Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36911 | |
Entity Registrant Name | ETSY, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-4898921 | |
Entity Address, Address Line One | 117 Adams Street | |
Entity Address, City or Town | Brooklyn | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11201 | |
City Area Code | 718 | |
Local Phone Number | 880-3660 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | ETSY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 119,327,613 | |
Entity Central Index Key | 0001370637 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 677,524 | $ 443,293 |
Short-term investments | 365,659 | 373,959 |
Accounts receivable, net of expected credit losses of $6,182 and $5,033 as of June 30, 2020 and December 31, 2019, respectively | 16,527 | 15,386 |
Prepaid and other current assets | 30,768 | 38,614 |
Funds receivable and seller accounts | 103,857 | 49,786 |
Total current assets | 1,194,335 | 921,038 |
Restricted cash | 5,341 | 5,341 |
Property and equipment, net of accumulated depreciation and amortization of $141,307 and $120,084 as of June 30, 2020 and December 31, 2019, respectively | 126,187 | 144,864 |
Goodwill | 138,757 | 138,731 |
Intangible assets, net of accumulated amortization of $17,293 and $16,911 as of June 30, 2020 and December 31, 2019, respectively | 191,685 | 199,236 |
Deferred tax assets | 8,336 | 14,257 |
Long-term investments | 73,143 | 89,343 |
Other assets | 24,247 | 29,542 |
Total assets | 1,762,031 | 1,542,352 |
Current liabilities: | ||
Accounts payable | 15,978 | 26,324 |
Accrued expenses | 134,016 | 88,345 |
Finance lease obligations—current | 8,073 | 8,275 |
Funds payable and amounts due to sellers | 103,857 | 49,786 |
Deferred revenue | 9,181 | 7,617 |
Other current liabilities | 8,474 | 8,181 |
Total current liabilities | 279,579 | 188,528 |
Finance lease obligations—net of current portion | 49,258 | 53,611 |
Deferred tax liabilities | 66,301 | 64,497 |
Long-term debt, net | 803,227 | 785,126 |
Other liabilities | 39,491 | 43,956 |
Total liabilities | 1,237,856 | 1,135,718 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock ($0.001 par value, 1,400,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 119,140,637 and 118,342,772 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively) | 119 | 119 |
Preferred stock ($0.001 par value, 25,000,000 shares authorized as of June 30, 2020 and December 31, 2019) | 0 | 0 |
Additional paid-in capital | 675,213 | 642,628 |
Accumulated deficit | (143,458) | (227,414) |
Accumulated other comprehensive loss | (7,699) | (8,699) |
Total stockholders’ equity | 524,175 | 406,634 |
Total liabilities and stockholders’ equity | $ 1,762,031 | $ 1,542,352 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, expected credit losses | $ 6,182 | $ 5,033 |
Accumulated amortization | 17,293 | 16,911 |
Property and equipment, accumulated depreciation and amortization | $ 141,307 | $ 120,084 |
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) | 119,140,637 | 118,342,772 |
Common stock, shares outstanding (in shares) | 119,140,637 | 118,342,772 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 428,737 | $ 181,095 | $ 656,792 | $ 350,434 |
Cost of revenue | 111,381 | 58,605 | 193,797 | 111,263 |
Gross profit | 317,356 | 122,490 | 462,995 | 239,171 |
Operating expenses: | ||||
Marketing | 114,707 | 45,994 | 163,212 | 81,438 |
Product development | 45,233 | 28,765 | 83,015 | 53,712 |
General and administrative | 38,276 | 29,883 | 72,263 | 54,530 |
Total operating expenses | 198,216 | 104,642 | 318,490 | 189,680 |
Income from operations | 119,140 | 17,848 | 144,505 | 49,491 |
Other (expense) income: | ||||
Interest expense | (10,026) | (4,678) | (19,993) | (9,331) |
Interest and other income | 1,732 | 3,391 | 5,345 | 6,776 |
Foreign exchange gain (loss) | 1,470 | (192) | (7,848) | 870 |
Total other expense | (6,824) | (1,479) | (22,496) | (1,685) |
Income before income taxes | 112,316 | 16,369 | 122,009 | 47,806 |
(Provision) benefit for income taxes | (15,891) | 1,854 | (13,062) | 1,996 |
Net income | $ 96,425 | $ 18,223 | $ 108,947 | $ 49,802 |
Net income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.81 | $ 0.15 | $ 0.92 | $ 0.42 |
Diluted (in dollars per share) | $ 0.75 | $ 0.14 | $ 0.88 | $ 0.38 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 118,865,885 | 120,198,526 | 118,483,712 | 119,848,289 |
Diluted (in shares) | 134,408,041 | 130,807,743 | 133,238,316 | 130,463,025 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 96,425 | $ 18,223 | $ 108,947 | $ 49,802 |
Other comprehensive income (loss): | ||||
Cumulative translation adjustment | 2,538 | 982 | (133) | (79) |
Unrealized gains on marketable securities, net of tax expense of $142, $0, $347, and $0, respectively | 462 | 378 | 1,133 | 477 |
Total other comprehensive income | 3,000 | 1,360 | 1,000 | 398 |
Comprehensive income | $ 99,425 | $ 19,583 | $ 109,947 | $ 50,200 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized (losses) gains on marketable securities, tax | $ 142 | $ 0 | $ 347 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2018 | 119,771,702 | ||||||
Beginning balance at Dec. 31, 2018 | $ 400,898 | $ 7,116 | $ 120 | $ 562,033 | $ (153,442) | $ 7,116 | $ (7,813) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 19,896 | 19,896 | |||||
Exercise of vested options (in shares) | 688,890 | ||||||
Exercise of vested options | 7,840 | $ 1 | 7,839 | ||||
Vesting of restricted stock units, net of shares withheld (in shares) | 407,344 | ||||||
Vesting of restricted stock units, net of shares withheld | (16,157) | (16,157) | |||||
Stock repurchase (in shares) | (532,412) | ||||||
Stock repurchase | (27,492) | $ (1) | (27,491) | ||||
Other comprehensive income | 398 | 398 | |||||
Net income | 49,802 | 49,802 | |||||
Ending balance (in shares) at Jun. 30, 2019 | 120,335,524 | ||||||
Ending balance at Jun. 30, 2019 | 442,301 | $ 120 | 573,611 | (124,015) | (7,415) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 119,933,386 | ||||||
Beginning balance at Mar. 31, 2019 | 420,013 | $ 120 | 570,906 | (142,238) | (8,775) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 11,280 | 11,280 | |||||
Exercise of vested options (in shares) | 154,197 | ||||||
Exercise of vested options | 1,910 | 1,910 | |||||
Vesting of restricted stock units, net of shares withheld (in shares) | 247,941 | ||||||
Vesting of restricted stock units, net of shares withheld | (10,485) | (10,485) | |||||
Other comprehensive income | 1,360 | 1,360 | |||||
Net income | 18,223 | 18,223 | |||||
Ending balance (in shares) at Jun. 30, 2019 | 120,335,524 | ||||||
Ending balance at Jun. 30, 2019 | $ 442,301 | $ 120 | 573,611 | (124,015) | (7,415) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 118,342,772 | 118,342,772 | |||||
Beginning balance at Dec. 31, 2019 | $ 406,634 | $ 119 | 642,628 | (227,414) | (8,699) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock repurchase (in shares) | (543,106) | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 118,376,782 | ||||||
Ending balance at Mar. 31, 2020 | $ 406,847 | $ 118 | 657,311 | (239,883) | (10,699) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 118,342,772 | 118,342,772 | |||||
Beginning balance at Dec. 31, 2019 | $ 406,634 | $ 119 | 642,628 | (227,414) | (8,699) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | $ 30,960 | 30,960 | |||||
Exercise of vested options (in shares) | 957,999 | 957,999 | |||||
Exercise of vested options | $ 12,177 | $ 1 | 12,176 | ||||
Vesting of restricted stock units, net of shares withheld (in shares) | 382,972 | ||||||
Vesting of restricted stock units, net of shares withheld | (10,551) | (10,551) | |||||
Stock repurchase (in shares) | (543,106) | ||||||
Stock repurchase | (24,992) | $ (1) | (24,991) | ||||
Other comprehensive income | 1,000 | 1,000 | |||||
Net income | $ 108,947 | 108,947 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 119,140,637 | 119,140,637 | |||||
Ending balance at Jun. 30, 2020 | $ 524,175 | $ 119 | 675,213 | (143,458) | (7,699) | ||
Beginning balance (in shares) at Mar. 31, 2020 | 118,376,782 | ||||||
Beginning balance at Mar. 31, 2020 | 406,847 | $ 118 | 657,311 | (239,883) | (10,699) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 16,975 | 16,975 | |||||
Exercise of vested options (in shares) | 510,113 | ||||||
Exercise of vested options | 7,281 | $ 1 | 7,280 | ||||
Vesting of restricted stock units, net of shares withheld (in shares) | 253,742 | ||||||
Vesting of restricted stock units, net of shares withheld | $ (6,353) | (6,353) | |||||
Stock repurchase (in shares) | 0 | ||||||
Other comprehensive income | $ 3,000 | 3,000 | |||||
Net income | $ 96,425 | 96,425 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 119,140,637 | 119,140,637 | |||||
Ending balance at Jun. 30, 2020 | $ 524,175 | $ 119 | $ 675,213 | $ (143,458) | $ (7,699) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 108,947 | $ 49,802 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation expense | 30,536 | 18,919 |
Depreciation and amortization expense | 29,334 | 19,952 |
Bad debt expense | 5,904 | 4,146 |
Foreign exchange loss (gain) | 10,394 | (1,240) |
Non-cash interest expense | 17,026 | 6,792 |
Deferred income taxes | 7,389 | (1,996) |
Other non-cash expense (income), net | 1,845 | (478) |
Changes in operating assets and liabilities: | ||
Current assets | (51,975) | (51,284) |
Non-current assets | 4,994 | 2,037 |
Current liabilities | 90,707 | 37,626 |
Non-current liabilities | (5,006) | (2,982) |
Net cash provided by operating activities | 250,095 | 81,294 |
Cash flows from investing activities | ||
Purchases of property and equipment | (209) | (3,747) |
Development of internal-use software | (2,043) | (4,669) |
Purchases of marketable securities | (181,198) | (305,391) |
Sales of marketable securities | 206,182 | 265,852 |
Net cash provided by (used in) investing activities | 22,732 | (47,955) |
Cash flows from financing activities | ||
Payment of tax obligations on vested equity awards | (10,551) | (16,157) |
Repurchase of stock | (24,992) | (27,492) |
Proceeds from exercise of stock options | 12,177 | 7,840 |
Payment of debt issuance costs | (14) | (1,392) |
Payments on finance lease obligations | (4,927) | (5,475) |
Other financing, net | (10,196) | 2,072 |
Net cash used in financing activities | (38,503) | (40,604) |
Effect of exchange rate changes on cash | (93) | (561) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 234,231 | (7,826) |
Cash, cash equivalents, and restricted cash at beginning of period | 448,634 | 372,326 |
Cash, cash equivalents, and restricted cash at end of period | 682,865 | 364,500 |
Supplemental non-cash disclosures: | ||
Stock-based compensation capitalized in development of capitalized software | 424 | 977 |
Additions to development of internal-use software and property and equipment included in accounts payable and accrued expenses | 658 | 2,637 |
Additions to intangible assets included in other current liabilities | 0 | 1,720 |
Right-of-use assets obtained in exchange for new lease liabilities: | ||
Finance leases | 370 | 333 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Total cash, cash equivalents, and restricted cash | $ 682,865 | $ 372,326 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
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”) operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers. Our primary marketplace, Etsy.com, is the global marketplace for unique and creative goods. The Company generates revenue primarily from transaction, listing, and payments processing fees, and on-site advertising and shipping label services. 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. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). We have condensed or omitted certain information and notes normally included in complete annual financial statements prepared in accordance with GAAP. These unaudited interim consolidated financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2020 (the “Annual Report”). In the opinion of management, all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for the periods presented have been reflected in the consolidated financial statements. The results of operations of any interim period are not necessarily indicative of the results of operations for the full annual period or any future period due to seasonal and other factors. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying Notes. Actual results could differ from these estimates and assumptions. However, the Company believes it has used reasonable estimates and assumptions in preparing the consolidated financial statements. The accounting estimates that require management’s most subjective judgments include: leases, including determining the incremental borrowing rate; income taxes, including the estimate of annual effective tax rate at interim periods and evaluation of uncertain tax positions; purchase price allocations for business combinations, valuation of the acquired intangibles purchased in a business combination, and valuation of goodwill and intangible assets; stock-based compensation; fair value of financial instruments; and provision for expected credit losses . As of June 30, 2020 , the effects of the ongoing COVID-19 pandemic on our business, results of operations, and financial condition continue to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, our estimates may change materially in future periods. Reclassifications Certain items in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation reflected in the consolidated financial statements. Specifically, the Company reclassified $6.8 million previously included in other non-cash expense (income), net to non-cash interest expense on the Consolidated Statement of Cash Flows for the six months ended June 30, 2019 to conform to the current year presentation. Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06— Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity . The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12 —Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The Company adopted this standard in the first quarter of 2020, effective as of January 1, 2020, on a prospective basis. The effect of this standard was not material to the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15 —Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this standard January 1, 2020 on a prospective basis. The effect of this standard was not material to the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13— Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses on Financial Instruments , and additional changes, modifications, clarifications, or interpretations related to this guidance thereafter, which require a reporting entity to estimate credit losses on certain types of financial instruments, including accounts receivable and funds receivable and seller accounts, and present assets held at amortized cost and available-for-sale debt securities at the amount expected to be collected. The Company adopted this standard January 1, 2020 using a modified retrospective transition method. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements on the date of its adoption. For the six months ended June 30, 2020 , our assessment of the provision for expected credit losses considered market disruptions caused by COVID-19 and estimates of expected and emerging credit and collectibility trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a significant impact on our provision for credit losses in future periods. Accounts Receivable : This standard requires the Company to consider forward-looking information to estimate expected credit losses in addition to its previous policy of determining the allowance by a number of factors, including age of the receivable, current economic conditions, historical losses, and management’s assessment of the financial condition of sellers on its platform. The following table provides a rollforward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands): June 30, Balance as of December 31, 2019 $ 5,033 Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings — Provision for expected credit losses 5,904 Amounts written off, net of recoveries (4,755 ) Balance as of June 30, 2020 $ 6,182 Available-For-Sale Debt Securities : The Company’s investment portfolio at any point in time contains investments in U.S. Government and agency securities, corporate bonds, commercial paper, certificates of deposit, cash deposits, and money market funds. The Company’s investment policy is to invest in high quality, investment grade securities from diverse issuers with credit ratings higher than BBB. In accordance with its investment policy, the Company’s investments have maturities no longer than 37 months, with the average maturity of these investments maintained at 12 months or less. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero loss expectation for U.S. treasury and U.S. Government agency securities. The potential of credit losses for the remainder of the portfolio of available-for-sale debt securities is mitigated by the high quality nature of the investments. The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors including their credit rating, and current economic conditions. As of June 30, 2020 , the Company did not recognize any year-to-date credit loss related to available-for-sale debt securities. The Company evaluates fair values for each individual security in the investment portfolio. See “ Note 7—Marketable Securities ” for additional information on the Company’s marketable securities. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 2—Revenue The following table summarizes revenue by type of service for the periods presented (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Marketplace revenue $ 332,031 $ 135,199 $ 487,952 $ 262,367 Services revenue 96,706 45,896 168,840 88,067 Revenue $ 428,737 $ 181,095 $ 656,792 $ 350,434 On May 4, 2020, Etsy started charging sellers on its marketplace platform for Offsite Ads, whereby sellers will pay Etsy an advertising fee of 12% or 15% of the value of a sale based on the seller’s volume of sales, if such sale is generated from an advertisement placed by the Company on third-party internet platforms. The Company recognizes the revenue related to Offsite Ads on a gross basis in Marketplace revenue. The Company recognizes the cost of promoting the sellers’ listing on multiple third-party internet platforms as marketing expense. Our dedicated on-site advertising service for sellers to promote their listings to shoppers on Etsy.com has been renamed Etsy Ads (formerly Promoted Listings). Revenue from Etsy Ads consists of cost-per-click fees an Etsy seller pays for prominent placement of her listings in search results in the Etsy.com marketplace. Etsy Ads fees are based on an auction system, which utilizes the budget that each Etsy seller sets when using Etsy Ads to determine the cost-per-click fee. Etsy Ads fees are nonrefundable and are charged to a seller’s Etsy bill when the Etsy Ad is clicked, at which time the Company recognizes revenue as part of Services revenue. Contract balances Deferred revenues The amount of revenue recognized in the six months ended June 30, 2020 that was included in the deferred balance at January 1, 2020 was $7.6 million . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 3—Income Taxes The Company’s provision or benefit from income taxes in interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. The estimate of the annual effective income tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The Company’s quarterly tax provision, and its quarterly estimate of the annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting its income or loss before tax and the mix of jurisdictions to which they relate, taxable income or loss in each jurisdiction, changes in its stock price, audit-related developments, acquisitions, changes in its deferred tax assets and liabilities and their valuation, foreign currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, the effective tax rate can be more or less volatile based on the amount of income or loss before tax. For example, the impact of discrete items and non-deductible expenses on the effective tax rate is greater when income before tax is lower. For the six months ended June 30, 2020 the Company’s effective income tax rate was 10.7% representing an income tax provision recorded on net income before tax. The effective tax rate for the six months ended June 30, 2020 was lower than the U.S. statutory rate of 21% primarily due to excess tax benefits from employee stock-based compensation, a benefit related to research and development tax credit and the impact from foreign operations that are subject to lower tax rates, partially offset by additional U.S. taxes on foreign earnings. Although management believes its tax positions and related provisions reflected in the consolidated financial statements are fully supportable, it recognizes that these tax positions and related provisions may be challenged by various tax authorities. These tax positions and related provisions are reviewed on an ongoing basis and are adjusted as additional facts and information become available, including progress on tax audits, changes in interpretation of tax laws, developments in case law and closing of statute of limitations. To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in the provision for income taxes. The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income and deductions, and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. Any adjustments as a result of any examination, may result in additional taxes or penalties against the Company. If the ultimate result of these audits differ from original or adjusted estimates, they could have a material impact on the Company’s tax provision. The amount of unrecognized tax benefits included in the Consolidated Balance Sheets increased $1.3 million in the six months ended June 30, 2020 , from $19.9 million at December 31, 2019 to $21.2 million at June 30, 2020 . The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate is $20.7 million at June 30, 2020 . Although the timing of the resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. Given the number of years remaining subject to examination and the number of matters being examined, at this time, the Company is unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. The Company recognizes interest and/or penalties related to uncertain tax positions in income tax expense. The amount of interest and penalties accrued in tax (benefit)/expense for the six months ended June 30, 2020 was nil , and the total amount accrued as of June 30, 2020 remained flat at $0.2 million from December 31, 2019 . |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 4— Net Income Per Share The following table presents the calculation of basic and diluted net income per share for the periods presented (in thousands, except share and per share amounts): Three Months Ended Six Months Ended 2020 2019 2020 2019 Numerator: Net income $ 96,425 $ 18,223 $ 108,947 $ 49,802 Net income allocated to participating securities under the two-class method — (9 ) — (24 ) Net income attributable to common stockholders—basic 96,425 18,214 108,947 49,778 Dilutive effect of net income allocated to participating securities under the two-class method — 9 — 24 Add back interest expense, net of tax attributable to assumed conversion of the 2018 Notes (1) 3,969 — 7,891 — Net income attributable to common stockholders—diluted $ 100,394 $ 18,223 $ 116,838 $ 49,802 Denominator: Weighted-average common shares outstanding—basic (2) 118,865,885 120,198,526 118,483,712 119,848,289 Dilutive effect of assumed conversion of options to purchase common stock 4,279,288 4,667,849 4,149,229 4,764,942 Dilutive effect of assumed conversion of restricted stock units 1,750,875 1,693,130 1,093,382 1,841,363 Dilutive effect of assumed conversion of the 2018 Notes (1) 9,511,993 4,226,839 9,511,993 3,989,402 Dilutive effect of assumed conversion of restricted stock from acquisition — 21,399 — 19,029 Weighted-average common shares outstanding—diluted 134,408,041 130,807,743 133,238,316 130,463,025 Net income per share attributable to common stockholders—basic $ 0.81 $ 0.15 $ 0.92 $ 0.42 Net income per share attributable to common stockholders—diluted $ 0.75 $ 0.14 $ 0.88 $ 0.38 (1) The Company used the if-converted method when calculating the dilutive effect of the 0% Convertible Senior Notes due 2023 (the “ 2018 Notes ”) for the three and six months ended June 30, 2020 and used the treasury stock method for the three and six months ended June 30, 2019 . (2) 22,993 and 23,759 shares of unvested stock were considered participating securities and were excluded from basic shares outstanding for the three and six months ended June 30, 2019 , respectively. Since the Company expects to settle in cash the principal outstanding under the 0.125% Convertible Senior Notes due 2026 (the “ 2019 Notes ”), it used the treasury stock method to determine that the 2019 Notes were anti-dilutive for the three and six months ended June 30, 2020 . The following potential common shares were excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Three Months Ended Six Months Ended 2020 2019 2020 2019 Stock options 410,409 337,907 777,412 224,706 Restricted stock units 42,361 716,869 1,166,627 424,461 2019 Notes 7,412,600 — 7,412,600 — Total anti-dilutive securities 7,865,370 1,054,776 9,356,639 649,167 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Note 5—Business Combinations On August 15, 2019 , the Company acquired all of the outstanding capital stock of Reverb, a leading online marketplace dedicated to buying and selling new, used, and vintage musical instruments. The acquisition enables the Company to expand into a new vertical with a company that has a similar strategy and business model. The total cash consideration paid was $270.4 million , net of cash acquired. The acquisition was accounted for under the acquisition method of accounting. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill, which consists largely of synergies and acquisition of workforce. The resulting goodwill is not expected to be deductible for tax purposes. The Company has finalized the valuation of assets acquired and liabilities assumed for the acquisition of Reverb as of December 31, 2019 . Purchase Price Allocation The following table summarizes the allocation of the purchase price (at fair value) to the assets acquired and liabilities assumed of Reverb as of August 15, 2019 (the date of acquisition) (in thousands): Final Fair Value as Adjusted Short-term investments $ 1,028 Other current assets (1) 2,902 Funds receivable and seller accounts 5,578 Property and equipment other 1,543 Developed technology 30,300 Trademark 79,400 Customer relationships 93,500 Goodwill 101,703 Other assets (1) 6,743 Other net working capital (208 ) Funds payable and amounts due to sellers (5,578 ) Other current liabilities (1) (3,684 ) Other liabilities (1) (7,333 ) Deferred tax liability, net (1) (35,485 ) Total purchase price $ 270,409 (1) Other current liabilities and other liabilities are primarily related to non-income tax related contingency reserves, which are wholly offset by an indemnification asset of $5.5 million and a deferred tax asset. Acquisition-related expenses are expensed as incurred and are recorded in general and administrative expenses. They were $0.6 million and $1.3 million for the three and six months ended June 30, 2020 , respectively, and primarily related to non-recurring employee-related costs associated with the acquisition. Acquisition-related expenses were $1.2 million for both the three and six months ended June 30, 2019 , and primarily related to advisory, legal, and other professional fees. Unaudited Supplemental Pro Forma Information The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2018 (in thousands): Three Months Ended Six Months Ended Revenue $ 192,365 $ 373,524 Net income 14,948 42,965 The pro forma financial information includes adjustments that are directly attributable to the business combination and are factually supportable. The pro forma adjustments include incremental amortization of intangible and developed technology assets, based on final values of each asset and acquisition-related expenses and are tax-effected. For the three and six months ended June 30, 2019 , the pro forma financial information excludes $1.7 million |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6—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 Sheets 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 financial instruments where values are derived from techniques in which one or more significant inputs are unobservable. The following are the major categories of assets measured at fair value on a recurring basis as of the dates indicated (in thousands): As of June 30, 2020 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 550,544 $ — $ — $ 550,544 550,544 — — 550,544 Short-term investments: Certificate of deposit — 14,998 — 14,998 Commercial paper — 8,690 — 8,690 Corporate bonds — 81,849 — 81,849 U.S. Government and agency securities 260,122 — — 260,122 260,122 105,537 — 365,659 Funds receivable and seller accounts: Money market funds 35,495 — — 35,495 35,495 — — 35,495 Long-term investments: Certificate of deposit — 2,040 — 2,040 Corporate bonds — 13,803 — 13,803 U.S. Government and agency securities 57,300 — — 57,300 57,300 15,843 — 73,143 $ 903,461 $ 121,380 $ — $ 1,024,841 As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Certificate of deposit $ — $ 2,959 $ — $ 2,959 Commercial paper — 5,794 — 5,794 Money market funds 228,859 — — 228,859 228,859 8,753 — 237,612 Short-term investments: Certificate of deposit — 26,132 — 26,132 Commercial paper — 29,320 — 29,320 Corporate bonds — 114,202 — 114,202 U.S. Government and agency securities 204,305 — — 204,305 204,305 169,654 — 373,959 Funds receivable and seller accounts: Money market funds 18,168 — — 18,168 18,168 — — 18,168 Long-term investments: Certificate of deposit — 4,729 — 4,729 Corporate bonds — 38,563 — 38,563 U.S. Government and agency securities 46,051 — — 46,051 46,051 43,292 — 89,343 $ 497,383 $ 221,699 $ — $ 719,082 Level 1 instruments include investments in debt securities, including money market funds and 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 investments in debt securities, including fixed-income funds consisting of investments in certificates of deposit, 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. The Company did not have any Level 3 instruments as of June 30, 2020 and December 31, 2019 . The Company evaluates fair value for each individual security in the investment portfolio. See “ Note 7—Marketable Securities ” for additional information on the Company’s marketable securities measured at fair value. Disclosure of Fair Values The Company’s financial instruments that are not remeasured at fair value include the 2018 Notes and 2019 Notes (see “ Note 9—Debt ”). The Company estimates the fair value of the 2018 Notes and 2019 Notes through consideration of quoted market prices of similar instruments, classified as Level 2 as described above. The estimated fair value of the 2018 Notes was $312.2 million and $310.3 million as of June 30, 2020 and December 31, 2019 , respectively. The estimated fair value of the 2019 Notes was $517.5 million and $522.2 million as of June 30, 2020 and December 31, 2019 , respectively. The carrying value of other financial instruments, including cash, accounts receivable, accounts payable, funds receivable and seller accounts, and funds payable and amounts due to sellers approximate fair value due to the immediate or short-term maturity associated with these instruments. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Note 7—Marketable Securities Short- and long-term investments and certain cash equivalents consist of investments in debt 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 June 30, 2020 Short-term investments: Certificate of deposit $ 14,938 $ — $ 60 $ 14,998 Commercial paper 8,634 — 56 8,690 Corporate bonds 81,426 (1 ) 424 81,849 U.S. Government and agency securities 259,245 — 877 260,122 364,243 (1 ) 1,417 365,659 Long-term investments: Certificate of deposit 2,041 (1 ) — 2,040 Corporate bonds 13,765 (19 ) 57 13,803 U.S. Government and agency securities 57,060 — 240 57,300 72,866 (20 ) 297 73,143 $ 437,109 $ (21 ) $ 1,714 $ 438,802 December 31, 2019 Cash equivalents: Certificate of deposit $ 2,958 $ — $ 1 $ 2,959 Commercial paper 5,794 — — 5,794 8,752 — 1 8,753 Short-term investments: Certificates of deposit 26,129 (3 ) 6 26,132 Commercial paper 29,319 (1 ) 2 29,320 Corporate bonds 114,068 (22 ) 156 114,202 U.S. Government and agency securities 204,246 (8 ) 67 204,305 373,762 (34 ) 231 373,959 Long-term investments: Certificate of deposit 4,727 — 2 4,729 Corporate bonds 38,582 (35 ) 16 38,563 U.S. Government and agency securities 46,017 (2 ) 36 46,051 89,326 (37 ) 54 89,343 $ 471,840 $ (71 ) $ 286 $ 472,055 All investments in an unrealized loss position have been in an unrealized loss position for less than 12 months as of June 30, 2020 . See “ Note 6—Fair Value Measurements ” for additional information on the Company’s marketable securities measured at fair value. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 8—Accrued Expenses Accrued expenses consisted of the following as of the dates indicated (in thousands): As of June 30, As of December 31, Taxes payable $ 64,320 $ 39,250 Vendor accruals 46,333 25,760 Employee compensation-related liabilities 23,363 23,335 Total accrued expenses $ 134,016 $ 88,345 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 9—Debt 2019 Convertible Debt In September 2019 , the Company issued $650.0 million aggregate principal amount of the 2019 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the sale of the 2019 Notes were $639.5 million after deducting the initial purchasers’ discount and offering expenses. The equity component of the 2019 Notes is approximately $154.0 million and is included in additional paid-in capital in the Consolidated Balance Sheets. The Company used $76.2 million of the net proceeds from the 2019 Notes offering to enter into separate capped call transactions (“2019 Capped Call Transactions”) with the initial purchasers and/or their respective affiliates. During any calendar quarter preceding June 1, 2026 in which the closing price of the Company’s common stock exceeds 130% of the applicable conversion price of the 2019 Notes on at least 20 of the last 30 consecutive trading days of the quarter, holders may, in the immediate quarter following, convert all or a portion of their 2019 Notes . Based on the daily closing prices of the Company’s stock during the quarter ended June 30, 2020 , holders of the 2019 Notes are not eligible to convert their 2019 Notes during the third quarter of 2020 . Based on the terms of the 2019 Notes , when a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof. Accordingly, the Company cannot be required to settle the 2019 Notes in cash and, therefore, the 2019 Notes are classified as long-term debt as of June 30, 2020 . As of June 30, 2020 , the if-converted value of the 2019 Notes was approximately $137.4 million higher than the aggregate principal amount, or $787.4 million . The 2019 Notes are general unsecured obligations of the Company. The 2019 Notes rank senior in right of payment to all of the Company’s future indebtedness that is expressly subordinated in right of payment to the 2019 Notes ; rank equal in right of payment with all of our liabilities that are not so subordinated, including our 2018 Notes ; are effectively junior to any of the Company’s secured indebtedness; and are structurally junior to all indebtedness and liabilities (including trade payables) of the Company’s subsidiaries. The Company capitalized $10.5 million of debt issuance costs in connection with the 2019 Notes . The effective interest rate for the 2019 Notes is 4.00% . Interest expense, including amortization of debt issuance costs, related to the 2019 Notes for the three and six months ended June 30, 2020 was $5.3 million and $10.6 million , respectively. Total unamortized debt issuance costs were $7.3 million and $7.8 million as of June 30, 2020 and December 31, 2019 , respectively. The estimated fair value of the 2019 Notes was $517.5 million and $522.2 million as of June 30, 2020 and December 31, 2019 , respectively. The estimated fair value of the 2019 Notes was determined through consideration of quoted market prices for similar instruments. The fair value is classified as Level 2, as defined in “ Note 6—Fair Value Measurements .” As of June 30, 2020 , there were no other material changes related to the 2019 Notes and 2019 Capped Call Transactions compared to that disclosed in the Annual Report. 2018 Convertible Debt In March 2018 , the Company issued $345.0 million aggregate principal amount of the 2018 Notes in a private placement to qualified institutional buyers pursuant to the Securities Act. The net proceeds from the sale of the 2018 Notes were $335.0 million after deducting the initial purchasers’ discount and offering expenses. The equity component of the 2018 Notes is approximately $72.8 million and is included in additional paid-in capital in the Consolidated Balance Sheets. The Company used $34.2 million of the net proceeds from the 2018 Notes offering to enter into separate capped call transactions (“2018 Capped Call Transactions”) with the initial purchasers and/or their respective affiliates. During any calendar quarter preceding November 1, 2022 in which the closing price of the Company’s common stock exceeds 130% of the applicable conversion price of the 2018 Notes on at least 20 of the last 30 consecutive trading days of the quarter, holders may, in the immediate quarter following, convert all or a portion of their 2018 Notes . Based on the daily closing prices of the Company’s stock during the quarter ended June 30, 2020 , holders of the 2018 Notes are eligible to convert their 2018 Notes during the third quarter of 2020 . Based on the terms of the 2018 Notes , when a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof. Accordingly, the Company cannot be required to settle the 2018 Notes in cash and, therefore, the 2018 Notes are classified as long-term debt as of June 30, 2020 . As of June 30, 2020 , the if-converted value of the 2018 Notes was approximately $665.4 million higher than the aggregate principal amount, or $1.0 billion . The 2018 Notes are general unsecured obligations of the Company. The 2018 Notes rank senior in right of payment to all of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment with all of our liabilities that are not so subordinated, including our 2019 Notes ; are effectively junior to any of the Company’s secured indebtedness; and are structurally junior to all indebtedness and liabilities (including trade payables) of the Company’s subsidiaries. The Company capitalized $10.0 million of debt issuance costs in connection with the 2018 Notes . The effective interest rate for the 2018 Notes is 4.75% . Interest expense, including amortization of debt issuance costs, related to the 2018 Notes for the three months ended June 30, 2020 and 2019 was $4.0 million and $3.8 million , respectively. Interest expense, including amortization of debt issuance costs, related to the 2018 Notes for the six months ended June 30, 2020 and 2019 was $7.9 million and $7.5 million , respectively. Total unamortized debt issuance costs related to the 2018 Notes were $4.4 million and $5.2 million as of June 30, 2020 and December 31, 2019 , respectively. The estimated fair value of the 2018 Notes was $312.2 million and $310.3 million as of June 30, 2020 and December 31, 2019 , respectively. The estimated fair value of the 2018 Notes was determined through consideration of quoted market prices for similar instruments. The fair value is classified as Level 2, as defined in “ Note 6—Fair Value Measurements .” As of June 30, 2020 , there were no other material changes related to the 2018 Notes and 2018 Capped Call Transactions compared to that disclosed in the Annual Report. 2019 Credit Agreement On February 25, 2019 , the Company entered into a $200.0 million senior secured revolving credit facility pursuant to a Credit Agreement (the “ 2019 Credit Agreement ”) with lenders party thereto from time to time, and Citibank N.A., as administrative Agent. The 2019 Credit Agreement will mature in February 2024 . The 2019 Credit Agreement includes a letter of credit sublimit of $30.0 million and a swingline loan sublimit of $10.0 million . Borrowings under the 2019 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 0.25% to 0.875% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.25% to 1.875% . Swingline loans under the 2019 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 senior secured net leverage ratio (defined as secured funded debt, net of unrestricted cash up to $100 million , to EBITDA) 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, ranging from 0.20% to 0.35% depending on the Company’s senior secured net leverage ratio, and fees associated with letters of credit. The Company capitalized $1.4 million of debt issuance costs in connection with the 2019 Credit Agreement . Interest expense related to debt issuance costs on the 2019 Credit Agreement for both the three and six months ended June 30, 2020 and 2019 was $0.1 million . Total unamortized debt issuance costs related to the 2019 Credit Agreement were $1.0 million and $1.1 million as of June 30, 2020 and December 31, 2019 , respectively. At June 30, 2020 , the Company did no t have any borrowings under the 2019 Credit Agreement |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10—Commitments and Contingencies Legal Proceedings 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 results of operations, cash flows, or business and financial condition in the period the claims or litigation are resolved. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11—Stockholders’ Equity In November 2018, the Board of Directors approved a stock repurchase program that enables the Company to repurchase up to $200 million of its common stock. The program does not have a time limit and may be modified, suspended, or terminated at any time by the Board of Directors. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume, and general market conditions, along with Etsy’s working capital requirements, general business conditions, and other factors. Under the stock repurchase program, the Company may purchase shares of its common stock through various means, including open market transactions, privately negotiated transactions, tender offers, or any combination thereof. In addition, open market repurchases of common stock could be made pursuant to trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit common stock to be repurchased at a time that the Company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The following table summarizes the Company’s cumulative share repurchase activity of the program noted above, excluding shares withheld to satisfy tax withholding obligations in connection with the vesting of employee restricted stock units (“RSUs”) (in thousands, except share and per share amounts): Shares Repurchased Average Price Paid per Share (1) Value of Shares Repurchased (1) Remaining Amount Authorized Balance as of December 31, 2019 1,924,294 $ 50.65 $ 97,500 $ 102,500 Repurchases of common stock for the three months ended: March 31, 2020 543,106 46.02 25,000 (25,000 ) June 30, 2020 — — — — Balance as of June 30, 2020 2,467,400 $ 49.63 $ 122,500 $ 77,500 (1) Average price paid per share excludes broker commissions. Value of shares repurchased includes broker commissions. All repurchases were made using cash resources and all repurchased shares of common stock have been retired. In light of the macroeconomic situation related to COVID-19, our Board of Directors decided to temporarily pause share repurchases in the second quarter of 2020. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 12—Stock-Based Compensation During the three and six months ended June 30, 2020 , the Company granted stock options and RSUs under its 2015 Equity Incentive Plan (“2015 Plan”) and, pursuant to the evergreen increase provision of the 2015 Plan, the Board of Directors approved an increase of 5,917,139 shares to the total number of shares available for issuance under the 2015 Plan effective as of January 2, 2020. At June 30, 2020 , 31,831,808 shares were authorized under the 2015 Plan and 24,665,329 shares were available for future grant. The fair value of options granted in the periods presented below using the Black-Scholes pricing model has been based on the following assumptions: Three Months Ended Six Months Ended 2020 2019 2020 2019 Volatility 41.3% - 41.7% 39.2% - 39.5% 38.9% - 41.7% 39.2% - 39.5% Risk-free interest rate 0.4% - 0.5% 1.9% - 2.4% 0.4% - 1.7% 1.9% - 2.5% Expected term (in years) 5.52 - 6.16 5.50 - 6.16 5.52 - 6.16 5.50 - 6.16 Dividend rate —% —% —% —% The following table summarizes the activity for the Company’s options during the six months ended June 30, 2020 (in thousands, except share and per share amounts): Shares Weighted-Average Exercise Price Weighted-Average Remaining Contract Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2019 6,294,919 $ 16.26 Granted 645,300 45.26 Exercised (957,999 ) 12.71 Forfeited/Canceled (14,490 ) 32.15 Outstanding at June 30, 2020 5,967,730 19.93 7.23 $ 515,046 Total exercisable at June 30, 2020 3,638,011 13.37 6.71 337,836 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 during the three and six months ended June 30, 2020 and 2019 (in thousands, except per share amounts): Three Months Ended Six Months Ended 2020 2019 2020 2019 Weighted-average grant date fair value of options granted $ 28.97 $ 25.00 $ 17.72 $ 28.90 Intrinsic value of options exercised 32,034 8,373 52,458 36,896 Fair value of awards vested 19,022 12,108 26,408 18,191 The total unrecognized compensation expense at June 30, 2020 related to the Company’s options was $26.6 million , which will be recognized over an estimated weighted-average amortization period of 2.69 years. The following table summarizes the activity for the Company’s unvested RSUs during the six months ended June 30, 2020 : Shares Weighted-Average Unvested at December 31, 2019 2,960,413 $ 40.61 Granted 1,509,157 44.16 Vested (635,645 ) 32.34 Forfeited/Canceled (141,115 ) 41.06 Unvested at June 30, 2020 3,692,810 43.46 The total unrecognized compensation expense at June 30, 2020 related to the Company’s unvested RSUs was $142.7 million , which will be recognized over an estimated weighted-average amortization period of 3.08 years. Stock-based compensation expense included in the Consolidated Statements of Operations for the periods presented below is as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Cost of revenue $ 1,907 $ 1,456 $ 3,527 $ 2,555 Marketing 1,357 723 2,581 1,354 Product development 8,472 5,294 15,273 8,813 General and administrative 4,989 3,364 9,155 6,197 Stock-based compensation expense $ 16,725 $ 10,837 $ 30,536 $ 18,919 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). We have condensed or omitted certain information and notes normally included in complete annual financial statements prepared in accordance with GAAP. These unaudited interim consolidated financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2020 (the “Annual Report”). In the opinion of management, all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for the periods presented have been reflected in the consolidated financial statements. The results of operations of any interim period are not necessarily indicative of the results of operations for the full annual period or any future period due to seasonal and other factors. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying Notes. Actual results could differ from these estimates and assumptions. However, the Company believes it has used reasonable estimates and assumptions in preparing the consolidated financial statements. The accounting estimates that require management’s most subjective judgments include: leases, including determining the incremental borrowing rate; income taxes, including the estimate of annual effective tax rate at interim periods and evaluation of uncertain tax positions; purchase price allocations for business combinations, valuation of the acquired intangibles purchased in a business combination, and valuation of goodwill and intangible assets; stock-based compensation; fair value of financial instruments; and provision for expected credit losses . As of June 30, 2020 , the effects of the ongoing COVID-19 pandemic on our business, results of operations, and financial condition continue to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, our estimates may change materially in future periods. |
Reclassifications | Reclassifications Certain items in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation reflected in the consolidated financial statements. Specifically, the Company reclassified $6.8 million previously included in other non-cash expense (income), net to non-cash interest expense on the Consolidated Statement of Cash Flows for the six months ended June 30, 2019 to conform to the current year presentation. |
Recently Issued and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06— Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity . The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12 —Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The Company adopted this standard in the first quarter of 2020, effective as of January 1, 2020, on a prospective basis. The effect of this standard was not material to the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15 —Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this standard January 1, 2020 on a prospective basis. The effect of this standard was not material to the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13— Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses on Financial Instruments , and additional changes, modifications, clarifications, or interpretations related to this guidance thereafter, which require a reporting entity to estimate credit losses on certain types of financial instruments, including accounts receivable and funds receivable and seller accounts, and present assets held at amortized cost and available-for-sale debt securities at the amount expected to be collected. The Company adopted this standard January 1, 2020 using a modified retrospective transition method. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements on the date of its adoption. For the six months ended June 30, 2020 , our assessment of the provision for expected credit losses considered market disruptions caused by COVID-19 and estimates of expected and emerging credit and collectibility trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a significant impact on our provision for credit losses in future periods. Accounts Receivable : This standard requires the Company to consider forward-looking information to estimate expected credit losses in addition to its previous policy of determining the allowance by a number of factors, including age of the receivable, current economic conditions, historical losses, and management’s assessment of the financial condition of sellers on its platform. The following table provides a rollforward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands): June 30, Balance as of December 31, 2019 $ 5,033 Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings — Provision for expected credit losses 5,904 Amounts written off, net of recoveries (4,755 ) Balance as of June 30, 2020 $ 6,182 Available-For-Sale Debt Securities : The Company’s investment portfolio at any point in time contains investments in U.S. Government and agency securities, corporate bonds, commercial paper, certificates of deposit, cash deposits, and money market funds. The Company’s investment policy is to invest in high quality, investment grade securities from diverse issuers with credit ratings higher than BBB. In accordance with its investment policy, the Company’s investments have maturities no longer than 37 months, with the average maturity of these investments maintained at 12 months or less. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero loss expectation for U.S. treasury and U.S. Government agency securities. The potential of credit losses for the remainder of the portfolio of available-for-sale debt securities is mitigated by the high quality nature of the investments. The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors including their credit rating, and current economic conditions. As of June 30, 2020 , the Company did not recognize any year-to-date credit loss related to available-for-sale debt securities. The Company evaluates fair values for each individual security in the investment portfolio. See “ Note 7—Marketable Securities |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable, Allowance for Credit Loss | The following table provides a rollforward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands): June 30, Balance as of December 31, 2019 $ 5,033 Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings — Provision for expected credit losses 5,904 Amounts written off, net of recoveries (4,755 ) Balance as of June 30, 2020 $ 6,182 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue by type of service for the periods presented (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Marketplace revenue $ 332,031 $ 135,199 $ 487,952 $ 262,367 Services revenue 96,706 45,896 168,840 88,067 Revenue $ 428,737 $ 181,095 $ 656,792 $ 350,434 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Income Per Share | The following table presents the calculation of basic and diluted net income per share for the periods presented (in thousands, except share and per share amounts): Three Months Ended Six Months Ended 2020 2019 2020 2019 Numerator: Net income $ 96,425 $ 18,223 $ 108,947 $ 49,802 Net income allocated to participating securities under the two-class method — (9 ) — (24 ) Net income attributable to common stockholders—basic 96,425 18,214 108,947 49,778 Dilutive effect of net income allocated to participating securities under the two-class method — 9 — 24 Add back interest expense, net of tax attributable to assumed conversion of the 2018 Notes (1) 3,969 — 7,891 — Net income attributable to common stockholders—diluted $ 100,394 $ 18,223 $ 116,838 $ 49,802 Denominator: Weighted-average common shares outstanding—basic (2) 118,865,885 120,198,526 118,483,712 119,848,289 Dilutive effect of assumed conversion of options to purchase common stock 4,279,288 4,667,849 4,149,229 4,764,942 Dilutive effect of assumed conversion of restricted stock units 1,750,875 1,693,130 1,093,382 1,841,363 Dilutive effect of assumed conversion of the 2018 Notes (1) 9,511,993 4,226,839 9,511,993 3,989,402 Dilutive effect of assumed conversion of restricted stock from acquisition — 21,399 — 19,029 Weighted-average common shares outstanding—diluted 134,408,041 130,807,743 133,238,316 130,463,025 Net income per share attributable to common stockholders—basic $ 0.81 $ 0.15 $ 0.92 $ 0.42 Net income per share attributable to common stockholders—diluted $ 0.75 $ 0.14 $ 0.88 $ 0.38 (1) The Company used the if-converted method when calculating the dilutive effect of the 0% Convertible Senior Notes due 2023 (the “ 2018 Notes ”) for the three and six months ended June 30, 2020 and used the treasury stock method for the three and six months ended June 30, 2019 . (2) 22,993 and 23,759 shares of unvested stock were considered participating securities and were excluded from basic shares outstanding for the three and six months ended June 30, 2019 , respectively. |
Schedule of Anti-Dilutive Securities Excluded from Computation of Net Income Per Share | The following potential common shares were excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Three Months Ended Six Months Ended 2020 2019 2020 2019 Stock options 410,409 337,907 777,412 224,706 Restricted stock units 42,361 716,869 1,166,627 424,461 2019 Notes 7,412,600 — 7,412,600 — Total anti-dilutive securities 7,865,370 1,054,776 9,356,639 649,167 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes the allocation of the purchase price (at fair value) to the assets acquired and liabilities assumed of Reverb as of August 15, 2019 (the date of acquisition) (in thousands): Final Fair Value as Adjusted Short-term investments $ 1,028 Other current assets (1) 2,902 Funds receivable and seller accounts 5,578 Property and equipment other 1,543 Developed technology 30,300 Trademark 79,400 Customer relationships 93,500 Goodwill 101,703 Other assets (1) 6,743 Other net working capital (208 ) Funds payable and amounts due to sellers (5,578 ) Other current liabilities (1) (3,684 ) Other liabilities (1) (7,333 ) Deferred tax liability, net (1) (35,485 ) Total purchase price $ 270,409 (1) Other current liabilities and other liabilities are primarily related to non-income tax related contingency reserves, which are wholly offset by an indemnification asset of $5.5 million |
Schedule of Unaudited Supplemental Pro Forma Information | The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2018 (in thousands): Three Months Ended Six Months Ended Revenue $ 192,365 $ 373,524 Net income 14,948 42,965 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Major Categories of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following are the major categories of assets measured at fair value on a recurring basis as of the dates indicated (in thousands): As of June 30, 2020 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 550,544 $ — $ — $ 550,544 550,544 — — 550,544 Short-term investments: Certificate of deposit — 14,998 — 14,998 Commercial paper — 8,690 — 8,690 Corporate bonds — 81,849 — 81,849 U.S. Government and agency securities 260,122 — — 260,122 260,122 105,537 — 365,659 Funds receivable and seller accounts: Money market funds 35,495 — — 35,495 35,495 — — 35,495 Long-term investments: Certificate of deposit — 2,040 — 2,040 Corporate bonds — 13,803 — 13,803 U.S. Government and agency securities 57,300 — — 57,300 57,300 15,843 — 73,143 $ 903,461 $ 121,380 $ — $ 1,024,841 As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Certificate of deposit $ — $ 2,959 $ — $ 2,959 Commercial paper — 5,794 — 5,794 Money market funds 228,859 — — 228,859 228,859 8,753 — 237,612 Short-term investments: Certificate of deposit — 26,132 — 26,132 Commercial paper — 29,320 — 29,320 Corporate bonds — 114,202 — 114,202 U.S. Government and agency securities 204,305 — — 204,305 204,305 169,654 — 373,959 Funds receivable and seller accounts: Money market funds 18,168 — — 18,168 18,168 — — 18,168 Long-term investments: Certificate of deposit — 4,729 — 4,729 Corporate bonds — 38,563 — 38,563 U.S. Government and agency securities 46,051 — — 46,051 46,051 43,292 — 89,343 $ 497,383 $ 221,699 $ — $ 719,082 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
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 June 30, 2020 Short-term investments: Certificate of deposit $ 14,938 $ — $ 60 $ 14,998 Commercial paper 8,634 — 56 8,690 Corporate bonds 81,426 (1 ) 424 81,849 U.S. Government and agency securities 259,245 — 877 260,122 364,243 (1 ) 1,417 365,659 Long-term investments: Certificate of deposit 2,041 (1 ) — 2,040 Corporate bonds 13,765 (19 ) 57 13,803 U.S. Government and agency securities 57,060 — 240 57,300 72,866 (20 ) 297 73,143 $ 437,109 $ (21 ) $ 1,714 $ 438,802 December 31, 2019 Cash equivalents: Certificate of deposit $ 2,958 $ — $ 1 $ 2,959 Commercial paper 5,794 — — 5,794 8,752 — 1 8,753 Short-term investments: Certificates of deposit 26,129 (3 ) 6 26,132 Commercial paper 29,319 (1 ) 2 29,320 Corporate bonds 114,068 (22 ) 156 114,202 U.S. Government and agency securities 204,246 (8 ) 67 204,305 373,762 (34 ) 231 373,959 Long-term investments: Certificate of deposit 4,727 — 2 4,729 Corporate bonds 38,582 (35 ) 16 38,563 U.S. Government and agency securities 46,017 (2 ) 36 46,051 89,326 (37 ) 54 89,343 $ 471,840 $ (71 ) $ 286 $ 472,055 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following as of the dates indicated (in thousands): As of June 30, As of December 31, Taxes payable $ 64,320 $ 39,250 Vendor accruals 46,333 25,760 Employee compensation-related liabilities 23,363 23,335 Total accrued expenses $ 134,016 $ 88,345 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Class of Treasury Stock | The following table summarizes the Company’s cumulative share repurchase activity of the program noted above, excluding shares withheld to satisfy tax withholding obligations in connection with the vesting of employee restricted stock units (“RSUs”) (in thousands, except share and per share amounts): Shares Repurchased Average Price Paid per Share (1) Value of Shares Repurchased (1) Remaining Amount Authorized Balance as of December 31, 2019 1,924,294 $ 50.65 $ 97,500 $ 102,500 Repurchases of common stock for the three months ended: March 31, 2020 543,106 46.02 25,000 (25,000 ) June 30, 2020 — — — — Balance as of June 30, 2020 2,467,400 $ 49.63 $ 122,500 $ 77,500 (1) Average price paid per share excludes broker commissions. Value of shares repurchased includes broker commissions. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Black-Scholes Valuation Assumptions Used to Determine Fair Value of Options Granted | The fair value of options granted in the periods presented below using the Black-Scholes pricing model has been based on the following assumptions: Three Months Ended Six Months Ended 2020 2019 2020 2019 Volatility 41.3% - 41.7% 39.2% - 39.5% 38.9% - 41.7% 39.2% - 39.5% Risk-free interest rate 0.4% - 0.5% 1.9% - 2.4% 0.4% - 1.7% 1.9% - 2.5% Expected term (in years) 5.52 - 6.16 5.50 - 6.16 5.52 - 6.16 5.50 - 6.16 Dividend rate —% —% —% —% |
Summary of Stock Option Activity | The following table summarizes the activity for the Company’s options during the six months ended June 30, 2020 (in thousands, except share and per share amounts): Shares Weighted-Average Exercise Price Weighted-Average Remaining Contract Term (in years) Aggregate Intrinsic Value Outstanding at December 31, 2019 6,294,919 $ 16.26 Granted 645,300 45.26 Exercised (957,999 ) 12.71 Forfeited/Canceled (14,490 ) 32.15 Outstanding at June 30, 2020 5,967,730 19.93 7.23 $ 515,046 Total exercisable at June 30, 2020 3,638,011 13.37 6.71 337,836 |
Summary of Intrinsic Value of Options Exercised | 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 during the three and six months ended June 30, 2020 and 2019 (in thousands, except per share amounts): Three Months Ended Six Months Ended 2020 2019 2020 2019 Weighted-average grant date fair value of options granted $ 28.97 $ 25.00 $ 17.72 $ 28.90 Intrinsic value of options exercised 32,034 8,373 52,458 36,896 Fair value of awards vested 19,022 12,108 26,408 18,191 |
Summary of Weighted Average Grant Date Fair Value and Fair Value of Awards Vested | 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 during the three and six months ended June 30, 2020 and 2019 (in thousands, except per share amounts): Three Months Ended Six Months Ended 2020 2019 2020 2019 Weighted-average grant date fair value of options granted $ 28.97 $ 25.00 $ 17.72 $ 28.90 Intrinsic value of options exercised 32,034 8,373 52,458 36,896 Fair value of awards vested 19,022 12,108 26,408 18,191 |
Summary of Unvested RSU Activity | The following table summarizes the activity for the Company’s unvested RSUs during the six months ended June 30, 2020 : Shares Weighted-Average Unvested at December 31, 2019 2,960,413 $ 40.61 Granted 1,509,157 44.16 Vested (635,645 ) 32.34 Forfeited/Canceled (141,115 ) 41.06 Unvested at June 30, 2020 3,692,810 43.46 |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense included in the Consolidated Statements of Operations for the periods presented below is as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Cost of revenue $ 1,907 $ 1,456 $ 3,527 $ 2,555 Marketing 1,357 723 2,581 1,354 Product development 8,472 5,294 15,273 8,813 General and administrative 4,989 3,364 9,155 6,197 Stock-based compensation expense $ 16,725 $ 10,837 $ 30,536 $ 18,919 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Reclassification [Line Items] | ||
Non-cash interest expense | $ 17,026 | $ 6,792 |
Other non-cash (income) expense, net | $ (1,845) | 478 |
Reclassifications | ||
Reclassification [Line Items] | ||
Non-cash interest expense | 6,800 | |
Other non-cash (income) expense, net | $ (6,800) |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 5,033 | |
Provision for expected credit losses | 5,904 | $ 4,146 |
Amounts written off, net of recoveries | (4,755) | |
Ending balance | 6,182 | |
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 0 |
Revenue - Summary of Revenue by
Revenue - Summary of Revenue by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 428,737 | $ 181,095 | $ 656,792 | $ 350,434 |
Marketplace revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 332,031 | 135,199 | 487,952 | 262,367 |
Services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 96,706 | $ 45,896 | $ 168,840 | $ 88,067 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 2 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenue recognized in the period | $ 7.6 | |
Level One | ||
Disaggregation of Revenue [Line Items] | ||
Advertising fee, percent on the value of a sale | 12.00% | |
Level Two | ||
Disaggregation of Revenue [Line Items] | ||
Advertising fee, percent on the value of a sale | 15.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 10.70% | |
Unrecognized tax benefits, period increase | $ 1,300,000 | |
Unrecognized tax benefits | 21,200,000 | $ 19,900,000 |
Unrecognized tax benefits that would impact effective tax rate favorably | 20,700,000 | |
Change in income tax penalties and interest expense | 0 | |
Income tax penalties and interest accrued | $ 200,000 | $ 200,000 |
Net Income Per Share - Calculat
Net Income Per Share - Calculation of Basic and Diluted Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Mar. 31, 2018 | |
Numerator: | ||||||
Net income | $ 96,425 | $ 18,223 | $ 108,947 | $ 49,802 | ||
Net income allocated to participating securities under the two-class method | 0 | (9) | 0 | (24) | ||
Net income attributable to common stockholders—basic | 96,425 | 18,214 | 108,947 | 49,778 | ||
Dilutive effect of net income allocated to participating securities under the two-class method | 0 | 9 | 0 | 24 | ||
Add back interest expense, net of tax attributable to assumed conversion of the 2018 Notes | 3,969 | 0 | 7,891 | 0 | ||
Net income attributable to common stockholders—diluted | $ 100,394 | $ 18,223 | $ 116,838 | $ 49,802 | ||
Denominator: | ||||||
Weighted average common shares outstanding—basic (in shares) | 118,865,885 | 120,198,526 | 118,483,712 | 119,848,289 | ||
Weighted average common shares outstanding - diluted (in shares) | 134,408,041 | 130,807,743 | 133,238,316 | 130,463,025 | ||
Net income per share attributable to common stockholders—basic (in dollars per shares) | $ 0.81 | $ 0.15 | $ 0.92 | $ 0.42 | ||
Net income per share attributable to common stockholders—diluted (in dollars per share) | $ 0.75 | $ 0.14 | $ 0.88 | $ 0.38 | ||
Participating securities excluded from computation of earnings per share (in shares) | 7,865,370 | 1,054,776 | 9,356,639 | 649,167 | ||
Convertible Debt | Convertible Senior Notes Due 2026 | ||||||
Denominator: | ||||||
Interest rate, stated percentage | 0.125% | |||||
Convertible Debt | Convertible Senior Notes Due 2023 | ||||||
Denominator: | ||||||
Interest rate, stated percentage | 0.00% | |||||
Participating Securities | ||||||
Denominator: | ||||||
Participating securities excluded from computation of earnings per share (in shares) | 22,993 | 23,759 | ||||
Stock options | ||||||
Denominator: | ||||||
Dilutive effect of assumed conversion (in shares) | 4,279,288 | 4,667,849 | 4,149,229 | 4,764,942 | ||
Restricted stock units | ||||||
Denominator: | ||||||
Dilutive effect of assumed conversion (in shares) | 1,750,875 | 1,693,130 | 1,093,382 | 1,841,363 | ||
2019 Notes | ||||||
Denominator: | ||||||
Dilutive effect of assumed conversion of the 2018 Notes (in shares) | 9,511,993 | 4,226,839 | 9,511,993 | 3,989,402 | ||
Restricted stock | ||||||
Denominator: | ||||||
Dilutive effect of assumed conversion (in shares) | 0 | 21,399 | 0 | 19,029 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Shares Excluded from the Calculation of Diluted Net (Loss) Income Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 7,865,370 | 1,054,776 | 9,356,639 | 649,167 |
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) | 410,409 | 337,907 | 777,412 | 224,706 |
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) | 42,361 | 716,869 | 1,166,627 | 424,461 |
2019 Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 7,412,600 | 0 | 7,412,600 | 0 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - Reverb Holdings Inc. - USD ($) $ in Thousands | Aug. 15, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||||
Cash consideration paid | $ 270,400 | ||||
Acquisition-related expenses | $ 600 | $ 1,200 | $ 1,300 | $ 1,200 | |
Non-recurring acquisition-related expenses | 14,948 | 42,965 | |||
Acquisition-related Costs | |||||
Business Acquisition [Line Items] | |||||
Non-recurring acquisition-related expenses | $ 1,700 | $ 1,700 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Aug. 15, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 138,757 | $ 138,731 | |
Reverb Holdings Inc. | |||
Business Acquisition [Line Items] | |||
Short-term investments | $ 1,028 | ||
Other current assets | 2,902 | ||
Funds receivable and seller accounts | 5,578 | ||
Goodwill | 101,703 | ||
Other assets | 6,743 | ||
Other net working capital | (208) | ||
Funds payable and amounts due to sellers | (5,578) | ||
Other current liabilities | (3,684) | ||
Other liabilities | (7,333) | ||
Deferred tax liability, net | (35,485) | ||
Total purchase price | 270,409 | ||
Indemnification asset | 5,500 | ||
Reverb Holdings Inc. | Trademark | |||
Business Acquisition [Line Items] | |||
Purchase price of intangible assets | 79,400 | ||
Reverb Holdings Inc. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Purchase price of intangible assets | 93,500 | ||
Reverb Holdings Inc. | Property and equipment other | |||
Business Acquisition [Line Items] | |||
Purchase price of property and equipment other and developed technology | 1,543 | ||
Reverb Holdings Inc. | Developed technology | |||
Business Acquisition [Line Items] | |||
Purchase price of property and equipment other and developed technology | $ 30,300 |
Business Combinations - Unaudit
Business Combinations - Unaudited Supplemental Pro Forma Information (Details) - Reverb Holdings Inc. - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | ||
Revenue | $ 192,365 | $ 373,524 |
Net income | $ 14,948 | $ 42,965 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 365,659 | $ 373,959 |
Long-term investments | 73,143 | 89,343 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 550,544 | 237,612 |
Short-term investments | 365,659 | 373,959 |
Funds receivable and seller accounts | 35,495 | 18,168 |
Long-term investments | 73,143 | 89,343 |
Assets | 1,024,841 | 719,082 |
Recurring | Certificate of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,959 | |
Short-term investments | 14,998 | 26,132 |
Long-term investments | 2,040 | 4,729 |
Recurring | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,794 | |
Short-term investments | 8,690 | 29,320 |
Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 81,849 | 114,202 |
Long-term investments | 13,803 | 38,563 |
Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 550,544 | 228,859 |
Funds receivable and seller accounts | 35,495 | 18,168 |
Recurring | U.S. Government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 260,122 | 204,305 |
Long-term investments | 57,300 | 46,051 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 550,544 | 228,859 |
Short-term investments | 260,122 | 204,305 |
Funds receivable and seller accounts | 35,495 | 18,168 |
Long-term investments | 57,300 | 46,051 |
Assets | 903,461 | 497,383 |
Recurring | Level 1 | Certificate of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Recurring | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | 0 |
Recurring | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Recurring | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 550,544 | 228,859 |
Funds receivable and seller accounts | 35,495 | 18,168 |
Recurring | Level 1 | U.S. Government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 260,122 | 204,305 |
Long-term investments | 57,300 | 46,051 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 8,753 |
Short-term investments | 105,537 | 169,654 |
Funds receivable and seller accounts | 0 | 0 |
Long-term investments | 15,843 | 43,292 |
Assets | 121,380 | 221,699 |
Recurring | Level 2 | Certificate of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,959 | |
Short-term investments | 14,998 | 26,132 |
Long-term investments | 2,040 | 4,729 |
Recurring | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,794 | |
Short-term investments | 8,690 | 29,320 |
Recurring | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 81,849 | 114,202 |
Long-term investments | 13,803 | 38,563 |
Recurring | Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Funds receivable and seller accounts | 0 | 0 |
Recurring | Level 2 | U.S. Government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Funds receivable and seller accounts | 0 | 0 |
Long-term investments | 0 | 0 |
Assets | 0 | 0 |
Recurring | Level 3 | Certificate of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Recurring | Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | 0 |
Recurring | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Recurring | Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Funds receivable and seller accounts | 0 | 0 |
Recurring | Level 3 | U.S. Government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Long-term investments | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Convertible Debt - Reported Value Measurement - Level 2 - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Convertible Senior Notes Due 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 312.2 | $ 310.3 |
Convertible Senior Notes Due 2026 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 517.5 | $ 522.2 |
Marketable Securities - (Detail
Marketable Securities - (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost | $ 437,109 | $ 471,840 |
Gross Unrealized Holding Loss | (21) | (71) |
Gross Unrealized Holding Gain | 1,714 | 286 |
Fair Value | 438,802 | 472,055 |
Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 364,243 | 373,762 |
Gross Unrealized Holding Loss | (1) | (34) |
Gross Unrealized Holding Gain | 1,417 | 231 |
Fair Value | 365,659 | 373,959 |
Short-term Investments | Certificate of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 14,938 | 26,129 |
Gross Unrealized Holding Loss | 0 | (3) |
Gross Unrealized Holding Gain | 60 | 6 |
Fair Value | 14,998 | 26,132 |
Short-term Investments | Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 8,634 | 29,319 |
Gross Unrealized Holding Loss | 0 | (1) |
Gross Unrealized Holding Gain | 56 | 2 |
Fair Value | 8,690 | 29,320 |
Short-term Investments | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 81,426 | 114,068 |
Gross Unrealized Holding Loss | (1) | (22) |
Gross Unrealized Holding Gain | 424 | 156 |
Fair Value | 81,849 | 114,202 |
Short-term Investments | U.S. Government and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 259,245 | 204,246 |
Gross Unrealized Holding Loss | 0 | (8) |
Gross Unrealized Holding Gain | 877 | 67 |
Fair Value | 260,122 | 204,305 |
Long-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 72,866 | 89,326 |
Gross Unrealized Holding Loss | (20) | (37) |
Gross Unrealized Holding Gain | 297 | 54 |
Fair Value | 73,143 | 89,343 |
Long-term investments | Certificate of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,041 | 4,727 |
Gross Unrealized Holding Loss | (1) | 0 |
Gross Unrealized Holding Gain | 0 | 2 |
Fair Value | 2,040 | 4,729 |
Long-term investments | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 13,765 | 38,582 |
Gross Unrealized Holding Loss | (19) | (35) |
Gross Unrealized Holding Gain | 57 | 16 |
Fair Value | 13,803 | 38,563 |
Long-term investments | U.S. Government and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 57,060 | 46,017 |
Gross Unrealized Holding Loss | 0 | (2) |
Gross Unrealized Holding Gain | 240 | 36 |
Fair Value | $ 57,300 | 46,051 |
Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 8,752 | |
Gross Unrealized Holding Loss | 0 | |
Gross Unrealized Holding Gain | 1 | |
Fair Value | 8,753 | |
Cash Equivalents | Certificate of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,958 | |
Gross Unrealized Holding Loss | 0 | |
Gross Unrealized Holding Gain | 1 | |
Fair Value | 2,959 | |
Cash Equivalents | Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 5,794 | |
Gross Unrealized Holding Loss | 0 | |
Gross Unrealized Holding Gain | 0 | |
Fair Value | $ 5,794 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Taxes payable | $ 64,320 | $ 39,250 |
Vendor accruals | 46,333 | 25,760 |
Employee compensation-related liabilities | 23,363 | 23,335 |
Total accrued expenses | $ 134,016 | $ 88,345 |
Debt - 2019 Convertible Debt (D
Debt - 2019 Convertible Debt (Details) - Convertible Debt | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($)day | Mar. 31, 2018USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Convertible Senior Notes Due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument | $ 650,000,000 | |||||
Proceeds from issuance of convertible senior notes | 639,500,000 | |||||
Equity component | $ 154,000,000 | |||||
Threshold percentage of stock price trigger | 130.00% | |||||
Threshold trading days | day | 20 | |||||
Threshold consecutive trading days | day | 30 | |||||
If-converted value in excess of principal | $ 137,400,000 | |||||
If-converted value | 787,400,000 | $ 787,400,000 | $ 787,400,000 | |||
Capitalization of debt issuance costs | $ 10,500,000 | |||||
Effective interest rate | 4.00% | |||||
Non-cash interest expense | 5,300,000 | 10,600,000 | ||||
Unamortized debt issuance expense | 7,300,000 | 7,300,000 | 7,300,000 | $ 7,800,000 | ||
Convertible Senior Notes Due 2026 | Reported Value Measurement | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, fair value | $ 517,500,000 | $ 517,500,000 | $ 517,500,000 | $ 522,200,000 | ||
Capped Call Transaction | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of convertible senior notes | $ 76,200,000 | $ 34,200,000 |
Debt - 2018 Convertible Debt (D
Debt - 2018 Convertible Debt (Details) - Convertible Debt | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2018USD ($)day | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Convertible Senior Notes Due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument | $ 345,000,000 | |||||||
Proceeds from issuance of convertible senior notes | 335,000,000 | |||||||
Equity component | $ 72,800,000 | |||||||
Threshold percentage of stock price trigger | 130.00% | |||||||
Threshold trading days | day | 20 | |||||||
Threshold consecutive trading days | day | 30 | |||||||
If-converted value in excess of principal | $ 665,400,000 | |||||||
If-converted value | 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | |||||
Capitalization of debt issuance costs | $ 10,000,000 | |||||||
Effective interest rate | 4.75% | |||||||
Non-cash interest expense | 4,000,000 | $ 3,800,000 | 7,900,000 | $ 7,500,000 | ||||
Unamortized debt issuance expense | 4,400,000 | 4,400,000 | 4,400,000 | $ 5,200,000 | ||||
Convertible Senior Notes Due 2023 | Level 2 | Reported Value Measurement | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, fair value | $ 312,200,000 | $ 312,200,000 | $ 312,200,000 | $ 310,300,000 | ||||
Capped Call Transaction | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from issuance of convertible senior notes | $ 76,200,000 | $ 34,200,000 |
Debt - 2019 Credit Agreement (D
Debt - 2019 Credit Agreement (Details) - Credit Agreement - USD ($) | Feb. 25, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||||||
Capitalization of debt issuance costs | $ 1,400,000 | |||||
Non-cash interest expense | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | ||
Unamortized debt issuance expense | 1,000,000 | 1,000,000 | $ 1,100,000 | |||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit, maximum borrowing capacity | 200,000,000 | |||||
Maximum unrestricted cash | $ 100,000,000 | |||||
Line of credit facility, amount outstanding | $ 0 | $ 0 | ||||
Revolving Credit Facility | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | 0.20% | |||||
Revolving Credit Facility | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | 0.35% | |||||
Revolving Credit Facility | Federal Funds Effective Swap Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
Revolving Credit Facility | One-Month London Interbank Offered Rate (LIBOR) Plus 1% | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.25% | |||||
Revolving Credit Facility | One-Month London Interbank Offered Rate (LIBOR) Plus 1% | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.875% | |||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR), Adjusted | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR), Adjusted | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.875% | |||||
Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 30,000,000 | |||||
Bridge Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 10,000,000 |
Stockholders' Equity - (Details
Stockholders' Equity - (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Nov. 30, 2018 |
Equity [Abstract] | |||||
Stock repurchase program, authorized amount | $ 200,000,000 | ||||
Shares Repurchased (in shares) | 2,467,400 | 1,924,294 | 0 | 543,106 | |
Average Price Paid per Share (in dollars per share) | $ 49.63 | $ 50.65 | $ 0 | $ 46.02 | |
Stock repurchased and retired during period, value, including broker fees | $ (122,500,000) | $ (97,500,000) | $ 0 | $ (25,000,000) | |
Remaining Amount Authorized | $ 77,500,000 | $ 102,500,000 | $ 77,500,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | Jan. 02, 2020 | Jun. 30, 2020 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation | $ 26.6 | |
Total unrecognized compensation, period of recognition | 2 years 8 months 8 days | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation, period of recognition | 3 years 29 days | |
Total unrecognized compensation | $ 142.7 | |
2015 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of additional shares issued annually (in shares) | 5,917,139 | |
Number of shares authorized (in shares) | 31,831,808 | |
Number of shares available for grant (in shares) | 24,665,329 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Options Granted Using the Black-Scholes Pricing Model (Details) - Stock options | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend rate | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 41.30% | 39.20% | 38.90% | 39.20% |
Risk-free interest rate | 0.40% | 1.90% | 0.40% | 1.90% |
Expected term | 5 years 6 months 7 days | 5 years 6 months | 5 years 6 months 7 days | 5 years 6 months |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 41.70% | 39.50% | 41.70% | 39.50% |
Risk-free interest rate | 0.50% | 2.40% | 1.70% | 2.50% |
Expected term | 6 years 1 month 27 days | 6 years 1 month 27 days | 6 years 1 month 27 days | 6 years 1 month 27 days |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2020 | |
Shares | |
Outstanding, beginning balance (in shares) | 6,294,919 |
Granted (in shares) | 645,300 |
Exercised (in shares) | (957,999) |
Forfeited/Canceled (in shares) | (14,490) |
Outstanding, ending balance (in shares) | 5,967,730 |
Total exercisable (in shares) | 3,638,011 |
Weighted-Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ 16.26 |
Granted (in dollars per share) | 45.26 |
Exercised (in dollars per share) | 12.71 |
Forfeited/Canceled (in dollars per share) | 32.15 |
Outstanding, ending balance (in dollars per share) | 19.93 |
Total exercisable (in dollars per share) | $ 13.37 |
Weighted-Average Remaining Contract Term (in years) | |
Outstanding, Weighted-Average Remaining Contract Term | 7 years 2 months 23 days |
Total exercisable, Weighted-Average Remaining Contract Term | 6 years 8 months 15 days |
Aggregate Intrinsic Value | |
Outstanding, Aggregate Intrinsic Value | $ 515,046 |
Total exercisable, Aggregate Intrinsic Value | $ 337,836 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Grant Date Fair Value of Options Granted, Intrinsic Value of Options Exercised and Fair Value of Awards Vested (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Weighted average grant date fair value of options (in dollars per share) | $ 28.97 | $ 25 | $ 17.72 | $ 28.90 |
Intrinsic value of options exercised | $ 32,034 | $ 8,373 | $ 52,458 | $ 36,896 |
Fair value of awards vested | $ 19,022 | $ 12,108 | $ 26,408 | $ 18,191 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Unvested RSUs (Details) - RSUs | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Shares | |
Unvested at December 31, 2019 (in shares) | shares | 2,960,413 |
Granted (in shares) | shares | 1,509,157 |
Vested (in shares) | shares | (635,645) |
Forfeited/Cancelled (in shares) | shares | (141,115) |
Unvested at June 30, 2020 (in shares) | shares | 3,692,810 |
Weighted-Average Grant Date Fair Value | |
Unvested at December 31, 2019 (in dollars per share) | $ / shares | $ 40.61 |
Granted (in dollars per share) | $ / shares | 44.16 |
Vested (in dollars per share) | $ / shares | 32.34 |
Forfeited/Cancelled (in dollars per share) | $ / shares | 41.06 |
Unvested at June 30, 2020 (in dollars per share) | $ / shares | $ 43.46 |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocated Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 16,725 | $ 10,837 | $ 30,536 | $ 18,919 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,907 | 1,456 | 3,527 | 2,555 |
Marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,357 | 723 | 2,581 | 1,354 |
Product development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 8,472 | 5,294 | 15,273 | 8,813 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 4,989 | $ 3,364 | $ 9,155 | $ 6,197 |
Uncategorized Items - etsy63020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201602Member |