 include non-lease components whereas the balance as of December 31, 2018 does not. Accumulated depreciation of ROU assets under finance leases totaled $43.6 million and $44.9 million at March 31, 2019 and December 31, 2018, respectively. As of December 31, 2018, land, buildings and building improvements included approximately $56.5 million of build-to-suit arrangements which represented the estimated fair value of buildings under build-to-suit arrangements of which the Company was the "deemed owner" for accounting purposes. As of December 31, 2018, accumulated depreciation for these build-to-suit arrangements was $8.1 million. Upon adoption of ASC 842 on January 1, 2019, the Company derecognized its build-to-suit arrangements as these arrangements no longer qualify for build-to-suit accounting and are instead recognized as operating leases under ASC 842 and included in the operating ROU assets and operating lease liabilities recorded as of the adoption date. Included in property and equipment is approximately $34.8 million and $26.3 million of assets in construction as of March 31, 2019 and December 31, 2018, respectively, the majority of which relates to computer equipment and software. Depreciation and amortization expense totaled $29.3 million and $22.6 million for the three months ended March 31, 2019 and 2018, respectively. Intangible Assets Intangible assets are comprised of the following: Weighted Average Useful Life March 31, 2019 December 31, 2018 (in thousands) Customer relationships 9 years $ 275,546 $ 275,546 Less: accumulated amortization (96,095) (91,087) 179,451 184,459 Trade name 9 years 112,120 112,120 Less: accumulated amortization (42,051) (38,320) 70,069 73,800 Purchased technology 5 years 121,769 121,769 Less: accumulated amortization (67,763) (64,142) 54,006 57,627 Other 2 years 3,797 4,097 Less: accumulated amortization (3,797) (3,829) — 268 Total 8 years $ 303,526 $ 316,154 Intangible asset amortization expense for the three months ended March 31, 2019 and March 31, 2018 was $12.8 million and $2.3 million, respectively. Amortization of existing intangible assets is estimated to be as follows (in thousands): Year Ending December 31: Remainder of 2019 37,077 2020 48,877 2021 48,749 2022 48,057 2023 29,278 Thereafter 91,488 $ 303,526 Goodwill The following table presents the goodwill allocated to the Company's reportable segments as of and during the three months ended March 31, 2019: December 31, 2018 Translation Adjustments March 31, 2019 (in thousands) Shutterfly Consumer $ 372,072 $ — $ 372,072 Lifetouch 434,632 21 434,653 Shutterfly Business Solutions 36,903 — 36,903 $ 843,607 $ 21 $ 843,628 Accrued Liabilities March 31, 2019 December 31, 2018 (in thousands) Accrued compensation $ 45,459 $ 44,720 Accrued marketing expenses 14,330 36,428 Accrued production costs 12,194 46,497 Finance lease liabilities, current portion 14,286 14,741 Accrued income, sales and other taxes 8,806 28,886 Accrued professional services 8,302 11,988 Accrued other 33,623 43,185 $ 137,000 $ 226,445 Other Liabilities March 31, 2019 December 31, 2018 (in thousands) Finance lease liabilities, non-current portion $ 45,652 $ 38,576 Deferred tax liability 7,758 7,110 Financing obligations — 51,732 Other liabilities 31,209 36,609 $ 84,619 $ 134,027 Financing obligations related to the Company's build-to-suit arrangements. Upon adoption of ASC 842 on January 1, 2019, the Company derecognized its build-to-suit arrangements as these arrangements no longer qualify for build-to-suit accounting and therefore there was no balance as of March 31, 2019. These arrangements are now recognized as operating leases under ASC 842 and included in the lease liability recorded as of the effective date.

Debt

Debt	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Debt	Debt The following table summarizes components of the Company's debt: (in thousands, except percentages) March 31, 2019 December 31, 2018 Effective Interest Rate Syndicated Credit Facility Initial term loan due August 17, 2024 $ 296,269 $ 297,011 LIBOR plus (1) Incremental term loan due August 17, 2024 619,328 820,880 LIBOR plus (1) (2) Assumed Lifetouch notes payable due at various dates through July 2022 5,565 7,137 0.0%-2.2% Total principal amount 921,162 1,125,028 Less: unamortized issuance costs (15,669) (20,383) Total debt 905,493 1,104,645 Less: current portion (5,348) (14,203) Total long term debt $ 900,145 $ 1,090,442 (1 ) As of December 31, 2018 and March 31, 2019, the Initial Term Loan and Incremental Term Loan bear interest at a rate equal to one-month LIBOR, plus an applicable margin of 2.50% and 2.75% per annum, respectively. (2) 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. Syndicated Credit Facility On August 17, 2017, 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. 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. The obligations under the Initial Term Loan and Incremental Term Loan rank equally in right of payment. The Credit Agreement requires quarterly principal payments as well as mandatory prepayments under certain conditions as set forth in the Credit Agreement. The full amount of the $200.0 million Revolving Loan Facility remains undrawn as of March 31, 2019. Borrowings under the Revolving Loan Facility are available through August 17, 2022. The interest rate for the Revolving Loan Facility is based on a formula using certain market rates and the Company's secured leverage ratio as defined by the Incremental Term Loan Amendment dated April 2, 2018. Refer to Note 14 in the Company's Form 10-K for the year ended December 31, 2018 for further details. 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 Initial Term Loan so that the interest payable on such portion becomes fixed (refer to Note 15 - Derivative Financial Instruments for further details regarding the interest-rate swap agreements). The effective interest rates for the unhedged portion of the Initial Term Loan for three months ended March 31, 2019 and 2018 were 5.00% and 4.10%, respectively. The effective interest rate for the Incremental Term Loan for the three months ended March 31, 2019 was 5.26%. The incremental Term Loan was drawn in April 2018 and therefore there was no effective interest rate for the Incremental Term Loan for the three months ended March 31, 2018. The Credit Agreement contains customary affirmative and negative covenants. The Company is also required to maintain compliance, measured as of the end of each fiscal quarter, with a consolidated secured leverage ratio and a consolidated interest expense coverage ratio. As of March 31, 2019, the Company is in compliance with these covenants. Principal payments made on the Initial Term Loan during the three months ended March 31, 2019 and 2018 were $0.7 million and $0.8 million respectively. Total principal payments made on the Incremental Term Loan during the three months ended March 31, 2019 was $201.6 million, including a $200.0 million principal prepayment the Company made in January 2019. The $200.0 million prepayment is applied to future quarterly principal payments which removes the required quarterly payments until maturity date on August 17, 2024. The following table sets forth the total interest expense recognized related to the Initial Term Loan and the Incremental Term Loan for the three months ended March 31, 2019 and 2018. The Incremental Term Loan was drawn in April 2018; therefore, there was no interest expense for the three months ended March 31, 2018 associated with Incremental Term Loan. Three Months Ended March 31, 2019 2018 (in thousands) Floating interest (including the effects of cash flow hedges) $ 12,450 $ 3,279 Amortization of debt issuance costs 4,660 172 Total $ 17,110 $ 3,451 Assumed Lifetouch Notes Payable In connection with the acquisition of Lifetouch in the second quarter of 2018 (refer to Note 3 - Acquisition ), the Company assumed $9.1 million of legacy Lifetouch notes payable. These notes payable were issued by Lifetouch to finance various acquisitions and represents promissory notes issued to the owners of the acquired companies for an amount equal to the purchase consideration. Payments of principal for these notes payable during the three months ended March 31, 2019 was $1.6 million. Debt Principal Payments As of March 31, 2019, the future principal payments of the Initial Term Loan, Incremental Term Loan and the assumed Lifetouch notes payable are as follows (in thousands): Year Ending December 31: Remainder of 2019 3,873 2020 4,940 2021 4,036 2022 3,609 2023 2,868 2024 901,836 Total principal payments $ 921,162

Segment Reporting

Segment Reporting	3 Months Ended
	Mar. 31, 2019
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 segment margin to evaluate the performance of the segments and allocate resources. Management considers segment 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. Segment margin includes technology and development expenses, sales and marketing expenses, and credit card fees, arriving at a margin for the segment. Segment margin excludes corporate expenses, amortization of intangible assets, stock-based compensation expense, restructuring charges, acquisition-related costs and executive transition and strategic review charges. Corporate expenses include activities that are not directly attributable or allocable to a specific segment. The Company’s segments are determined based on the products and services each segment provides and how the CODM evaluates the business. The Company has the following reportable segments: Shutterfly 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, personalized gifts and home décor products, calendars and prints, and related shipping revenue, as well as rental revenue from its BorrowLenses brand. Revenue from advertising displayed on the Company's website is also included in Shutterfly Consumer revenue. Lifetouch - Includes revenue from professional photography services for schools, preschools and retail studios operated by Lifetouch under the JCPenney Portrait brand as well as churches and other groups. Shutterfly Business Solutions - Includes revenue from personalized direct marketing, other end-consumer communications and just-in-time, inventory-free printing for the Company's business customers. 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. Substantially all of the Company's revenue is generated from sales originating in the United States. The Company’s segment results for the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, (dollars in thousands) 2019 2018 Shutterfly Consumer: Net revenue $ 148,847 $ 152,059 Cost of net revenue (1) 90,406 84,845 Technology and development 33,523 32,129 Sales and marketing 29,123 30,725 Credit card fees 4,156 4,199 Margin (1) (2) $ (8,361) $ 161 Margin % (5.6) % 0.1 % Lifetouch ( 3 ) : Net revenue ( 4 ) $ 129,952 $ — Cost of net revenue 78,328 — Technology and development 7,973 — Sales and marketing 76,295 — Credit card fees 2,227 — Margin ( 2 ) $ (34,871) $ — Margin % (26.8) % — % Shutterfly Business Solutions: Net revenue $ 46,527 $ 47,666 Cost of net revenue 38,151 39,910 Technology and development 3,292 3,945 Sales and marketing 1,408 1,450 Margin ( 2 ) $ 3,676 $ 2,361 Margin % 7.9 % 5.0 % Consolidated Segments: Net revenue ( 4 ) $ 325,326 $ 199,725 Cost of net revenue ( 1 ) 206,885 124,755 Technology and development 44,788 36,074 Sales and marketing 106,826 32,175 Credit card fees 6,383 4,199 Margin (1)(2) $ (39,556) $ 2,522 Margin % (12.2) % 1.3 % ( 1 ) Includes an immaterial out-of-period adjustment for shipping services provided in the fourth quarter of 2018 of $2.8 million, which increased cost of net revenue and lowered segment margin. ( 2 ) The margins reported reflect only costs that are directly attributable or allocable to a specific segment and exclude corporate expenses, amortization of intangible assets, stock-based compensation, restructuring, acquisition-related, and executive transition and strategic review charges. ( 3 ) The Company acquired Lifetouch on April 2, 2018. ( 4 ) Lifetouch net revenue presented in management reporting related to certain obligations that would have otherwise been recorded by Lifetouch as an independent entity but were not recognized in the Company's condensed consolidated financial statements for the three months ended March 31, 2019 due to business combination accounting requirements.

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	Leases The Company leases certain equipment, office space, production and warehouse facilities and several photographic studios under various non-cancelable operating leases that expire on various dates through 2030. The Company’s finance leases primarily relate to production equipment. The following table presents the classification of ROU assets and lease liabilities as of March 31, 2019: Leases Consolidated Balance Sheet Classification March 31, 2019 (in thousands) Assets: Operating right-of-use assets Other assets $ 67,780 Finance right-of-use assets Property and equipment, net (1) 55,181 Total leased assets $ 122,961 Liabilities: Current Operating lease liabilities Operating lease liabilities, current portion $ 21,564 Finance lease liabilities Accrued liabilities 14,286 Noncurrent Operating lease liabilities Operating lease liabilities 60,701 Finance lease liabilities Other liabilities 45,652 Total lease liabilities $ 142,203 (1) Finance lease assets are recorded net of accumulated amortization of $44.0 million as of March 31, 2019. The following table represents the lease expenses for the three months ended March 31, 2019: (in thousands) Three Months Ended March 31, 2019 Operating lease expense (1) $ 7,280 Finance lease expense Amortization of right-of-use-assets 4,179 Interest on lease liabilities 767 Variable lease expense 7,655 Sublease income (127) Net lease cost $ 19,754 ( 1 ) Includes short-term lease expense of $0.2 million for the three months ended March 31, 2019. Future minimum lease payments under non-cancelable leases as of March 31, 2019 were as follows: Year Ended December 31, Operating Leases (1) Finance Leases Total (in thousands) Remainder of 2019 $ 19,303 $ 13,252 $ 32,555 2020 22,556 13,704 36,260 2021 19,038 12,671 31,709 2022 15,448 12,291 27,739 2023 8,695 10,193 18,888 Thereafter 8,290 5,086 13,376 Total lease payments $ 93,330 $ 67,197 $ 160,527 Less: Interest (11,065) (7,259) (18,324) Present value of lease liabilities (2) $ 82,265 $ 59,938 $ 142,203 (1) Operating lease payments exclude $28.1 million of legally binding minimum lease payments for an operating lease the Company entered into in March 2019 for the Company's new 237,000 square foot facility in Plano, Texas. The lease is expected to commence in early 2020 when construction of the asset is completed with an original lease term of 10 years. ( 2 ) Includes the current portion of $21.6 million for operating leases and $14.3 million for finance leases. Future minimum lease payments under non-cancelable leases and build-to-suit arrangement as of December 31, 2018 were as follows: Year Ended December 31, Operating leases Build-to-Suit Finance leases (in thousands) 2019 $ 23,557 $ 6,501 $ 16,853 2020 17,730 6,646 10,582 2021 13,763 6,794 9,908 2022 9,928 6,947 9,820 2023 1,872 6,479 8,237 Thereafter 1,501 6,522 4,023 Total lease payments $ 68,351 $ 39,889 $ 59,423 Less: Interest (6,106) Present value of lease liabilities $ 53,317 Other information about leases is as follows: Lease Term and Discount Rate March 31, 2019 Weighted-average remaining lease term (years) Operating leases 4.2 Finance leases 4.1 Weighted-average discount rate Operating leases 5.7 % Finance leases 4.8 % Supplemental Cash Flow Information Three Months Ended March 31, 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (10,585) Operating cash flows from finance leases (690) Financing cash flows from finance leases (5,312) ROU assets obtained in exchange for operating lease liabilities $ 139

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Purchase Obligations There have been no significant changes to the non-cancelable purchase obligations disclosed in the Company's Form 10-K for the year ended December 31, 2018 except for a new five-year non-cancelable commitment for the Company's enterprise resource planning system of approximately $11.5 million. 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. Letter of Credit As of March 31, 2019, the Company has stand-by-letters of credit, totaling approximately $18.7 million, for the benefit of the Company's workers' compensation insurance carriers. There were no amounts drawn against any of the letters of credit at March 31, 2019. The letters of credit are secured by collateral in the form of a certificate of deposit, which is treated as restricted other current asset and is recorded in other current assets on the balance sheet. 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. One legal proceeding was terminated during April 2019. Antonio Davis v. Lifetouch, Inc. On March 10, 2019, Antonio Davis filed a purported class action complaint on behalf of himself and other Lifetouch customers in the U.S. District Court for the District of Kansas. The complaint alleges that Lifetouch violated Kansas consumer protection statutes prohibiting the sale of unsolicited goods. Davis is seeking monetary damages and injunctive relief. The Company believes the suit is without merit and intends to vigorously defend against it. Monroy v. Shutterfly, Inc. On November 30, 2016, Alejandro Monroy on behalf of himself and all others similarly situated, filed a complaint against the Company in the U.S. District Court for the Northern District of Illinois. The complaint asserts that the Company violated the Illinois Biometric Information Privacy Act by extracting his and others’ biometric identifiers from photographs and seeks statutory damages and an injunction. Monroy was seeking monetary damages and injunctive relief. On April 8, 2019, the U.S. District Court for the Northern District of Illinois dismissed Monroy’s claims with prejudice. 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. The complaint 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 successfully compelled the matter to private arbitration and is awaiting a decision from the arbitrator whether the class action waiver contained in the terms of use that the plaintiff agreed to is enforceable. Taylor is seeking monetary damages and injunctive relief. The Company believes the suit is without merit and intends to vigorously defend against it. Vigeant 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. The plaintiffs seek recovery for damages arising from the alleged breaches of fiduciary duty. On November 7, 2018, the District Court granted defendant’s motion to dismiss in its entirety and with prejudice. Plaintiffs’ counsel filed a timely notice of appeal with the 8th Circuit Court of Appeals. 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
	Mar. 31, 2019
Share Repurchase Program [Abstract]
Share Repurchase Program	Share Repurchase Program The Company has a share repurchase program originally authorized by the Company's Board of Directors and approved by the Audit Committee to repurchase up to $60.0 million of the Company's common stock. The Company’s Board of Directors approved expansions of the share repurchase program in 2014, 2015, 2016 and 2017 by an additional $640.0 million in aggregate to the amounts repurchased as of the date of approval. The Company suspended its share repurchase program as of December 31, 2017. The Company expects to begin executing on a capital return plan during the fourth quarter of 2019. 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, when effective, permits the Company to effect repurchases for cash from time to time through the

Restructuring

Restructuring	3 Months Ended
	Mar. 31, 2019
Restructuring and Related Activities [Abstract]
Restructuring	Restructuring 2018 Restructuring Plan During the fourth quarter of 2018, the Company's' Board of Directors approved a restructuring plan to close four Lifetouch facilities in 2019 ("2018 Restructuring Plan"): Loves Park, Illinois; Bloomington, Minnesota; Chico, California; and Chattanooga, Tennessee and consolidate this volume into existing Shutterfly facilities and a new 237,000 square foot facility in Plano, Texas to be completed in the first quarter of 2020. The consolidation involves a mix of moving existing Lifetouch equipment to Shutterfly facilities, and migrating Lifetouch volumes to Shutterfly's digital presses. During the first quarter of 2019, the planned exit resulted in restructuring charges of $4.0 million and consisted primarily of employee related costs of $2.4 million and depreciation of property and equipment of $1.3 million. The cumulative charges to date amount to $5.6 million. The Company expects to substantially complete the 2018 Restructuring Plan by the end of 2019. The total estimated restructuring costs associated with the 2018 Restructuring Plan will be approximately $13.5 million and will primarily impact the Company's operating expenses line items within the condensed consolidated statement of operations as these costs are incurred. Any changes to the estimates of executing the 2018 Restructuring Plan will be reflected in the Company's future results of operations. Restructuring Activity The following table summarizes the restructuring costs recognized during the three months ended March 31, 2019: Fiscal 2019 Activity Balance December 31, 2018 (1) Restructuring Charges Cash Payments Non-Cash Adjustments (2) Balance March 31, 2019 (1) (in thousands) 2018 Restructuring Plan: Employee costs $ 861 $ 2,405 $ (281) $ — $ 2,985 Property and equipment — 1,296 — (1,296) — Other — 272 (221) (51) — Total 2018 Restructuring Plan 861 3,973 (502) (1,347) 2,985 Prior year plans 1,271 — — (1,271) — Total restructuring plans $ 2,132 $ 3,973 $ (502) $ (2,618) $ 2,985 (1) Restructuring costs as of March 31, 2019 and December 31, 2018, are recorded in accrued liabilities and other non-current liabilities. (2) Non-cash adjustments for the 2018 Restructuring include depreciation of property and equipment and other non-cash costs incurred as part of the restructuring. The Company did not incur any restructuring expense during the three months ended March 31, 2018.

Derivative Financial Instrument

Derivative Financial Instruments	3 Months Ended
	Mar. 31, 2019
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 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 9 - 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 was $2.4 million and $4.2 million as of March 31, 2019 and December 31, 2018, respectively, and were classified as other assets in the balance sheet. The unrealized (losses) gains recognized in other comprehensive loss were $(1.8) million and $2.8 million for the three months ended March 31, 2019 and 2018, respectively. The amounts reclassified from other comprehensive loss to interest expense during the three months ended March 31, 2019 and 2018 were insignificant. Amounts expected to be reclassified from other comprehensive income (loss) into interest expense in the coming 12 months is $0.9 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 $1.9 million and $1.7 million for the three months ended March 31, 2019 and 2018, respectively. The Company does not use derivative financial instruments for trading purposes.

The Company and Summary of Si_2

The Company and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
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 including the financial results of Lifetouch which are included prospectively from the acquisition date of April 2, 2018. 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, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, or for any other period. The December 31, 2018 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, 2018 included in the Company’s Annual Report on Form 10-K. The Company has evaluated subsequent events through the date that the financial statements were issued.
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to the significant accounting policies during the three months ended March 31, 2019 other than those noted below.
Lease Accounting	Lease Accounting The Company determines if an arrangement is or contains a lease at inception. Lease right-of-use ("ROU") assets and lease liabilities for operating and finance leases are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Operating leases are included in other assets, current operating lease liabilities and operating lease liabilities in the condensed consolidated balance sheets. Finance leases are included in property and equipment, accrued liabilities and other liabilities in the condensed consolidated balance sheets. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. ROU assets also include any lease payments made and initial direct costs, and exclude lease incentives. Variable lease payments are excluded from the ROU assets and lease liabilities and recognized in the period in which the obligation for those payments is incurred. Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to terminate or purchase the leased asset. The Company’s lease agreements do not contain any material residual value guarantee or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term. The Company elected a short-term lease exception policy, permitting the Company not to apply the recognition requirements of Accounting Standard Codification 842, Leases , ("ASC 842") to short-term leases (i.e., leases with terms of 12 months or less). For all leases, the Company accounts for the lease and non-lease components as a single lease component.
Recently Adopted and Pending Adoption Accounting Pronouncements	Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , (“ASC 842”) which requires the recognition of ROU assets and corresponding lease liabilities on the balance sheet, measured at present value of the future lease payments. The most significant impact relates to the recognition of lease assets and liabilities for operating leases, while the accounting for finance leases remained unchanged except for recognition of lease assets and liabilities for fixed non-lease components. Accounting for leases by lessors is substantially unchanged from prior practice as lessors will continue to recognize lease revenue as earned. The Company adopted ASC 842 as of January 1, 2019 (the effective date), using the alternative modified retrospective transition method provided in ASU 2018-11, Leases (Topic 842 ): Targeted Improvements . Under this method, the Company recorded a cumulative-effect adjustment as of the effective date and prior comparative periods were not retrospectively presented in the consolidated financial statements. This adoption approach results in a balance sheet presentation that is not comparable to the prior year period in the first year of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance, which among other things allows companies to carry forward their historical lease classification. The Company did not elect the hindsight practical expedient, which permits the use of hindsight when determining the lease term and impairment of ROU assets. Adoption of ASC 842 resulted in the recording of additional net lease assets and lease liabilities of approximately $37.6 million and $42.4 million, respectively, as of January 1, 2019, for finance lease and operating leases including the impact of the reclassification of the Company's financing obligations related to build-to-suit arrangements to operating leases. The difference between the additional net lease assets and lease liabilities, net of deferred tax impact, was recorded as an adjustment to the opening balance of accumulated deficit. As of December 31, 2018, building assets of $48.4 million and financing obligations of $54.0 million related to build-to-suit arrangements. As of January 1, 2019, these balances were derecognized and these arrangements were accounted for as operating leases. The adoption of ASC 842 did not materially impact the Company’s consolidated net loss and had no impact on the consolidated statement of cash flows. 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. The Company adopted ASU 2018-02 as of January 1, 2019 using the prospective transition method, which resulted in an immaterial reclassification from accumulated other comprehensive income to the opening balance of accumulated deficit. The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“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. The cumulative impact of the adoption of ASC 606 resulted in a decrease to the opening balance of 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. Refer to Note 3 in the Company's Form 10-K for the year ended December 31, 2018 for further details. Recent Accounting Pronouncements Pending Adoption In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and earlier adoption is permitted including adoption in any interim period. 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. 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, with early adoption permitted beginning January 1, 2019. The Company is evaluating the impact of adopting this new accounting guidance on the consolidated financial statements.
Business Combinations	In accordance with ASC 805, Business Combinations
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, convertible senior notes and conversion of warrants.

Revenues (Tables)

Revenues (Tables)	3 Months Ended
	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	The following table disaggregates the Company’s net revenue by brand for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (in thousands) Shutterfly Consumer net revenue: Shutterfly Brand Core $ 105,076 $ 111,668 Shutterfly Brand Personalized Gifts and Home Décor 34,585 30,965 Tiny Prints Boutique 1,695 2,134 Other 7,491 7,292 Shutterfly Consumer net revenue 148,847 152,059 Lifetouch net revenue ( 1 ) 129,307 — Shutterfly Business Solutions net revenue 46,527 47,666 Net revenue $ 324,681 $ 199,725 ( 1 )

Acquisition (Tables)

Acquisition (Tables)	3 Months Ended
	Mar. 31, 2019
Business Combinations [Abstract]
Summary of Calculation of the Purchase Consideration	The following table shows the calculation of how the purchase consideration paid by the Company was determined in accordance with the Purchase Agreement: (in thousands) Cash consideration at closing $ 825,000 Less: Closing indebtedness (1) (27,742) Less: Closing net working capital adjustment (1) (10,559) Less: Transaction expenses (1)(2) (17,614) Add: Closing cash and investments (1) 212,872 Purchase price adjustments 156,957 Total purchase consideration $ 981,957 (1) As defined in the Purchase Agreement. (2) Transaction expenses incurred by Lifetouch in connection with the transaction as defined by the Purchase Agreement.
Summary of the Preliminary Allocation of the Total Purchase Price to Net Assets Acquired	The following table shows the allocation of the total purchase price to the net assets acquired based on their estimated fair values as of April 2, 2018: (in thousands) Cash and cash equivalents $ 91,753 Investments 100,574 Accounts receivable 7,680 Inventories 19,857 Property and equipment 134,973 Intangible assets 326,300 Goodwill 434,862 Prepaid expenses and other assets 37,037 Accounts payable (9,388) Deferred revenue, current portion (31,334) Notes payable (9,102) Accrued and other liabilities (121,255) Total $ 981,957
Schedule of Intangible Assets Acquired from Lifetouch	The following table shows the valuation of the intangible assets acquired from Lifetouch along with their estimated useful lives: Approximate Fair Value (in thousands) Weighted Average Life (in years) Customer contracts and related relationships $ 200,400 10 Developed technology 68,000 5 Trade names / trademarks / domain name 57,600 5 Favorable/unfavorable leases 300 7 Total intangible assets $ 326,300
Schedule of Unaudited Pro Forma Financial Information	The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2017. Three Months Ended March 31, (in thousands, except per share data) 2018 Total net revenue $ 334,059 Net loss $ (84,385) Net loss per share - basic and diluted $ (2.58)

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of stock-based compensation expense	The Company's stock-based compensation expense is allocated as follows in its condensed consolidated statements of operations: Three Months Ended March 31, 2019 2018 (in thousands) Cost of net revenue $ 892 $ 999 Technology and development 2,298 2,429 Sales and marketing 3,466 3,504 General and administrative 5,383 4,760 Total stock-based compensation $ 12,039 $ 11,692
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, 2019 is as follows: Number of Options Outstanding (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2018 1,405 $ 53.44 Granted — $ — Exercised (2) $ 25.50 Forfeited, cancelled or expired — $ — Balance as of March 31, 2019 1,403 $ 53.49 3.1 $ 185 Options vested and expected to vest as of March 31, 2019 1,271 $ 53.10 3.1 $ 185 Options vested as of March 31, 2019 587 $ 50.49 2.2 $ 185
Summary of valuation assumptions for stock options	The assumptions used to value options granted during the three months ended March 31, 2018 are as follows (there were no option awards granted during the three months ended March 31, 2019): Three Months Ended March 31, 2018 Dividend yield — Annual risk-free rate of return 2.6 % Expected volatility 33.7 % Expected term (years) 4.1
Summary of company restricted stock unit activity	A summary of the Company’s RSU activity, including service-based awards, performance-based awards, and market-based awards for the three months ended March 31, 2019, is as follows: Number of Units Outstanding (in thousands) Weighted Average Grant Date Fair Value Awarded and unvested as of December 31, 2018 1,941 $ 56.91 Granted 991 $ 44.49 Vested (506) $ 51.57 Forfeited (48) $ 54.42 Awarded and unvested as of March 31, 2019 2,378 $ 52.91 RSUs expected to vest as of March 31, 2019 1,818

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
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, 2019 and 2018 is as follows: Three Months Ended March 31, (in thousands, except per share data) 2019 2018 Net loss per share: Numerator Net loss $ (83,619) $ (27,165) Denominator for basic and diluted net loss per share Weighted-average common shares outstanding 33,918 32,702 Net loss per share - basic and diluted $ (2.47) $ (0.83)
Schedule of antidilutive securities excluded from computation of earnings per share	The following weighted-average outstanding stock options and RSUs were excluded from the computation of diluted net loss per common share for the periods presented as the Company had a net loss in the period and including them would have had an anti-dilutive effect: Three Months Ended March 31, 2019 2018 (in thousands) Weighted average stock options and RSUs that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period 1,256 3,422 Weighted average stock options and RSUs that would have been excluded from the computation of dilutive common equivalent shares outstanding if net income had been reported due to their antidilutive effect 1,991 265 Total 3,247 3,687

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Fair value of short and long-term investments classified as available for sale	At March 31, 2019 and December 31, 2018, the estimated fair value of short-term and long-term debt securities investments, all of which are classified as available-for-sale, was as follows: March 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Short-term investments Corporate debt securities $ 17,354 $ 9 $ (7) $ 17,356 Agency securities 3,610 — (7) 3,603 U.S. government securities 3,484 — (4) 3,480 Total short-term investments $ 24,448 $ 9 $ (18) $ 24,439 Long-term investments Corporate debt securities $ 995 $ 5 $ — $ 1,000 Agency securities 2,117 1 (1) 2,117 U.S. government securities 2,964 1 — 2,965 Total long-term investments $ 6,076 $ 7 $ (1) $ 6,082 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Short-term investments Corporate debt securities $ 24,367 $ — $ (43) $ 24,324 Agency securities 5,728 — (19) 5,709 U.S. government securities 3,986 — (8) 3,978 Total short-term investments $ 34,081 $ — $ (70) $ 34,011 Long-term investments Corporate debt securities $ 4,283 $ — $ (13) $ 4,270 Agency securities 2,113 — (7) 2,106 U.S. government securities 4,445 — (13) 4,432 Total long-term investments $ 10,841 $ — $ (33) $ 10,808
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, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 (in thousands) One year or less $ 24,439 $ 34,011 One year through three years 6,082 10,808 $ 30,521 $ 44,819

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	3 Months Ended
	Mar. 31, 2019
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: Total Estimated Fair Value as of March 31, 2019 December 31, 2018 Cash Equivalents Investments Cash Equivalents Investments (in thousands) Level 1 Securities: Money market funds $ 81,418 $ — $ 116,212 $ — Level 2 Securities: Corporate debt securities — 18,356 — 28,594 Agency securities — 5,720 — 7,815 U.S. government securities — 6,445 — 8,410 Total cash equivalents and investments $ 81,418 $ 30,521 $ 116,212 $ 44,819
Fair value, derivative assets	As of March 31, 2019 and December 31, 2018, 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, volatility and basis spreads (Level 2), were as follows: Total Estimated Fair Value as of March 31, 2019 December 31, 2018 (in thousands) Derivative assets $ 2,360 $ 4,204
Fair value, liabilities measured on a recurring basis	As of March 31, 2019 and December 31, 2018, the fair value of the Company's Term Loan borrowings (as described in Note 9 - Debt ), 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: Total Estimated Fair Value as of March 31, 2019 December 31, 2018 (in thousands) Term Loans $ 904,508 $ 1,081,520

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Schedule of prepaid expenses and other current assets	Prepaid Expenses and Other Current Assets March 31, 2019 December 31, 2018 (in thousands) Intra-period income tax asset $ 41,445 $ — Restricted certificate of deposit 18,745 18,745 Prepaid service contracts – current portion 15,928 13,562 Other prepaid expenses and current assets 26,751 34,654 $ 102,869 $ 66,961
Schedule of property and equipment	Property and Equipment, Net March 31, 2019 December 31, 2018 (in thousands) Computer equipment and software $ 367,053 $ 347,032 Plant and equipment 310,189 297,597 Land, buildings and building improvements 56,664 113,048 Leasehold improvements 27,079 27,011 Furniture, fixtures and other 11,586 11,498 772,571 796,186 Less: Accumulated depreciation and amortization (430,498) (415,168) Property and equipment, net $ 342,073 $ 381,018
Schedule of intangible assets	Intangible assets are comprised of the following: Weighted Average Useful Life March 31, 2019 December 31, 2018 (in thousands) Customer relationships 9 years $ 275,546 $ 275,546 Less: accumulated amortization (96,095) (91,087) 179,451 184,459 Trade name 9 years 112,120 112,120 Less: accumulated amortization (42,051) (38,320) 70,069 73,800 Purchased technology 5 years 121,769 121,769 Less: accumulated amortization (67,763) (64,142) 54,006 57,627 Other 2 years 3,797 4,097 Less: accumulated amortization (3,797) (3,829) — 268 Total 8 years $ 303,526 $ 316,154
Schedule of amortization of intangible assets	Amortization of existing intangible assets is estimated to be as follows (in thousands): Year Ending December 31: Remainder of 2019 37,077 2020 48,877 2021 48,749 2022 48,057 2023 29,278 Thereafter 91,488 $ 303,526
Schedule of goodwill	The following table presents the goodwill allocated to the Company's reportable segments as of and during the three months ended March 31, 2019: December 31, 2018 Translation Adjustments March 31, 2019 (in thousands) Shutterfly Consumer $ 372,072 $ — $ 372,072 Lifetouch 434,632 21 434,653 Shutterfly Business Solutions 36,903 — 36,903 $ 843,607 $ 21 $ 843,628
Schedule of accrued liabilities	Accrued Liabilities March 31, 2019 December 31, 2018 (in thousands) Accrued compensation $ 45,459 $ 44,720 Accrued marketing expenses 14,330 36,428 Accrued production costs 12,194 46,497 Finance lease liabilities, current portion 14,286 14,741 Accrued income, sales and other taxes 8,806 28,886 Accrued professional services 8,302 11,988 Accrued other 33,623 43,185 $ 137,000 $ 226,445
Schedule of other liabilities	Other Liabilities March 31, 2019 December 31, 2018 (in thousands) Finance lease liabilities, non-current portion $ 45,652 $ 38,576 Deferred tax liability 7,758 7,110 Financing obligations — 51,732 Other liabilities 31,209 36,609 $ 84,619 $ 134,027

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Schedule of long-term debt instruments	The following table summarizes components of the Company's debt: (in thousands, except percentages) March 31, 2019 December 31, 2018 Effective Interest Rate Syndicated Credit Facility Initial term loan due August 17, 2024 $ 296,269 $ 297,011 LIBOR plus (1) Incremental term loan due August 17, 2024 619,328 820,880 LIBOR plus (1) (2) Assumed Lifetouch notes payable due at various dates through July 2022 5,565 7,137 0.0%-2.2% Total principal amount 921,162 1,125,028 Less: unamortized issuance costs (15,669) (20,383) Total debt 905,493 1,104,645 Less: current portion (5,348) (14,203) Total long term debt $ 900,145 $ 1,090,442 (1 ) As of December 31, 2018 and March 31, 2019, the Initial Term Loan and Incremental Term Loan bear interest at a rate equal to one-month LIBOR, plus an applicable margin of 2.50% and 2.75% per annum, respectively. (2) 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.
Interest expense related to convertible senior notes	The following table sets forth the total interest expense recognized related to the Initial Term Loan and the Incremental Term Loan for the three months ended March 31, 2019 and 2018. The Incremental Term Loan was drawn in April 2018; therefore, there was no interest expense for the three months ended March 31, 2018 associated with Incremental Term Loan. Three Months Ended March 31, 2019 2018 (in thousands) Floating interest (including the effects of cash flow hedges) $ 12,450 $ 3,279 Amortization of debt issuance costs 4,660 172 Total $ 17,110 $ 3,451
Schedule of maturities of assumed debt	As of March 31, 2019, the future principal payments of the Initial Term Loan, Incremental Term Loan and the assumed Lifetouch notes payable are as follows (in thousands): Year Ending December 31: Remainder of 2019 3,873 2020 4,940 2021 4,036 2022 3,609 2023 2,868 2024 901,836 Total principal payments $ 921,162

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
Segment reporting information	The Company’s segment results for the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, (dollars in thousands) 2019 2018 Shutterfly Consumer: Net revenue $ 148,847 $ 152,059 Cost of net revenue (1) 90,406 84,845 Technology and development 33,523 32,129 Sales and marketing 29,123 30,725 Credit card fees 4,156 4,199 Margin (1) (2) $ (8,361) $ 161 Margin % (5.6) % 0.1 % Lifetouch ( 3 ) : Net revenue ( 4 ) $ 129,952 $ — Cost of net revenue 78,328 — Technology and development 7,973 — Sales and marketing 76,295 — Credit card fees 2,227 — Margin ( 2 ) $ (34,871) $ — Margin % (26.8) % — % Shutterfly Business Solutions: Net revenue $ 46,527 $ 47,666 Cost of net revenue 38,151 39,910 Technology and development 3,292 3,945 Sales and marketing 1,408 1,450 Margin ( 2 ) $ 3,676 $ 2,361 Margin % 7.9 % 5.0 % Consolidated Segments: Net revenue ( 4 ) $ 325,326 $ 199,725 Cost of net revenue ( 1 ) 206,885 124,755 Technology and development 44,788 36,074 Sales and marketing 106,826 32,175 Credit card fees 6,383 4,199 Margin (1)(2) $ (39,556) $ 2,522 Margin % (12.2) % 1.3 % ( 1 ) Includes an immaterial out-of-period adjustment for shipping services provided in the fourth quarter of 2018 of $2.8 million, which increased cost of net revenue and lowered segment margin. ( 2 ) The margins reported reflect only costs that are directly attributable or allocable to a specific segment and exclude corporate expenses, amortization of intangible assets, stock-based compensation, restructuring, acquisition-related, and executive transition and strategic review charges. ( 3 ) The Company acquired Lifetouch on April 2, 2018. ( 4 ) Lifetouch net revenue presented in management reporting related to certain obligations that would have otherwise been recorded by Lifetouch as an independent entity but were not recognized in the Company's condensed consolidated financial statements for the three months ended March 31, 2019 due to business combination accounting requirements.
Reconciliation of operating segments to consolidated	The following table reconciles segment margin to total operating loss and loss before income taxes, segment net revenue to Net revenue, and segment cost of net revenue to Cost of net revenue for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (in thousands) Total segment margin $ (39,556) $ 2,522 Purchase accounting deferred revenue adjustment (1) (645) — Corporate expenses ( 2 ) (35,089) (18,021) Amortization of intangible assets (12,825) (2,334) Stock-based compensation expense (12,039) (11,692) Restructuring (3,973) — Executive transition and strategic review costs (1,654) — Acquisition-related costs — (4,585) Loss from operations $ (105,781) $ (34,110) Loss from operations $ (105,781) $ (34,110) Interest expense (18,253) (9,633) Interest and other income, net 1,178 1,749 Loss before income taxes $ (122,856) $ (41,994) Total segment net revenue $ 325,326 $ 199,725 Purchase accounting deferred revenue adjustment (1) (645) — Net revenue $ 324,681 $ 199,725 Total segment cost of net revenue $ 206,885 $ 124,755 Stock-based compensation expense for cost of net revenue 892 999 Amortization of intangible assets for cost of net revenue 2,622 292 Cost of net revenue $ 210,399 $ 126,046 (1) Lifetouch net revenue presented in management reporting related to certain obligations that would have otherwise been recorded by Lifetouch as an independent entity but were not recognized in the Company's condensed consolidated financial statements for the three months ended March 31, 2019 due to business combination accounting requirements. ( 2 ) Corporate expenses include activities that are not directly attributable or allocable to a specific segment. This category consists primarily of expenses related to certain functions performed at the corporate level such as non-manufacturing facilities, human resources, finance and accounting, legal, information technology, integration, etc.

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Schedule of Right-of-Use Assets and Lease Liabilities	The following table presents the classification of ROU assets and lease liabilities as of March 31, 2019: Leases Consolidated Balance Sheet Classification March 31, 2019 (in thousands) Assets: Operating right-of-use assets Other assets $ 67,780 Finance right-of-use assets Property and equipment, net (1) 55,181 Total leased assets $ 122,961 Liabilities: Current Operating lease liabilities Operating lease liabilities, current portion $ 21,564 Finance lease liabilities Accrued liabilities 14,286 Noncurrent Operating lease liabilities Operating lease liabilities 60,701 Finance lease liabilities Other liabilities 45,652 Total lease liabilities $ 142,203 (1) Finance lease assets are recorded net of accumulated amortization of $44.0 million as of March 31, 2019.
Lease, Cost	The following table represents the lease expenses for the three months ended March 31, 2019: (in thousands) Three Months Ended March 31, 2019 Operating lease expense (1) $ 7,280 Finance lease expense Amortization of right-of-use-assets 4,179 Interest on lease liabilities 767 Variable lease expense 7,655 Sublease income (127) Net lease cost $ 19,754 ( 1 ) Includes short-term lease expense of $0.2 million for the three months ended March 31, 2019.
Future Minimum Payments of Operating Leases	Future minimum lease payments under non-cancelable leases as of March 31, 2019 were as follows: Year Ended December 31, Operating Leases (1) Finance Leases Total (in thousands) Remainder of 2019 $ 19,303 $ 13,252 $ 32,555 2020 22,556 13,704 36,260 2021 19,038 12,671 31,709 2022 15,448 12,291 27,739 2023 8,695 10,193 18,888 Thereafter 8,290 5,086 13,376 Total lease payments $ 93,330 $ 67,197 $ 160,527 Less: Interest (11,065) (7,259) (18,324) Present value of lease liabilities (2) $ 82,265 $ 59,938 $ 142,203 (1) Operating lease payments exclude $28.1 million of legally binding minimum lease payments for an operating lease the Company entered into in March 2019 for the Company's new 237,000 square foot facility in Plano, Texas. The lease is expected to commence in early 2020 when construction of the asset is completed with an original lease term of 10 years. ( 2 )
Future Minimum Payments of Finance Leases	Future minimum lease payments under non-cancelable leases as of March 31, 2019 were as follows: Year Ended December 31, Operating Leases (1) Finance Leases Total (in thousands) Remainder of 2019 $ 19,303 $ 13,252 $ 32,555 2020 22,556 13,704 36,260 2021 19,038 12,671 31,709 2022 15,448 12,291 27,739 2023 8,695 10,193 18,888 Thereafter 8,290 5,086 13,376 Total lease payments $ 93,330 $ 67,197 $ 160,527 Less: Interest (11,065) (7,259) (18,324) Present value of lease liabilities (2) $ 82,265 $ 59,938 $ 142,203 (1) Operating lease payments exclude $28.1 million of legally binding minimum lease payments for an operating lease the Company entered into in March 2019 for the Company's new 237,000 square foot facility in Plano, Texas. The lease is expected to commence in early 2020 when construction of the asset is completed with an original lease term of 10 years. ( 2 )
Schedule of Future Minimum Rental Payments for Operating And Capital Leases	Future minimum lease payments under non-cancelable leases and build-to-suit arrangement as of December 31, 2018 were as follows: Year Ended December 31, Operating leases Build-to-Suit Finance leases (in thousands) 2019 $ 23,557 $ 6,501 $ 16,853 2020 17,730 6,646 10,582 2021 13,763 6,794 9,908 2022 9,928 6,947 9,820 2023 1,872 6,479 8,237 Thereafter 1,501 6,522 4,023 Total lease payments $ 68,351 $ 39,889 $ 59,423 Less: Interest (6,106) Present value of lease liabilities $ 53,317
Schedule of Future Obligations for Build-to-Suit Leases	Future minimum lease payments under non-cancelable leases and build-to-suit arrangement as of December 31, 2018 were as follows: Year Ended December 31, Operating leases Build-to-Suit Finance leases (in thousands) 2019 $ 23,557 $ 6,501 $ 16,853 2020 17,730 6,646 10,582 2021 13,763 6,794 9,908 2022 9,928 6,947 9,820 2023 1,872 6,479 8,237 Thereafter 1,501 6,522 4,023 Total lease payments $ 68,351 $ 39,889 $ 59,423 Less: Interest (6,106) Present value of lease liabilities $ 53,317
Schedule of Lease Term and Discount Rate	Other information about leases is as follows: Lease Term and Discount Rate March 31, 2019 Weighted-average remaining lease term (years) Operating leases 4.2 Finance leases 4.1 Weighted-average discount rate Operating leases 5.7 % Finance leases 4.8 %
Schedule of Cash Flow Information Relating to Leases	Supplemental Cash Flow Information Three Months Ended March 31, 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (10,585) Operating cash flows from finance leases (690) Financing cash flows from finance leases (5,312) ROU assets obtained in exchange for operating lease liabilities $ 139

Restructuring (Tables)

Restructuring (Tables)	3 Months Ended
	Mar. 31, 2019
Restructuring and Related Activities [Abstract]
Schedule of restructuring and related costs	The following table summarizes the restructuring costs recognized during the three months ended March 31, 2019: Fiscal 2019 Activity Balance December 31, 2018 (1) Restructuring Charges Cash Payments Non-Cash Adjustments (2) Balance March 31, 2019 (1) (in thousands) 2018 Restructuring Plan: Employee costs $ 861 $ 2,405 $ (281) $ — $ 2,985 Property and equipment — 1,296 — (1,296) — Other — 272 (221) (51) — Total 2018 Restructuring Plan 861 3,973 (502) (1,347) 2,985 Prior year plans 1,271 — — (1,271) — Total restructuring plans $ 2,132 $ 3,973 $ (502) $ (2,618) $ 2,985 (1) Restructuring costs as of March 31, 2019 and December 31, 2018, are recorded in accrued liabilities and other non-current liabilities. (2) Non-cash adjustments for the 2018 Restructuring include depreciation of property and equipment and other non-cash costs incurred as part of the restructuring.

The Company and Summary of Si_3

The Company and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)segment	Jan. 01, 2019USD ($)	Dec. 31, 2018USD ($)	Jan. 01, 2018USD ($)	Dec. 31, 2017USD ($)
Business Acquisition [Line Items]
Number of operating segments (segment) | segment	3
Operating lease, right-of-use asset	$ 67,780
Operating lease, liability	82,265
Liabilities	1,347,287		$ 1,627,843
Assets	$ 1,945,914		2,302,209
Accounting Standards Update 2016-02
Business Acquisition [Line Items]
Operating lease, right-of-use asset		$ 37,600
Operating lease, liability		42,400
Building assets		(48,400)
Financing obligation		$ (54,000)
Accounting Standards Update 2014-09
Business Acquisition [Line Items]
Liabilities			5,100
Assets			900
Accumulated deficit
Business Acquisition [Line Items]
Impact of adoption of new accounting standards			$ (3,972)	$ 4,200	$ 4,201

Revenues - Consumer Revenues by

Revenues - Consumer Revenues by Brand (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Net revenue	$ 324,681	$ 199,725
Operating Segments
Disaggregation of Revenue [Line Items]
Net revenue	325,326	199,725
Operating Segments | Shutterfly Consumer
Disaggregation of Revenue [Line Items]
Net revenue	148,847	152,059
Operating Segments | Shutterfly Consumer | Shutterfly Brand Core
Disaggregation of Revenue [Line Items]
Net revenue	105,076	111,668
Operating Segments | Shutterfly Consumer | Shutterfly Brand Personalized Gifts and Home Decor
Disaggregation of Revenue [Line Items]
Net revenue	34,585	30,965
Operating Segments | Shutterfly Consumer | Tiny Prints Boutique
Disaggregation of Revenue [Line Items]
Net revenue	1,695	2,134
Operating Segments | Shutterfly Consumer | Other
Disaggregation of Revenue [Line Items]
Net revenue	7,491	7,292
Operating Segments | Lifetouch
Disaggregation of Revenue [Line Items]
Net revenue	129,307	0
Operating Segments | Shutterfly Business Solutions
Disaggregation of Revenue [Line Items]
Net revenue	$ 46,527	$ 47,666

Revenues - Deferred Revenues (D

Revenues - Deferred Revenues (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019USD ($)
Revenue from Contract with Customer [Abstract]
Revenues recognized that were included in deferred revenue	$ 13

Acquisition - Narrative (Detail

Acquisition - Narrative (Details) - USD ($) $ in Thousands	Apr. 02, 2018	Mar. 31, 2019	Jun. 30, 2018	Dec. 31, 2018
Business Acquisition [Line Items]
Acquisition-related costs				$ 15,500
Lifetouch
Business Acquisition [Line Items]
Percentage of issued and outstanding shares of common stock acquired	100.00%
All-cash purchase price, subject to certain adjustments	$ 825,000
Revenue since acquisition date		$ 129,300
Gross profit since acquisition date		$ 48,600
Purchase consideration	$ 981,957		$ 982,000

Acquisition - Calculation of Pu

Acquisition - Calculation of Purchase Consideration (Details) - Lifetouch - USD ($) $ in Thousands	Apr. 02, 2018	Jun. 30, 2018
Business Acquisition [Line Items]
Cash consideration at closing	$ 825,000
Less: Closing Indebtedness	(27,742)
Less: Net Working Capital Adjustment	(10,559)
Less: Transaction Expenses	(17,614)
Add: Closing Cash and Investments	212,872
Purchase price adjustments	156,957
Total purchase consideration	$ 981,957	$ 982,000

Acquisition - Purchase Price Al

Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Apr. 02, 2018
Business Acquisition [Line Items]
Goodwill	$ 843,628	$ 843,607
Lifetouch
Business Acquisition [Line Items]
Cash and cash equivalents			$ 91,753
Investments			100,574
Accounts receivable, net			7,680
Inventories			19,857
Property and equipment, net			134,973
Intangible assets			326,300
Goodwill			434,862
Prepaid expenses and other assets			37,037
Accounts payable			(9,388)
Deferred revenue, current portion			(31,334)
Notes payable			(9,102)
Accrued and other liabilities			(121,255)
Total			$ 981,957

Acquisition - Valuation of the

Acquisition - Valuation of the Intangible Assets (Details) - Lifetouch $ in Thousands	Apr. 02, 2018USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 326,300
Customer contracts and related relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 200,400
Weighted Average Life (in years)	10 years
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 68,000
Weighted Average Life (in years)	5 years
Trade names / trademarks / domain name
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 57,600
Weighted Average Life (in years)	5 years
Favorable/unfavorable leases
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 300
Weighted Average Life (in years)	7 years

Acquisition - Unaudited Pro For

Acquisition - Unaudited Pro Forma Financial Information (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)$ / shares
Business Combinations [Abstract]
Total net revenue | $	$ 334,059
Net loss | $	$ (84,385)
Basic loss per share (in dollars per share) | $ / shares	$ (2.58)
Diluted loss per share (in dollars per share) | $ / shares	$ (2.58)

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation for operating segments	$ 12,039	$ 11,692
Cost of net revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation for operating segments	892	999
Technology and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation for operating segments	2,298	2,429
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation for operating segments	3,466	3,504
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation for operating segments	$ 5,383	$ 4,760

Stock-Based Compensation - St_2

Stock-Based Compensation - Stock Option Activity (Details) - Employee Stock Option $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Number of Options Outstanding (in thousands)
Balances (in shares) | shares	1,405
Granted (in shares) | shares	0
Exercised (in shares) | shares	(2)
Forfeited, cancelled or expired (in shares) | shares	0
Balances (in shares) | shares	1,403
Options vested and expected to vest (in shares) | shares	1,271
Options vested (in shares) | shares	587
Weighted Average Exercise Price
Balances (in dollars per share) | $ / shares	$ 53.44
Granted (in dollars per share) | $ / shares	0
Exercised (in dollars per share) | $ / shares	25.50
Forfeited, cancelled or expired (in dollars per share) | $ / shares	0
Balances (in dollars per share) | $ / shares	53.49
Options vested and expected to vest (in dollars per share) | $ / shares	53.10
Options vested (in dollars per share) | $ / shares	$ 50.49
Weighted Average Remaining Contractual Term (years)
Term at end of period	3 years 1 month 6 days
Options vested and expected to vest	3 years 1 month 6 days
Options vested	2 years 2 months 12 days
Aggregate Intrinsic Value (in thousands)
Value at end of period | $	$ 185
Options vested and expected to vest | $	185
Options vested | $	$ 185

Stock-Based Compensation - St_3

Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation
Net cash proceeds from the exercise of stock options	$ 60	$ 13,775
Unrecognized compensation expense	$ 88,800
Weighted average period of unrecognized compensation expense (in years)	2 years 7 months 6 days
Employee Stock Option
Share-based Compensation
Exercises in period, intrinsic value		7,900
Net cash proceeds from the exercise of stock options	$ 100	$ 13,800
Options granted to purchase (in shares)	0
Restricted Stock Units (RSUs)
Share-based Compensation
Granted (in shares)	991,000
Restricted Stock Units (RSUs) | 2015 Equity Incentive Plan
Share-based Compensation
Vesting period of restricted stock	4 years
Performance Based Restricted Stock Units
Share-based Compensation
Granted (in shares)	116,000
Vesting period of restricted stock	3 years
Market Based Restricted Stock Units
Share-based Compensation
Granted (in shares)	116,000
Market criteria, period	3 years
Vesting period of restricted stock	3 years

Stock-Based Compensation - Valu

Stock-Based Compensation - Valuation of Stock Options (Details)	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Dividend yield (percent)	0.00%
Annual risk-free rate of return (percent)	2.60%
Expected volatility (percent)	33.70%
Expected term (years)	4 years 1 month 6 days

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Number of Units Outstanding
Awarded and unvested, beginning of period (in shares)	1,941
Granted (in shares)	991
Vested (in shares)	(506)
Forfeited (in shares)	(48)
Awarded and unvested, ending period (in shares)	2,378
Restricted stock units expected to vest, ending period (in shares)	1,818
Weighted Average Grant Date Fair Value
Awarded and unvested, beginning period (in dollars per share) | $ / shares	$ 56.91
Granted (in dollars per share) | $ / shares	44.49
Vested (in dollars per share) | $ / shares	51.57
Forfeited (in dollars per share) | $ / shares	54.42
Awarded and unvested, ending period (in dollars per share) | $ / shares	$ 52.91

Net Loss Per Share (Details)

Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator
Net loss	$ (83,619)	$ (27,165)
Denominator for basic and diluted net loss per share
Weighted-average shares outstanding (in shares)	33,918	32,702
Net loss per share - basic and diluted (in dollars per share)	$ (2.47)	$ (0.83)

Schedule of Antidilutive Securi

Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average stock options and RSU's that would have been included in the computation of the dilutive common equivalent shares outstanding if net income had been reported in the period (shares)	$ 1,256	$ 3,422
Total (shares)	3,247,000	3,687,000
Stock options and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average stock options and RSU's that would have been excluded in the computation of the dilutive common equivalent shares outstanding if net income had been reported due to their antidilutive effect (shares)	1,991,000	265,000
Convertible Senior Notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average stock options and RSU's that would have been excluded in the computation of the dilutive common equivalent shares outstanding if net income had been reported due to their antidilutive effect (shares)		373,000

Investments - Schedule of Estim

Investments - Schedule of Estimated Fair Value (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 30,521,000		$ 44,819,000
Impairments recorded on available-for-sale investments	0	$ 0
Short-term investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	24,448,000		34,081,000
Gross Unrealized Gains	9,000		0
Gross Unrealized Losses	(18,000)		(70,000)
Estimated Fair Value	24,439,000		34,011,000
Short-term investments | Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	17,354,000		24,367,000
Gross Unrealized Gains	9,000		0
Gross Unrealized Losses	(7,000)		(43,000)
Estimated Fair Value	17,356,000		24,324,000
Short-term investments | Agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,610,000		5,728,000
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(7,000)		(19,000)
Estimated Fair Value	3,603,000		5,709,000
Short-term investments | U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,484,000		3,986,000
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(4,000)		(8,000)
Estimated Fair Value	3,480,000		3,978,000
Long-term investments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	6,076,000		10,841,000
Gross Unrealized Gains	7,000		0
Gross Unrealized Losses	(1,000)		(33,000)
Estimated Fair Value	6,082,000		10,808,000
Long-term investments | Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	995,000		4,283,000
Gross Unrealized Gains	5,000		0
Gross Unrealized Losses	0		(13,000)
Estimated Fair Value	1,000,000		4,270,000
Long-term investments | Agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,117,000		2,113,000
Gross Unrealized Gains	1,000		0
Gross Unrealized Losses	(1,000)		(7,000)
Estimated Fair Value	2,117,000		2,106,000
Long-term investments | U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,964,000		4,445,000
Gross Unrealized Gains	1,000		0
Gross Unrealized Losses	0		(13,000)
Estimated Fair Value	$ 2,965,000		$ 4,432,000

Investments - Summary of Contra

Investments - Summary of Contractual Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
One year or less	$ 24,439	$ 34,011
One year through three years	6,082	10,808
Total	$ 30,521	$ 44,819

Fair Value Measurement - Cash E

Fair Value Measurement - Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	$ 81,418	$ 116,212
Investments	30,521	44,819
Money market funds | Level 1 Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	81,418	116,212
Investments	0	0
Corporate debt securities | Level 2 Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	0	0
Investments	18,356	28,594
Agency securities | Level 2 Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	0	0
Investments	5,720	7,815
U.S. government securities | Level 2 Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	0	0
Investments	$ 6,445	$ 8,410

Fair Value Measurement - Deriva

Fair Value Measurement - Derivative Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 2,360	$ 4,204

Fair Value Measurement - Borrow

Fair Value Measurement - Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Term Loans	$ 904,508	$ 1,081,520

Balance Sheet Components - Prep

Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Prepaid Expense and Other Assets, Current [Abstract]
Intra-period income tax asset	$ 41,445	$ 0
Restricted certificate of deposit	18,745	18,745
Prepaid service contracts – current portion	15,928	13,562
Other prepaid expenses and current assets	26,751	34,654
Total prepaid expenses and other current assets	$ 102,869	$ 66,961

Balance Sheet Components - Prop

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 772,571		$ 796,186
Less: Accumulated depreciation and amortization	(430,498)		(415,168)
Property and equipment, net	342,073		381,018
Depreciation and amortization expense	29,333	$ 22,564
Finance right-of-use assets	55,181
Finance lease, right-of-use asset, accumulated depreciation	43,600		44,900
Assets in construction	34,800		26,300
Computer equipment and software
Property, Plant and Equipment [Line Items]
Gross property and equipment	367,053		347,032
Plant and equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	310,189		297,597
Land, buildings and building improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	56,664		113,048
Build-to-suit arrangements, accumulated depreciation			8,100
Incentive to lessee			56,500
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	27,079		27,011
Furniture and fixtures and other
Property, Plant and Equipment [Line Items]
Gross property and equipment	11,586		11,498
Capitalized software and website development costs
Property, Plant and Equipment [Line Items]
Property and equipment, net	82,000		75,300
Depreciation and amortization expense	9,500	$ 6,600
Manufacturing facility equipment
Property, Plant and Equipment [Line Items]
Finance right-of-use assets	$ 95,800		$ 92,500

Balance Sheet Components - Inta

Balance Sheet Components - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 303,526		$ 316,154
Amortization expense	12,800	$ 2,300
Remainder of 2018	37,077
2020	48,877
2021	48,749
2022	48,057
2023	29,278
Thereafter	91,488
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	275,546		275,546
Less: accumulated amortization	(96,095)		(91,087)
Intangible assets, net	179,451		184,459
Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	112,120		112,120
Less: accumulated amortization	(42,051)		(38,320)
Intangible assets, net	70,069		73,800
Purchased technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	121,769		121,769
Less: accumulated amortization	(67,763)		(64,142)
Intangible assets, net	54,006		57,627
Other
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	3,797		4,097
Less: accumulated amortization	(3,797)		(3,829)
Intangible assets, net	$ 0		$ 268
Weighted Average | Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life (years)	9 years
Weighted Average | Trade name
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life (years)	9 years
Weighted Average | Purchased technology
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life (years)	5 years
Weighted Average | Other
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life (years)	2 years

Balance Sheet Components - Good

Balance Sheet Components - Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Goodwill [Roll Forward]
Beginning of period	$ 843,607
Translation Adjustments	21
End of period	843,628
Shutterfly Consumer
Goodwill [Roll Forward]
Beginning of period	372,072
Translation Adjustments	0
End of period	372,072
Lifetouch
Goodwill [Roll Forward]
Beginning of period	434,632
Translation Adjustments	21
End of period	434,653
Shutterfly Business Solutions
Goodwill [Roll Forward]
Beginning of period	36,903
Translation Adjustments	0
End of period	$ 36,903

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued Liabilities, Current [Abstract]
Accrued compensation	$ 45,459	$ 44,720
Accrued marketing expenses	14,330	36,428
Accrued production costs	12,194	46,497
Finance lease liabilities, current portion	14,286	14,741
Accrued income, sales and other taxes	8,806	28,886
Accrued professional services	8,302	11,988
Accrued other	33,623	43,185
Total accrued liabilities	$ 137,000	$ 226,445

Balance Sheet Components - Othe

Balance Sheet Components - Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Other Liabilities, Noncurrent [Abstract]
Finance lease liabilities, non-current portion	$ 45,652	$ 38,576
Deferred tax liability	7,758	7,110
Financing obligations	0	51,732
Other liabilities	31,209	36,609
Other liabilities	$ 84,619	$ 134,027

Debt - Schedule of Debt (Detail

Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Oct. 18, 2017	Mar. 31, 2019	Dec. 31, 2018	Apr. 02, 2018
Debt Instrument [Line Items]
Total principal amount		$ 921,162	$ 1,125,028
Less: unamortized issuance costs		(15,669)	(20,383)
Total principal payments		905,493	1,104,645
Less: current portion		(5,348)	(14,203)
Total long term debt		900,145	1,090,442
Initial Term Loan
Debt Instrument [Line Items]
Total principal amount		296,269	297,011
Incremental Term Loan
Debt Instrument [Line Items]
Total principal amount		619,328	820,880
Legacy Lifetouch Notes Payable
Debt Instrument [Line Items]
Total principal amount		5,565	$ 7,137
LIBOR | Minimum | Initial and Incremental Term Loan
Debt Instrument [Line Items]
Basis spread	2.50%
LIBOR | Maximum | Initial and Incremental Term Loan
Debt Instrument [Line Items]
Basis spread	2.75%
Notes Payable
Debt Instrument [Line Items]
Total principal payments		$ 921,162
Notes Payable | Lifetouch | Minimum | Legacy Lifetouch Notes Payable
Debt Instrument [Line Items]
Contractual interest rate				0.00%
Notes Payable | Lifetouch | Maximum | Legacy Lifetouch Notes Payable
Debt Instrument [Line Items]
Contractual interest rate				2.20%

Debt - Narrative (Details)

Debt - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Mar. 31, 2018	Apr. 02, 2018	Oct. 31, 2017	Aug. 17, 2017
Debt Instrument [Line Items]
Effective percentage of term loan		5.26%
Initial Term Loan
Debt Instrument [Line Items]
Prepaid principal amount		$ 700,000	$ 800,000
Incremental Term Loan
Debt Instrument [Line Items]
Prepaid principal amount	$ 200,000,000	201,600,000
Line of credit | Revolving credit facility
Debt Instrument [Line Items]
Amount of credit facility undrawn		$ 200,000,000
Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 300,000,000
Term Loan | Initial Term Loan
Debt Instrument [Line Items]
Amount of draw on term loan facility					$ 300,000,000
Effective interest rate for unhedged portion of Initial Term Loan		5.00%	4.10%
Effective percentage of term loan		5.26%
Term Loan | Incremental Term Loan
Debt Instrument [Line Items]
Amount of draw on term loan facility				$ 825,000,000
Lifetouch | Notes Payable | Legacy Lifetouch Notes Payable
Debt Instrument [Line Items]
Debt assumed in a business combination				$ 9,100,000
Prepaid principal amount		$ 1,600,000

Debt - Schedule of Interest Exp

Debt - Schedule of Interest Expense (Details) - Term Loan - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Debt Instrument [Line Items]
Floating interest (including the effects of cash flow hedges)	$ 12,450	$ 3,279
Amortization of debt issuance costs	4,660	172
Total	$ 17,110	$ 3,451

Debt - Summary of Maturities of

Debt - Summary of Maturities of Assumed Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Total principal payments	$ 905,493	$ 1,104,645
Notes Payable
Debt Instrument [Line Items]
Remainder of 2019	3,873
2020	4,940
2021	4,036
2022	3,609
2023	2,868
2024	901,836
Total principal payments	$ 921,162

Segment Reporting - Segment Inf

Segment Reporting - Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Segment Reporting Information
Net revenue	$ 324,681		$ 199,725
Cost of net revenue	210,399		126,046
Technology and development	48,332		38,504
Sales and marketing	119,370		37,720
Gross profit	114,282		73,679
Operating Segments
Segment Reporting Information
Net revenue	325,326		199,725
Cost of net revenue	206,885		124,755
Technology and development	44,788		36,074
Sales and marketing	106,826		32,175
Credit card fees	6,383		4,199
Gross profit	$ (39,556)		$ 2,522
Gross profit as percentage of revenue (percent)	(12.20%)		1.30%
Operating Segments | Shutterfly Consumer
Segment Reporting Information
Net revenue	$ 148,847		$ 152,059
Cost of net revenue	90,406		84,845
Technology and development	33,523		32,129
Sales and marketing	29,123		30,725
Credit card fees	4,156		4,199
Gross profit	$ (8,361)		$ 161
Gross profit as percentage of revenue (percent)	(5.60%)		0.10%
Operating Segments | Lifetouch
Segment Reporting Information
Net revenue	$ 129,307		$ 0
Net revenue including purchase accounting adjustment	129,952		0
Cost of net revenue	78,328		0
Technology and development	7,973		0
Sales and marketing	76,295		0
Credit card fees	2,227		0
Gross profit	$ (34,871)		$ 0
Gross profit as percentage of revenue (percent)	(26.80%)		0.00%
Operating Segments | Shutterfly Business Solutions
Segment Reporting Information
Net revenue	$ 46,527		$ 47,666
Cost of net revenue	38,151		39,910
Technology and development	3,292		3,945
Sales and marketing	1,408		1,450
Gross profit	$ 3,676		$ 2,361
Gross profit as percentage of revenue (percent)	7.90%		5.00%
Shipping Services Not Included in Cost of Net Revenue
Segment Reporting Information
Cost of net revenue		$ 2,800

Segment Reporting - Reconciliat

Segment Reporting - Reconciliation of Operating Segments to Consolidated (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment Reporting, Revenue Reconciling Item [Line Items]
Gross Profit	$ 114,282	$ 73,679
Amortization of intangible assets	(12,825)	(2,334)
Stock-based compensation expense for operating segments	(12,039)	(11,692)
Restructuring	(3,973)	0
Acquisition-related costs			$ (15,500)
Loss from operations	(105,781)	(34,110)
Interest expense	(18,253)	(9,633)
Interest and other income, net	1,178	1,749
Loss before income taxes	(122,856)	(41,994)
Net revenue	324,681	199,725
Cost of net revenue	210,399	126,046
Cost of net revenue
Segment Reporting, Revenue Reconciling Item [Line Items]
Stock-based compensation expense for operating segments	(892)	(999)
Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Gross Profit	(39,556)	2,522
Net revenue	325,326	199,725
Cost of net revenue	206,885	124,755
Segment Reconciling Items
Segment Reporting, Revenue Reconciling Item [Line Items]
Purchase accounting deferred revenue adjustment	(645)	0
Corporate expenses	(35,089)	(18,021)
Amortization of intangible assets	(12,825)	(2,334)
Stock-based compensation expense for operating segments	(12,039)	(11,692)
Restructuring	(3,973)	0
Executive transition and strategic review costs	(1,654)	0
Acquisition-related costs	0	(4,585)
Segment Reconciling Items | Cost of net revenue
Segment Reporting, Revenue Reconciling Item [Line Items]
Amortization of intangible assets	(2,622)	(292)
Stock-based compensation expense for operating segments	$ (892)	$ (999)

Leases - Narrative (Details)

Leases - Narrative (Details) ft² in Thousands, $ in Thousands	Mar. 31, 2019USD ($)ft²	Mar. 31, 2019USD ($)ft²	Dec. 31, 2018USD ($)
Lessee, Lease, Description [Line Items]
Amortization of right-of-use-assets	$ 44,000	$ 4,179
Lessee, operating lease, lease not yet commenced, future minimum payments	$ 28,100	$ 28,100
Lessee, operating lease, term of contract (years)	10 years	10 years
Operating lease liabilities, current portion	$ 21,564	$ 21,564
Finance lease liabilities, current portion	$ 14,286	$ 14,286	$ 14,741
Texas
Lessee, Lease, Description [Line Items]
Area of real estate property | ft²	237	237

Leases - ROU Assets and Lease L

Leases - ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease, right-of-use asset	$ 67,780
Finance right-of-use assets	55,181
Total leased assets	122,961
Current
Operating lease liabilities, current portion	21,564
Finance lease liabilities, current portion	14,286	$ 14,741
Noncurrent
Operating lease liabilities	60,701
Finance lease liabilities, non-current portion	45,652	$ 38,576
Total lease liabilities	$ 142,203

Leases - Schedule of Lease Cost

Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2019
Leases [Abstract]
Operating lease cost		$ 7,280
Finance Lease, Cost [Abstract]
Amortization of right-of-use-assets	$ 44,000	4,179
Interest on lease liabilities		767
Variable lease expense		7,655
Sublease income		127
Net lease cost		19,754
Short-term lease, cost		$ 200

Leases - Future Minimum Payment

Leases - Future Minimum Payments of Leases (Details) $ in Thousands	Mar. 31, 2019USD ($)
Operating Lease Liabilities, Payments Due [Abstract]
Remainder of 2019	$ 19,303
2020	22,556
2021	19,038
2022	15,448
2023	8,695
Thereafter	8,290
Total lease payments	93,330
Less: Interest	(11,065)
Present value of lease liabilities	82,265
Finance Lease Liabilities, Payments, Due [Abstract]
Remainder of 2019	13,252
2020	13,704
2021	12,671
2022	12,291
2023	10,193
Thereafter	5,086
Total lease payments	67,197
Less: Interest	(7,259)
Present value of lease liabilities	59,938
Lease Liabilities, Payments Due [Abstract]
Remainder of 2019	32,555
2020	36,260
2021	31,709
2022	27,739
2023	18,888
Thereafter	13,376
Total lease payments	160,527
Less: Interest	18,324
Total lease liabilities	$ 142,203

Leases - Future Minimum Payme_2

Leases - Future Minimum Payments Under Non-Cancelable Leases and Build-to-Suite Arrangements (Details) $ in Thousands	Dec. 31, 2018USD ($)
Operating leases
2019	$ 23,557
2020	17,730
2021	13,763
2022	9,928
2023	1,872
Thereafter	1,501
Total lease payments	68,351
Build-to-Suit
2019	6,501
2020	6,646
2021	6,794
2022	6,947
2023	6,479
Thereafter	6,522
Total lease payments	39,889
Finance leases
2019	16,853
2020	10,582
2021	9,908
2022	9,820
2023	8,237
Thereafter	4,023
Total lease payments	59,423
Less: Interest	(6,106)
Present value of lease liabilities	$ 53,317

Leases - Lease Term and Discoun

Leases - Lease Term and Discount Rate (Details)	Mar. 31, 2019
Leases [Abstract]
Operating lease, weighted average remaining lease term	4 years 2 months 12 days
Finance lease, weighted average remaining lease term	4 years 1 month 6 days
Operating leases, weighted average discount rate, percent	5.70%
Finance lease, weighted average discount rate, percent	4.80%

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Leases [Abstract]
Operating cash flows from operating leases	$ 10,585
Operating cash flows from finance leases	690
Financing cash flows from finance leases	5,312	$ 4,643
ROU assets obtained in exchange for operating lease liabilities	$ 139

- Narrative (Details)

- Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Total purchase obligations		$ 11.5
Letters of credit, amount	$ 18.7

Share Repurchase Program - Narr

Share Repurchase Program - Narrative (Details) - USD ($)	Dec. 31, 2017	Oct. 24, 2012
Share Repurchase Program [Abstract]
Stock repurchase program, authorized amount		$ 60,000,000
Stock repurchase program, additional authorized amount	$ 640,000,000

Restructuring - Narrative (Deta

Restructuring - Narrative (Details) ft² in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)ft²	Mar. 31, 2018USD ($)	Dec. 31, 2018facility
Restructuring Cost and Reserve [Line Items]
Number of facilities closed | facility			4
Restructuring	$ 3,973	$ 0
2018 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring	4,000
Restructuring charges incurred	5,600
Restructuring costs, expected cost	13,500
Employee-related costs | 2018 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring	2,400
Property and equipment | 2018 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 1,300
Texas
Restructuring Cost and Reserve [Line Items]
Area of real estate property | ft²	237

Restructuring - Restructuring R

Restructuring - Restructuring Reserve Activities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Restructuring Reserve [Roll Forward]
Accrued liability, beginning balance	$ 2,132
Restructuring Charges	3,973
Cash payments	(502)
Non-cash adjustments	(2,618)
Accrued liability, ending balance	2,985
2018 Restructuring
Restructuring Reserve [Roll Forward]
Accrued liability, beginning balance	861
Restructuring Charges	3,973
Cash payments	(502)
Non-cash adjustments	(1,347)
Accrued liability, ending balance	2,985
Prior year plans
Restructuring Reserve [Roll Forward]
Accrued liability, beginning balance	1,271
Restructuring Charges	0
Cash payments	0
Non-cash adjustments	(1,271)
Accrued liability, ending balance	0
Employee costs | 2018 Restructuring
Restructuring Reserve [Roll Forward]
Accrued liability, beginning balance	861
Restructuring Charges	2,405
Cash payments	(281)
Non-cash adjustments	0
Accrued liability, ending balance	2,985
Property and equipment | 2018 Restructuring
Restructuring Reserve [Roll Forward]
Accrued liability, beginning balance	0
Restructuring Charges	1,296
Cash payments	0
Non-cash adjustments	(1,296)
Accrued liability, ending balance	0
Other | 2018 Restructuring
Restructuring Reserve [Roll Forward]
Accrued liability, beginning balance	0
Restructuring Charges	272
Cash payments	(221)
Non-cash adjustments	(51)
Accrued liability, ending balance	$ 0

Derivative Financial Instrume_2

Derivative Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Sep. 30, 2018	Aug. 31, 2017
Derivative [Line Items]
Unrealized (losses) gains on cash flow hedges	$ (1,844)	$ 2,770
Amounts expected to be reclassified from other comprehensive income into interest expense in coming 12 months	900
Interest expense	18,253	9,633
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	1,900	$ 1,700
Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement
Derivative [Line Items]
Derivative assets	$ 2,360		$ 4,204