Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 24, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ETSY INC | ||
Entity Central Index Key | 1,370,637 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 116,129,719 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,067,009,418 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 181,592 | $ 271,244 |
Short-term investments | 100,494 | 21,620 |
Accounts receivable, net | 26,426 | 20,275 |
Prepaid and other current assets | 15,571 | 9,521 |
Deferred tax charge—current | 17,132 | 17,132 |
Funds receivable and seller accounts | 29,817 | 19,262 |
Total current assets | 371,032 | 359,054 |
Restricted cash | 5,341 | 5,341 |
Property and equipment, net | 126,407 | 105,021 |
Goodwill | 35,657 | 27,752 |
Intangible assets, net | 7,507 | 2,871 |
Deferred tax charge—net of current portion | 34,264 | 51,396 |
Other assets | 985 | 1,626 |
Total assets | 581,193 | 553,061 |
Current liabilities: | ||
Accounts payable | 10,978 | 14,382 |
Accrued expenses | 24,179 | 31,253 |
Capital lease obligations—current | 6,829 | 5,610 |
Funds payable and amounts due to sellers | 29,817 | 19,262 |
Deferred revenue | 5,648 | 4,712 |
Other current liabilities | 6,557 | 4,903 |
Total current liabilities | 84,008 | 80,122 |
Capital lease obligations—net of current portion | 5,296 | 7,571 |
Deferred tax liabilities | 65,068 | 61,420 |
Facility financing obligation | 57,360 | 51,804 |
Other liabilities | 24,704 | 21,646 |
Total liabilities | 236,436 | 222,563 |
Stockholders’ equity: | ||
Common stock ($0.001 par value, 120,000,000 and 1,400,000,000 shares authorized as of December 31, 2014 and December 31, 2015; 44,180,939 and 112,563,354 shares issued and outstanding as of December 31, 2014, and December 31, 2015, respectively) | 116 | 113 |
Additional paid-in capital | 442,510 | 406,020 |
Accumulated deficit | (116,341) | (86,440) |
Accumulated other comprehensive (loss) income | 18,472 | 10,805 |
Total stockholders’ equity | 344,757 | 330,498 |
Total liabilities, convertible preferred stock and stockholders’ equity | $ 581,193 | $ 553,061 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 |
Statement of Financial Position [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized (in shares) | 1,400,000,000 | 1,400,000,000 | ||
Common stock, shares issued (in shares) | 115,973,039 | 112,563,354 | 44,180,939 | 3,301,887 |
Common stock, shares outstanding (in shares) | 115,973,039 | 112,563,354 | 44,180,393 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 364,967 | $ 273,499 | $ 195,591 |
Cost of revenue | 123,328 | 96,979 | 73,633 |
Gross profit | 241,639 | 176,520 | 121,958 |
Operating expenses: | |||
Marketing | 82,799 | 66,771 | 39,655 |
Product development | 55,083 | 42,694 | 36,634 |
General and administrative | 86,180 | 68,939 | 51,920 |
Total operating expenses | 224,062 | 178,404 | 128,209 |
(Loss) income from operations | 17,577 | (1,884) | (6,251) |
Other (expense) income: | |||
Interest expense and amortization of deferred financing costs | (7,204) | (1,526) | (590) |
Interest and other income | 1,702 | 324 | 41 |
Net unrealized loss on warrant and other liabilities | 0 | (3,133) | (411) |
Foreign exchange loss | (14,951) | (21,775) | (3,049) |
Total other expense | (20,453) | (26,110) | (4,009) |
Loss before income taxes | (2,876) | (27,994) | (10,260) |
Provision for income taxes | (27,025) | (26,069) | (4,983) |
Net loss | $ (29,901) | $ (54,063) | $ (15,243) |
Net loss per share attributable to common stockholders: | |||
Basic and diluted (in dollars per share) | $ (0.26) | $ (0.59) | $ (0.38) |
Weighted average common shares outstanding: | |||
Basic and diluted (shares) | 113,562,738 | 91,122,291 | 40,246,663 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (29,901) | $ (54,063) | $ (15,243) |
Other comprehensive (loss) income: | |||
Cumulative translation adjustment | 7,675 | 14,746 | (4,091) |
Unrealized losses on marketable securities, net of tax | (8) | (7) | (3) |
Total other comprehensive (loss) income | 7,667 | 14,739 | (4,094) |
Comprehensive loss | $ (22,234) | $ (39,324) | $ (19,337) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity - USD ($) $ in Thousands | Total | Series A and A-1 preferred stock | Series B preferred stock | Series C preferred stock | Series D and D-1 preferred stock | Series E preferred stock | Series 1 preferred stock | Series F preferred stock | Preferred StockSeries A and A-1 preferred stock | Preferred StockSeries B preferred stock | Preferred StockSeries C preferred stock | Preferred StockSeries D and D-1 preferred stock | Preferred StockSeries E preferred stock | Preferred StockSeries 1 preferred stock | Preferred StockSeries F preferred stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income |
Convertible preferred stock, beginning balance at Dec. 31, 2013 | $ 808 | $ 865 | $ 3,361 | $ 27,870 | $ 6,201 | $ 1,322 | $ 39,785 | ||||||||||||
Convertible preferred stock, beginning balance (in shares) at Dec. 31, 2013 | 2,363,786 | 1,128,425 | 1,222,282 | 4,215,610 | 396,727 | 203,399 | 11,594,203 | ||||||||||||
Convertible preferred stock, ending balance at Dec. 31, 2014 | $ 808 | $ 865 | $ 3,361 | $ 27,870 | $ 6,201 | $ 1,322 | $ 39,785 | $ 808 | $ 865 | $ 3,361 | $ 27,870 | $ 6,201 | $ 1,322 | $ 39,785 | |||||
Convertible preferred stock, ending balance (in shares) at Dec. 31, 2014 | 2,363,786 | 1,128,425 | 1,222,282 | 4,215,610 | 396,727 | 203,399 | 11,594,203 | 2,363,786 | 1,128,425 | 1,222,282 | 4,215,610 | 396,727 | 203,399 | 11,594,203 | |||||
Beginning balance at Dec. 31, 2013 | $ 4,003 | $ 33 | $ 20,944 | $ (17,134) | $ 160 | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2013 | 33,082,948 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Stock-based compensation | 6,110 | 6,110 | |||||||||||||||||
Exercise of vested options | $ 7,956 | $ 4 | 7,952 | ||||||||||||||||
Exercise of vested options (in shares) | 4,215,628 | 4,215,628 | |||||||||||||||||
Common stock issued through public offering | $ 35,000 | $ 3 | 34,997 | ||||||||||||||||
Common stock issued through public offering (in shares) | 3,301,887 | ||||||||||||||||||
Issuance of stock at acquisition date | 27,723 | $ 4 | 27,719 | ||||||||||||||||
Issuance of stock at acquisition date (in shares) | 3,580,476 | ||||||||||||||||||
Stock-based compensation—acquisitions | 756 | 756 | |||||||||||||||||
Excess tax benefit from the exercise of options | 4,877 | 4,877 | |||||||||||||||||
Other comprehensive income (loss) | (4,094) | (4,094) | |||||||||||||||||
Net loss | (15,243) | (15,243) | |||||||||||||||||
Ending balance at Dec. 31, 2014 | 67,088 | $ 44 | 103,355 | (32,377) | (3,934) | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2014 | (44,180,939) | ||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||
Convertible preferred stock, conversion of preferred stock upon public offering | $ (808) | $ (865) | $ (3,361) | $ (27,870) | $ (6,201) | $ (1,322) | $ (39,785) | ||||||||||||
Convertible preferred stock, conversion of preferred stock upon public offering (in shares) | (2,363,786) | (1,128,425) | (1,222,282) | (4,215,610) | (396,727) | (203,399) | (11,594,203) | ||||||||||||
Convertible preferred stock, ending balance at Dec. 31, 2015 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||
Convertible preferred stock, ending balance (in shares) at Dec. 31, 2015 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Stock-based compensation | 9,444 | 9,444 | |||||||||||||||||
Exercise of vested options | $ 3,626 | $ 2 | 3,624 | ||||||||||||||||
Exercise of vested options (in shares) | 1,315,735 | 1,315,735 | |||||||||||||||||
Exercise of warrants, net of shares withheld | $ 0 | $ 0 | 0 | ||||||||||||||||
Common stock issued through public offering | 194,361 | $ 14 | 194,347 | ||||||||||||||||
Common stock issued through public offering (in shares) | 13,333,333 | ||||||||||||||||||
Contribution of stock to Good Work Institute (formerly Etsy.org) | 3,200 | 3,200 | |||||||||||||||||
Contribution to Etsy.org, (in shares) | 188,235 | ||||||||||||||||||
Stock-based compensation—acquisitions | 1,122 | 1,122 | |||||||||||||||||
Conversion of liability-classified restricted shares upon vesting | 1,755 | 1,755 | |||||||||||||||||
Conversion of preferred stock upon public offering | 80,212 | $ 53 | 80,159 | ||||||||||||||||
Conversion of preferred stock upon public offering (in shares) | 53,448,243 | ||||||||||||||||||
Conversion of liability-classified warrants upon public offering | 5,070 | 5,070 | |||||||||||||||||
Excess tax benefit from the exercise of options | 3,944 | 3,944 | |||||||||||||||||
Other comprehensive income (loss) | 14,739 | 14,739 | |||||||||||||||||
Net loss | (54,063) | (54,063) | |||||||||||||||||
Ending balance at Dec. 31, 2015 | 330,498 | $ 113 | 406,020 | (86,440) | 10,805 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2015 | (112,563,354) | ||||||||||||||||||
Convertible preferred stock, ending balance at Dec. 31, 2016 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||
Convertible preferred stock, ending balance (in shares) at Dec. 31, 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Stock-based compensation | 13,960 | 13,960 | |||||||||||||||||
Exercise of vested options | $ 10,568 | $ 3 | 10,565 | ||||||||||||||||
Exercise of vested options (in shares) | 2,535,620 | 2,535,620 | |||||||||||||||||
Vesting of restricted stock units, net of shares withheld | $ (1,258) | (1,258) | |||||||||||||||||
Vesting of restricted stock units, net of shares withheld (in shares) | 144,651 | ||||||||||||||||||
Exercise of warrants, net of shares withheld | 0 | 0 | |||||||||||||||||
Retirement of restricted shares | 0 | ||||||||||||||||||
Retirement of restricted shares (in shares) | (36,346) | ||||||||||||||||||
Common stock issued through public offering | 6,966 | 6,966 | |||||||||||||||||
Common stock issued through public offering (in shares) | 685,749 | ||||||||||||||||||
Stock-based compensation—acquisitions | 1,080 | 1,080 | |||||||||||||||||
Conversion of liability-classified restricted shares upon vesting | 1,942 | 1,942 | |||||||||||||||||
Excess tax benefit from the exercise of options | 3,235 | 3,235 | |||||||||||||||||
Other comprehensive income (loss) | 7,667 | 7,667 | |||||||||||||||||
Net loss | (29,901) | (29,901) | |||||||||||||||||
Ending balance at Dec. 31, 2016 | $ 344,757 | $ 116 | $ 442,510 | $ (116,341) | $ 18,472 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2016 | (115,973,039) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net loss | $ (29,901) | $ (54,063) | $ (15,243) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Stock-based compensation expense | 13,168 | 8,981 | 5,920 |
Stock-based compensation expense—acquisitions | 2,733 | 1,860 | 4,130 |
Contribution of stock to Good Work Institute (formerly Etsy.org) | 0 | 3,200 | 0 |
Depreciation and amortization expense | 22,525 | 18,550 | 17,223 |
Bad debt expense | 1,770 | 1,780 | 1,881 |
Foreign exchange loss | 14,951 | 21,775 | 3,049 |
Amortization of debt issuance costs | 184 | 167 | 68 |
Non-cash interest expense | 5,337 | 0 | 0 |
Interest on marketable securities | 914 | 0 | 0 |
Net unrealized loss on warrant and other liabilities | 0 | 3,133 | 411 |
Loss on disposal of assets | 1,143 | 1,319 | 79 |
Loss on asset impairment | 551 | 0 | 0 |
Amortization of deferred tax charge | 17,132 | 17,132 | 0 |
Excess tax benefit from exercise of stock options | (3,235) | (3,944) | (4,877) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (8,192) | (6,739) | (6,197) |
Funds receivable and seller accounts | (10,910) | (9,025) | (3,975) |
Prepaid expenses and other current assets | (6,186) | (266) | (5,820) |
Other assets | 438 | 225 | (1,446) |
Accounts payable | (3,585) | 6,728 | 1,046 |
Accrued and other current liabilities | 11,193 | 12,395 | 11,463 |
Funds payable and amounts due to sellers | 10,910 | 9,025 | 3,880 |
Deferred revenue | 964 | 1,279 | 693 |
Other liabilities | 4,855 | (4,301) | (198) |
Net cash provided by operating activities | 46,759 | 29,211 | 12,087 |
Cash flows from investing activities | |||
Acquisition of businesses, net of cash acquired | (7,880) | 0 | (4,688) |
Purchases of property and equipment | (35,981) | (11,116) | (1,304) |
Development of internal-use software | (11,769) | (9,719) | (8,280) |
Purchases of marketable securities | (160,504) | (26,040) | (21,698) |
Sales of marketable securities | 80,704 | 23,592 | 20,588 |
Net increase in restricted cash | 0 | 0 | (5,341) |
Net cash used in investing activities | (135,430) | (23,283) | (20,723) |
Cash flows from financing activities | |||
Proceeds from public offering | 0 | 199,467 | 0 |
Proceeds from the issuance of common stock | 0 | 0 | 35,000 |
Repurchase of stock | (1,258) | 0 | 0 |
Proceeds from exercise of stock options | 10,568 | 3,626 | 7,956 |
Excess tax benefit from the exercise of stock options | 3,235 | 3,944 | 4,877 |
Payments on capitalized lease obligations | (6,086) | (3,377) | (1,480) |
Deferred payments on acquisition of business | (649) | 0 | (75) |
Payments relating to public offering | 0 | (4,052) | (1,041) |
Net cash provided by financing activities | 5,810 | 199,608 | 45,237 |
Effect of exchange rate changes on cash | (6,791) | (3,951) | (3,737) |
Net increase (decrease) in cash and cash equivalents | (89,652) | 201,585 | 32,864 |
Cash and cash equivalents at beginning of period | 271,244 | 69,659 | 36,795 |
Cash and cash equivalents at end of period | 181,592 | 271,244 | 69,659 |
Supplemental cash flow disclosures: | |||
Cash paid for interest | 2,000 | 1,346 | 342 |
Cash paid for income taxes | 10,559 | 7,604 | 217 |
Supplemental non-cash disclosures: | |||
Equipment acquired under capital lease obligations | 5,030 | 11,657 | 5,564 |
Stock-based compensation capitalized in development of capitalized software | 792 | 463 | 190 |
Non-cash additions to development of internal-use software and property and equipment | 2,239 | 12,721 | 2,510 |
Non-cash addition to construction in progress related to build-to-suit lease and facility financing obligation | 0 | 1,484 | 50,320 |
Non-cash addition to capitalized public offering costs | 0 | 13 | 1,413 |
Fair value of common stock issued in acquisition | $ 6,966 | $ 0 | $ 27,723 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 1—Basis of Presentation and Summary of Significant Accounting Policies Description of Business Etsy, Inc. (the “Company” or “Etsy”) was incorporated in Delaware in February 2006. Etsy offers markets, services and technology that empower creative entrepreneurs and shape a positive future for business. The Company generates revenue primarily from transaction and listing fees, Direct Checkout fees, Promoted Listing fees and Shipping Label sales. Initial Public Offering On April 21, 2015, the Company completed an initial public offering (the “IPO”) in which it issued and sold 13,333,333 shares of common stock at a public offering price of $16.00 per share. The Company received net proceeds of $194.4 million after deducting underwriting discounts of $13.9 million and other offering expenses of approximately $5.1 million . These expenses were recorded against the proceeds received from the IPO. Certain selling stockholders sold an additional 5,833,332 shares of common stock in the IPO. The Company did not receive any proceeds from the sale of shares sold by the selling stockholders. Upon the closing of the IPO, all outstanding shares of preferred stock of the Company converted into 53,448,243 shares of common stock. In addition, all outstanding warrants for preferred stock converted into warrants for 203,030 shares of common stock. The Company effected a 1-for-2 reverse split of its common stock on March 25, 2015. The reverse split combined each two shares of the Company’s issued and outstanding common stock into one share of common stock and correspondingly adjusted the conversion prices of its convertible preferred stock. No fractional shares were issued in connection with the reverse split, and fractional shares resulting from the reverse split were rounded down to the nearest whole share. All share, per share and related information presented in the consolidated financial statements and accompanying notes have been retroactively adjusted, where applicable, to reflect the reverse stock split. Basis of Consolidation The consolidated financial statements include the accounts of Etsy and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The accounting estimates that require management’s most difficult and subjective judgments include revenue recognition, income taxes, website development costs and internal-use software, purchase price allocations for business combinations, valuation of goodwill and intangible assets, leases and stock-based compensation. The Company evaluates its estimates and judgments on an ongoing basis and revises them when necessary. Actual results may differ from the original or revised estimates. Revenue Recognition The Company's revenue is diversified, generated from a mix of market activities and the Seller Services provided to Etsy sellers to help them start, manage and scale their business. The Company's largest market is Etsy.com. The Company also owns A Little Market, a handmade and supplies market for sellers and buyers in France. Markets revenue is primarily made up of the 3.5% transaction fee an Etsy seller pays for each completed transaction on Etsy.com and the $0.20 listing fee she pays for each item she lists on Etsy.com. Seller Services revenue includes the fees Etsy sellers pay for services, which include Direct Checkout, a payment processing service; Promoted Listings, an ad service for prominent placement in on-site search results; Shipping Labels, which allow Etsy sellers to directly purchase shipping labels through the Company's platform; and Pattern by Etsy, launched in April 2016, which enables sellers to easily create their own custom website. Other revenue typically includes revenue generated from commercial partnerships and processing fees we receive from Paypal. The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the Etsy seller; (3) the collection of fees is reasonably assured; and (4) the amount of fees to be paid by the Etsy seller is fixed or determinable. The Company evaluates whether it is appropriate to recognize revenue on a gross or net basis based upon its evaluation of whether it is the primary obligor in a transaction, has inventory risk and has latitude in establishing pricing and selecting suppliers, among other factors. Based on its evaluation of these factors, revenue is recorded net of gross merchandise values associated with the transaction. Markets revenue . Markets revenue is primarily made up of two components: the 3.5% transaction fee that an Etsy seller pays for each completed transaction on Etsy.com, exclusive of shipping fees charged, and the listing fee of $0.20 she pays for each item she lists on Etsy.com. Transaction fees are recognized when the corresponding transaction is made. Listing fees are recognized ratably over a four -month listing period, unless the item is sold or the seller relists it, at which time any remaining listing fee is recognized. Revenue from completed Wholesale transactions through Etsy.com and transaction and listing revenue for other markets, including ALM are also included in Markets revenue. Seller Services revenue . Seller Services revenue consists of fees an Etsy seller pays the Company for the Seller Services she uses, including Direct Checkout, Promoted Listings, Shipping Labels and Pattern. • Revenue from Direct Checkout consists of fees an Etsy seller pays the Company to process credit, debit and Etsy Gift Card payments. Direct Checkout fees vary between 3 - 4% of the item’s total sale price plus a flat fee per order, depending on the country in which her bank account is located. Direct Checkout fees are based on the item’s total sale price, including shipping. Revenue from Direct Checkout is recognized when the corresponding transaction is made. • Revenue from Promoted Listings consists of cost-per-click fees an Etsy seller pays for prominent placement of her listings in search results generated by Etsy buyers in the Company's markets. Revenue is recognized when the Promoted Listing is clicked. • Revenue from Shipping Labels consists of fees an Etsy seller pays the Company when she purchases shipping labels through its platform, net of the cost the Company incurs in purchasing those shipping labels. The Company provides its sellers shipping labels from the United States Postal Service, FedEx and Canada Post at a discounted price due to the volume of purchases through its platform. The Company recognizes Shipping Label revenue when an Etsy seller purchases a shipping label. The Company recognizes Shipping Label revenue on a net basis as it is not the primary obligor in the delivery of these services. • Revenue from Pattern consists of monthly subscription and annual domain registration fees, an optional add-on, an Etsy seller pays to use our custom website services. The Company recognizes revenue from Pattern ratably over the term of the subscription. Other revenue . Other revenue includes the fees the Company receives from Paypal for transactions that occur outside of Direct Checkout, which is recognized as transactions are processed, funds the Company receives from a third-party for unused Etsy Gift Cards, which are recognized when the third-party approves the release of these funds and revenue from other commercial partnerships, which are recognized as earned over the term of the contract. The following table summarizes revenue by type of service (in thousands): Year Ended 2014 2015 2016 Markets $ 108,732 $ 132,648 $ 158,204 Seller Services 82,502 136,608 200,857 Other 4,357 4,243 5,906 Revenue $ 195,591 $ 273,499 $ 364,967 Cost of Revenue Cost of revenue consists primarily of the cost of interchange and other fees for credit card processing services, credit card verification service fees and credit card chargebacks to support Direct Checkout revenue and costs of refunds made to Etsy buyers that the Company is not able to collect from Etsy sellers. Cost of revenue also includes expenses associated with the operation and maintenance of the Company’s platform and data centers, including depreciation and amortization, employee-related costs and hosting and bandwidth costs. Accounts Receivable and Allowance for Doubtful Accounts The Company’s trade accounts receivable are recorded at amounts billed to Etsy sellers and are presented on the consolidated balance sheet net of the allowance for doubtful accounts. The allowance is determined by a number of factors, including age of the receivable, current economic conditions, historical losses and management’s assessment of the financial condition of Etsy sellers. Receivables are written off once they are deemed uncollectible, which may arise when Etsy sellers file for bankruptcy or are otherwise deemed unable to repay the amounts owed to the Company. Estimates of uncollectible accounts receivable are recorded to general and administrative expense. The following table summarizes the allowance activity during the periods indicated (in thousands): Year Ended 2014 2015 2016 Balance as of the beginning of period $ 1,279 $ 1,841 $ 2,071 Bad debt expense 1,881 1,780 1,770 Write-offs, net of recoveries and other adjustments (1,319 ) (1,550 ) (1,842 ) Balance as of the end of period $ 1,841 $ 2,071 $ 1,999 Funds Receivable and Seller Accounts and Funds Payable and Amounts due to Sellers The Company records funds receivable and seller accounts and funds payable and amounts due to sellers as current assets and liabilities, respectively, on the consolidated balance sheet. Funds receivable and seller accounts represent amounts received or expected to be received from Etsy buyers via third-party credit card processors, which flow through an Etsy bank account for payment to Etsy sellers. This cash and related receivable represent the total amount due to sellers, and as such a liability for the same amount is recorded to funds payable and amounts due to Etsy sellers. Property and Equipment Property and equipment, consisting principally of building, computer equipment and leasehold improvements, are recorded at cost. The Company capitalizes construction in progress for build-to-suit lease agreements where we are the owner, for accounting purposes only, during the construction period. Depreciation and amortization begin at the time the asset is placed into service and are recognized using the straight-line method in amounts sufficient to relate the cost of depreciable and amortizable assets to operations over their estimated useful lives. Repairs and maintenance are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. When events or changes in circumstances require, the Company assesses the likelihood of recovering the cost of tangible long-lived assets based on its expectations of future profitability, undiscounted cash flows and management’s plans with respect to operations to determine if the asset is impaired and subject to write-off. Measurement of any impairment loss is based on the excess of the carrying value of the asset over the fair value. Internal-use Software and Website Development Costs Costs incurred to develop software for internal use and the Company’s website are capitalized and amortized over the estimated useful life of the software, generally three years. In accordance with authoritative accounting guidance, capitalization of costs to develop software begin when preliminary development efforts are successfully completed, management has authorized and committed project funding and it is probable that the project will be completed and the software will be used as intended. The Company also capitalizes costs related to upgrades and enhancements when it is probable the expenditures will result in additional functionality or will extend the useful life of existing functionality. Costs related to the design or maintenance of internal-use software and website development are expensed as incurred. The Company periodically reviews internal-use software and website development costs to determine whether the projects will be completed, placed in service, removed from service or replaced by other internally developed or third-party software. If the asset is not expected to provide any future benefit, the asset is retired and any unamortized cost is expensed. These costs are included in property and equipment on the consolidated balance sheets. Leases The Company leases office space and certain computer equipment in multiple locations under non-cancelable lease agreements. The leases are reviewed for classification as operating, capital or build-to-suit leases. For operating leases, rent is recognized on a straight-line basis over the lease period. For capital leases, the Company records the leased asset with a corresponding liability. Payments are recorded as reductions to the liability with an appropriate interest charge recorded based on the then-outstanding remaining liability. The Company considers the nature of the renovations and the Company’s involvement during the construction period of newly leased office space to determine if it is considered, for accounting purposes only, to be the owner of the construction project during the construction period. If the Company determines that it is the owner of the construction project, it is required to capitalize the fair value of the building as well as the construction costs incurred on its consolidated balance sheet along with a corresponding financing liability (“build-to-suit accounting”). Upon occupancy for build-to-suit leases, the Company assesses whether the circumstances qualify for sales recognition under the sale-leaseback accounting guidance. If the lease meets the sale-leaseback criteria, the Company will remove the asset and related financial obligation from the balance sheet and treat the building lease as an operating lease. If upon completion of construction, the project does not meet the sale-leaseback criteria, the leased property will be treated as a capital lease for financial reporting purposes. In May 2016, the Company took possession of its corporate headquarters in Brooklyn, New York upon substantial completion of the construction phase of the build-out. Upon completion of the project, the Company performed a sale-leaseback analysis pursuant to Accounting Standards Codification (“ASC”) 840 - Leases , to determine the appropriateness of removing the previously capitalized assets from the consolidated balance sheets. The Company concluded that components of “continuing involvement” were evident as a result of this review, precluding the derecognition of the related assets from the consolidated balance sheets. In conjunction with the initiation of the lease in May 2014, the Company also recorded a facility financing obligation equal to the fair market value of the assets received from the landlord. At the end of the lease term, including exercise of any renewal options, the remaining value of the net facility financing obligation over the net carrying value of the fixed asset will be recognized as a non-cash gain on sale of the property. The Company does not report rent expense for the lease. Rather, rental payments under the lease are recognized as a reduction of the financing obligation and interest expense, and the associated asset capitalized throughout the construction project is depreciated over its estimated useful life. Income Taxes The income tax benefit (provision) is based on income (loss) before income taxes and is accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to settle. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Management assesses the need for a valuation allowance on a quarterly basis to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertainty in income taxes using a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate audit settlement. The Company recognizes interest and penalties, if any, associated with income tax matters as part of the income tax provision and includes accrued interest and penalties with the related income tax liability in the consolidated balance sheet. Business Combinations The Company has completed a number of acquisitions of other businesses in the past and may acquire additional businesses or technologies in the future. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity or a combination of the two, in a business combination to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. When the Company issues stock-based or cash awards to an acquired company’s stockholders, the Company evaluates whether the awards are contingent consideration or compensation for post-combination services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholder beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-combination services and recognized as expense over the requisite service period. The Company initially recognizes intangible assets at fair value, and amortizes them on a straight-line basis over their estimated useful lives, typically three years. When circumstances indicate that the carrying value of these assets may not be recoverable, the Company reviews its identifiable amortizable intangible assets for impairment. To date, the assets acquired and liabilities assumed in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily of developed technologies, customer relationships and trademarks. The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, the nature of the business acquired and the specific characteristics of the identified intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection with determination of fair values, the Company may engage independent appraisal firms to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. Acquisition-related transaction costs incurred by the Company are not included as a component of consideration transferred, but are accounted for as an expense in the period in which the costs are incurred. Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Goodwill is not amortized, but is subject to an annual impairment test. Management has determined that the Company has a single reporting unit and performs its annual goodwill impairment test during the fourth quarter or more frequently if events or changes in circumstances indicate that the goodwill may be impaired. Events or changes in circumstances which could trigger an impairment review include significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends, significant underperformance relative to historical or projected future results of operations, a significant adverse change in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel. The Company has the option to first assess qualitative factors (“Step Zero”) to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform the first of a two-step impairment test. The first step involves comparing the estimated fair value of the reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then a second step is required that compares the carrying amount of the goodwill with its implied fair value. The estimate of implied fair value of goodwill may require valuations of certain internally-generated and unrecognized intangible and tangible net assets. If the carrying amount of goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess. The Company completed a Step Zero analysis during the fourth quarter of 2016 . No impairment of goodwill was recorded at December 31, 2014 , 2015 or 2016 . Intangible Assets Intangible assets are amortized over the estimated useful life of the acquired technology, customer relationships and trademarks, generally three years. Stock-Based Compensation For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option-pricing model and the expense is recognized over the requisite service period for awards expected to vest. Prior to the IPO, the Company utilized equity valuations based on comparable publicly-traded companies, discounted free cash flows, an analysis of the Company's enterprise value and other factors deemed relevant in estimating the fair value of its common stock. Subsequent to the IPO, the Company has used the closing price of its common stock on Nasdaq as the fair value of its common stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatilities are based on implied volatilities from market comparisons of certain publicly traded companies and other factors. The expected term of stock options granted has been determined using the simplified method, which uses the midpoint between the vesting date and the contractual term. The requisite service period is generally four years from the date of grant. The fair value of RSUs is determined based on the closing price of the Company's common stock on Nasdaq on the grant date. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We account for stock-based compensation arrangements in restricted shares subject to a put option that allows the holder of the shares to put the shares back to the Company for cash as liability-classified stock awards. These awards are re-measured at fair value each reporting period, with changes in fair value being charged to the statement of operations. Compensation expense is recognized using a graded vesting methodology for each separately vesting tranche as though the award were, in substance, multiple awards. Unless the put option is exercised, the restricted shares will be reclassified from a liability to an equity classified award upon the termination of the put option at the vesting of each separate tranche. Cash and Cash Equivalents The Company considers all investments with an original maturity of three months or less at time of purchase to be cash equivalents. Cash restricted by third parties is not considered cash and cash equivalents. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and short-term investments. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. At times, such amounts may exceed federally insured limits. Fair Value of Financial Instruments Management believes that the fair value of financial instruments, consisting of cash and cash equivalents, short-term investments, accounts receivable and accounts payable, approximates carrying value due to the immediate or short-term maturity associated with its cash and cash equivalents, accounts receivable and accounts payable. Marketing Marketing expenses consist primarily of acquisition and brand-related marketing costs, such as product listing ads, search engine marketing, affiliate marketing, display marketing and other marketing expenses supporting these initiatives. Marketing expenses also include employee-related expenses for our employees involved in digital marketing, brand marketing and design, seller development and growth, public relations and communications, product marketing and marketing research activities. Marketing expenses are primarily driven by investments to grow and retain members on the Company's platform. Net Income (Loss) Per Share Prior to the IPO, the Company followed the two-class method when computing net income (loss) per share as the Company had issued shares that met the definition of participating securities. The two-class method determined net income (loss) per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method required income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s convertible preferred stock contractually entitled the holders of such shares to participate in dividends, but did not contractually require the holders of such shares to participate in losses of the Company. Accordingly, the two-class method did not apply for periods in which the Company reported a net loss or a net loss attributable to common stockholders resulting from dividends, accretion or modifications to its convertible preferred stock. Upon the closing of the IPO on April 21, 2015, all outstanding shares of convertible preferred stock were converted into shares of common stock. For current and future periods, the two-class method is not applicable to the computation of net (loss) income per share until shares of authorized preferred stock become issued and outstanding. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding common stock options, convertible preferred stock and warrants to purchase common stock and convertible preferred stock. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Segment Data The Company identifies operating segments as components of an entity for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and performance assessment. The Company defines the term “chief operating decision maker” to be its chief executive officer. The Company has determined it operates in one operating segment and one reportable segment, as its chief operating decision maker reviews financial information presented on only a consolidated basis for purposes of allocating resources and evaluating financial performance. Foreign Currency The Company has determined that the functional currency for each of its foreign operations is the local currency in which the operation is located. All assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Revenue and expenses are translated using average exchange rates during the period. Foreign currency translation adjustments are reflected in stockholders’ equity as a component of other comprehensive income (loss). Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in foreign exchange gain (loss) within other income (expense) in the statement of operations. Excess Tax Benefits from Exercise of Stock Options The Company uses the “with and without” approach in determining the order in which tax attributes are utilized. As a result, the Company recognizes a tax benefit from stock-based awards in additional paid-in capital only if an incremental tax benefit is realized after all other tax attributes currently available to the Company have been utilized. When tax deductions from stock-based awards are less than the cumulative book compensation expense, the tax effect of the resulting difference (“shortfall”) is charged first to additional paid-in capital, to the extent of the Company’s pool of windfall tax benefits, with any remainder recognized in income tax expense. The Company determined that it had a sufficient windfall pool available through December 31, 2016 to absorb any shortfalls. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, which replaces existing revenue recognition guidance. The new guidance is effective for the annual and interim periods beginning after December 15, 2017. Among other things, the updated guidance requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company has performed a preliminary assessment over the Markets and Seller Services revenue streams and does not expect the adopti |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Note 2—Business Combinations On September 19, 2016, the Company acquired all of the outstanding common stock of Blackbird Technologies, Inc. (“Blackbird”), a machine learning company, for $32.5 million . The Company completed this acquisition to improve the quality and relevance of search on Etsy.com. Total consideration for the acquisition was approximately $15.0 million , consisting of $8.1 million in cash and 513,304 shares of the Company’s common stock with a fair value of $6.9 million on the acquisition date. Additionally, the Company issued 184,230 shares of common stock and restricted stock units (“RSUs”) on the acquisition date with a fair value of $2.5 million which are tied to continuous service with the Company as an employee and are being accounted for as post-combination stock-based compensation expense over a three -year vesting period. The Company will pay up to an additional $8.8 million in cash and issue up to an additional 460,575 shares of RSUs post-close with a fair value of $6.2 million , both of which are also tied to continuous service with the Company as an employee and are being accounted for as post-combination stock-based and other compensation expense over a three -year vesting period. A portion of the consideration and post-combination compensation is subject to indemnification provisions. The below table summarizes the components of the Blackbird purchase price and allocation of the purchase price at fair value (in thousands): Cash paid $ 8,050 Common shares 6,966 Total purchase consideration $ 15,016 Net working capital $ 81 Developed technology 7,200 Customer relationships 1,250 Goodwill 8,660 Deferred tax liability (2,175 ) Net assets acquired $ 15,016 Included in working capital is approximately $0.2 million of cash acquired. The amounts allocated to developed technology and customer relationships (the acquired intangible assets) total $8.5 million . The acquired identifiable intangible assets are being amortized on a straight-line basis approximating the pattern in which the assets are utilized. Acquired technology intangible assets will amortize over three years and acquired customer relationships will amortize over six months. The fair value assigned to developed technology was determined primarily by using the cost approach, which estimates the cost to reproduce the asset, adjusted for loss due to functional and economic obsolescence. The fair value of the Company’s customer relationships was determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management. Goodwill recorded in connection with the Blackbird acquisition is primarily attributed to the value of the acquired workforce and their future contribution to Etsy. None of the resulting goodwill is deductible for tax purposes. The Company incurred approximately $0.6 million in acquisition-related costs in the Blackbird acquisition in the year ended December 31, 2016 , included in general and administrative expenses. This acquisition contributed $2.4 million to the Company’s consolidated net loss in the the year ended December 31, 2016 , respectively. The impact to net loss was primarily due to amortization of intangibles of $1.4 million and stock-based and other compensation expenses associated with the acquisition of $1.1 million , included in product development and marketing expenses. The following unaudited pro forma financial information presents the combined operating results of the Company and Blackbird Technologies as if the acquisition had occurred as of January 1, 2015 . The unaudited pro forma financial information includes the accounting effects of the business combination, including adjustments to the amortization of intangible assets, stock-based and other compensation expenses and professional fees associated with the acquisition. The unaudited pro forma information does not necessarily reflect the actual results that would have been achieved, nor is it necessarily indicative of our future consolidated results. The unaudited pro forma financial information is presented in the table below for the years ended December 31, 2015 and 2016 (in thousands except per share amounts): Year Ended December 31, 2015 2016 Revenue $ 273,616 $ 365,786 Net loss (65,106 ) (35,401 ) Basic and diluted net loss per share (0.71 ) (0.31 ) On June 18, 2014, the Company completed the acquisition of Incubart SAS, a societe par actions simplifiee organized under the laws of France, which operates the online market A Little Market (“ALM”), for $37.1 million . Total consideration for the acquisition was $30.8 million , consisting of $5.3 million in cash, of which $4.2 million was paid on the closing date, $0.3 million was paid on March 31, 2015 and $0.8 million was paid on February 18, 2016, and 2,439,847 shares of the Company’s common stock with a fair value of $25.5 million on the acquisition date. Because the Company was not publicly traded at the time of the acquisition, the Company utilized equity valuations based on comparable publicly-traded companies, discounted cash flows, an analysis of the Company’s enterprise value and other factors deemed relevant in estimating the fair value of its common stock for purposes of calculating the fair value of the purchase price. The terms of the purchase agreement provide for the sale of put options to certain of the former shareholders of ALM. The put options enable the holders of the options to sell up to all of their shares back to the Company, subject to certain vesting and restrictions, at fair value, but not to exceed $8.26 per share and not less than $4.00 per share. The put right terminates with respect to a share on the earlier of one year from when such share is vested or the liquidation date, as defined in the agreement containing the put option. The holders of the options paid an aggregate of $0.1 million cash to the Company at the date of acquisition and the Company recorded a $0.1 million liability for the fair value of the put options at that time. Additionally, the Company issued 599,497 shares of common stock, with a fair value of $6.3 million on the acquisition date, which are tied to continuous service with the Company as an employee or consultant and are being accounted for as post-combination stock-based compensation expense over the three-year vesting period. Since the put options relate in part to these shares, these restricted shares will be recorded as liability-classified stock awards as earned. The following table summarizes the components of the purchase price and allocation of the purchase price at fair value (in thousands): Cash paid $ 5,290 Common shares 25,521 Total purchase consideration $ 30,811 Net working capital $ 625 Property and equipment and other assets 95 Developed technology 1,636 Customer relationships 1,693 Trademarks 775 Goodwill 27,309 Deferred tax liability (757 ) Other long-term liabilities (565 ) Net assets acquired $ 30,811 Included in working capital is approximately $0.5 million of cash and cash equivalents acquired. The amount allocated to developed technology, customer relationships and trademark (the acquired intangible assets) total $4.1 million . The fair value assigned to developed technology was determined primarily by using the cost approach and fair value of the Company’s customer relationships was determined primarily by using the income approach. The fair value assigned to trademark was determined using the relief from royalty method, where the owner of the asset realizes a benefit from owning the intangible asset rather than paying a rental or royalty rate for use of the asset. The acquired identifiable intangible assets are being amortized on a straight-line basis over three years, which approximates the pattern in which the assets are utilized. Goodwill of $27.3 million , none of which is deductible for tax purposes, was recorded in connection with the ALM acquisition, which is primarily attributed to synergies arising from the acquisition and the value of the acquired workforce. On April 29, 2014, the Company completed the acquisition of Jarvis Labs, Inc., owners of the “Grand St.” online technology marketplace, for $6.6 million . Total consideration for the acquisition was approximately $3.2 million , consisting of $1.0 million in cash and 212,552 shares of the Company’s common stock with a fair value of $2.2 million on the acquisition date. Additionally, the Company issued 328,580 shares of common stock, with a fair value of $3.4 million on the acquisition date, which are tied to continuous service with the Company as an employee or consultant and are being accounted for as post-combination stock-based compensation expense over the three -year vesting period. Because the Company was not publicly traded at the time of the acquisition, the Company utilized equity valuations based on comparable publicly-traded companies, discounted cash flows, an analysis of the Company’s enterprise value and other factors deemed relevant in estimating the fair value of its common stock for purposes of calculating the fair value of the purchase price. The following table summarizes the components of the Grand St. purchase price and the allocation of the purchase price at fair value (in thousands): Cash paid $ 1,040 Common shares 2,202 Total purchase consideration $ 3,242 Net working capital $ 85 Developed technology 2,000 Customer relationships 600 Trademarks 200 Goodwill 991 Deferred tax liability (634 ) Net assets acquired $ 3,242 Included in working capital is approximately $0.1 million of cash acquired. The amounts allocated to developed technology, customer relationships and trademark (the acquired intangible assets) total $2.8 million . The fair value assigned to developed technology was determined primarily using the cost approach, the fair value of the Company’s customer relationships was determined primarily using the income approach and the fair value assigned to trademark was determined using the relief from royalty method. The acquired identifiable intangible assets are being amortized on a straight-line basis over three years, which approximates the pattern in which the assets are utilized. None of the goodwill recorded in the acquisition is deductible for tax purposes. The Company incurred approximately $2.1 million in acquisition-related costs in the ALM and Grand Street acquisitions in the year ended December 31, 2014, included in general and administrative expenses. These acquisitions increased revenue by $1.8 million and contributed $5.7 million to the Company’s consolidated net loss in the year ended December 31, 2014. The impact to net loss was primarily due to amortization of intangibles and stock-based compensation associated with the acquisitions. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3—Fair Value Measurements The Company has characterized its investments in marketable securities, based on the priority of the inputs used to value the investments, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), and lowest priority to unobservable inputs (Level 3). If the inputs used to measure the investments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the investment. Investments recorded in the accompanying consolidated balance sheet are categorized based on the inputs to valuation techniques as follows: Level 1—These are investments where values are based on unadjusted quoted prices for identical assets in an active market that the Company has the ability to access. Level 2—These are investments where values are based on quoted market prices in markets that are not active or model derived valuations in which all significant inputs are observable in active markets. Level 3—These are liabilities where values are derived from techniques in which one or more significant inputs are unobservable. The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and December 31, 2016 (in thousands): As of December 31, 2015 Level 1 Level 2 Level 3 Total Asset Cash equivalents: Money market funds $ 212,390 $ — $ — $ 212,390 U.S. Government bills 3 — — 3 212,393 — — 212,393 Short-term investments: U.S. Government and agency bills 21,620 — — 21,620 $ 234,013 $ — $ — $ 234,013 Liability Post-combination compensation classified as liability $ — $ — $ 2,357 $ 2,357 $ — $ — $ 2,357 $ 2,357 As of December 31, 2016 Level 1 Level 2 Level 3 Total Asset Cash equivalents: Money market funds $ 98,161 $ — $ — $ 98,161 U.S. Government bills 1,950 — — 1,950 Commercial paper — 2,997 — 2,997 100,111 2,997 — 103,108 Short-term investments: Commercial paper — 17,146 — 17,146 Corporate bonds — 33,303 — 33,303 U.S. Government and agency bills 50,045 — — 50,045 50,045 50,449 — 100,494 $ 150,156 $ 53,446 $ — $ 203,602 Liability Post-combination compensation classified as liability $ — $ — $ 2,067 $ 2,067 $ — $ — $ 2,067 $ 2,067 Level 1 instruments include money market funds and AAA-rated U.S. Government and agency securities, which are valued based on inputs including quotes from broker-dealers or recently executed transactions in the same or similar securities. Level 2 instruments include fixed-income funds consisting of investments in commercial paper and corporate bonds, which are valued based on quoted market prices in markets that are not active or model derived valuations in which all significant inputs are observable in active markets. Level 3 instruments include post-combination compensation classified as a liability in connection with the acquisition of ALM and convertible warrants classified as a liability. The post-combination compensation is classified as a liability due to its affiliation with a related put option, and its fair value is determined based on the fair value of the Company's common stock at the period-end reporting date, with adjustments included in general and administrative expenses. The fair value of the warrants classified as a liability is determined using the period-end fair value of the Company's common stock, the risk-free rate for periods within the contractual life of the warrant based on the U.S. Treasury yield curve in effect at the time of grant, implied volatilities from market comparisons of certain publicly traded companies and the contractual term, with adjustments included in net unrealized loss on warrant and other liabilities. On the date of the IPO, the warrants converted from warrants for preferred stock to warrants for common stock and as a result are no longer classified as a liability or subject to further fair value adjustments. The table below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands): Year Ended 2015 2016 Balance at beginning of period $ 5,310 $ 2,357 Changes to liability-classified stock awards 739 1,652 Conversion of liability-classified instruments to equity (6,825 ) (1,942 ) Net unrealized loss on warrants 3,133 — Balance at end of period $ 2,357 $ 2,067 |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Note 4—Marketable Securities Short-term investments consist of marketable securities that are available-for-sale. The cost and fair value of available-for-sale securities were as follows as of the dates indicated (in thousands): Cost Gross Gross Fair Value December 31, 2015 U.S. Government and agency bills $ 21,636 $ (16 ) $ — $ 21,620 $ 21,636 $ (16 ) $ — $ 21,620 December 31, 2016 Commercial paper $ 17,146 $ — $ — $ 17,146 Corporate bonds 33,318 (16 ) 1 33,303 U.S. Government and agency bills 50,059 (15 ) 1 50,045 $ 100,523 $ (31 ) $ 2 $ 100,494 The Company’s investments in marketable securities consist primarily of investments in fixed-income funds and AAA-rated U.S. Government and agency bills. When evaluating investments for other-than-temporary impairment, the Company reviews factors such as length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and the Company’s ability and intent to hold the investment for a period of time, which may be sufficient for anticipated recovery in market value. The Company evaluates fair values for each individual security in the investment portfolio. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5—Property and Equipment Property and equipment consisted of the following as of the dates indicated (in thousands): As of Estimated useful lives 2015 2016 Computer equipment 3 years $ 27,054 $ 30,378 Furniture and equipment 2 - 4 years 1,959 5,920 Software 1 - 3 years 1,427 856 Leasehold improvements Shorter of life of asset or lease term 8,097 10,155 Construction in progress(1) Not applicable 71,106 — Building 25 years — 81,957 Website development 3 years 33,469 43,294 143,112 172,560 Less: Accumulated depreciation and amortization 38,091 46,153 $ 105,021 $ 126,407 (1) The Company capitalizes construction in progress and records a corresponding long-term liability for build-to-suit lease arrangements where it is considered the owner, for accounting purposes, during the construction period. The Company completed construction on its new Brooklyn, NY headquarters in May 2016. Depreciation and amortization expense on property and equipment was $15.7 million , $16.3 million and $19.2 million for the years ended December 31, 2014, 2015 and 2016 , respectively, which includes amortization expense for equipment acquired under capital leases of $1.5 million , $3.8 million and $6.3 million for the years ended December 31, 2014, 2015 and 2016 , respectively. The gross balance of leased equipment as of December 31, 2015 and 2016 was $17.2 million and $22.3 million , respectively. The related accumulated amortization of equipment under capital leases was $4.6 million and $10.9 million at December 31, 2015 and 2016 , respectively. The following table summarizes capitalized website development and internal-use software activities during the periods indicated (in thousands): Year Ended 2015 2016 Balance as of the beginning of the period $ 31,156 $ 33,469 Additions to website development, excluding stock-based compensation 9,719 11,769 Additions to website development—stock-based compensation 463 792 Less: Retirements 7,869 2,736 33,469 43,294 Less: Accumulated amortization 19,676 24,155 $ 13,793 $ 19,139 For the years ended December 31, 2014, 2015 and 2016 , the Company recorded amortization expense relating to capitalized website development and internal-use software of $8.1 million , $7.3 million and $6.3 million , respectively. The loss on write-off for website development and internal-use software assets that were retired during the years ended December 31, 2014, 2015 and 2016 was $0.1 million , $1.3 million and $0.9 million , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 6—Goodwill and Intangible Assets The following table summarizes the changes in the carrying amount of goodwill for the periods indicated (in thousands): Year Ended 2015 2016 Balance as of the beginning of the period $ 30,831 $ 27,752 Acquisitions(1) — 8,660 Currency and other adjustments(2) (3,079 ) (755 ) Balance as of the end of the period $ 27,752 $ 35,657 (1) Includes goodwill as a result of the Blackbird Technologies acquisition. See “ Note 2—Business Combinations ” for more information. (2) Includes the effect of foreign currency translation and in 2015 includes an adjustment to purchase price allocation of $0.6 million . The Company did not recognize any goodwill impairments during the years ended December 31, 2014, 2015 and 2016 . At December 31, 2015 and 2016 , the gross book value and accumulated amortization of intangible assets were as follows (in thousands): As of December 31, 2015 As of December 31, 2016 Gross book Accumulated Net book Gross book Accumulated Net book Trademarks $ 822 $ (427 ) $ 395 $ — $ — $ — Technology 3,882 (2,341 ) 1,541 10,466 (3,536 ) 6,930 Customer relationships 1,959 (1,024 ) 935 1,250 (673 ) 577 Intangible assets, net $ 6,663 $ (3,792 ) $ 2,871 $ 11,716 $ (4,209 ) $ 7,507 (1) Excludes the gross book value and accumulated amortization of fully amortized intangibles. The Company acquired intangible assets valued at $8.5 million in the Blackbird acquisition. See “ Note 2—Business Combinations ” for more information. Amortization expense for the years ended December 31, 2014, 2015 and 2016 was $1.5 million , $2.2 million and $3.3 million , respectively. The Company recognized a $0.6 million intangible asset impairment loss during the year ended December 31, 2016 , included in marketing expenses. During the fourth quarter of 2016, the Company determined that there were indicators present that carrying amount of intangible assets acquired in the ALM and Grand St. acquisitions may not be recoverable. The Company prepared an undiscounted cash flow analysis and determined that intangible assets for customer relationships and trademarks acquired in the ALM and Grand St. acquisitions were not recoverable. The Company used the income approach to determine the fair value of intangible assets and concluded that these assets were fully impaired. Based on amounts recorded at December 31, 2016 , the Company will recognize intangible asset amortization expense in each of the years ending December 31 as follows (in thousands): 2017 $ 3,407 2018 2,400 2019 1,700 Thereafter — Total amortization expense $ 7,507 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Note 7—Debt Credit Agreement In May 2014 , the Company entered into a $35.0 million senior secured revolving credit facility pursuant to a Revolving Credit and Guaranty Agreement with several lenders (the “Credit Agreement”). In March 2015, the Company amended the Credit Agreement to increase the credit facility to $50.0 million. In December 2015, the Company amended the Credit Agreement to clarify certain provisions relating to permitted investments and to make other immaterial updates. As amended, the Credit Agreement will mature in May 2019 . The amended Credit Agreement includes a letter of credit sublimit of $10.0 million and a swingline loan sublimit of $15.0 million. Borrowings under the Credit Agreement (other than swingline loans) bear interest, at the Company’s option, at (i) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50% and (c) an adjusted LIBOR rate for a one-month interest period plus 1.00% , in each case plus a margin ranging from 0.00% to 0.25% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 1.25% . Swingline loans under the Credit Agreement bear interest at the same base rate (plus the margin applicable to borrowings bearing interest at the base rate). These margins are determined based on the total leverage ratio for the preceding four-fiscal-quarter period. The Company is also obligated to pay other customary fees for a credit facility of this size and type, including an unused commitment fee and fees associated with letters of credit. As amended, the Credit Agreement also permits the Company, in certain circumstances, to request an increase in the facility by an amount of up to $50.0 million (and in minimum amounts of $10.0 million ) at the same maturity, pricing and other terms. The amended Credit Agreement contains customary representations and warranties applicable to the Company and its subsidiaries and customary affirmative and negative covenants applicable to the Company and its restricted subsidiaries. The negative covenants include restrictions on, among other things, indebtedness, liens, investments, mergers, dispositions, transactions with affiliates and dividends and other distributions. These restrictions do not prohibit a subsidiary of the Company from making pro rata payments to the Company or any other person that owns an equity interest in such subsidiary. The amended Credit Agreement contains a financial covenant that requires the Company and its subsidiaries to maintain a total leverage ratio (defined as net debt to adjusted EBITDA) not to exceed 3.50 to 1.00 . As amended, the Credit Agreement includes customary events of default, including a change in control and a cross-default on the Company’s material indebtedness. The Company’s obligations under the Credit Agreement are secured by substantially all of the Company and its subsidiaries’ assets, and its obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries. At December 31, 2016 , the Company did not have any borrowings under the Credit Agreement. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Warrants | Note 8—Warrants In May 2016, the Company issued 80,011 shares of common stock upon the net exercise of warrants to purchase 97,931 shares of common stock with a weighted-average exercise price of $1.62 per share and a weighted-average fair market value of common stock at the date of exercise of $8.88 . The warrant holders exercised this warrant in a cashless transaction and 17,920 shares were forfeited to the Company as payment of the exercise price. As of December 31, 2016 , the Company did not have any outstanding warrants. During 2015 upon the closing of the IPO, all outstanding warrants for Preferred stock were converted into warrants for 203,030 shares of common stock. The warrants were revalued at the opening stock price of $24.97 on April 21, 2015, the closing date of the IPO, and $5.1 million was reclassified from liabilities to equity on that date. In October 2015, the Company issued 96,869 shares of common stock upon the net exercise of warrants to purchase 105,099 shares of common stock with a weighted-average exercise price of $1.03 per share and a weighted-average fair market value of common stock at the date of exercise of $12.90 . The warrant holders exercised this warrant in a cashless transaction and 8,230 shares were forfeited to the Company as payment of the exercise price. As of December 31, 2014, the Company had outstanding warrants to purchase 11,373 shares of its Series C Preferred stock with an exercise price of $2.67 per share, 24,510 shares of its Series D Preferred stock with an exercise price of $6.63 per share and 4,723 shares of its Series E Preferred stock with an exercise price of $15.88 per share (see “ Note 9—Stockholders’ Equity ”). All of these warrants were originally issued in connection with previous lines of credit and were fair valued on the date of issuance, with the fair value amount recognized as debt issuance costs and amortized to interest expense over the original life of the line of credit. As these warrants were exercisable into shares of Preferred stock, which included certain redemption rights that are outside of the control of the Company, in accordance with ASC 480 - Distinguishing Liabilities from Equity , the warrants were accounted for as liabilities and were revalued at each balance sheet date. The warrants were fully vested at issuance. For 2015, the Company determined the fair value of the convertible preferred stock warrants through April 21, 2015, the closing date of the IPO, utilizing the opening stock price of $24.97 per share. For 2014, the Company determined the fair value of the convertible preferred stock warrants utilizing the Black-Scholes model.The following weighted-average assumptions were utilized in determining the fair value of warrants for 2014: Series C December 31, 2014 Risk-free interest rate 1.1 % Expected term (in years) 3 Estimated dividend yield — % Weighted-average estimated volatility 43.1 % Fair value (in thousands) $ 579 Series D December 31, 2014 Risk-free interest rate 0.5 % Expected term (in years) 0.5 Estimated dividend yield — % Weighted-average estimated volatility 38.9 % Fair value (in thousands) $ 1,156 Series E December 31, 2014 Risk-free interest rate 1.1 % Expected term (in years) 3 Estimated dividend yield — % Weighted-average estimated volatility 43.1 % Fair value (in thousands) $ 185 During the years ended December 31, 2014 and 2015 , the Company recorded an unrealized loss of $0.5 million and $3.1 million , respectively, from the remeasurement of the warrants to fair value. The Company did not record any unrealized gains or losses from the remeasurement of the warrants to fair value in the year ended December 31, 2016 . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9—Stockholders’ Equity At December 31, 2015 and 2016 , the authorized capital stock of the Company included 1,400,000,000 shares of common stock. At December 31, 2015 and 2016 there were 25,000,000 shares of preferred stock authorized. Common Stock At December 31, 2014 , 2015 and 2016 there were 44,180,939 , 112,563,354 and 115,973,039 shares of common stock issued and outstanding, respectively. Holders of common stock are entitled to one vote per share. Holders of common stock are not entitled to receive dividends unless declared by the board of directors. No dividends have been declared through December 31, 2016 . The common stock has a $0.001 par value. Convertible Preferred Stock At December 31, 2014, the Company’s outstanding convertible preferred stock consisted of the following (in thousands except share data): Shares Authorized Shares Outstanding Carrying Values Series A and A-1 preferred stock 2,363,786 2,363,786 $ 808 Series B preferred stock 1,128,431 1,128,425 865 Series C preferred stock 1,234,084 1,222,282 3,361 Series D and D-1 preferred stock 4,240,120 4,215,610 27,870 Series E preferred stock 401,450 396,727 6,201 Series 1 preferred stock 203,399 203,399 1,322 Series F preferred stock 11,594,203 11,594,203 39,785 Total convertible preferred stock 21,165,473 21,124,432 $ 80,212 At December 31, 2014, the holders of the convertible preferred stock had certain voting rights and dividend and liquidity preferences. The liquidation preference provisions of the convertible preferred stock were considered contingent redemption provisions because there were certain elements that were not solely within the control of the Company, such as a change in control of the Company. Accordingly, the Company presented the convertible preferred stock within the mezzanine portion of the accompanying consolidated balance sheets. Each outstanding share of convertible preferred stock was convertible, at the holder’s option or automatically upon certain events as described below, into shares of common stock at a conversion rate determined by dividing the original issue price for such share by the then Conversion Price for such share. The original issue price, conversion price and liquidation preference price of each series of preferred stock were as follows: Price Per Share Original Issue Price Conversion Price Liquidation Preference Series A preferred stock $ 0.2429 $ 0.04858 $ 0.2429 Series A-1 preferred stock 0.3915 0.07830 0.3915 Series B preferred stock 0.80 0.160 0.80 Series C preferred stock 2.67 0.534 2.67 Series D preferred stock 6.63 1.326 6.63 Series D-1 preferred stock 6.63 1.326 6.63 Series E preferred stock 15.88 3.176 15.88 Series 1 preferred stock 6.45 1.290 6.45 Series F preferred stock 3.45 6.90 3.45 The conversion price was subject to adjustment in the event of certain anti-dilutive issuances of shares of common stock. The conversion price per share in the table above reflects the adjustment for the 10 -for-1 stock split of the Company’s common stock effective in May 2011 and the 1-for-2 reverse split of the Company's common stock, which was effected on March 25, 2015. Upon the closing of the IPO on April 21, 2015, all outstanding shares of convertible preferred stock were converted into 53,448,243 shares of common stock. As of December 31, 2015, there was no convertible preferred stock outstanding. Tender Offers On January 13, 2014, certain investors participated in a tender offer to purchase shares of common stock and preferred stock at a price of $10.60 per share (on an as-converted basis) from the Company’s employees and existing stockholders with the maximum aggregate offer price of up to $74.2 million . The terms of the tender offer were limited to a maximum of one-half of an employee’s fully-vested stock and options and warrants to purchase stock and a minimum of one-half of a former employee’s or non-employee’s fully-vested stock and options and warrants to purchase stock. At the close of the transaction, 3,154,219 shares were tendered for a total price of $33.4 million . Common Stock Issuances In April 2014, the Company issued 3,301,887 shares of common stock to certain investors at $10.60 per share for an aggregate value of $35.0 million . In the year ended December 31, 2015 , the Company issued a total of 3,580,476 shares of common stock in connection with the acquisitions of Grand St. and ALM, of which 2,652,399 shares with an aggregate fair value of $27.7 million on the applicable acquisition dates are included in the purchase price and 928,077 shares with an aggregate fair value of $9.7 million on the applicable acquisition dates are tied to continued employment with the Company and are being accounted for as post-combination compensation expense. Additionally, in the year ended December 31, 2016 , the Company issued a total of 685,749 shares of common stock in connection with the acquisition of Blackbird Technologies, of which 513,304 shares with an aggregate fair value of $6.9 million on the applicable acquisition date is included in the purchase price and 172,445 shares with an aggregate fair value of $2.3 million on the applicable acquisition date is tied to continued employment with the Company and is being accounted for as post-combination compensation expense. Secondary Transactions In the year ended December 31, 2014, the Company recorded $0.5 million as compensation expense related to the excess of the selling price per share paid to certain of the Company’s former employees over the fair value of the shares sold to an investor by these former employees in secondary transactions. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Note 10—Stock-based Compensation The Company's 2015 Equity Incentive Plan (the “2015 Plan”) was adopted by its board of directors and approved by stockholders in March 2015. The 2015 Plan became effective immediately upon adoption although no awards were made under it until the effective date of the IPO. The 2015 Plan replaced the 2006 Stock Plan, and no further grants were made under the 2006 Stock Plan as of the effective date of the IPO. Under the 2006 Stock Plan, incentive and nonqualified stock options or rights to purchase common stock were granted to eligible participants. Options were generally granted for a term of 10 years and generally vested 25% after the first year of service and ratably each month over the remaining 36 -month period contingent on continued employment with the Company on each vesting date. At December 31, 2014, 24,252,967 shares were authorized under the 2006 Stock Plan and 1,518,002 shares were available for future grant. The 2015 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and performance cash awards to employees, directors and consultants. Beginning in 2016, the number of shares available for issuance under the 2015 Plan may be increased annually by an amount equal to the lesser of 7,050,000 shares of common stock, 5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year, or such other amount as determined by the Company's board of directors. The Board of Directors approved an increase of 2,814,083 and 5,798,651 shares available for issuance under the 2015 Plan as of January 4, 2016 and January 3, 2017, respectively. Any awards issued under the 2015 Plan that are forfeited by the participant will become available for future grant under the 2015 Plan. The number of shares of the Company’s common stock initially reserved for issuance under the 2015 Plan equaled the sum of 14,100,000 shares plus up to 12,653,075 shares reserved for issuance or subject to outstanding awards under the 2006 Stock Plan. At December 31, 2016 , 17,549,262 shares were authorized under the 2015 Plan and 13,486,596 shares were available for future grant. In the year ended December 31, 2016 , we granted nonqualified stock options and RSUs to eligible participants. Options were generally granted for a term of 10 years . For both options and RSUs, vesting is typically over a four -year period and is contingent upon continued employment with the Company on each vesting date. In general, for newly-hired employees, options vest 25% after the first year of service and ratably each month over the remaining 36 -month period. In general, for current employees who receive an additional grant, options vest ratably each month over a 48 -month period. In general, for newly-hired employees, RSUs vest 25% after the first year following the vesting commencement date, which is the first day of the fiscal quarter closest to the date of grant, and then vest ratably each quarter over the remaining 12 -quarter period. In general, for current employees who receive an additional grant, RSUs vest ratably each quarter over a 16 -quarter period following the vesting commencement date, which is the first day of the fiscal quarter closest to the date of grant . The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the inputs below. Prior to the IPO, the Company utilized equity valuations based on comparable publicly-traded companies, discounted free cash flows, an analysis of the Company's enterprise value and other factors deemed relevant in estimating the fair value of its common stock. Subsequent to the IPO, the Company has used the closing price of its common stock on Nasdaq as the fair value of its common stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant for time periods that approximate the expected life of the option awards. Expected volatilities are based on implied volatilities from market comparisons of certain publicly traded companies and other factors. The expected term of stock options granted has been determined using the simplified method, which uses the midpoint between the vesting date and the contractual term. The requisite service period is generally four years from the date of grant. The fair value of RSUs is determined based on the closing price of the Company's common stock on Nasdaq on the grant date. The fair value of options granted in each year using the Black-Scholes pricing model has been based on the following assumptions: Year Ended 2014 2015 2016 Volatility 43.0% - 49.0% 40.4% - 45.0% 38.6% - 44.6% Risk-free interest rate 1.7% - 2.1% 1.3% - 1.9% 1.1% - 2.1% Expected term (in years) 5.5 - 6.1 5.5 - 6.1 5.5 - 6.3 Dividend rate —% —% —% The following table summarizes the activity for the Company’s options (in thousands except share and per share amounts): Shares Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2013 13,190,420 $ 3.10 Granted 3,206,717 10.28 Exercised (4,215,628 ) 1.89 Forfeited/Canceled (656,230 ) 6.58 Outstanding at December 31, 2014 11,525,279 5.34 Granted 1,660,170 16.19 Exercised (1,315,735 ) 2.76 Forfeited/Canceled (800,855 ) 9.94 Outstanding at December 31, 2015 11,068,859 6.94 Granted 1,700,234 9.35 Exercised (2,535,620 ) 4.17 Forfeited/Canceled (893,906 ) 9.51 Outstanding at December 31, 2016 9,339,567 7.89 6.64 $ 43,613 Total exercisable at December 31, 2016 6,352,071 6.29 5.76 38,257 Total vested and expected to vest at December 31, 2016 9,166,097 7.82 6.60 43,364 The following table summarizes the weighted average grant date fair value of options granted, intrinsic value of options exercised and fair value of awards vested in the year ended December 31, 2014 , 2015 and 2016 (in thousands except per share amounts): Year Ended December 31, 2014 2015 2016 Weighted average grant date fair value of options granted $ 4.86 $ 6.89 $ 4.03 Intrinsic value of options exercised 24,788 15,148 19,130 Fair value of awards vested 4,691 8,337 9,533 The total unrecognized compensation expense at December 31, 2016 was $14.5 million , which will be recognized over a weighted-average period of 2.5 years . The following table summarizes the activity for the Company’s unvested RSUs: Shares Weighted-Average Unvested at December 31, 2014 — $ — Granted 407,368 13.78 Vested — — Forfeited/Canceled (11,522 ) 16.76 Unvested at December 31, 2015 395,846 13.70 Granted 3,200,297 10.29 Vested (255,868 ) 10.64 Forfeited/Canceled (205,094 ) 10.15 Unvested at December 31, 2016 3,135,181 10.70 Total vested and expected to vest at December 31, 2016 2,843,448 10.68 The total unrecognized compensation at December 31, 2016 was $31.0 million , which will be recognized over a weighted-average period of 3.29 years . Total stock-based compensation expense included in the consolidated statements of operations is as follows (in thousands): Year Ended 2014 2015 2016 Cost of revenue $ 1,113 $ 871 $ 1,057 Marketing 216 560 971 Product development 1,461 2,860 5,079 General and administrative 7,260 6,550 8,794 Total stock-based compensation expense $ 10,050 $ 10,841 $ 15,901 The total stock-based compensation expense in years ended December 31, 2014, 2015 and 2016 includes $4.1 million , $1.9 million and $2.7 million in acquisition-related stock-based compensation expense, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11—Income Taxes The following are the domestic and foreign components of the Company’s income (loss) before income taxes (in thousands): Year Ended 2014 2015 2016 Domestic $ 6,084 $ 25,627 $ 25,910 International (16,344 ) (53,621 ) (28,786 ) Loss before income taxes $ (10,260 ) $ (27,994 ) $ (2,876 ) The income tax provision is comprised of the following (in thousands): Year Ended 2014 2015 2016 Current: Federal $ 5,378 $ 24,524 $ 22,084 State 21 3,843 2,623 Foreign 401 579 580 Total current 5,800 28,946 25,287 Deferred: Federal (50 ) (2,863 ) 2,008 State (186 ) 108 (247 ) Foreign (581 ) (122 ) (23 ) Total deferred (817 ) (2,877 ) 1,738 Total income tax provision $ 4,983 $ 26,069 $ 27,025 The current tax expense listed above does not reflect income tax benefits of $4.9 million , $3.9 million and $3.2 million for the years ended December 31, 2014, 2015 and 2016 , respectively, related to excess tax deductions on share-based compensation because we recorded these benefits directly to additional paid-in capital. A reconciliation of the income tax provision at the U.S. federal statutory income tax rate of 35% to the Company’s total income tax provision is as follows (in thousands): Year Ended 2014 2015 2016 Income tax benefit at federal statutory rate $ (3,488 ) $ (9,798 ) $ (1,007 ) State and local taxes net of federal benefit (109 ) 2,575 1,545 Foreign income tax rate differential 3,255 11,584 5,849 Non-deductible stock-based compensation 1,963 1,571 1,412 Net unrealized loss on warrant and other liabilities 140 1,097 — Non-deductible items 152 1,314 267 Uncertain tax positions 398 5,523 4,033 Return to provision adjustment 36 (25 ) (498 ) Non-deductible acquisition costs 582 10 199 Change in valuation allowance 2,065 7,957 4,911 Research and development credit — (7,684 ) (2,170 ) Deferred charge on restructuring — 12,168 12,168 Other (11 ) (223 ) 316 Total income tax provision $ 4,983 $ 26,069 $ 27,025 Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) are as follows (in thousands): As of December 31, 2015 2016 Deferred tax assets: Net operating loss carryforwards $ 7,961 $ 13,084 Research and development credit carryforwards 898 898 Stock-based compensation expense 3,953 5,692 Accrued VAT liability 74 68 Alternative minimum tax credit 717 274 Allowance for doubtful accounts 650 611 Deferred rent 146 644 Accrued vacation 640 1,035 Unrealized loss on foreign currency 3,035 — Other, net 1,143 1,418 Total deferred tax assets 19,217 23,724 Less valuation allowance 9,540 13,839 Total net deferred tax asset 9,677 9,885 Deferred tax liabilities: Depreciation (4,490 ) (6,618 ) Restructuring Liability (65,585 ) (64,460 ) Unrealized gain on foreign currency — (1,059 ) Other liabilities (1,022 ) (2,816 ) Total deferred tax liabilities (71,097 ) (74,953 ) Net deferred tax liabilities $ (61,420 ) $ (65,068 ) The Company does not have any federal or state income tax NOL carryforwards as of December 31, 2016 . The NOL deferred tax asset balance is comprised of losses in certain foreign jurisdictions and are currently subject to a valuation allowance. As of December 31, 2015 and 2016 , the Company had approximately $0.7 million and $0.3 million of federal alternative minimum tax credits, which may be carried forward indefinitely. As of December 31, 2015 and 2016 , the Company had $2.8 million and $0.9 million of federal research and development tax credit carryforwards which will begin to expire in 2035 if unused. The Company assesses the likelihood of its ability to realize the benefit of its deferred tax assets in each jurisdiction by evaluating all relevant positive and negative evidence. To the extent the Company determines that some or all of its deferred tax assets are not more likely than not to be realized, it establishes a valuation allowance. For the year ended December 31, 2016 , the Company determined that the existence of a three -year cumulative loss incurred in certain foreign jurisdictions, inclusive of 2016 , constituted sufficiently strong negative evidence to warrant the maintenance of a valuation allowance. As a result, a valuation allowance of $13.8 million as of December 31, 2016 has been recorded against certain of the Company’s deferred tax assets. The amount of the deferred tax assets considered realizable is $9.9 million . The following table summarizes the valuation allowance activity for the periods indicated (in thousands): Year Ended 2014 2015 2016 Balance as of the beginning of period $ — $ 1,892 $ 9,540 Additions charged to expense 3,915 7,983 4,886 Deletions credited to expense (1,850 ) — — Currency translation (173 ) (335 ) (587 ) Balance as of the end of period $ 1,892 $ 9,540 $ 13,839 The Company has not recorded deferred income taxes with respect to undistributed earnings of foreign subsidiaries as such earnings are expected to remain reinvested indefinitely. Upon distribution as dividends or otherwise, such amounts would be subject to taxation in the United States. However, U.S. tax liabilities would be offset, in whole or part, by allowable tax credits with respect to income taxes previously paid to foreign jurisdictions. The amount of undistributed earnings of non-U.S. subsidiaries at December 31, 2016 , as well as the related deferred income tax, if any, is not material. The following table summarizes the unrecognized tax benefit activity for the periods indicated (in thousands): As of December 31, 2014 2015 2016 Balance as of the beginning of period $ — $ 398 $ 22,229 Additions based on tax positions related to the current year 398 21,797 1,071 Additions for tax positions of prior years — 34 274 Reductions for tax provisions of prior years — — — Settlements — — — Balance as of the end of period $ 398 $ 22,229 $ 23,574 The amount of unrecognized tax benefits included within “other liabilities” on the consolidated balance sheets as of December 31, 2014, 2015 and 2016 are $0.4 million , $22.2 million and $23.6 million , respectively. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate is $11.8 million at December 31, 2016 . In January 2015, the Company implemented an updated global corporate structure to more closely align with its global operations and future expansion plans outside of the United States. The new structure changed how the Company uses its intellectual property and implemented certain intercompany arrangements. The Company believes this may eventually result in a reduction in its overall effective tax rate and other operational efficiencies. The revised structure resulted in the setup of a deferred tax liability in the amount of $66.0 million on the taxable gain created in the transaction. In addition, the Company recorded an asset of $66.0 million for the deferred tax charge representing the future income tax on the gain, which will be amortized into income tax expense through 2019. The Company also recorded an asset of $19.7 million for the deferred tax charge representing the future unrecognized tax benefit which will be amortized into income tax expense through 2019. During the twelve months ended December 31, 2016 , $17.1 million of the deferred tax charge was amortized into income tax expense ( $13.2 million related to the updated corporate structure and $3.9 million related to the unrecognized tax benefit thereon). At December 31, 2016, the Company had a total deferred tax charge of $ 51.4 million , of which $ 17.1 million is expected to amortize in the next twelve months and, therefore, is classified as deferred tax charge - current and $34.3 million is deferred tax charge, net of current portion. The Company is subject to taxation in the United States, New York, and various other states and foreign jurisdictions. As of December 31, 2016 , tax year 2011 and later remain open to examination. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 12— Net Loss Per Share The following table presents the calculation of basic and diluted net loss per share for periods presented (in thousands except share and per share amounts): Year Ended 2014 2015 2016 Net loss $ (15,243 ) $ (54,063 ) $ (29,901 ) Basic and diluted shares: Weighted average common shares outstanding 40,246,663 91,122,291 113,562,738 Net loss per share attributable to common stockholders: Basic and diluted net loss per share applicable to common stockholders $ (0.38 ) $ (0.59 ) $ (0.26 ) The following potential common shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Year Ended 2014 2015 2016 Stock options 11,308,241 11,806,620 10,041,403 Restricted Stock Units — 128,200 2,043,544 Warrants 203,030 182,031 33,447 Convertible preferred stock 53,448,243 16,254,123 — Total anti-dilutive securities 64,959,514 28,370,974 12,118,394 |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Note 13—Segment and Geographic Information The Company has determined it operates as one operating and reportable segment for purposes of allocating resources and evaluating financial performance. Revenue by country is based on the billing address of the seller. The following table summarizes revenue by geographic area (in thousands): Year Ended 2014 2015 2016 United States $ 153,866 $ 213,389 $ 276,537 International 41,725 60,110 88,430 Revenue $ 195,591 $ 273,499 $ 364,967 No individual international country’s revenue exceeded 10% of total revenue. All significant long-lived assets are located in the United States. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14—Commitments and Contingencies Lease Commitments Capital Leases The Company entered into a credit agreement with Dell Financial Services, LLC. (“DFS”) effective on February 17, 2016, which provided the Company with a credit line of up to $6.0 million for hosting equipment leases (the “DFS Line”). The DFS Line allows the Company to lease hosting equipment from DFS. The leases have a 36 -month term, zero interest and are payable in equal monthly installments with a buy-out option of $1 at the end of the lease term. As of December 31, 2016 , the Company has leased approximately $1.1 million of hosting equipment using the DFS Line. The Company entered into a credit agreement with ePlus Group, Inc. (“ePlus”) on January 3, 2014, which provided the Company with a credit line of up to $8.0 million for computer equipment leases (the “ePlus Line”), which was increased to $18.0 million during 2015. The ePlus Line allows the Company to order equipment from any approved vendor. ePlus purchases the equipment on behalf of the Company and leases it back to the Company. The leases have a 36 -month term, interest rate of 3.50 - 6.93% and are payable in equal monthly installments at fair market value or a $1 buy-out option at the end of the lease term depending on the equipment. As of December 31, 2016 , the Company has leased approximately $21.1 million of computer equipment using the ePlus Line. The Company had a credit agreement with TriplePoint Capital, LLC (“TriplePoint”), which provided the Company with a credit line of up to $20.0 million for computer equipment leases (the “TriplePoint Line”). The TriplePoint Line allowed the Company to order equipment from any vendor. TriplePoint purchased the equipment on behalf of the Company and leased it back to the Company. The leases have a 36 -month term, interest rate of 8.25% and are payable in equal monthly installments. The Company stopped leasing equipment under the TriplePoint Line in June 2012 and paid off the remaining lease obligations during 2015 in accordance with the terms of the credit agreement. At December 31, 2015, the Company no longer had any leased computer equipment under the TriplePoint Line. For the years ended December 31, 2014, 2015 and 2016 , the accompanying consolidated statement of operations includes charges of approximately $0.4 million , $1.2 million and $1.6 million for interest expense, respectively, related to the equipment leased using the TriplePoint, ePlus and DFS Lines. Operating Leases In 2015 , the Company entered into a new lease for office space in London, U.K. expiring in 2025, and entered into lease extensions for existing office space in San Francisco, California and Hudson, New York expiring in 2020 and 2021, respectively. The Company did not enter into any material operating leases or extensions in 2016 . Rent expense for these operating leases is recognized over the term of each respective lease on a straight-line basis. In addition, the Company leases other office facilities under shorter terms and cancelable leases. Total rent expense for the years ended December 31, 2014, 2015 and 2016 was $3.6 million , $5.1 million and $6.0 million respectively. Build-to-Suit Lease In May 2014, the Company entered into a 10 -year lease agreement for approximately 199,000 rentable square feet of office space in Brooklyn, New York for the Company’s new headquarters, which commenced in 2015 . Of the total new office space, approximately 172,000 rentable square feet is being accounted for as a build-to-suit lease and approximately 27,000 rentable square feet located in an adjacent building is being accounted for as an operating lease. In connection with the lease agreement, the Company established a $5.3 million collateral account, reflected in the restricted cash balance on the consolidated balance sheet. The following table represents the Company’s commitments under its current capital, operating and build-to-suit lease agreements as of December 31, 2016 (in thousands): Capital Lease Operating Build-to-Suit Periods ending 2017 $ 7,970 $ 3,026 $ 5,883 2018 4,436 3,787 9,381 2019 1,296 3,817 9,451 2020 38 3,471 9,522 2021 — 2,718 10,354 Thereafter — 10,475 48,834 Total minimum payments required $ 13,740 $ 27,294 $ 93,425 Amounts representing interest 1,615 Present value of net minimum payments 12,125 Current maturities 6,829 Long-term payment obligations $ 5,296 Non-Income Tax Contingencies The Company had reserves of $2.6 million and $0.3 million at December 31, 2015 and 2016 , respectively, for certain non-income tax obligations, representing management’s best estimate of its potential liability. The Company could also be subject to examination in various jurisdictions related to income tax and non-income tax matters. The resolution of these types of matters, if in excess of the recorded reserve, could have an adverse impact on the Company’s business. Legal Proceedings On May 13, 2015, a purported securities class action complaint ( Altayyar v. Etsy, Inc., et al. , Docket No. 1:15-cv-02785) was filed in the United States District Court for the Eastern District of New York against the Company and certain officers. The complaint was brought on behalf of a purported class consisting of all persons or entities who purchased or otherwise acquired shares of the Company's common stock from April 16, 2015 through and including May 10, 2015. It asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false or misleading statements and omissions with respect to, among other things, merchandise for sale on the Company's website that may be counterfeit or constitute trademark or copyright infringement and actions taken by third-party brands against Etsy sellers for trademark or copyright infringement. On October 22, 2015, the court appointed a lead plaintiff and lead plaintiff’s counsel. On January 21, 2016, the lead plaintiff filed an amended class action complaint alleging false or misleading statements or omissions with respect to substantially the same topics as the original complaint. The amended complaint adds certain outside directors and underwriters as defendants, expands the purported class period to be April 16, 2015 to August 4, 2015, inclusive, and asserts violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as well as Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The amended complaint seeks certification as a class action and unspecified compensatory damages plus interest and attorneys' fees. The Company and the named officers and directors intend to defend themselves vigorously against this action. In light of, among other things, the early stage of the litigation, the Company is unable to predict the outcome of this matter and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome. On July 21, 2015, a purported securities class action complaint ( Cervantes v. Dickerson, et.al ., Case No. CIV 534768) was filed in the Superior Court of State of California, County of San Mateo against the Company, certain officers, directors and underwriters. The complaint asserts violations of Sections 11 and 15 of the Securities Act of 1933. As in the Altayyar litigation, the complaint alleges misrepresentations in the Company’s Registration Statement on Form S-1 and Prospectus with respect to, among other things, merchandise for sale on the Company's website that may be counterfeit or constitute trademark or copyright infringement. The complaint seeks certification as a class action and unspecified compensatory damages plus interest and attorneys' fees. On December 7, 2015, the Company and the underwriter defendants moved to stay the Cervantes action on the grounds of forum non conveniens. On November 5, 2015, another purported securities class action complaint ( Weiss v. Etsy et al. , No. CIV 536123) was filed in the Superior Court of State of California, County of San Mateo. The Weiss complaint names as defendants the Company and the same officers, directors and underwriters named in the Cervantes complaint, and also asserts violations of Sections 11 and 15 of the Securities Act of 1933 based on allegedly false or misleading statements or omissions with respect to, among other things, merchandise for sale on the Company's website that may be counterfeit or constitute trademark or copyright infringement. On December 24, 2015, the court consolidated the Cervantes and Weiss actions. The Company and the named officers and directors intend to defend themselves vigorously against these consolidated actions. In light of, among other things, the early stage of the litigation, the Company is unable to predict the outcome of this matter and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome. On February 3, 2016, the court granted the Company’s motion to stay the consolidated actions. In addition, from time to time in the normal course of business, various other claims and litigation have been asserted or commenced against the Company. Due to uncertainties inherent in litigation and other claims, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability for damages. Any claims or litigation, regardless of their success, could have an adverse effect on the Company’s consolidated results of operations or cash flows in the period the claims or litigation are resolved. As of December 31, 2016 , the Company does not believe that there are any material litigation exposures relating to these other claims. |
Basis of Presentation and Sum22
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of Etsy and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The accounting estimates that require management’s most difficult and subjective judgments include revenue recognition, income taxes, website development costs and internal-use software, purchase price allocations for business combinations, valuation of goodwill and intangible assets, leases and stock-based compensation. The Company evaluates its estimates and judgments on an ongoing basis and revises them when necessary. Actual results may differ from the original or revised estimates. |
Revenue Recognition | Revenue Recognition The Company's revenue is diversified, generated from a mix of market activities and the Seller Services provided to Etsy sellers to help them start, manage and scale their business. The Company's largest market is Etsy.com. The Company also owns A Little Market, a handmade and supplies market for sellers and buyers in France. Markets revenue is primarily made up of the 3.5% transaction fee an Etsy seller pays for each completed transaction on Etsy.com and the $0.20 listing fee she pays for each item she lists on Etsy.com. Seller Services revenue includes the fees Etsy sellers pay for services, which include Direct Checkout, a payment processing service; Promoted Listings, an ad service for prominent placement in on-site search results; Shipping Labels, which allow Etsy sellers to directly purchase shipping labels through the Company's platform; and Pattern by Etsy, launched in April 2016, which enables sellers to easily create their own custom website. Other revenue typically includes revenue generated from commercial partnerships and processing fees we receive from Paypal. The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the Etsy seller; (3) the collection of fees is reasonably assured; and (4) the amount of fees to be paid by the Etsy seller is fixed or determinable. The Company evaluates whether it is appropriate to recognize revenue on a gross or net basis based upon its evaluation of whether it is the primary obligor in a transaction, has inventory risk and has latitude in establishing pricing and selecting suppliers, among other factors. Based on its evaluation of these factors, revenue is recorded net of gross merchandise values associated with the transaction. Markets revenue . Markets revenue is primarily made up of two components: the 3.5% transaction fee that an Etsy seller pays for each completed transaction on Etsy.com, exclusive of shipping fees charged, and the listing fee of $0.20 she pays for each item she lists on Etsy.com. Transaction fees are recognized when the corresponding transaction is made. Listing fees are recognized ratably over a four -month listing period, unless the item is sold or the seller relists it, at which time any remaining listing fee is recognized. Revenue from completed Wholesale transactions through Etsy.com and transaction and listing revenue for other markets, including ALM are also included in Markets revenue. Seller Services revenue . Seller Services revenue consists of fees an Etsy seller pays the Company for the Seller Services she uses, including Direct Checkout, Promoted Listings, Shipping Labels and Pattern. • Revenue from Direct Checkout consists of fees an Etsy seller pays the Company to process credit, debit and Etsy Gift Card payments. Direct Checkout fees vary between 3 - 4% of the item’s total sale price plus a flat fee per order, depending on the country in which her bank account is located. Direct Checkout fees are based on the item’s total sale price, including shipping. Revenue from Direct Checkout is recognized when the corresponding transaction is made. • Revenue from Promoted Listings consists of cost-per-click fees an Etsy seller pays for prominent placement of her listings in search results generated by Etsy buyers in the Company's markets. Revenue is recognized when the Promoted Listing is clicked. • Revenue from Shipping Labels consists of fees an Etsy seller pays the Company when she purchases shipping labels through its platform, net of the cost the Company incurs in purchasing those shipping labels. The Company provides its sellers shipping labels from the United States Postal Service, FedEx and Canada Post at a discounted price due to the volume of purchases through its platform. The Company recognizes Shipping Label revenue when an Etsy seller purchases a shipping label. The Company recognizes Shipping Label revenue on a net basis as it is not the primary obligor in the delivery of these services. • Revenue from Pattern consists of monthly subscription and annual domain registration fees, an optional add-on, an Etsy seller pays to use our custom website services. The Company recognizes revenue from Pattern ratably over the term of the subscription. Other revenue . Other revenue includes the fees the Company receives from Paypal for transactions that occur outside of Direct Checkout, which is recognized as transactions are processed, funds the Company receives from a third-party for unused Etsy Gift Cards, which are recognized when the third-party approves the release of these funds and revenue from other commercial partnerships, which are recognized as earned over the term of the contract. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of the cost of interchange and other fees for credit card processing services, credit card verification service fees and credit card chargebacks to support Direct Checkout revenue and costs of refunds made to Etsy buyers that the Company is not able to collect from Etsy sellers. Cost of revenue also includes expenses associated with the operation and maintenance of the Company’s platform and data centers, including depreciation and amortization, employee-related costs and hosting and bandwidth costs. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s trade accounts receivable are recorded at amounts billed to Etsy sellers and are presented on the consolidated balance sheet net of the allowance for doubtful accounts. The allowance is determined by a number of factors, including age of the receivable, current economic conditions, historical losses and management’s assessment of the financial condition of Etsy sellers. Receivables are written off once they are deemed uncollectible, which may arise when Etsy sellers file for bankruptcy or are otherwise deemed unable to repay the amounts owed to the Company. Estimates of uncollectible accounts receivable are recorded to general and administrative expense. |
Funds Receivable and Seller Accounts and Funds Payable and Amounts Due to Sellers | Funds Receivable and Seller Accounts and Funds Payable and Amounts due to Sellers The Company records funds receivable and seller accounts and funds payable and amounts due to sellers as current assets and liabilities, respectively, on the consolidated balance sheet. Funds receivable and seller accounts represent amounts received or expected to be received from Etsy buyers via third-party credit card processors, which flow through an Etsy bank account for payment to Etsy sellers. This cash and related receivable represent the total amount due to sellers, and as such a liability for the same amount is recorded to funds payable and amounts due to Etsy sellers. |
Property and Equipment | Property and Equipment Property and equipment, consisting principally of building, computer equipment and leasehold improvements, are recorded at cost. The Company capitalizes construction in progress for build-to-suit lease agreements where we are the owner, for accounting purposes only, during the construction period. Depreciation and amortization begin at the time the asset is placed into service and are recognized using the straight-line method in amounts sufficient to relate the cost of depreciable and amortizable assets to operations over their estimated useful lives. Repairs and maintenance are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. When events or changes in circumstances require, the Company assesses the likelihood of recovering the cost of tangible long-lived assets based on its expectations of future profitability, undiscounted cash flows and management’s plans with respect to operations to determine if the asset is impaired and subject to write-off. Measurement of any impairment loss is based on the excess of the carrying value of the asset over the fair value. |
Internal-use Software and Website Development Costs | Internal-use Software and Website Development Costs Costs incurred to develop software for internal use and the Company’s website are capitalized and amortized over the estimated useful life of the software, generally three years. In accordance with authoritative accounting guidance, capitalization of costs to develop software begin when preliminary development efforts are successfully completed, management has authorized and committed project funding and it is probable that the project will be completed and the software will be used as intended. The Company also capitalizes costs related to upgrades and enhancements when it is probable the expenditures will result in additional functionality or will extend the useful life of existing functionality. Costs related to the design or maintenance of internal-use software and website development are expensed as incurred. The Company periodically reviews internal-use software and website development costs to determine whether the projects will be completed, placed in service, removed from service or replaced by other internally developed or third-party software. If the asset is not expected to provide any future benefit, the asset is retired and any unamortized cost is expensed. These costs are included in property and equipment on the consolidated balance sheets. |
Leases | Leases The Company leases office space and certain computer equipment in multiple locations under non-cancelable lease agreements. The leases are reviewed for classification as operating, capital or build-to-suit leases. For operating leases, rent is recognized on a straight-line basis over the lease period. For capital leases, the Company records the leased asset with a corresponding liability. Payments are recorded as reductions to the liability with an appropriate interest charge recorded based on the then-outstanding remaining liability. The Company considers the nature of the renovations and the Company’s involvement during the construction period of newly leased office space to determine if it is considered, for accounting purposes only, to be the owner of the construction project during the construction period. If the Company determines that it is the owner of the construction project, it is required to capitalize the fair value of the building as well as the construction costs incurred on its consolidated balance sheet along with a corresponding financing liability (“build-to-suit accounting”). Upon occupancy for build-to-suit leases, the Company assesses whether the circumstances qualify for sales recognition under the sale-leaseback accounting guidance. If the lease meets the sale-leaseback criteria, the Company will remove the asset and related financial obligation from the balance sheet and treat the building lease as an operating lease. If upon completion of construction, the project does not meet the sale-leaseback criteria, the leased property will be treated as a capital lease for financial reporting purposes. In May 2016, the Company took possession of its corporate headquarters in Brooklyn, New York upon substantial completion of the construction phase of the build-out. Upon completion of the project, the Company performed a sale-leaseback analysis pursuant to Accounting Standards Codification (“ASC”) 840 - Leases , to determine the appropriateness of removing the previously capitalized assets from the consolidated balance sheets. The Company concluded that components of “continuing involvement” were evident as a result of this review, precluding the derecognition of the related assets from the consolidated balance sheets. In conjunction with the initiation of the lease in May 2014, the Company also recorded a facility financing obligation equal to the fair market value of the assets received from the landlord. At the end of the lease term, including exercise of any renewal options, the remaining value of the net facility financing obligation over the net carrying value of the fixed asset will be recognized as a non-cash gain on sale of the property. The Company does not report rent expense for the lease. Rather, rental payments under the lease are recognized as a reduction of the financing obligation and interest expense, and the associated asset capitalized throughout the construction project is depreciated over its estimated useful life. |
Income Taxes | Income Taxes The income tax benefit (provision) is based on income (loss) before income taxes and is accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to settle. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Management assesses the need for a valuation allowance on a quarterly basis to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertainty in income taxes using a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate audit settlement. The Company recognizes interest and penalties, if any, associated with income tax matters as part of the income tax provision and includes accrued interest and penalties with the related income tax liability in the consolidated balance sheet. |
Business Combinations | Business Combinations The Company has completed a number of acquisitions of other businesses in the past and may acquire additional businesses or technologies in the future. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity or a combination of the two, in a business combination to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. When the Company issues stock-based or cash awards to an acquired company’s stockholders, the Company evaluates whether the awards are contingent consideration or compensation for post-combination services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholder beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-combination services and recognized as expense over the requisite service period. The Company initially recognizes intangible assets at fair value, and amortizes them on a straight-line basis over their estimated useful lives, typically three years. When circumstances indicate that the carrying value of these assets may not be recoverable, the Company reviews its identifiable amortizable intangible assets for impairment. To date, the assets acquired and liabilities assumed in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily of developed technologies, customer relationships and trademarks. The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, the nature of the business acquired and the specific characteristics of the identified intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection with determination of fair values, the Company may engage independent appraisal firms to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. Acquisition-related transaction costs incurred by the Company are not included as a component of consideration transferred, but are accounted for as an expense in the period in which the costs are incurred. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Goodwill is not amortized, but is subject to an annual impairment test. Management has determined that the Company has a single reporting unit and performs its annual goodwill impairment test during the fourth quarter or more frequently if events or changes in circumstances indicate that the goodwill may be impaired. Events or changes in circumstances which could trigger an impairment review include significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends, significant underperformance relative to historical or projected future results of operations, a significant adverse change in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel. The Company has the option to first assess qualitative factors (“Step Zero”) to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform the first of a two-step impairment test. The first step involves comparing the estimated fair value of the reporting unit with its respective book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then a second step is required that compares the carrying amount of the goodwill with its implied fair value. The estimate of implied fair value of goodwill may require valuations of certain internally-generated and unrecognized intangible and tangible net assets. If the carrying amount of goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess. |
Intangible Assets | Intangible Assets Intangible assets are amortized over the estimated useful life of the acquired technology, customer relationships and trademarks, generally three years. |
Stock-Based Compensation | Stock-Based Compensation For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option-pricing model and the expense is recognized over the requisite service period for awards expected to vest. Prior to the IPO, the Company utilized equity valuations based on comparable publicly-traded companies, discounted free cash flows, an analysis of the Company's enterprise value and other factors deemed relevant in estimating the fair value of its common stock. Subsequent to the IPO, the Company has used the closing price of its common stock on Nasdaq as the fair value of its common stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatilities are based on implied volatilities from market comparisons of certain publicly traded companies and other factors. The expected term of stock options granted has been determined using the simplified method, which uses the midpoint between the vesting date and the contractual term. The requisite service period is generally four years from the date of grant. The fair value of RSUs is determined based on the closing price of the Company's common stock on Nasdaq on the grant date. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We account for stock-based compensation arrangements in restricted shares subject to a put option that allows the holder of the shares to put the shares back to the Company for cash as liability-classified stock awards. These awards are re-measured at fair value each reporting period, with changes in fair value being charged to the statement of operations. Compensation expense is recognized using a graded vesting methodology for each separately vesting tranche as though the award were, in substance, multiple awards. Unless the put option is exercised, the restricted shares will be reclassified from a liability to an equity classified award upon the termination of the put option at the vesting of each separate tranche. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all investments with an original maturity of three months or less at time of purchase to be cash equivalents. Cash restricted by third parties is not considered cash and cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and short-term investments. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. At times, such amounts may exceed federally insured limits. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Management believes that the fair value of financial instruments, consisting of cash and cash equivalents, short-term investments, accounts receivable and accounts payable, approximates carrying value due to the immediate or short-term maturity associated with its cash and cash equivalents, accounts receivable and accounts payable. |
Marketing | Marketing Marketing expenses consist primarily of acquisition and brand-related marketing costs, such as product listing ads, search engine marketing, affiliate marketing, display marketing and other marketing expenses supporting these initiatives. Marketing expenses also include employee-related expenses for our employees involved in digital marketing, brand marketing and design, seller development and growth, public relations and communications, product marketing and marketing research activities. Marketing expenses are primarily driven by investments to grow and retain members on the Company's platform. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Prior to the IPO, the Company followed the two-class method when computing net income (loss) per share as the Company had issued shares that met the definition of participating securities. The two-class method determined net income (loss) per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method required income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s convertible preferred stock contractually entitled the holders of such shares to participate in dividends, but did not contractually require the holders of such shares to participate in losses of the Company. Accordingly, the two-class method did not apply for periods in which the Company reported a net loss or a net loss attributable to common stockholders resulting from dividends, accretion or modifications to its convertible preferred stock. Upon the closing of the IPO on April 21, 2015, all outstanding shares of convertible preferred stock were converted into shares of common stock. For current and future periods, the two-class method is not applicable to the computation of net (loss) income per share until shares of authorized preferred stock become issued and outstanding. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding common stock options, convertible preferred stock and warrants to purchase common stock and convertible preferred stock. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Segment Data | Segment Data The Company identifies operating segments as components of an entity for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and performance assessment. The Company defines the term “chief operating decision maker” to be its chief executive officer. The Company has determined it operates in one operating segment and one reportable segment, as its chief operating decision maker reviews financial information presented on only a consolidated basis for purposes of allocating resources and evaluating financial performance. |
Foreign Currency | Foreign Currency The Company has determined that the functional currency for each of its foreign operations is the local currency in which the operation is located. All assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Revenue and expenses are translated using average exchange rates during the period. Foreign currency translation adjustments are reflected in stockholders’ equity as a component of other comprehensive income (loss). Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in foreign exchange gain (loss) within other income (expense) in the statement of operations. |
Excess Tax Benefits from Exercise of Stock Options | Excess Tax Benefits from Exercise of Stock Options The Company uses the “with and without” approach in determining the order in which tax attributes are utilized. As a result, the Company recognizes a tax benefit from stock-based awards in additional paid-in capital only if an incremental tax benefit is realized after all other tax attributes currently available to the Company have been utilized. When tax deductions from stock-based awards are less than the cumulative book compensation expense, the tax effect of the resulting difference (“shortfall”) is charged first to additional paid-in capital, to the extent of the Company’s pool of windfall tax benefits, with any remainder recognized in income tax expense. The Company determined that it had a sufficient windfall pool available through December 31, 2016 to absorb any shortfalls. |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, which replaces existing revenue recognition guidance. The new guidance is effective for the annual and interim periods beginning after December 15, 2017. Among other things, the updated guidance requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company has performed a preliminary assessment over the Markets and Seller Services revenue streams and does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, which requires a reporting entity to recognize right-of-use assets and lease liabilities on the balance sheet for operating leases to increase transparency and comparability. The new guidance is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. Upon adoption of this standard, the Company expects to recognize, on a discounted basis, its minimum commitments under noncancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets and lease obligations. The Company is currently evaluating additional impacts the guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 for share-based payment transactions that require a reporting entity to recognize excess tax benefits and deficiencies as income tax expense or benefit in the income statement. The new guidance is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted for financial statements as of the beginning of an interim or annual reporting period. The Company will adopt this standard in the first quarter of 2017 and anticipates increased volatility in the income statement upon recognition of excess tax benefits and deficiencies within the tax provision rather than as an adjustment to equity. The Company has elected to account for forfeitures when they occur and does not anticipate a material impact related to the change in forfeiture recognition. In October 2016, the FASB issued ASU 2016-16 which eliminated the exception that previously existed for the income tax consequences of intra-entity asset transfers other than inventory . The new guidance is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted in annual reporting periods for which interim or annual financial statements have not been issued. The Company plans to adopt this standard during our interim period ending March 31, 2017. The amendments in this update will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has evaluated the effect of the adoption of this standard and expects a cumulative effect adjustment to beginning retained earnings in the period of adoption of $51.4 million which represents the unamortized amount of the deferred tax charge asset on the balance sheet. Consequently, the adoption of this standard is expected to eliminate the recognition in our tax provision of $17.1 million in each year through 2019, the year through which the deferred tax charge was previously amortizable. In November 2016, the FASB issued ASU 2016-18 which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The new guidance is effective for the annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01 to clarify the definition of a business and provide guidance for evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is to be applied on a prospective basis and is effective for the annual and interim periods beginning after December 15, 2017. As the adoption of this standard will only impact prospective acquisitions, the Company does not anticipate this update to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 to simplify the measurement of goodwill impairment by eliminating step two from the goodwill impairment test. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The new guidance is effective for the annual and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company does not anticipate the update to have a material impact on its consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, under which management will be required to assess an entity’s ability to continue as a going concern and provide related disclosures in certain circumstances. The new guidance is effective for annual and interim periods ending after December 15, 2016. The Company adopted this guidance in the fourth quarter of 2016 noting no impact on the Company's consolidated financial statements or disclosures. In April 2015, the FASB issued ASU 2015-05, under which customers will apply the same criteria as vendors to determine whether a cloud computing arrangement contains a software license or is solely a service contract. The new standard is effective for annual and interim periods beginning after December 15, 2015. The Company has adopted this guidance in the first quarter of 2016 noting no material impact to the current period consolidated financial statements. In August 2015, the FASB issued ASU 2015-15 to address the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The guidance affirms the Company's treatment of such costs, which is to defer and present the debt issuance costs as an asset and subsequently amortize the costs over the term of the line-of-credit arrangement. The new standard is effective for annual and interim periods beginning after December 15, 2015. The Company has adopted this guidance in the first quarter of 2016 noting no impact to the current period consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The new guidance is effective for annual and interim periods beginning after December 15, 2015. The Company has adopted this guidance in the first quarter of 2016 noting no impact to the current period consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 to clarify how certain cash receipts and payments are presented and classified in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted for financial statements as of the beginning of an interim or annual reporting period. The Company has adopted this guidance in the fourth quarter of 2016 noting no material impact to the consolidated financial statements. |
Basis of Presentation and Sum23
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revenue by Type of Service | The following table summarizes revenue by type of service (in thousands): Year Ended 2014 2015 2016 Markets $ 108,732 $ 132,648 $ 158,204 Seller Services 82,502 136,608 200,857 Other 4,357 4,243 5,906 Revenue $ 195,591 $ 273,499 $ 364,967 |
Schedule of Allowance Activity | The following table summarizes the allowance activity during the periods indicated (in thousands): Year Ended 2014 2015 2016 Balance as of the beginning of period $ 1,279 $ 1,841 $ 2,071 Bad debt expense 1,881 1,780 1,770 Write-offs, net of recoveries and other adjustments (1,319 ) (1,550 ) (1,842 ) Balance as of the end of period $ 1,841 $ 2,071 $ 1,999 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the components of the purchase price and allocation of the purchase price at fair value (in thousands): Cash paid $ 5,290 Common shares 25,521 Total purchase consideration $ 30,811 Net working capital $ 625 Property and equipment and other assets 95 Developed technology 1,636 Customer relationships 1,693 Trademarks 775 Goodwill 27,309 Deferred tax liability (757 ) Other long-term liabilities (565 ) Net assets acquired $ 30,811 The following table summarizes the components of the Grand St. purchase price and the allocation of the purchase price at fair value (in thousands): Cash paid $ 1,040 Common shares 2,202 Total purchase consideration $ 3,242 Net working capital $ 85 Developed technology 2,000 Customer relationships 600 Trademarks 200 Goodwill 991 Deferred tax liability (634 ) Net assets acquired $ 3,242 The below table summarizes the components of the Blackbird purchase price and allocation of the purchase price at fair value (in thousands): Cash paid $ 8,050 Common shares 6,966 Total purchase consideration $ 15,016 Net working capital $ 81 Developed technology 7,200 Customer relationships 1,250 Goodwill 8,660 Deferred tax liability (2,175 ) Net assets acquired $ 15,016 |
Summary of Unaudited Pro Forma Financial Information | The unaudited pro forma financial information is presented in the table below for the years ended December 31, 2015 and 2016 (in thousands except per share amounts): Year Ended December 31, 2015 2016 Revenue $ 273,616 $ 365,786 Net loss (65,106 ) (35,401 ) Basic and diluted net loss per share (0.71 ) (0.31 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring | The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and December 31, 2016 (in thousands): As of December 31, 2015 Level 1 Level 2 Level 3 Total Asset Cash equivalents: Money market funds $ 212,390 $ — $ — $ 212,390 U.S. Government bills 3 — — 3 212,393 — — 212,393 Short-term investments: U.S. Government and agency bills 21,620 — — 21,620 $ 234,013 $ — $ — $ 234,013 Liability Post-combination compensation classified as liability $ — $ — $ 2,357 $ 2,357 $ — $ — $ 2,357 $ 2,357 As of December 31, 2016 Level 1 Level 2 Level 3 Total Asset Cash equivalents: Money market funds $ 98,161 $ — $ — $ 98,161 U.S. Government bills 1,950 — — 1,950 Commercial paper — 2,997 — 2,997 100,111 2,997 — 103,108 Short-term investments: Commercial paper — 17,146 — 17,146 Corporate bonds — 33,303 — 33,303 U.S. Government and agency bills 50,045 — — 50,045 50,045 50,449 — 100,494 $ 150,156 $ 53,446 $ — $ 203,602 Liability Post-combination compensation classified as liability $ — $ — $ 2,067 $ 2,067 $ — $ — $ 2,067 $ 2,067 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The table below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands): Year Ended 2015 2016 Balance at beginning of period $ 5,310 $ 2,357 Changes to liability-classified stock awards 739 1,652 Conversion of liability-classified instruments to equity (6,825 ) (1,942 ) Net unrealized loss on warrants 3,133 — Balance at end of period $ 2,357 $ 2,067 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Cost and Fair Value of Available-For-Sale Securities | The cost and fair value of available-for-sale securities were as follows as of the dates indicated (in thousands): Cost Gross Gross Fair Value December 31, 2015 U.S. Government and agency bills $ 21,636 $ (16 ) $ — $ 21,620 $ 21,636 $ (16 ) $ — $ 21,620 December 31, 2016 Commercial paper $ 17,146 $ — $ — $ 17,146 Corporate bonds 33,318 (16 ) 1 33,303 U.S. Government and agency bills 50,059 (15 ) 1 50,045 $ 100,523 $ (31 ) $ 2 $ 100,494 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of the dates indicated (in thousands): As of Estimated useful lives 2015 2016 Computer equipment 3 years $ 27,054 $ 30,378 Furniture and equipment 2 - 4 years 1,959 5,920 Software 1 - 3 years 1,427 856 Leasehold improvements Shorter of life of asset or lease term 8,097 10,155 Construction in progress(1) Not applicable 71,106 — Building 25 years — 81,957 Website development 3 years 33,469 43,294 143,112 172,560 Less: Accumulated depreciation and amortization 38,091 46,153 $ 105,021 $ 126,407 (1) The Company capitalizes construction in progress and records a corresponding long-term liability for build-to-suit lease arrangements where it is considered the owner, for accounting purposes, during the construction period. The Company completed construction on its new Brooklyn, NY headquarters in May 2016. |
Summary of Capitalized Website Development and Internal-Use Software Activities | The following table summarizes capitalized website development and internal-use software activities during the periods indicated (in thousands): Year Ended 2015 2016 Balance as of the beginning of the period $ 31,156 $ 33,469 Additions to website development, excluding stock-based compensation 9,719 11,769 Additions to website development—stock-based compensation 463 792 Less: Retirements 7,869 2,736 33,469 43,294 Less: Accumulated amortization 19,676 24,155 $ 13,793 $ 19,139 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the periods indicated (in thousands): Year Ended 2015 2016 Balance as of the beginning of the period $ 30,831 $ 27,752 Acquisitions(1) — 8,660 Currency and other adjustments(2) (3,079 ) (755 ) Balance as of the end of the period $ 27,752 $ 35,657 (1) Includes goodwill as a result of the Blackbird Technologies acquisition. See “ Note 2—Business Combinations ” for more information. (2) Includes the effect of foreign currency translation and in 2015 includes an adjustment to purchase price allocation of $0.6 million . |
Schedule of Indefinite-Lived Intangible Assets | At December 31, 2015 and 2016 , the gross book value and accumulated amortization of intangible assets were as follows (in thousands): As of December 31, 2015 As of December 31, 2016 Gross book Accumulated Net book Gross book Accumulated Net book Trademarks $ 822 $ (427 ) $ 395 $ — $ — $ — Technology 3,882 (2,341 ) 1,541 10,466 (3,536 ) 6,930 Customer relationships 1,959 (1,024 ) 935 1,250 (673 ) 577 Intangible assets, net $ 6,663 $ (3,792 ) $ 2,871 $ 11,716 $ (4,209 ) $ 7,507 (1) Excludes the gross book value and accumulated amortization of fully amortized intangibles. |
Schedule of Finite-Lived Intangible Assets | At December 31, 2015 and 2016 , the gross book value and accumulated amortization of intangible assets were as follows (in thousands): As of December 31, 2015 As of December 31, 2016 Gross book Accumulated Net book Gross book Accumulated Net book Trademarks $ 822 $ (427 ) $ 395 $ — $ — $ — Technology 3,882 (2,341 ) 1,541 10,466 (3,536 ) 6,930 Customer relationships 1,959 (1,024 ) 935 1,250 (673 ) 577 Intangible assets, net $ 6,663 $ (3,792 ) $ 2,871 $ 11,716 $ (4,209 ) $ 7,507 (1) Excludes the gross book value and accumulated amortization of fully amortized intangibles. |
Schedule of Future Amortization Expense | Based on amounts recorded at December 31, 2016 , the Company will recognize intangible asset amortization expense in each of the years ending December 31 as follows (in thousands): 2017 $ 3,407 2018 2,400 2019 1,700 Thereafter — Total amortization expense $ 7,507 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of the Assumptions Used to Determine the Fair Value of Convertible Preferred Stock Warrants Utilizing the Black-Scholes Model | The following weighted-average assumptions were utilized in determining the fair value of warrants for 2014: Series C December 31, 2014 Risk-free interest rate 1.1 % Expected term (in years) 3 Estimated dividend yield — % Weighted-average estimated volatility 43.1 % Fair value (in thousands) $ 579 Series D December 31, 2014 Risk-free interest rate 0.5 % Expected term (in years) 0.5 Estimated dividend yield — % Weighted-average estimated volatility 38.9 % Fair value (in thousands) $ 1,156 Series E December 31, 2014 Risk-free interest rate 1.1 % Expected term (in years) 3 Estimated dividend yield — % Weighted-average estimated volatility 43.1 % Fair value (in thousands) $ 185 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Preferred Stock | At December 31, 2014, the Company’s outstanding convertible preferred stock consisted of the following (in thousands except share data): Shares Authorized Shares Outstanding Carrying Values Series A and A-1 preferred stock 2,363,786 2,363,786 $ 808 Series B preferred stock 1,128,431 1,128,425 865 Series C preferred stock 1,234,084 1,222,282 3,361 Series D and D-1 preferred stock 4,240,120 4,215,610 27,870 Series E preferred stock 401,450 396,727 6,201 Series 1 preferred stock 203,399 203,399 1,322 Series F preferred stock 11,594,203 11,594,203 39,785 Total convertible preferred stock 21,165,473 21,124,432 $ 80,212 The original issue price, conversion price and liquidation preference price of each series of preferred stock were as follows: Price Per Share Original Issue Price Conversion Price Liquidation Preference Series A preferred stock $ 0.2429 $ 0.04858 $ 0.2429 Series A-1 preferred stock 0.3915 0.07830 0.3915 Series B preferred stock 0.80 0.160 0.80 Series C preferred stock 2.67 0.534 2.67 Series D preferred stock 6.63 1.326 6.63 Series D-1 preferred stock 6.63 1.326 6.63 Series E preferred stock 15.88 3.176 15.88 Series 1 preferred stock 6.45 1.290 6.45 Series F preferred stock 3.45 6.90 3.45 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of options granted in each year using the Black-Scholes pricing model has been based on the following assumptions: Year Ended 2014 2015 2016 Volatility 43.0% - 49.0% 40.4% - 45.0% 38.6% - 44.6% Risk-free interest rate 1.7% - 2.1% 1.3% - 1.9% 1.1% - 2.1% Expected term (in years) 5.5 - 6.1 5.5 - 6.1 5.5 - 6.3 Dividend rate —% —% —% |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the activity for the Company’s options (in thousands except share and per share amounts): Shares Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2013 13,190,420 $ 3.10 Granted 3,206,717 10.28 Exercised (4,215,628 ) 1.89 Forfeited/Canceled (656,230 ) 6.58 Outstanding at December 31, 2014 11,525,279 5.34 Granted 1,660,170 16.19 Exercised (1,315,735 ) 2.76 Forfeited/Canceled (800,855 ) 9.94 Outstanding at December 31, 2015 11,068,859 6.94 Granted 1,700,234 9.35 Exercised (2,535,620 ) 4.17 Forfeited/Canceled (893,906 ) 9.51 Outstanding at December 31, 2016 9,339,567 7.89 6.64 $ 43,613 Total exercisable at December 31, 2016 6,352,071 6.29 5.76 38,257 Total vested and expected to vest at December 31, 2016 9,166,097 7.82 6.60 43,364 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | The following table summarizes the weighted average grant date fair value of options granted, intrinsic value of options exercised and fair value of awards vested in the year ended December 31, 2014 , 2015 and 2016 (in thousands except per share amounts): Year Ended December 31, 2014 2015 2016 Weighted average grant date fair value of options granted $ 4.86 $ 6.89 $ 4.03 Intrinsic value of options exercised 24,788 15,148 19,130 Fair value of awards vested 4,691 8,337 9,533 |
Summary of the Activity of Unvested RSUs | The following table summarizes the activity for the Company’s unvested RSUs: Shares Weighted-Average Unvested at December 31, 2014 — $ — Granted 407,368 13.78 Vested — — Forfeited/Canceled (11,522 ) 16.76 Unvested at December 31, 2015 395,846 13.70 Granted 3,200,297 10.29 Vested (255,868 ) 10.64 Forfeited/Canceled (205,094 ) 10.15 Unvested at December 31, 2016 3,135,181 10.70 Total vested and expected to vest at December 31, 2016 2,843,448 10.68 |
Schedule of Share-based Compensation, Allocation of Recognized Period Costs | Total stock-based compensation expense included in the consolidated statements of operations is as follows (in thousands): Year Ended 2014 2015 2016 Cost of revenue $ 1,113 $ 871 $ 1,057 Marketing 216 560 971 Product development 1,461 2,860 5,079 General and administrative 7,260 6,550 8,794 Total stock-based compensation expense $ 10,050 $ 10,841 $ 15,901 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The following are the domestic and foreign components of the Company’s income (loss) before income taxes (in thousands): Year Ended 2014 2015 2016 Domestic $ 6,084 $ 25,627 $ 25,910 International (16,344 ) (53,621 ) (28,786 ) Loss before income taxes $ (10,260 ) $ (27,994 ) $ (2,876 ) |
Income Tax (Benefit) Provision | The income tax provision is comprised of the following (in thousands): Year Ended 2014 2015 2016 Current: Federal $ 5,378 $ 24,524 $ 22,084 State 21 3,843 2,623 Foreign 401 579 580 Total current 5,800 28,946 25,287 Deferred: Federal (50 ) (2,863 ) 2,008 State (186 ) 108 (247 ) Foreign (581 ) (122 ) (23 ) Total deferred (817 ) (2,877 ) 1,738 Total income tax provision $ 4,983 $ 26,069 $ 27,025 |
Reconciliation of the Income Tax (Benefit) Provision | A reconciliation of the income tax provision at the U.S. federal statutory income tax rate of 35% to the Company’s total income tax provision is as follows (in thousands): Year Ended 2014 2015 2016 Income tax benefit at federal statutory rate $ (3,488 ) $ (9,798 ) $ (1,007 ) State and local taxes net of federal benefit (109 ) 2,575 1,545 Foreign income tax rate differential 3,255 11,584 5,849 Non-deductible stock-based compensation 1,963 1,571 1,412 Net unrealized loss on warrant and other liabilities 140 1,097 — Non-deductible items 152 1,314 267 Uncertain tax positions 398 5,523 4,033 Return to provision adjustment 36 (25 ) (498 ) Non-deductible acquisition costs 582 10 199 Change in valuation allowance 2,065 7,957 4,911 Research and development credit — (7,684 ) (2,170 ) Deferred charge on restructuring — 12,168 12,168 Other (11 ) (223 ) 316 Total income tax provision $ 4,983 $ 26,069 $ 27,025 |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets (liabilities) are as follows (in thousands): As of December 31, 2015 2016 Deferred tax assets: Net operating loss carryforwards $ 7,961 $ 13,084 Research and development credit carryforwards 898 898 Stock-based compensation expense 3,953 5,692 Accrued VAT liability 74 68 Alternative minimum tax credit 717 274 Allowance for doubtful accounts 650 611 Deferred rent 146 644 Accrued vacation 640 1,035 Unrealized loss on foreign currency 3,035 — Other, net 1,143 1,418 Total deferred tax assets 19,217 23,724 Less valuation allowance 9,540 13,839 Total net deferred tax asset 9,677 9,885 Deferred tax liabilities: Depreciation (4,490 ) (6,618 ) Restructuring Liability (65,585 ) (64,460 ) Unrealized gain on foreign currency — (1,059 ) Other liabilities (1,022 ) (2,816 ) Total deferred tax liabilities (71,097 ) (74,953 ) Net deferred tax liabilities $ (61,420 ) $ (65,068 ) |
Summary of Valuation Allowance | The following table summarizes the valuation allowance activity for the periods indicated (in thousands): Year Ended 2014 2015 2016 Balance as of the beginning of period $ — $ 1,892 $ 9,540 Additions charged to expense 3,915 7,983 4,886 Deletions credited to expense (1,850 ) — — Currency translation (173 ) (335 ) (587 ) Balance as of the end of period $ 1,892 $ 9,540 $ 13,839 |
Schedule of Unrecognized Tax Benefits Activity | The following table summarizes the unrecognized tax benefit activity for the periods indicated (in thousands): As of December 31, 2014 2015 2016 Balance as of the beginning of period $ — $ 398 $ 22,229 Additions based on tax positions related to the current year 398 21,797 1,071 Additions for tax positions of prior years — 34 274 Reductions for tax provisions of prior years — — — Settlements — — — Balance as of the end of period $ 398 $ 22,229 $ 23,574 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted net loss per share for periods presented (in thousands except share and per share amounts): Year Ended 2014 2015 2016 Net loss $ (15,243 ) $ (54,063 ) $ (29,901 ) Basic and diluted shares: Weighted average common shares outstanding 40,246,663 91,122,291 113,562,738 Net loss per share attributable to common stockholders: Basic and diluted net loss per share applicable to common stockholders $ (0.38 ) $ (0.59 ) $ (0.26 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential common shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Year Ended 2014 2015 2016 Stock options 11,308,241 11,806,620 10,041,403 Restricted Stock Units — 128,200 2,043,544 Warrants 203,030 182,031 33,447 Convertible preferred stock 53,448,243 16,254,123 — Total anti-dilutive securities 64,959,514 28,370,974 12,118,394 |
Segment and Geographic Inform34
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas | The following table summarizes revenue by geographic area (in thousands): Year Ended 2014 2015 2016 United States $ 153,866 $ 213,389 $ 276,537 International 41,725 60,110 88,430 Revenue $ 195,591 $ 273,499 $ 364,967 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Under Current Capital, Operating and Build-to-Suit Lease Agreements | The following table represents the Company’s commitments under its current capital, operating and build-to-suit lease agreements as of December 31, 2016 (in thousands): Capital Lease Operating Build-to-Suit Periods ending 2017 $ 7,970 $ 3,026 $ 5,883 2018 4,436 3,787 9,381 2019 1,296 3,817 9,451 2020 38 3,471 9,522 2021 — 2,718 10,354 Thereafter — 10,475 48,834 Total minimum payments required $ 13,740 $ 27,294 $ 93,425 Amounts representing interest 1,615 Present value of net minimum payments 12,125 Current maturities 6,829 Long-term payment obligations $ 5,296 |
Basis of Presentation and Sum36
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | Apr. 21, 2015USD ($)$ / sharesshares | Mar. 25, 2015 | May 31, 2011 | Dec. 31, 2016USD ($)reportable_segmentoperating_segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Apr. 30, 2014$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share price (in dollars per share) | $ / shares | $ 10.60 | ||||||
Proceeds from initial public offering | $ 0 | $ 199,467,000 | $ 0 | ||||
Reverse stock split conversion ratio | 0.5 | 10 | |||||
Fee for each completed transaction, percent | 3.50% | ||||||
Listing fee per item (usd per item) | $ 0.20 | ||||||
Period over which listing fee is recognized | 4 months | ||||||
Intangible asset, useful life | 3 years | ||||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | ||||
Number of operating segments | operating_segment | 1 | ||||||
Number of reportable segments | reportable_segment | 1 | ||||||
IPO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued (in shares) | shares | 13,333,333 | ||||||
Share price (in dollars per share) | $ / shares | $ 16 | ||||||
Proceeds from initial public offering | $ 194,400,000 | ||||||
Underwriting discount | 13,900,000 | ||||||
Other offering expense | $ 5,100,000 | ||||||
Sale of stock by stockholders (in shares) | shares | 5,833,332 | ||||||
Conversion of preferred stock warrants into common stock warrants (in shares) | shares | 203,030 | ||||||
Convertible preferred stock | IPO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Conversion of convertible preferred stock into common stock (in shares) | shares | 53,448,243 | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Direct checkout fees, percent | 3.00% | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Direct checkout fees, percent | 4.00% | ||||||
Software | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Estimated useful lives | 3 years | ||||||
Software | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Estimated useful lives | 1 year | 1 year | |||||
Software | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Estimated useful lives | 3 years | 3 years | |||||
Adjustments for New Accounting Principle, Early Adoption | Accounting Standards Update 2016-16 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Cumulative effect on beginning retained earnings | $ 51,400,000 | ||||||
Amortization of deferred charges related to deferred tax liability | $ 17,100,000 |
Basis of Presentation and Sum37
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Revenue by Type of Service (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product Information [Line Items] | |||
Revenue | $ 364,967 | $ 273,499 | $ 195,591 |
Markets | |||
Product Information [Line Items] | |||
Revenue | 158,204 | 132,648 | 108,732 |
Seller Services | |||
Product Information [Line Items] | |||
Revenue | 200,857 | 136,608 | 82,502 |
Other | |||
Product Information [Line Items] | |||
Revenue | $ 5,906 | $ 4,243 | $ 4,357 |
Basis of Presentation and Sum38
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Allowance Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance as of the beginning of period | $ 2,071 | $ 1,841 | $ 1,279 |
Bad debt expense | 1,770 | 1,780 | 1,881 |
Write-offs, net of recoveries and other adjustments | (1,842) | (1,550) | (1,319) |
Balance as of the end of period | $ 1,999 | $ 2,071 | $ 1,841 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 19, 2016 | Feb. 18, 2016 | Mar. 31, 2015 | Jun. 19, 2014 | Jun. 18, 2014 | Apr. 29, 2014 | Feb. 28, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||||||||
Intangible asset, useful life | 3 years | |||||||||
Amortization expense of intangible assets | $ 3,300 | $ 2,200 | $ 1,500 | |||||||
Goodwill | 35,657 | 27,752 | 30,831 | |||||||
Increase in revenue as a result of the acquisitions | 1,800 | |||||||||
Loss of acquirees since acquisition date | 5,700 | |||||||||
Stock-based compensation expense—acquisitions | 2,733 | $ 1,860 | $ 4,130 | |||||||
Blackbird Technologies, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common stock, value, outstanding | $ 32,500 | |||||||||
Total purchase consideration | 15,016 | |||||||||
Cash paid | $ 8,050 | |||||||||
Stock issued during period, issued for services (in shares) | 184,230 | |||||||||
Stock issued during period, value, issued for services | $ 2,500 | |||||||||
Vesting period | 3 years | |||||||||
Contingent consideration, liability | $ 8,800 | |||||||||
Cash and equivalents acquired | $ 200 | |||||||||
Finite-lived intangibles | 8,500 | |||||||||
Amortization expense of intangible assets | 1,400 | |||||||||
Goodwill | $ 8,660 | |||||||||
Loss of acquirees since acquisition date | (2,400) | |||||||||
Stock-based compensation expense—acquisitions | 1,100 | |||||||||
Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase consideration | 30,811 | |||||||||
Cash paid | $ 800 | $ 300 | $ 4,200 | $ 5,290 | ||||||
Number of shares issued for business acquisition (in shares) | 2,439,847 | |||||||||
Cash and equivalents acquired | $ 500 | |||||||||
Consideration transferred including cash paid | 37,100 | |||||||||
Common shares | $ 25,500 | |||||||||
Shares issued (in shares) | 599,497 | |||||||||
Fair value of shares issued | $ 6,300 | |||||||||
Acquired intangible assets | 4,100 | |||||||||
Goodwill | 27,309 | |||||||||
Jarvis Labs, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase consideration | $ 3,242 | |||||||||
Cash paid | $ 1,040 | |||||||||
Number of shares issued for business acquisition (in shares) | 212,552 | |||||||||
Vesting period | 3 years | |||||||||
Cash and equivalents acquired | $ 100 | |||||||||
Consideration transferred including cash paid | 6,600 | |||||||||
Common shares | $ 2,202 | |||||||||
Shares issued (in shares) | 328,580 | |||||||||
Fair value of shares issued | $ 3,400 | |||||||||
Acquired intangible assets | 2,800 | |||||||||
Goodwill | 991 | |||||||||
Put option classified as liability | Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from sale of options indexed to issuers' equity | 100 | |||||||||
Liability recorded for fair value of put options | $ 100 | |||||||||
Maximum | Put option classified as liability | Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Price per share (USD per share) | $ 8.26 | |||||||||
Minimum | Put option classified as liability | Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Price per share (USD per share) | $ 4 | |||||||||
General and administrative | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition related costs | 2,100 | |||||||||
General and administrative | Blackbird Technologies, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition related costs | $ 600 | |||||||||
Common Stock | Blackbird Technologies, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of shares issued for business acquisition (in shares) | 513,304 | |||||||||
Equity interest value assigned | $ 6,900 | |||||||||
Common shares | 6,966 | |||||||||
Common Stock | Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common shares | $ 25,521 | |||||||||
Common Stock | Jarvis Labs, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common shares | 2,202 | |||||||||
Scenario, Forecast | Blackbird Technologies, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Stock issued during period, issued for services (in shares) | 460,575 | |||||||||
Stock issued during period, value, issued for services | $ 6,200 | |||||||||
Vesting period | 3 years | |||||||||
Developed Technology | Blackbird Technologies, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles | $ 7,200 | |||||||||
Intangible asset, useful life | 3 years | |||||||||
Developed Technology | Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles | 1,636 | |||||||||
Developed Technology | Jarvis Labs, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles | 2,000 | |||||||||
Customer relationships | Blackbird Technologies, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles | $ 1,250 | |||||||||
Intangible asset, useful life | 6 months | |||||||||
Customer relationships | Incubart SAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles | $ 1,693 | |||||||||
Customer relationships | Jarvis Labs, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles | $ 600 |
Business Combinations - Compone
Business Combinations - Components of the Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 19, 2016 | Feb. 18, 2016 | Mar. 31, 2015 | Jun. 19, 2014 | Jun. 18, 2014 | Apr. 29, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 35,657 | $ 27,752 | $ 30,831 | ||||||
Blackbird Technologies, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid | $ 8,050 | ||||||||
Total purchase consideration | 15,016 | ||||||||
Working capital | 81 | ||||||||
Finite-lived intangibles | $ 8,500 | ||||||||
Goodwill | 8,660 | ||||||||
Deferred tax liability | (2,175) | ||||||||
Net assets acquired | 15,016 | ||||||||
Blackbird Technologies, Inc. | Developed Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangibles | 7,200 | ||||||||
Blackbird Technologies, Inc. | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangibles | 1,250 | ||||||||
Blackbird Technologies, Inc. | Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Common shares | $ 6,966 | ||||||||
Incubart SAS | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid | $ 800 | $ 300 | $ 4,200 | $ 5,290 | |||||
Common shares | 25,500 | ||||||||
Total purchase consideration | 30,811 | ||||||||
Working capital | 625 | ||||||||
Property and equipment and other assets | 95 | ||||||||
Goodwill | 27,309 | ||||||||
Deferred tax liability | (757) | ||||||||
Other long-term liabilities | (565) | ||||||||
Net assets acquired | 30,811 | ||||||||
Incubart SAS | Developed Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangibles | 1,636 | ||||||||
Incubart SAS | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangibles | 1,693 | ||||||||
Incubart SAS | Trademarks | |||||||||
Business Acquisition [Line Items] | |||||||||
Trademarks | 775 | ||||||||
Incubart SAS | Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Common shares | $ 25,521 | ||||||||
Jarvis Labs, Inc | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid | $ 1,040 | ||||||||
Common shares | 2,202 | ||||||||
Total purchase consideration | 3,242 | ||||||||
Working capital | 85 | ||||||||
Goodwill | 991 | ||||||||
Deferred tax liability | (634) | ||||||||
Net assets acquired | 3,242 | ||||||||
Jarvis Labs, Inc | Developed Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangibles | 2,000 | ||||||||
Jarvis Labs, Inc | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangibles | 600 | ||||||||
Jarvis Labs, Inc | Trademarks | |||||||||
Business Acquisition [Line Items] | |||||||||
Trademarks | 200 | ||||||||
Jarvis Labs, Inc | Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Common shares | $ 2,202 |
Business Combinations - Summary
Business Combinations - Summary of Unaudited Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Revenue | $ 365,786 | $ 273,616 |
Net loss | $ (35,401) | $ (65,106) |
Basic and diluted net (loss) income per share (in dollars per share) | $ (0.31) | $ (0.71) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 103,108 | $ 212,393 |
Short-term investments | 100,494 | |
Asset | 203,602 | 234,013 |
Liability | 2,067 | 2,357 |
Post-combination compensation classified as liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability | 2,067 | 2,357 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 98,161 | 212,390 |
U.S. Government bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,950 | 3 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,997 | |
Short-term investments | 17,146 | |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 33,303 | |
U.S. Government and agency bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 50,045 | 21,620 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 100,111 | 212,393 |
Short-term investments | 50,045 | |
Asset | 150,156 | 234,013 |
Liability | 0 | 0 |
Level 1 | Post-combination compensation classified as liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability | 0 | 0 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 98,161 | 212,390 |
Level 1 | U.S. Government bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,950 | 3 |
Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | |
Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Level 1 | U.S. Government and agency bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 50,045 | 21,620 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,997 | 0 |
Short-term investments | 50,449 | |
Asset | 53,446 | 0 |
Liability | 0 | 0 |
Level 2 | Post-combination compensation classified as liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | U.S. Government bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,997 | |
Short-term investments | 17,146 | |
Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 33,303 | |
Level 2 | U.S. Government and agency bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | |
Asset | 0 | 0 |
Liability | 2,067 | 2,357 |
Level 3 | Post-combination compensation classified as liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability | 2,067 | 2,357 |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | U.S. Government bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | |
Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Level 3 | U.S. Government and agency bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 0 | $ 0 |
Fair Value Measurements - Sch43
Fair Value Measurements - Schedule of Unobservable Inputs Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 2,357 | $ 5,310 |
Changes to liability-classified stock awards | 1,652 | 739 |
Conversion of liability-classified instruments to equity | (1,942) | (6,825) |
Net unrealized loss on warrants | 0 | 3,133 |
Balance at end of period | $ 2,067 | $ 2,357 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 100,523 | $ 21,636 |
Gross Unrealized Holding Loss | (31) | (16) |
Gross Unrealized Holding Gain | 2 | 0 |
Fair Value | 100,494 | 21,620 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 17,146 | |
Gross Unrealized Holding Loss | 0 | |
Gross Unrealized Holding Gain | 0 | |
Fair Value | 17,146 | |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 33,318 | |
Gross Unrealized Holding Loss | (16) | |
Gross Unrealized Holding Gain | 1 | |
Fair Value | 33,303 | |
U.S. Government and agency bills | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 50,059 | 21,636 |
Gross Unrealized Holding Loss | (15) | (16) |
Gross Unrealized Holding Gain | 1 | 0 |
Fair Value | $ 50,045 | $ 21,620 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 172,560 | $ 143,112 |
Less: Accumulated depreciation and amortization | 46,153 | 38,091 |
Property and equipment, net | $ 126,407 | $ 105,021 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Property and equipment, gross | $ 30,378 | $ 27,054 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,920 | $ 1,959 |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 2 years | 2 years |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 4 years | 4 years |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Property and equipment, gross | $ 856 | $ 1,427 |
Software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 1 year | 1 year |
Software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 10,155 | $ 8,097 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 0 | $ 71,106 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 25 years | 25 years |
Property and equipment, gross | $ 81,957 | $ 0 |
Website development | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Property and equipment, gross | $ 43,294 | $ 33,469 |
Property and Equipment - Summ46
Property and Equipment - Summary of Capitalized Website Development and Internal-Use Software Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Capitalized Computer Software, Net [Roll Forward] | ||
Balance as of the beginning of the period | $ 33,469 | $ 31,156 |
Additions to website development, excluding stock-based compensation | 11,769 | 9,719 |
Additions to website development—stock-based compensation | 792 | 463 |
Less: Retirements | 2,736 | 7,869 |
Balance as of the end of the period | 43,294 | 33,469 |
Less: Accumulated amortization | 24,155 | 19,676 |
Capitalized Computer Software, Net | $ 19,139 | $ 13,793 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 19.2 | $ 16.3 | $ 15.7 |
Amortization expense for equipment acquired under capital leases | 6.3 | 3.8 | 1.5 |
Gross balance of leased equipment | 22.3 | 17.2 | |
Accumulated amortization of equipment under capital leases | 10.9 | 4.6 | |
Amortization expense related to capitalized website development and internal-use software | 6.3 | 7.3 | 8.1 |
Website development and internal-use software assets | |||
Property, Plant and Equipment [Line Items] | |||
Loss on write-off of retired website development and internal-use software | $ 0.9 | $ 1.3 | $ 0.1 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets - Summary of Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Balance as of the beginning of the period | $ 27,752 | $ 30,831 |
Acquisitions1 | 8,660 | 0 |
Other adjustments | (755) | (3,079) |
Balance as of the end of the period | 35,657 | $ 27,752 |
Foreign currency translation and adjustment | $ (600) |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 19, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | $ 3,300 | $ 2,200 | $ 1,500 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Gross book value | 11,716 | 6,663 | ||
Accumulated amortization | (4,209) | (3,792) | ||
Total amortization expense | 7,507 | 2,871 | ||
Trademarks | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross book value | 0 | 822 | ||
Accumulated amortization | 0 | (427) | ||
Total amortization expense | 0 | 395 | ||
Technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross book value | 10,466 | 3,882 | ||
Accumulated amortization | (3,536) | (2,341) | ||
Total amortization expense | 6,930 | 1,541 | ||
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross book value | 1,250 | 1,959 | ||
Accumulated amortization | (673) | (1,024) | ||
Total amortization expense | 577 | $ 935 | ||
Blackbird Technologies, Inc. | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | 1,400 | |||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangibles | $ 8,500 | |||
Blackbird Technologies, Inc. | Technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangibles | $ 7,200 | |||
Blackbird Technologies, Inc. | Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangibles | $ 1,250 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Summary of Future Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Loss on asset impairment | $ 551 | $ 0 | $ 0 |
2,017 | 3,407 | ||
2,018 | 2,400 | ||
2,019 | 1,700 | ||
Thereafter | 0 | ||
Total amortization expense | $ 7,507 | $ 2,871 |
Debt (Details)
Debt (Details) - Revolving Credit Facility | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Mar. 31, 2015USD ($) | May 31, 2014USD ($) | |
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 50,000,000 | $ 35,000,000 | |
Line of credit, maximum available borrowing capacity | $ 50,000,000 | ||
Line of credit, maximum available borrowing capacity, minimum increment of increase | $ 10,000,000 | ||
Total leverage ratio | 3.50 | ||
Outstanding borrowings | $ 0 | ||
Letter of Credit | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | 10,000,000 | ||
Bridge Loan | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 15,000,000 | ||
Federal Funds Effective Swap Rate | |||
Debt Instrument [Line Items] | |||
Line of credit, basis spread on variable interest rate | 0.50% | ||
One-Month London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Line of credit, basis spread on variable interest rate | 1.00% | ||
Minimum | One-Month London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Line of credit, basis spread on variable interest rate | 1.00% | ||
Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Line of credit, basis spread on variable interest rate | 0.00% | ||
Maximum | One-Month London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Line of credit, basis spread on variable interest rate | 1.25% | ||
Maximum | Base Rate | |||
Debt Instrument [Line Items] | |||
Line of credit, basis spread on variable interest rate | 0.25% |
Warrants - Additional Informati
Warrants - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 31, 2016 | Oct. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 21, 2015 | |
Class of Stock [Line Items] | ||||||
Net unrealized loss on warrant and other liabilities | $ 0 | $ 3,133 | $ 411 | |||
Series C preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Exercise price of warrant (in dollars per share) | $ 2.67 | |||||
Conversion of preferred stock warrants into common stock warrants (in shares) | 11,373 | |||||
Series D preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Exercise price of warrant (in dollars per share) | $ 6.63 | |||||
Conversion of preferred stock warrants into common stock warrants (in shares) | 24,510 | |||||
Series E preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Exercise price of warrant (in dollars per share) | $ 15.88 | |||||
Conversion of preferred stock warrants into common stock warrants (in shares) | 4,723 | |||||
Warrants | ||||||
Class of Stock [Line Items] | ||||||
Net unrealized loss on warrant and other liabilities | $ 3,100 | $ 500 | ||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Warrants exercised in period net of forfeitures (in shares) | 80,011 | 96,869 | ||||
Exercise of warrants (in shares) | 97,931 | 105,099 | ||||
Exercise price of warrant (in dollars per share) | $ 1.62 | $ 1.03 | ||||
Share price (in dollars per share) | $ 8.88 | $ 12.90 | ||||
Warrants forfeited (in shares) | 17,920 | 8,230 | ||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Exercise price of warrant (in dollars per share) | $ 24.97 | |||||
Share price (in dollars per share) | $ 24.97 | |||||
Conversion of preferred stock warrants into common stock warrants (in shares) | 203,030 | |||||
Fair value adjustment of warrants | $ 5,100 |
Warrants (Details)
Warrants (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Series C preferred stock | |
Class of Stock [Line Items] | |
Risk-free interest rate | 1.10% |
Expected term (in years) | 3 years |
Estimated dividend yield | 0.00% |
Weighted-average estimated volatility | 43.10% |
Fair value (in thousands) | $ 579 |
Series D preferred stock | |
Class of Stock [Line Items] | |
Risk-free interest rate | 0.50% |
Expected term (in years) | 6 months |
Estimated dividend yield | 0.00% |
Weighted-average estimated volatility | 38.90% |
Fair value (in thousands) | $ 1,156 |
Series E preferred stock | |
Class of Stock [Line Items] | |
Risk-free interest rate | 1.10% |
Expected term (in years) | 3 years |
Estimated dividend yield | 0.00% |
Weighted-average estimated volatility | 43.10% |
Fair value (in thousands) | $ 185 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Equity [Abstract] | ||
Common stock, shares authorized (in shares) | 1,400,000,000 | 1,400,000,000 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)vote$ / sharesshares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2014shares | Apr. 30, 2014shares | |
Equity [Abstract] | ||||
Common stock, shares issued (in shares) | 115,973,039 | 112,563,354 | 44,180,939 | 3,301,887 |
Common stock, shares outstanding (in shares) | 115,973,039 | 112,563,354 | 44,180,393 | |
Common stock, votes per share of stock held | vote | 1 | |||
Dividends declared for common stock | $ | $ 0 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Stockholders' Equity - Converti
Stockholders' Equity - Convertible Preferred Stock (Details) $ / shares in Units, $ in Thousands | Apr. 21, 2015shares | Mar. 25, 2015 | May 31, 2011 | Dec. 31, 2015shares | Dec. 31, 2014USD ($)$ / sharesshares |
Class of Stock [Line Items] | |||||
Reverse stock split conversion ratio | 0.5 | 10 | |||
Series A and A-1 preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 2,363,786 | ||||
Shares Outstanding (in shares) | shares | 2,363,786 | ||||
Carrying Values | $ | $ 808 | ||||
Original Issue Price (in dollars per share) | $ 0.2429 | ||||
Conversion Price (in dollars per share) | 0.04858 | ||||
Liquidation Preference (in dollars per share) | 0.2429 | ||||
Series A-1 preferred stock | |||||
Class of Stock [Line Items] | |||||
Original Issue Price (in dollars per share) | 0.3915 | ||||
Conversion Price (in dollars per share) | 0.07830 | ||||
Liquidation Preference (in dollars per share) | $ 0.3915 | ||||
Series B preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 1,128,431 | ||||
Shares Outstanding (in shares) | shares | 1,128,425 | ||||
Carrying Values | $ | $ 865 | ||||
Original Issue Price (in dollars per share) | $ 0.80 | ||||
Conversion Price (in dollars per share) | 0.160 | ||||
Liquidation Preference (in dollars per share) | $ 0.80 | ||||
Series C preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 1,234,084 | ||||
Shares Outstanding (in shares) | shares | 1,222,282 | ||||
Carrying Values | $ | $ 3,361 | ||||
Original Issue Price (in dollars per share) | $ 2.67 | ||||
Conversion Price (in dollars per share) | 0.534 | ||||
Liquidation Preference (in dollars per share) | $ 2.67 | ||||
Series D and D-1 preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 4,240,120 | ||||
Shares Outstanding (in shares) | shares | 4,215,610 | ||||
Carrying Values | $ | $ 27,870 | ||||
Original Issue Price (in dollars per share) | $ 6.63 | ||||
Conversion Price (in dollars per share) | 1.326 | ||||
Liquidation Preference (in dollars per share) | 6.63 | ||||
Series D-1 preferred stock | |||||
Class of Stock [Line Items] | |||||
Original Issue Price (in dollars per share) | 6.63 | ||||
Conversion Price (in dollars per share) | 1.326 | ||||
Liquidation Preference (in dollars per share) | $ 6.63 | ||||
Series E preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 401,450 | ||||
Shares Outstanding (in shares) | shares | 396,727 | ||||
Carrying Values | $ | $ 6,201 | ||||
Original Issue Price (in dollars per share) | $ 15.88 | ||||
Conversion Price (in dollars per share) | 3.176 | ||||
Liquidation Preference (in dollars per share) | $ 15.88 | ||||
Series 1 preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 203,399 | ||||
Shares Outstanding (in shares) | shares | 203,399 | ||||
Carrying Values | $ | $ 1,322 | ||||
Original Issue Price (in dollars per share) | $ 6.45 | ||||
Conversion Price (in dollars per share) | 1.29 | ||||
Liquidation Preference (in dollars per share) | $ 6.45 | ||||
Series F preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 11,594,203 | ||||
Shares Outstanding (in shares) | shares | 11,594,203 | ||||
Carrying Values | $ | $ 39,785 | ||||
Original Issue Price (in dollars per share) | $ 3.45 | ||||
Conversion Price (in dollars per share) | 6.90 | ||||
Liquidation Preference (in dollars per share) | $ 3.45 | ||||
Convertible preferred stock | |||||
Class of Stock [Line Items] | |||||
Shares Authorized (in shares) | shares | 21,165,473 | ||||
Shares Outstanding (in shares) | shares | 0 | 21,124,432 | |||
Carrying Values | $ | $ 80,212 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Conversion of preferred stock upon public offering (in shares) | shares | 53,448,243 | 53,448,243 |
Stockholders' Equity - Tender O
Stockholders' Equity - Tender Offers (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 13, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 |
Class of Stock [Line Items] | |||||
Share price (in dollars per share) | $ 10.60 | ||||
Value of stock issued | $ 6,966 | $ 194,361 | $ 35,000 | ||
Employee | Common Stock and Preferred Stock | Tender Offer | |||||
Class of Stock [Line Items] | |||||
Limitation of participant in tender offer, percentage of fully-vested stock, options and warrants, maximum | 50.00% | ||||
Non-Employee | Common Stock and Preferred Stock | Tender Offer | |||||
Class of Stock [Line Items] | |||||
Limitation of participant in tender offer, percentage of fully-vested stock, options and warrants, minimum | 50.00% | ||||
Plan | Common Stock and Preferred Stock | Tender Offer | |||||
Class of Stock [Line Items] | |||||
Share price (in dollars per share) | $ 10.60 | ||||
Plan | Maximum | Common Stock and Preferred Stock | Tender Offer | |||||
Class of Stock [Line Items] | |||||
Value of stock issued | $ 74,200 | ||||
Actual | Common Stock and Preferred Stock | Tender Offer | |||||
Class of Stock [Line Items] | |||||
Value of stock issued | $ 33,400 | ||||
Shares issued (in shares) | 3,154,219 |
Stockholders' Equity - Common58
Stockholders' Equity - Common Stock Issuances (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 | |
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 115,973,039 | 112,563,354 | 44,180,939 | 3,301,887 |
Share price (in dollars per share) | $ 10.60 | |||
Value of shares issued | $ 116 | $ 113 | $ 35,000 | |
Jarvis Labs, Inc. and Incubart SAS | ||||
Class of Stock [Line Items] | ||||
Shares issued in connection with acquisitions (in shares) | 685,749 | 3,580,476 | ||
Number of shares issued for business acquisition (in shares) | 2,652,399 | |||
Common shares | $ 27,700 | |||
Shares issued (in shares) | 172,445 | 928,077 | ||
Fair value of shares issued | $ 2,300 | $ 9,700 | ||
Common Stock | Jarvis Labs, Inc. and Incubart SAS | ||||
Class of Stock [Line Items] | ||||
Number of shares issued for business acquisition (in shares) | 513,304 | |||
Equity interest value assigned | $ 6,900 |
Stockholders' Equity - Secondar
Stockholders' Equity - Secondary Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Class of Stock [Line Items] | |||
Share-based compensation expense | $ 15,901 | $ 10,841 | $ 10,050 |
Secondary Offering | |||
Class of Stock [Line Items] | |||
Share-based compensation expense | $ 500 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | Jan. 03, 2017 | Jan. 04, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of awards vested | $ 9,533 | $ 8,337 | $ 4,691 | ||
Stock-based compensation expense—acquisitions | 2,733 | $ 1,860 | $ 4,130 | ||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation for stock options | $ 14,500 | ||||
Weighted-average period for unrecognized compensation | 2 years 5 months 19 days | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation for restricted stock units | $ 31,000 | ||||
Weighted-average period for unrecognized compensation | 3 years 3 months 15 days | ||||
2006 Stock Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term for options | 10 years | ||||
Number of shares authorized | 24,252,967 | ||||
Number of shares available for grant | 1,518,002 | ||||
2015 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 17,549,262 | ||||
Number of shares available for grant | 13,486,596 | ||||
Maximum number of additional shares issued annually | 2,814,083 | 7,050,000 | |||
Percentage of outstanding stock | 5.00% | ||||
Shares reserved for future issuance | 14,100,000 | ||||
2015 Equity Incentive Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term for options | 10 years | ||||
Stock option vesting period | 4 years | ||||
Stock option requisite service period | 4 years | ||||
2015 Equity Incentive Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting period | 4 years | ||||
2006 Plan Eligible for 2015 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance | 12,653,075 | ||||
25% Vest After First Year of Service | 2006 Stock Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting rights, percentage | 25.00% | ||||
25% Vest After First Year of Service | 2015 Equity Incentive Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting rights, percentage | 25.00% | ||||
25% Vest After First Year of Service | 2015 Equity Incentive Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting rights, percentage | 25.00% | ||||
Vest Ratably Each Month Over a 36-Month Period | 2006 Stock Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting period | 36 months | ||||
Vest Ratably Each Month Over a 36-Month Period | 2015 Equity Incentive Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting period | 36 months | ||||
Newly-Hired Employee | Vest Ratably Each Month Over a 36-Month Period | 2015 Equity Incentive Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting period | 3 years | ||||
Current Employee | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting period | 48 months | ||||
Current Employee | 2015 Equity Incentive Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option vesting period | 4 years | ||||
Subsequent Event | 2015 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of additional shares issued annually | 5,798,651 |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value of Options Granted Using the Black-Scholes Pricing Model (Details) - Stock options | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility, minimum | 38.60% | 40.40% | 43.00% |
Volatility, maximum | 44.60% | 45.00% | 49.00% |
Risk-free interest rate, minimum | 1.10% | 1.30% | 1.70% |
Risk-free interest rate, maximum | 2.10% | 1.90% | 2.10% |
Dividend rate | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 3 months 18 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | |||
Outstanding, beginning balance (in shares) | 11,068,859 | 11,525,279 | 13,190,420 |
Granted (in shares) | 1,700,234 | 1,660,170 | 3,206,717 |
Exercised (in shares) | (2,535,620) | (1,315,735) | (4,215,628) |
Forfeited/Cancelled (in shares) | (893,906) | (800,855) | (656,230) |
Outstanding, ending balance (in shares) | 9,339,567 | 11,068,859 | 11,525,279 |
Total exercisable at December 31, 2016 (in shares) | 6,352,071 | ||
Total vested and expected to vest at December 31, 2016 (in shares) | 9,166,097 | ||
Weighted-Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 6.94 | $ 5.34 | $ 3.10 |
Granted (in dollars per share) | 9.35 | 16.19 | 10.28 |
Exercised (in dollars per share) | 4.17 | 2.76 | 1.89 |
Forfeited/Cancelled (in dollars per share) | 9.51 | 9.94 | 6.58 |
Outstanding, ending balance (in dollars per share) | 7.89 | $ 6.94 | $ 5.34 |
Total exercisable at December 31, 2016 (in dollars per share) | 6.29 | ||
Total vested and expected to vest at December 31, 2016 (in dollars per share) | $ 7.82 | ||
Weighted-Average Remaining Contract Term (in years) | |||
Outstanding at December 31, 2016, Weighted-Average Remaining Contract Term | 6 years 7 months 21 days | ||
Total exercisable at December 31, 2016, Weighted-Average Remaining Contract Term | 5 years 9 months 4 days | ||
Total vested and expected to vest at December 31, 2016, Weighted-Average Remaining Contract Term | 6 years 7 months 6 days | ||
Aggregate Intrinsic Value | |||
Outstanding at December 31, 2016, Aggregate Intrinsic Value | $ 43,613 | ||
Total exercisable at December 31, 2016, Aggregate Intrinsic Value | 38,257 | ||
Total vested and expected to vest at December 31, 2016, Aggregate Intrinsic Value | $ 43,364 |
Stock-based Compensation - Weig
Stock-based Compensation - Weighted Average Grant Date Fair Value Options Granted and Awards Vested and Intrinsic Value of Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted average grant date fair value of options granted (in shares) | $ 4.03 | $ 6.89 | $ 4.86 |
Intrinsic value of options exercised | $ 19,130 | $ 15,148 | $ 24,788 |
Fair value of awards vested | $ 9,533 | $ 8,337 | $ 4,691 |
Stock-based Compensation - Su64
Stock-based Compensation - Summary of the Unvested RSUs (Details) - RSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Shares | ||
Unvested at beginning of period (in shares) | 395,846 | 0 |
Granted (in shares) | 3,200,297 | 407,368 |
Vested (in shares) | (255,868) | 0 |
Forfeited/Canceled (in shares) | (205,094) | (11,522) |
Unvested at period end | 3,135,181 | 395,846 |
Total expected to vest at December 31, 2016 (in shares) | 2,843,448 | |
Weighted-Average Fair Value | ||
Unvested at beginning of period (in dollars per share) | $ 13.70 | $ 0 |
Granted (in dollars per share) | 10.29 | 13.78 |
Vested (in dollars per share) | 10.64 | 0 |
Forfeited/Canceled (in dollars per share) | 10.15 | 16.76 |
Unvested at period end | 10.70 | $ 13.70 |
Total expected to vest at December 31, 2016 (in dollars per share) | $ 10.68 |
Stock-based Compensation - Allo
Stock-based Compensation - Allocated Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 15,901 | $ 10,841 | $ 10,050 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 1,057 | 871 | 1,113 |
Marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 971 | 560 | 216 |
Product development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 5,079 | 2,860 | 1,461 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 8,794 | $ 6,550 | $ 7,260 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of (Loss) Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 25,910 | $ 25,627 | $ 6,084 |
International | (28,786) | (53,621) | (16,344) |
Loss before income taxes | $ (2,876) | $ (27,994) | $ (10,260) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2015 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | |||||
Excess tax deductions on share-based compensation | $ 3,235 | $ 3,944 | $ 4,877 | ||
U.S. federal statutory income tax rate | 35.00% | ||||
Alternative minimum tax credit | $ 274 | 717 | |||
Research and development credit carryforwards | 898 | 898 | |||
Valuation allowance | 13,839 | 9,540 | |||
Deferred tax assets considered realizable | 9,885 | 9,677 | |||
Unrecognized tax benefits | 23,574 | 22,229 | 398 | $ 0 | |
Unrecognized tax benefits that would impact effective tax rate favorably | 11,800 | ||||
Deferred tax liability for gain in revised corporate structure transaction | 74,953 | 71,097 | |||
Deferred tax assets | 23,724 | 19,217 | |||
Deferred tax assets, net | 19,700 | ||||
Deferred charge amortized to income tax expense | 1,738 | (2,877) | (817) | ||
Deferred costs | 51,400 | ||||
Deferred tax charge—current | 17,132 | 17,132 | |||
Deferred tax charge—net of current portion | 34,264 | 51,396 | |||
Global Corporate Structure | |||||
Income Tax Contingency [Line Items] | |||||
Deferred tax liability for gain in revised corporate structure transaction | $ 66,000 | ||||
Deferred tax assets | $ 66,000 | ||||
Deferred charge amortized to income tax expense | 13,200 | ||||
Unrecognized Tax Benefit | |||||
Income Tax Contingency [Line Items] | |||||
Deferred charge amortized to income tax expense | 3,900 | ||||
Additional Paid-in Capital | |||||
Income Tax Contingency [Line Items] | |||||
Excess tax deductions on share-based compensation | 3,200 | 3,900 | $ 4,900 | ||
Internal Revenue Service (IRS) | |||||
Income Tax Contingency [Line Items] | |||||
Alternative minimum tax credit | 300 | 700 | |||
Research and development credit carryforwards | $ 900 | $ 2,800 | |||
Foreign Tax Authority | |||||
Income Tax Contingency [Line Items] | |||||
Term of cumulative foreign loss | 3 years |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 22,084 | $ 24,524 | $ 5,378 |
State | 2,623 | 3,843 | 21 |
Foreign | 580 | 579 | 401 |
Total current | 25,287 | 28,946 | 5,800 |
Deferred: | |||
Federal | 2,008 | (2,863) | (50) |
State | (247) | 108 | (186) |
Foreign | (23) | (122) | (581) |
Total deferred | 1,738 | (2,877) | (817) |
Total income tax provision | $ 27,025 | $ 26,069 | $ 4,983 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Income Tax (Benefit) Provision at the U.S. Federal Statutory Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at federal statutory rate | $ (1,007) | $ (9,798) | $ (3,488) |
State and local taxes net of federal benefit | 1,545 | 2,575 | (109) |
Foreign income tax rate differential | 5,849 | 11,584 | 3,255 |
Non-deductible stock-based compensation | 1,412 | 1,571 | 1,963 |
Net unrealized loss on warrant and other liabilities | 0 | 1,097 | 140 |
Non-deductible items | 267 | 1,314 | 152 |
Uncertain tax positions | 4,033 | 5,523 | 398 |
Return to provision adjustment | (498) | (25) | 36 |
Non-deductible acquisition costs | 199 | 10 | 582 |
Change in valuation allowance | 4,911 | 7,957 | 2,065 |
Research and development credit | (2,170) | (7,684) | 0 |
Deferred charge on restructuring | 12,168 | 12,168 | 0 |
Other | 316 | (223) | (11) |
Total income tax provision | $ 27,025 | $ 26,069 | $ 4,983 |
Income Taxes - Significant Comp
Income Taxes - Significant Component of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 13,084 | $ 7,961 |
Research and development credit carryforwards | 898 | 898 |
Stock-based compensation expense | 5,692 | 3,953 |
Accrued VAT liability | 68 | 74 |
Alternative minimum tax credit | 274 | 717 |
Allowance for doubtful accounts | 611 | 650 |
Deferred rent | 644 | 146 |
Accrued vacation | 1,035 | 640 |
Unrealized loss on foreign currency | 0 | 3,035 |
Other, net | 1,418 | 1,143 |
Total deferred tax assets | 23,724 | 19,217 |
Less valuation allowance | 13,839 | 9,540 |
Total net deferred tax asset | 9,885 | 9,677 |
Deferred tax liabilities: | ||
Depreciation | (6,618) | (4,490) |
Restructuring Liability | (64,460) | (65,585) |
Unrealized gain on foreign currency | (1,059) | 0 |
Other liabilities | (2,816) | (1,022) |
Total deferred tax liabilities | (74,953) | (71,097) |
Net deferred tax liabilities | $ (65,068) | $ (61,420) |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance Activity (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance as of the beginning of period | $ 9,540 | $ 1,892 | $ 0 |
Additions charged to expense | 4,886 | 7,983 | 3,915 |
Deletions credited to expense | 0 | 0 | (1,850) |
Currency translation | (587) | (335) | (173) |
Balance as of the end of period | $ 13,839 | $ 9,540 | $ 1,892 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of the beginning of period | $ 22,229 | $ 398 | $ 0 |
Additions based on tax positions related to the current year | 1,071 | 21,797 | 398 |
Additions for tax positions of prior years | 274 | 34 | 0 |
Reductions for tax provisions of prior years | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Balance as of the end of period | $ 23,574 | $ 22,229 | $ 398 |
Net Loss Per Share - Calculatio
Net Loss Per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (29,901) | $ (54,063) | $ (15,243) |
Basic and diluted shares: | |||
Weighted average common shares outstanding (in shares) | 113,562,738 | 91,122,291 | 40,246,663 |
Net loss per share attributable to common stockholders: | |||
Basic and diluted net loss per share applicable to common stockholders (in dollars per share) | $ (0.26) | $ (0.59) | $ (0.38) |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Shares Excluded from the Calculation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 12,118,394 | 28,370,974 | 64,959,514 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 10,041,403 | 11,806,620 | 11,308,241 |
Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 2,043,544 | 128,200 | 0 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 33,447 | 182,031 | 203,030 |
Convertible preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 0 | 16,254,123 | 53,448,243 |
Segment and Geographic Inform75
Segment and Geographic Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)reportable_segmentoperating_segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | reportable_segment | 1 | ||
Number of operating segments | operating_segment | 1 | ||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 364,967 | $ 273,499 | $ 195,591 |
United States | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 276,537 | 213,389 | 153,866 |
International | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 88,430 | $ 60,110 | $ 41,725 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) ft² in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 31, 2014ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Feb. 17, 2017USD ($) | Jan. 03, 2014USD ($) | |
Loss Contingencies [Line Items] | ||||||
Gross balance of leased equipment | $ 22,300,000 | $ 17,200,000 | ||||
Capital leases, interest expense | 1,600,000 | 1,200,000 | $ 400,000 | |||
Operating leases, rent expense | 6,000,000 | 5,100,000 | $ 3,600,000 | |||
Collateral account | 5,341,000 | 5,341,000 | ||||
Non-income Tax Obligations | ||||||
Loss Contingencies [Line Items] | ||||||
Non-income tax obligation reserve | $ 300,000 | 2,600,000 | ||||
Capital Lease Obligations | Dell Financial Services, LLC | ||||||
Loss Contingencies [Line Items] | ||||||
Term of lease | 36 months | |||||
Buyout option | $ 1 | |||||
Capital Lease Obligations | ePlus Group, Inc | ||||||
Loss Contingencies [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 18,000,000 | $ 8,000,000 | ||||
Term of lease | 36 months | |||||
Buyout option | $ 1 | |||||
Capital Lease Obligations | TriplePoint Capital, LLC | ||||||
Loss Contingencies [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 20,000,000 | |||||
Term of lease | 36 months | |||||
Interest rate percentage | 8.25% | |||||
Office Building | ||||||
Loss Contingencies [Line Items] | ||||||
Build-to-suit leases, term of contract | 10 years | |||||
Area of real estate property | ft² | 199 | |||||
Office Building | Build-to-Suit Lease | ||||||
Loss Contingencies [Line Items] | ||||||
Area of real estate property | ft² | 172 | |||||
Collateral account | $ 5,300,000 | |||||
Office Building | Operating Lease | ||||||
Loss Contingencies [Line Items] | ||||||
Area of real estate property | ft² | 27 | |||||
Computer Equipment | Dell Financial Services, LLC | ||||||
Loss Contingencies [Line Items] | ||||||
Gross balance of leased equipment | 1,100,000 | |||||
Computer Equipment | ePlus Group, Inc | ||||||
Loss Contingencies [Line Items] | ||||||
Gross balance of leased equipment | $ 21,100,000 | |||||
Subsequent Event | Capital Lease Obligations | Dell Financial Services, LLC | ||||||
Loss Contingencies [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 6,000,000 | |||||
Minimum | Capital Lease Obligations | ePlus Group, Inc | ||||||
Loss Contingencies [Line Items] | ||||||
Interest rate percentage | 3.50% | |||||
Maximum | Capital Lease Obligations | ePlus Group, Inc | ||||||
Loss Contingencies [Line Items] | ||||||
Interest rate percentage | 6.93% |
Commitments and Contingencies77
Commitments and Contingencies - Summary of Lease Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Capital Lease Obligations | ||
2,017 | $ 7,970 | |
2,018 | 4,436 | |
2,019 | 1,296 | |
2,020 | 38 | |
2,021 | 0 | |
Thereafter | 0 | |
Capital Leases, Future Minimum Payments Due | 13,740 | |
Operating Leases | ||
2,017 | 3,026 | |
2,018 | 3,787 | |
2,019 | 3,817 | |
2,020 | 3,471 | |
2,021 | 2,718 | |
Thereafter | 10,475 | |
Operating Leases, Future Minimum Payments Due | 27,294 | |
Build-to-Suit Lease | ||
2,017 | 5,883 | |
2,018 | 9,381 | |
2,019 | 9,451 | |
2,020 | 9,522 | |
2,021 | 10,354 | |
Thereafter | 48,834 | |
Build-to-Suit Leases, Future Minimum Payments Due | 93,425 | |
Amounts representing interest | 1,615 | |
Present value of net minimum payments | 12,125 | |
Current maturities | 6,829 | $ 5,610 |
Long-term payment obligations | $ 5,296 | $ 7,571 |