Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | 125,688,316 | |
Entity Central Index Key | 0001370637 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 789,990 | $ 780,196 |
Short-term Investments | 251,165 | 204,416 |
Accounts receivable, net of expected credit losses of $6,675 and $7,730 as of September 30, 2022 and December 31, 2021, respectively | 21,765 | 27,266 |
Prepaid and other current assets | 93,700 | 109,417 |
Funds receivable and seller accounts | 195,493 | 220,206 |
Total current assets | 1,352,113 | 1,341,501 |
Restricted cash | 5,341 | 5,341 |
Property and equipment, net of accumulated depreciation and amortization of $189,875 and $157,043 as of September 30, 2022 and December 31, 2021, respectively | 249,905 | 275,062 |
Goodwill | 135,922 | 1,371,064 |
Intangible assets, net of accumulated amortization of $78,531 and $53,152 as of September 30, 2022 and December 31, 2021, respectively | 517,018 | 607,170 |
Deferred tax assets | 115,068 | 95,863 |
Long-term Investments | 32,138 | 85,034 |
Other assets | 42,806 | 50,774 |
Total assets | 2,450,311 | 3,831,809 |
Current liabilities: | ||
Accounts payable | 16,841 | 28,007 |
Accrued expenses | 249,964 | 328,118 |
Finance lease obligations—current | 4,827 | 2,418 |
Funds payable and amounts due to sellers | 195,493 | 220,206 |
Deferred revenue | 12,225 | 12,339 |
Other current liabilities | 17,896 | 24,500 |
Total current liabilities | 497,246 | 615,588 |
Finance lease obligations—net of current portion | 106,330 | 110,283 |
Deferred tax liabilities | 62,155 | 79,484 |
Long-term debt, net | 2,278,585 | 2,275,418 |
Other liabilities | 112,237 | 122,417 |
Total liabilities | 3,056,553 | 3,203,190 |
Commitments and contingencies (Note 10) | ||
Stockholders’ (deficit) equity: | ||
Common stock ($0.001 par value, 1,400,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 125,661,777 and 127,022,118 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively) | 126 | 127 |
Preferred stock ($0.001 par value, 25,000,000 shares authorized as of September 30, 2022 and December 31, 2021) | 0 | 0 |
Additional paid-in capital | 773,887 | 631,762 |
(Accumulated deficit) retained earnings | (1,007,397) | 71,744 |
Accumulated other comprehensive loss | (372,858) | (75,014) |
Total stockholders' (deficit) equity | (606,242) | 628,619 |
Total liabilities and stockholders' (deficit) equity | $ 2,450,311 | $ 3,831,809 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, expected credit losses | $ 6,675 | $ 7,730 |
Property and equipment, accumulated depreciation and amortization | 189,875 | 157,043 |
Finite-lived intangible assets, accumulated amortization | $ 78,531 | $ 53,152 |
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) | 125,661,777 | 127,022,118 |
Common stock, shares outstanding (in shares) | 125,661,777 | 127,022,118 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 594,469 | $ 532,429 | $ 1,758,870 | $ 1,611,975 |
Cost of revenue | 174,401 | 153,660 | 518,817 | 445,546 |
Gross profit | 420,068 | 378,769 | 1,240,053 | 1,166,429 |
Operating expenses: | ||||
Marketing | 147,242 | 131,928 | 465,590 | 450,606 |
Product development | 108,040 | 73,521 | 299,611 | 188,980 |
General and administrative | 74,544 | 89,579 | 227,734 | 203,360 |
Goodwill impairment | 1,045,022 | 0 | 1,045,022 | 0 |
Total operating expenses | 1,374,848 | 295,028 | 2,037,957 | 842,946 |
(Loss) income from operations | (954,780) | 83,741 | (797,904) | 323,483 |
Other income, net | 5,763 | 58 | 8,036 | 3,798 |
(Loss) income before income taxes | (949,017) | 83,799 | (789,868) | 327,281 |
(Provision) benefit for income taxes | (14,051) | 6,131 | (13,968) | 4,669 |
Net (loss) income | $ (963,068) | $ 89,930 | $ (803,836) | $ 331,950 |
Net (loss) income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ (7.62) | $ 0.71 | $ (6.33) | $ 2.62 |
Diluted (in dollars per share) | $ (7.62) | $ 0.62 | $ (6.33) | $ 2.30 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 126,349,250 | 126,633,789 | 126,985,731 | 126,753,641 |
Diluted (in shares) | 126,349,250 | 147,413,915 | 126,985,731 | 145,866,797 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (963,068) | $ 89,930 | $ (803,836) | $ 331,950 |
Other comprehensive loss: | ||||
Cumulative translation adjustment | (135,493) | (66,709) | (295,792) | (75,059) |
Unrealized losses on marketable securities, net of tax benefit of $68, $21, $644, and $96, respectively | (239) | (67) | (2,052) | (304) |
Total other comprehensive loss | (135,732) | (66,776) | (297,844) | (75,363) |
Comprehensive (loss) income | $ (1,098,800) | $ 23,154 | $ (1,101,680) | $ 256,587 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (losses) on marketable securities, net of tax benefit | $ 68 | $ 21 | $ 644 | $ 96 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | |
Beginning balance (in shares) at Dec. 31, 2020 | 125,835,931 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 742,424 | $ (200,910) | $ 126 | $ 883,166 | $ (228,738) | $ (146,819) | $ 27,828 | $ 5,951 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based compensation | 95,062 | 95,062 | |||||||
Exercise of vested options (in shares) | 493,932 | ||||||||
Exercise of vested options | 10,867 | 10,867 | |||||||
Purchase of capped calls, net of taxes | (64,673) | (64,673) | |||||||
Settlement of convertible senior notes, net of taxes (in shares) | 985,081 | ||||||||
Settlement of convertible senior notes, net of taxes | (422) | $ 1 | (423) | ||||||
Vesting of restricted stock units, net of shares withheld (in shares) | 513,675 | ||||||||
Vesting of restricted stock units, net of shares withheld | (70,886) | $ 1 | (70,887) | ||||||
Stock repurchase (in shares) | (1,324,865) | ||||||||
Stock repurchase | (234,427) | $ (1) | (234,426) | ||||||
Other comprehensive income (loss) | (75,363) | (75,363) | |||||||
Net (loss) income | 331,950 | 331,950 | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 126,503,754 | ||||||||
Ending balance at Sep. 30, 2021 | 533,622 | $ 127 | 624,374 | (21,467) | (69,412) | ||||
Beginning balance (in shares) at Jun. 30, 2021 | 126,522,519 | ||||||||
Beginning balance at Jun. 30, 2021 | 530,753 | $ 127 | 590,232 | (56,970) | (2,636) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based compensation | 45,705 | 45,705 | |||||||
Exercise of vested options (in shares) | 154,137 | ||||||||
Exercise of vested options | 2,830 | 2,830 | |||||||
Vesting of restricted stock units, net of shares withheld (in shares) | 94,448 | ||||||||
Vesting of restricted stock units, net of shares withheld | (14,393) | (14,393) | |||||||
Stock repurchase (in shares) | (267,350) | ||||||||
Stock repurchase | (54,427) | (54,427) | |||||||
Other comprehensive income (loss) | (66,776) | (66,776) | |||||||
Net (loss) income | 89,930 | 89,930 | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 126,503,754 | ||||||||
Ending balance at Sep. 30, 2021 | $ 533,622 | $ 127 | 624,374 | (21,467) | (69,412) | ||||
Beginning balance (in shares) at Dec. 31, 2021 | 127,022,118 | 127,022,118 | |||||||
Beginning balance at Dec. 31, 2021 | $ 628,619 | $ 127 | 631,762 | 71,744 | (75,014) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based compensation (in shares) | [1] | 191,493 | |||||||
Stock-based compensation | [1] | 182,353 | 182,353 | ||||||
Exercise of vested options (in shares) | 546,367 | ||||||||
Exercise of vested options | 8,212 | $ 1 | 8,211 | ||||||
Settlement of convertible senior notes, net of taxes (in shares) | 160 | ||||||||
Vesting of restricted stock units, net of shares withheld (in shares) | 516,534 | ||||||||
Vesting of restricted stock units, net of shares withheld | $ (48,438) | $ 1 | (48,439) | ||||||
Stock repurchase (in shares) | (2,614,895) | (2,614,895) | |||||||
Stock repurchase | $ (275,308) | $ (3) | (275,305) | ||||||
Other comprehensive income (loss) | (297,844) | (297,844) | |||||||
Net (loss) income | $ (803,836) | (803,836) | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 125,661,777 | 125,661,777 | |||||||
Ending balance at Sep. 30, 2022 | $ (606,242) | $ 126 | 773,887 | (1,007,397) | (372,858) | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 126,741,612 | ||||||||
Beginning balance at Jun. 30, 2022 | 581,295 | $ 127 | 712,053 | 106,241 | (237,126) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based compensation (in shares) | [1] | 163,483 | |||||||
Stock-based compensation | [1] | 67,342 | 67,342 | ||||||
Exercise of vested options (in shares) | 152,181 | ||||||||
Exercise of vested options | 2,754 | $ 1 | 2,753 | ||||||
Settlement of convertible senior notes, net of taxes (in shares) | 1 | ||||||||
Vesting of restricted stock units, net of shares withheld (in shares) | 108,005 | ||||||||
Vesting of restricted stock units, net of shares withheld | $ (8,261) | (8,261) | |||||||
Stock repurchase (in shares) | (1,503,505) | (1,503,505) | |||||||
Stock repurchase | $ (150,572) | $ (2) | (150,570) | ||||||
Other comprehensive income (loss) | (135,732) | (135,732) | |||||||
Net (loss) income | $ (963,068) | (963,068) | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 125,661,777 | 125,661,777 | |||||||
Ending balance at Sep. 30, 2022 | $ (606,242) | $ 126 | $ 773,887 | $ (1,007,397) | $ (372,858) | ||||
[1](1) Includes the partial payments of Depop deferred consideration. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Cash flows from operating activities | |||||||
Net (loss) income | $ (963,068) | $ 89,930 | $ (803,836) | $ 331,950 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Stock-based compensation expense | 166,533 | 90,047 | |||||
Depreciation and amortization expense | 73,908 | 49,276 | |||||
Provision for expected credit losses | 7,621 | 12,993 | |||||
Foreign exchange gain | (17,585) | (7,159) | |||||
Deferred benefit for income taxes | (25,955) | (78,631) | |||||
Goodwill impairment | 1,045,022 | 0 | 1,045,022 | 0 | $ 0 | ||
Other non-cash expense, net | 6,519 | 5,610 | |||||
Changes in operating assets and liabilities (net of impact of business combinations): | |||||||
Current assets | 11,418 | (49,098) | |||||
Non-current assets | 6,420 | (4,067) | |||||
Current liabilities | (88,831) | (5,419) | |||||
Non-current liabilities | 10,628 | 15,590 | |||||
Net cash provided by operating activities | 391,862 | 361,092 | |||||
Cash flows from investing activities | |||||||
Acquisition of businesses, net of cash acquired | 0 | (1,690,823) | |||||
Cash paid for intangible assets | (6,400) | (1,862) | |||||
Purchases of property and equipment | (8,351) | (5,740) | |||||
Development of internal-use software | (16,912) | (11,519) | |||||
Purchases of marketable securities | (205,841) | (343,902) | |||||
Sales and maturities of marketable securities | 207,568 | 518,985 | |||||
Net cash used in investing activities | (29,936) | (1,534,861) | |||||
Cash flows from financing activities | |||||||
Payment of tax obligations on vested equity awards | (48,018) | (69,147) | |||||
Repurchase of stock | (275,308) | (234,427) | |||||
Proceeds from exercise of stock options | 8,212 | 10,867 | |||||
Proceeds from issuance of convertible senior notes | 0 | 1,000,000 | |||||
Payment of debt issuance costs | (25) | (12,849) | |||||
Purchase of capped calls | 0 | (85,000) | |||||
Settlement of convertible senior notes | (33) | (43,863) | |||||
Payments on finance lease obligations | (4,755) | (7,321) | |||||
Other financing, net | (2,483) | (93) | |||||
Net cash (used in) provided by financing activities | (322,410) | 558,167 | |||||
Effect of exchange rate changes on cash | (29,722) | (9,095) | |||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 9,794 | (624,697) | |||||
Cash, cash equivalents, and restricted cash at beginning of period | 785,537 | 1,249,440 | 1,249,440 | ||||
Cash, cash equivalents, and restricted cash at end of period | 795,331 | 624,743 | 795,331 | 624,743 | 785,537 | ||
Supplemental cash flow disclosures: | |||||||
Cash paid for income taxes, net of refunds | 25,071 | 66,105 | |||||
Supplemental non-cash disclosures: | |||||||
Deferred consideration (1) | [1] | 17,197 | 0 | ||||
Replacement share-based awards issued in conjunction with acquisitions | 0 | 5,686 | |||||
Stock-based compensation capitalized in development of capitalized software and asset additions in exchange for liabilities | 7,806 | 4,920 | |||||
Right-of-use assets obtained in exchange for new lease liabilities | 236 | 1,241 | |||||
Debt issuance costs included in accounts payable and accrued expenses | 0 | 476 | |||||
Reconciliation of cash, cash equivalents, and restricted cash | |||||||
Cash and cash equivalents | 789,990 | 619,402 | 789,990 | 619,402 | 780,196 | $ 1,244,099 | |
Restricted cash | 5,341 | 5,341 | 5,341 | 5,341 | 5,341 | 5,341 | |
Total cash, cash equivalents, and restricted cash | $ 795,331 | $ 624,743 | $ 795,331 | $ 624,743 | $ 785,537 | $ 1,249,440 | |
[1]See “Note 12—Stock-Based Compensation” for more information on the settlement of deferred consideration. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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 operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world. These marketplaces - which collectively create a “House of Brands” - share the Company’s mission, common levers for growth, similar business models, and a strong commitment to use the power of business and technology to strengthen communities and empower people. The Company’s primary marketplace, Etsy.com, is the global destination for unique and creative goods. The Company generates revenue primarily from marketplace activities, including transaction, listing, and payments processing fees, and fees for optional seller services, which include on-site advertising and shipping label services. Basis of Consolidation The condensed consolidated financial statements include the accounts of Etsy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. On July 12, 2021, Etsy acquired all of the issued share capital of Depop Limited (“Depop”) pursuant to a share purchase, and on July 2, 2021, Etsy acquired all the outstanding shares of Elo7 Serviços de Informática S.A. (“Elo7”) by means of a merger. The financial results of Depop and Elo7 have been included in Etsy’s condensed consolidated financial statements from the respective dates of acquisition. See “Note 5—Business Combinations.” Reclassification Certain items in the prior years’ condensed consolidated financial statements have been reclassified to conform to the current year presentation reflected in the condensed consolidated financial statements. Basis of Presentation The accompanying unaudited interim condensed 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”). The Company has condensed or omitted certain information and notes normally included in complete annual financial statements prepared in accordance with GAAP. These unaudited interim condensed consolidated financial statements should therefore be read in conjunction with the audited condensed consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022 (the “Annual Report”). In the opinion of management, all material adjustments, which are of a normal and recurring nature, necessary for a fair statement of the results for the periods presented have been reflected in the condensed 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 condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and judgments. The accounting estimates that require management’s most subjective judgments include: stock-based compensation; income taxes, including the estimate of the annual effective tax rate at interim periods and evaluation of uncertain tax positions; the valuation of acquired intangible assets, developed technology, and goodwill as part of purchase price allocations for business combinations; valuation of goodwill; and leases. As of September 30, 2022, the effects of global macroeconomic and geopolitical uncertainty, including COVID-19 pandemic related factors and general market, political, and economic conditions, on the Company’s business, results of operations, and financial condition continue to evolve. As a result, many of the Company’s estimates and judgments require increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, the Company’s estimates may change materially in future periods. Interim Impairment Evaluation During the quarter ended September 30, 2022, the Company evaluated whether events or circumstances had changed such that it would indicate it is more likely than not that its goodwill, finite-lived intangible assets, and other long-lived assets of the Depop and Elo7 reporting units fair values were less than their carrying amounts. Given that the trend of adverse macroeconomic conditions continued, including reopening, pressures on consumer discretionary spending, foreign exchange rate volatility, and ongoing geopolitical events, and the resultant headwinds to the Company’s business and the global economy; the changes to the Company’s executive management at Depop and Elo7; and the Company’s downward revisions to its business forecasts; the Company concluded a triggering event had occurred for the Depop and Elo7 reporting units and conducted an impairment test of each of their goodwill, finite-lived intangible assets, and other long-lived assets as of September 30, 2022. The Company prepared a quantitative assessment for the Depop and Elo7 reporting units, including estimates of future revenue, net available cash flows, and the discount rate. The Company concluded that finite-lived intangible assets and other long-lived assets for the Depop and Elo7 reporting units were not impaired. The Company recognized goodwill impairment charges for the Depop and Elo7 reporting units as a result of this quantitative assessment during the three months ended September 30, 2022. See “Note 6—Goodwill” for further information. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 2—Revenue The following table summarizes revenue disaggregated by Marketplace revenue and optional Services revenue for the periods presented (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Marketplace revenue $ 443,489 $ 395,503 $ 1,310,729 $ 1,204,608 Services revenue 150,980 136,926 448,141 407,367 Revenue $ 594,469 $ 532,429 $ 1,758,870 $ 1,611,975 Effective April 11, 2022, the Etsy marketplace increased the seller transaction fee, included in Marketplace revenue, from 5% to 6.5%. Contract balances Deferred revenues The amount of revenue recognized in the nine months ended September 30, 2022 that was included in the deferred balance at January 1, 2022 was $12.3 million. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
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 income taxes is lower. For the nine months ended September 30, 2022, the Company’s effective income tax rate was (1.8)% representing an income tax provision recorded on net loss before tax. The effective tax rate for the nine months ended September 30, 2022 was impacted by the non-cash impairment of Depop and Elo7 non-deductible goodwill, partially offset by excess tax benefits from employee stock-based compensation, the impact from foreign operations, and a benefit related to a research and development tax credit. Although management believes its tax positions and related provisions reflected in the condensed 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 $1.4 million in the nine months ended September 30, 2022, from $28.8 million as of December 31, 2021 to $30.2 million as of September 30, 2022. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate is $29.3 million as of September 30, 2022. 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. The Company’s reasonable estimate of its gross unrecognized tax benefits, excluding interest and penalties, that could potentially be reduced during the next 12 months is $3.7 million. |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share | Note 4—Net (Loss) Income Per Share The following table presents the calculation of basic and diluted net (loss) income per share for the periods presented (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Numerator: Net (loss) income $ (963,068) $ 89,930 $ (803,836) $ 331,950 Add back interest expense, net of tax attributable to assumed conversion of convertible senior notes — 1,594 — 3,312 Net (loss) income attributable to common stockholders—diluted $ (963,068) $ 91,524 $ (803,836) $ 335,262 Denominator: Weighted-average common shares outstanding—basic 126,349,250 126,633,789 126,985,731 126,753,641 Dilutive effect of assumed conversion of options to purchase common stock — 4,126,970 — 4,229,632 Dilutive effect of assumed conversion of restricted stock units — 1,936,390 — 2,042,745 Dilutive effect of assumed conversion of convertible senior notes (1) — 14,716,766 — 12,840,779 Weighted-average common shares outstanding—diluted 126,349,250 147,413,915 126,985,731 145,866,797 Net (loss) income per share attributable to common stockholders—basic $ (7.62) $ 0.71 $ (6.33) $ 2.62 Net (loss) income per share attributable to common stockholders—diluted $ (7.62) $ 0.62 $ (6.33) $ 2.30 (1) The $1.0 billion aggregate principal amount of 0.25% Convertible Senior Notes due 2028 (the “2021 Notes”), $650.0 million aggregate principal amount of 0.125% Convertible Senior Notes due 2027 (the “2020 Notes”), $649.9 million aggregate principal amount of 0.125% Convertible Senior Notes due 2026 (the “2019 Notes”), and 0% Convertible Senior Notes due 2023 (the “2018 Notes” and together with the 2021 Notes, 2020 Notes, and 2019 Notes, the “Notes”) were anti-dilutive for the three and nine months ended September 30, 2022 and dilutive for the three and nine months ended September 30, 2021. The following potential common shares were excluded from the calculation of diluted net (loss) income per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Stock options 2,999,502 193,919 3,197,330 135,179 Restricted stock units 6,021,635 54,189 5,377,776 475,475 Convertible senior notes 14,715,893 — 14,716,800 — Total anti-dilutive securities 23,737,030 248,108 23,291,906 610,654 Since the Company has reported net losses in the three and nine months ended September 30, 2022, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Note 5—Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The purchase price is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. The excess of the purchase price over the estimated fair value of the net assets acquired is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company’s condensed consolidated financial statements from the date of acquisition. Depop Acquisition On July 12, 2021, the Company acquired all of the issued share capital of Depop, an online global peer-to-peer fashion resale marketplace. The Company believes Depop extends its market opportunity in the high frequency apparel sector, specifically in the fast-growing resale space, and deepens the Company’s reach into the Gen Z consumer. The fair value of consideration transferred of $1.493 billion consisted of: (1) cash consideration paid of $1.489 billion, net of cash acquired and (2) non-cash consideration of $4.8 million representing the portion of the replacement equity awards issued in connection with the acquisition that was associated with services rendered through the date of the acquisition. The portion of the replacement equity awards associated with services rendered post-acquisition is recorded as post-combination expense on a straight-line basis over the remaining vesting period of the awards. Additionally, deferred consideration awards issued to certain Depop executives are also recorded as post-combination expense on a straight-line basis over the mandatory service period associated with the deferred consideration. Neither of these awards was included in the fair value of the consideration transferred. See “Note 12—Stock-Based Compensation” for more information on these awards. Goodwill consists largely of assembled workforce, expanded market opportunities, and value creation across the Company’s businesses. The resulting goodwill is not expected to be deductible for tax purposes. The Company finalized the valuation of assets acquired and liabilities assumed for the acquisition of Depop as of December 31, 2021. Depop Purchase Price Allocation The following table summarizes the allocation of the purchase price (at fair value) to the assets acquired and liabilities of Depop assumed as of July 12, 2021 (the date of acquisition) (in thousands): Final Purchase Price Allocation as Adjusted Estimated Useful Life (in years) Current assets $ 4,288 Property and equipment other 1,299 2-5 Developed technology 95,764 5 Trademark 249,820 20 Customer relationships 148,504 13 Goodwill 1,118,855 Indefinite Current liabilities (18,878) Non-current liabilities (1) (27,957) Deferred tax liability, net (78,872) Total purchase price $ 1,492,823 (1) Non-current liabilities are primarily related to non-income tax related contingency reserves. Elo7 Acquisition On July 2, 2021, the Company acquired all the outstanding shares of Elo7 (including Elo7, Ltd. and related subsidiaries entities), by means of a merger, an e-commerce marketplace in Brazil focused on unique, handmade items. The Company sees significant potential in Brazil's e-commerce sector, which is still in early stages of development and fueled by one of the largest economies in the world. The Company believes having a well-known local brand will help Etsy to better capitalize on this opportunity. The fair value of consideration transferred of $212.1 million consisted of: (1) cash consideration paid of $211.3 million, net of cash acquired, and (2) non-cash consideration of $0.8 million representing the portion of the replacement equity awards issued in connection with the acquisition that was associated with services rendered through the date of the acquisition. The portion of the replacement equity awards associated with services rendered post-acquisition are recorded as post-combination expense on a straight-line basis over the remaining vesting period of the awards, and were therefore not included in the fair value of the consideration transferred. See “Note 12—Stock-Based Compensation” for more information on these awards. Goodwill consists largely of assembled workforce, expanded market opportunities, and value creation across the Company’s businesses. The resulting goodwill is not expected to be deductible for tax purposes. The Company finalized the valuation of assets acquired and liabilities assumed for the acquisition of Elo7 as of December 31, 2021. Elo7 Purchase Price Allocation The following table summarizes the allocation of the purchase price (at fair value) to the assets acquired and liabilities assumed of Elo7 as of July 2, 2021 (the date of acquisition) (in thousands): Final Purchase Price Allocation as Adjusted Estimated Useful Life (in years) Current assets $ 2,721 Developed technology 12,084 5 Trademark 22,187 15 Customer relationships 44,374 15 Goodwill 157,187 Indefinite Non-current assets 2,412 Current liabilities (3,406) Non-current liabilities (2,691) Deferred tax liability, net (22,727) Total purchase price $ 212,141 Acquisition-Related Expenses Acquisition-related expenses are expensed as incurred. They were recorded in general and administrative expenses and were $0.5 million and $2.1 million for the three and nine months ended September 30, 2022, respectively, and $25.0 million and $35.0 million for the three and nine months ended September 30, 2021, respectively. Unaudited Supplemental Pro Forma Information The following unaudited pro forma summary presents consolidated information of the Company, including Depop and Elo7, as if the business combinations had occurred on January 1, 2020 (in thousands): Three Months Ended Nine Months Ended Revenue $ 534,395 $ 1,656,426 Net income 107,332 326,205 The pro forma financial information includes adjustments that are directly attributable to the business combinations and are factually supportable. The pro forma adjustments include incremental amortization of intangible and developed technology assets, and remove non-recurring transaction costs directly associated with the acquisitions, such as legal and other professional service fees, and the pro forma tax impact for such adjustments. Cost savings or operating synergies expected to result from the acquisitions are not included in the pro forma results. For the three and nine months ended September 30, 2021, the pro forma financial information excludes $44.2 million and $58.4 million, respectively, of non-recurring acquisition-related expenses. These pro forma results are illustrative only and not indicative of the actual results of operations that would have been achieved nor are they indicative of future results of operations. Depop and Elo7 Goodwill Impairment During the three months ended September 30, 2022, the Company impaired goodwill related to the Depop and Elo7 reporting units. See “Note 6—Goodwill” for further information. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the changes in the carrying amount of goodwill for the periods indicated (in thousands): As of September 30, 2022 As of December 31, 2021 Balance as of the beginning of the period $ 1,371,064 $ 140,810 Business combinations — 1,276,042 Impairment (1,045,022) — Foreign currency translation adjustments (190,120) (45,788) Balance as of the end of the period $ 135,922 $ 1,371,064 Management has determined that the Company has four operating segments, Etsy, Reverb, Depop, and Elo7, which qualify for aggregation as one reportable segment for purposes of allocating resources and evaluating financial performance, and each operating segment is determined to be a reporting unit. Due to then current adverse macroeconomic conditions, including reopening, inflationary pressures on consumer discretionary spending, foreign exchange rate volatility, and ongoing geopolitical events, and related headwinds on business performances, the Company concluded it was more likely than not that the fair values of the Depop and Elo7 reporting units were less than their carrying amounts at June 30, 2022. As a result, the Company performed impairment assessments of each of their goodwill, finite-lived intangible assets, and other long-lived assets. The quantitative impairment tests as of June 30, 2022 did not indicate an impairment. During the three months ended September 30, 2022, the trend of adverse macroeconomic conditions continued; there were executive management changes at Depop and Elo7; and the Company made downward revisions to its business forecasts. Therefore, the Company concluded a triggering event had occurred for the Depop and Elo7 reporting units and conducted an impairment test of each of their goodwill, finite-lived intangible assets, and other long-lived assets as of September 30, 2022. The Company updated the forecasted future cash flows used in the impairment assessment, including revenues, to reflect current conditions. Other changes in valuation assumptions compared to June 30, 2022 included the discount rates, which increased based on higher interest rates, market volatility, and other current market participant assumptions. The September 30, 2022 quantitative goodwill impairment test indicated a decline in the fair values of the Depop and Elo7 reporting units. As a result of this test, the Company recorded non-cash impairment charges of $897.9 million and $147.1 million to write off goodwill in full for the Depop and Elo7 reporting units, respectively. The Company did not record any non-cash impairment charges to the finite-lived intangible assets or other long-lived assets of Depop and Elo7 for the quarter ended September 30, 2022. The Company’s remaining goodwill balance as of September 30, 2022 relates to the Etsy standalone and Reverb reporting units, for which the Company concluded it was not more likely than not that their fair values were less than their carrying amounts at September 30, 2022. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 7—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 Company did not have any Level 3 instruments as of September 30, 2022 and December 31, 2021. Short- and long-term investments and certain cash equivalents consist of investments in debt securities that are available-for-sale. The following table sets forth the cost, gross unrealized losses, gross unrealized gains, and fair value of the Company’s investments as of the dates indicated (in thousands): Cost Gross Gross Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments September 30, 2022 Cash $ 289,768 $ — $ — $ 289,768 $ 289,768 $ — $ — Level 1 Money market funds (1) 571,727 — — 571,727 495,205 76 — U.S. Government and agency securities 73,702 (576) 2 73,128 — 73,128 — 645,429 (576) 2 644,855 495,205 73,204 — Level 2 Certificate of deposit 33,990 (206) 7 33,791 2,190 31,601 — Commercial paper 44,397 (120) 1 44,278 1,495 42,783 — Corporate bonds 139,386 (2,339) — 137,047 1,332 103,577 32,138 217,773 (2,665) 8 215,116 5,017 177,961 32,138 $ 1,152,970 $ (3,241) $ 10 $ 1,149,739 $ 789,990 $ 251,165 $ 32,138 December 31, 2021 Cash $ 214,771 $ — $ — $ 214,771 $ 214,771 $ — $ — Level 1 Money market funds 556,427 — — 556,427 556,427 — — U.S. Government and agency securities 60,311 (55) 11 60,267 — 52,632 7,635 616,738 (55) 11 616,694 556,427 52,632 7,635 Level 2 Certificate of deposit 20,709 (7) 1 20,703 — 20,703 — Commercial paper 25,235 (14) 1 25,222 8,998 16,224 — Corporate bonds 192,727 (481) 10 192,256 — 114,857 77,399 238,671 (502) 12 238,181 8,998 151,784 77,399 $ 1,070,180 $ (557) $ 23 $ 1,069,646 $ 780,196 $ 204,416 $ 85,034 (1) $76.4 million of money market funds were classified as funds receivable and seller accounts as of September 30, 2022. At December 31, 2021, there were no investments in a continuous unrealized loss position for 12 months or longer. The table below shows the gross unrealized loss and fair value of the following investments in debt securities that are available-for-sale classified by the length of time that the securities have been in a continuous unrealized loss position at September 30, 2022 (in thousands): Gross Fair Value Less than 12 months in a continuous unrealized loss position Corporate bonds $ (1,373) $ 115,340 U.S. Government and agency securities (527) 56,374 $ (1,900) $ 171,714 12 months or longer in a continuous unrealized loss position Corporate bonds $ (966) $ 21,707 U.S. Government and agency securities (49) 5,951 $ (1,015) $ 27,658 The Company evaluates fair value for each individual security in the investment portfolio. The Company typically invests in short- and long-term instruments, including fixed-income funds and U.S. Government and agency securities aligned with the Company’s investment strategy. The maturities of the Company’s non-current marketable debt securities generally range from greater than 12 and up to 37 months. Disclosure of Fair Values The Company’s financial instruments that are not remeasured at fair value in the Consolidated Balance Sheets include the Notes. See “Note 9—Debt” for additional information. The Company estimates the fair value of the Notes through inputs that are observable in the market, classified as Level 2 as described above. The following table presents the carrying value and estimated fair value of the Notes as of the dates indicated (in thousands): As of September 30, 2022 As of December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value 2021 Notes $ 989,154 $ 779,400 $ 987,729 $ 1,165,519 2020 Notes 644,133 586,755 643,237 862,774 2019 Notes 645,243 878,383 644,390 1,644,869 2018 Notes (1) 55 151 62 375 $ 2,278,585 $ 2,244,689 $ 2,275,418 $ 3,673,537 (1) Contemporaneously with the partial repurchase of the 2018 Notes in the third quarter of 2020, the Company agreed with the counterparties to the associated capped call instrument (the “2018 Capped Call Transactions”) that the 2018 Capped Call Transactions would remain outstanding with a maturity of March 2023 and there was no exchange of any consideration for such agreement. See “Note 9—Debt” for more information on the Company’s capped call transactions. The carrying value of other financial instruments, including accounts receivable, funds receivable and seller accounts, accounts payable, and funds payable and amounts due to sellers approximate fair value due to the immediate or short-term maturity associated with these instruments. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, As of December 31, Pass-through marketplace tax collection obligation $ 94,260 $ 136,360 Vendor accruals 93,654 115,593 Employee compensation-related liabilities 52,694 66,477 Taxes payable 9,356 9,688 Total accrued expenses $ 249,964 $ 328,118 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 9—Debt The following table presents the outstanding principal amount and carrying value of the Notes as of the dates indicated (in thousands): As of September 30, 2022 2021 Notes 2020 Notes 2019 Notes 2018 Notes Total Principal $ 1,000,000 $ 650,000 $ 649,932 $ 55 $ 2,299,987 Unamortized debt issuance costs 10,846 5,867 4,689 — 21,402 Net carrying value $ 989,154 $ 644,133 $ 645,243 $ 55 $ 2,278,585 As of December 31, 2021 2021 Notes 2020 Notes 2019 Notes 2018 Notes Total Principal $ 1,000,000 $ 650,000 $ 649,958 $ 62 $ 2,300,020 Unamortized debt issuance costs 12,271 6,763 5,568 — 24,602 Net carrying value $ 987,729 $ 643,237 $ 644,390 $ 62 $ 2,275,418 Terms of the Notes The Notes will mature at their maturity date unless earlier converted or repurchased. The terms of the Notes are summarized below: Convertible Notes Maturity Date Contractual Convertibility Date (1) Initial Conversion Rate per $1,000 Principal Initial Conversion Price Annual Effective Interest Rate 2021 Notes June 15, 2028 February 15, 2028 4.0518 $ 246.80 0.4 % 2020 Notes September 1, 2027 May 1, 2027 5.0007 199.97 0.3 % 2019 Notes October 1, 2026 June 1, 2026 11.4040 87.69 0.3 % 2018 Notes March 1, 2023 November 1, 2022 27.5691 36.27 — % (1) During any calendar quarter preceding the respective convertibility date of each series of Notes, in which the closing price of the Company’s common stock exceeds 130% of the applicable conversion price of the 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 Notes. Based on the daily closing prices of the Company’s stock during the quarter ended September 30, 2022, holders of the remaining 2018 Notes are eligible to convert their 2018 Notes, and holders of the 2021 Notes, 2020 Notes, and 2019 Notes are not eligible to convert their 2021 Notes, 2020 Notes, and remaining 2019 Notes, respectively, during the fourth quarter of 2022. Based on the terms of each series of 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 Notes in cash and, therefore, the Notes are classified as long-term debt as of September 30, 2022. The Company may redeem all or any portion of the 2021 Notes, at the Company’s option, subject to partial redemption limitations, on or after June 20, 2025, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2021 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Notes are general unsecured obligations of the Company. The 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 the Company’s liabilities that are not so subordinated; 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. Interest Expense Interest expense, which consists of coupon interest and amortization of debt issuance costs, related to each of the Notes for the periods presented below was as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 2021 Notes $ 1,100 $ 1,100 $ 3,300 $ 1,318 2020 Notes 502 502 1,505 1,505 2019 Notes 497 497 1,489 1,489 2018 Notes — — — 44 Total interest expense $ 2,099 $ 2,099 $ 6,294 $ 4,356 Fair Value of Notes The estimated fair value of each of the Notes was determined through inputs that are observable in the market, and are classified as Level 2. See “Note 7—Fair Value Measurements” for more information regarding the fair value of the Notes. Capped Call Transactions The Company used a portion of the net proceeds from each of the Notes offerings to enter into separate privately negotiated capped call instruments (the 2018, 2019, 2020, and 2021 capped call instruments collectively referred to as the “Capped Call Transactions”) with certain financial institutions, initial purchasers, and/or their respective affiliates. The Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the Notes upon conversion of the Notes in the event that the market price per share of the Company’s common stock is greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap. Collectively, the Capped Call Transactions cover, initially, the number of shares of the Company’s common stock underlying the respective Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Notes. The initial terms of the Company’s Capped Call Transactions are presented below: Capped Call Transactions Maturity Date Initial Cap Price per Share Cap Price Premium 2021 Capped Call Transactions June 13, 2028 $ 340.42 100 % 2020 Capped Call Transactions September 1, 2027 327.83 150 % 2019 Capped Call Transactions October 1, 2026 148.63 150 % 2018 Capped Call Transactions March 1, 2023 52.76 100 % 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 periods. The 2019 Credit Agreement contains customary provisions for the replacement of the adjusted LIBOR rate with an alternate benchmark rate when the adjusted LIBOR rate is phased out in the lending market. The Company does not anticipate that replacement of the benchmark rate, as provided in the 2019 Credit Agreement, will materially impact its liquidity or financial position. 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. At September 30, 2022, the Company did not have any borrowings under the 2019 Credit Agreement and was in compliance with all financial covenants. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
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 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 | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11—Stockholders’ Equity In December 2020, the Board of Directors approved a stock repurchase program that enabled the Company to repurchase up to $250 million of its common stock. The program was completed in the third quarter of 2022. Effective May 3, 2022, the Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to an additional $600 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 the Company’s working capital requirements, general business conditions, and other factors. Under the stock repurchase programs, 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 under the programs 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 January 1, 2022 $ 127,217 Repurchases of common stock for the three months ended: March 31, 2022 420,398 $ 148.83 $ 62,574 (62,574) June 30, 2022 690,992 89.97 62,178 (62,178) New Authorization as of May 3, 2022 — — — 600,000 Repurchases of common stock for the three months ended: September 30, 2022 1,503,505 100.15 150,595 (150,595) Balance as of September 30, 2022 2,614,895 $ 105.28 $ 275,347 $ 451,870 (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. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 12—Stock-Based Compensation During the three and nine months ended September 30, 2022, the Company granted RSUs, including financial performance-based restricted stock units (“Financial PBRSUs”) and total shareholder return performance-based restricted stock units (“TSR PBRSUs”), under its 2015 Equity Incentive Plan (“2015 Plan”) and, pursuant to the evergreen increase provision of the 2015 Plan, 6,351,106 additional shares were added to the total number of shares available for issuance under the 2015 Plan effective as of January 3, 2022. At September 30, 2022, 50,391,850 shares were authorized under the 2015 Plan and 32,035,675 shares were available for future grant. The following table summarizes the activity for the Company’s unvested RSUs, which includes Financial PBRSUs and TSR PBRSUs, during the nine months ended September 30, 2022: Shares Weighted-Average Unvested at December 31, 2021 3,506,721 $ 137.87 Granted 4,895,738 120.39 Vested (897,273) 105.23 Forfeited/Canceled (500,420) 157.15 Unvested at September 30, 2022 7,004,766 128.29 The total unrecognized compensation expense at September 30, 2022 related to the Company’s unvested RSUs, including the Financial PBRSUs and TSR PBRSUs, was $730.3 million, which will be recognized over an estimated weighted-average amortization period of 3.11 years. In connection with the acquisition of Depop, certain Depop executives are eligible to receive deferred consideration of $44.0 million in shares of Etsy common stock over the three years following the acquisition date, subject to certain service-based vesting conditions during the vesting period. These awards will be settled by issuing shares of Etsy common stock on or shortly following the applicable vesting date, with the number of shares to be determined based on the Company’s stock price on, or leading up to, the applicable vesting date. These awards will be recognized as post-combination service stock-based compensation expense over a vesting period equal to the mandatory service period associated with the award, with a corresponding liability included within Other liabilities on the Company’s Consolidated Balance Sheets until the service-based vesting criteria are met and the awards are settled in shares of Etsy common stock. The unrecognized compensation expense at September 30, 2022 related to these awards was $5.4 million, which will be recognized over an estimated weighted-average amortization period of 1.78 years. The decrease from the initial unrecognized compensation expense of $44.0 million primarily relates to the departure of Depop’s Chief Executive Officer, effective September 2022, and the partial payments of Depop deferred consideration in the nine months ended September 30, 2022. These amounts are excluded from the unrecognized compensation expense associated with the Company’s unvested RSUs noted above. The total unrecognized compensation expense at September 30, 2022 related to the Company’s options was $17.1 million, which will be recognized over an estimated weighted-average amortization period of 2.07 years. Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for the periods presented below is as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue $ 6,089 $ 3,587 $ 16,545 $ 8,985 Marketing 5,083 4,102 14,552 7,639 Product development 34,106 17,345 88,656 40,588 General and administrative 7,627 17,222 46,780 32,835 Stock-based compensation expense $ 52,905 $ 42,256 $ 166,533 $ 90,047 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 13—Subsequent EventOn October 27, 2022, the Company announced that Michael Fisher will step down from his role as Etsy's Chief Technology Officer, effective December 31, 2022. Rachana Kumar, currently Etsy’s Vice President of Engineering, will assume the role of Chief Technology Officer effective January 1, 2023. Mr. Fisher has agreed to continue in an advisory capacity through April 2023. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | Basis of ConsolidationThe condensed consolidated financial statements include the accounts of Etsy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. On July 12, 2021, Etsy acquired all of the issued share capital of Depop Limited (“Depop”) pursuant to a share purchase, and on July 2, 2021, Etsy acquired all the outstanding shares of Elo7 Serviços de Informática S.A. (“Elo7”) by means of a merger. The financial results of Depop and Elo7 have been included in Etsy’s condensed consolidated financial statements from the respective dates of acquisition. |
Reclassification | Reclassification Certain items in the prior years’ condensed consolidated financial statements have been reclassified to conform to the current year presentation reflected in the condensed consolidated financial statements. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed 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”). The Company has condensed or omitted certain information and notes normally included in complete annual financial statements prepared in accordance with GAAP. These unaudited interim condensed consolidated financial statements should therefore be read in conjunction with the audited condensed consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022 (the “Annual Report”). In the opinion of management, all material adjustments, which are of a normal and recurring nature, necessary for a fair statement of the results for the periods presented have been reflected in the condensed 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 condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and judgments. The accounting estimates that require management’s most subjective judgments include: stock-based compensation; income taxes, including the estimate of the annual effective tax rate at interim periods and evaluation of uncertain tax positions; the valuation of acquired intangible assets, developed technology, and goodwill as part of purchase price allocations for business combinations; valuation of goodwill; and leases. As of September 30, 2022, the effects of global macroeconomic and geopolitical uncertainty, including COVID-19 pandemic related factors and general market, political, and economic conditions, on the Company’s business, results of operations, and financial condition continue to evolve. As a result, many of the Company’s estimates and judgments require increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, the Company’s estimates may change materially in future periods. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes revenue disaggregated by Marketplace revenue and optional Services revenue for the periods presented (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Marketplace revenue $ 443,489 $ 395,503 $ 1,310,729 $ 1,204,608 Services revenue 150,980 136,926 448,141 407,367 Revenue $ 594,469 $ 532,429 $ 1,758,870 $ 1,611,975 |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 (loss) income per share for the periods presented (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Numerator: Net (loss) income $ (963,068) $ 89,930 $ (803,836) $ 331,950 Add back interest expense, net of tax attributable to assumed conversion of convertible senior notes — 1,594 — 3,312 Net (loss) income attributable to common stockholders—diluted $ (963,068) $ 91,524 $ (803,836) $ 335,262 Denominator: Weighted-average common shares outstanding—basic 126,349,250 126,633,789 126,985,731 126,753,641 Dilutive effect of assumed conversion of options to purchase common stock — 4,126,970 — 4,229,632 Dilutive effect of assumed conversion of restricted stock units — 1,936,390 — 2,042,745 Dilutive effect of assumed conversion of convertible senior notes (1) — 14,716,766 — 12,840,779 Weighted-average common shares outstanding—diluted 126,349,250 147,413,915 126,985,731 145,866,797 Net (loss) income per share attributable to common stockholders—basic $ (7.62) $ 0.71 $ (6.33) $ 2.62 Net (loss) income per share attributable to common stockholders—diluted $ (7.62) $ 0.62 $ (6.33) $ 2.30 (1) The $1.0 billion aggregate principal amount of 0.25% Convertible Senior Notes due 2028 (the “2021 Notes”), $650.0 million aggregate principal amount of 0.125% Convertible Senior Notes due 2027 (the “2020 Notes”), $649.9 million aggregate principal amount of 0.125% Convertible Senior Notes due 2026 (the “2019 Notes”), and 0% Convertible Senior Notes due 2023 (the “2018 Notes” and together with the 2021 Notes, 2020 Notes, and 2019 Notes, the “Notes”) were anti-dilutive for the three and nine months ended September 30, 2022 and dilutive for the three and nine months ended September 30, 2021. |
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 (loss) income per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Stock options 2,999,502 193,919 3,197,330 135,179 Restricted stock units 6,021,635 54,189 5,377,776 475,475 Convertible senior notes 14,715,893 — 14,716,800 — Total anti-dilutive securities 23,737,030 248,108 23,291,906 610,654 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [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 of Depop assumed as of July 12, 2021 (the date of acquisition) (in thousands): Final Purchase Price Allocation as Adjusted Estimated Useful Life (in years) Current assets $ 4,288 Property and equipment other 1,299 2-5 Developed technology 95,764 5 Trademark 249,820 20 Customer relationships 148,504 13 Goodwill 1,118,855 Indefinite Current liabilities (18,878) Non-current liabilities (1) (27,957) Deferred tax liability, net (78,872) Total purchase price $ 1,492,823 (1) Non-current liabilities are primarily related to non-income tax related contingency reserves. The following table summarizes the allocation of the purchase price (at fair value) to the assets acquired and liabilities assumed of Elo7 as of July 2, 2021 (the date of acquisition) (in thousands): Final Purchase Price Allocation as Adjusted Estimated Useful Life (in years) Current assets $ 2,721 Developed technology 12,084 5 Trademark 22,187 15 Customer relationships 44,374 15 Goodwill 157,187 Indefinite Non-current assets 2,412 Current liabilities (3,406) Non-current liabilities (2,691) Deferred tax liability, net (22,727) Total purchase price $ 212,141 |
Schedule of Unaudited Supplemental Pro Forma Information | The following unaudited pro forma summary presents consolidated information of the Company, including Depop and Elo7, as if the business combinations had occurred on January 1, 2020 (in thousands): Three Months Ended Nine Months Ended Revenue $ 534,395 $ 1,656,426 Net income 107,332 326,205 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the periods indicated (in thousands): As of September 30, 2022 As of December 31, 2021 Balance as of the beginning of the period $ 1,371,064 $ 140,810 Business combinations — 1,276,042 Impairment (1,045,022) — Foreign currency translation adjustments (190,120) (45,788) Balance as of the end of the period $ 135,922 $ 1,371,064 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Values Company’s Investments | The following table sets forth the cost, gross unrealized losses, gross unrealized gains, and fair value of the Company’s investments as of the dates indicated (in thousands): Cost Gross Gross Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments September 30, 2022 Cash $ 289,768 $ — $ — $ 289,768 $ 289,768 $ — $ — Level 1 Money market funds (1) 571,727 — — 571,727 495,205 76 — U.S. Government and agency securities 73,702 (576) 2 73,128 — 73,128 — 645,429 (576) 2 644,855 495,205 73,204 — Level 2 Certificate of deposit 33,990 (206) 7 33,791 2,190 31,601 — Commercial paper 44,397 (120) 1 44,278 1,495 42,783 — Corporate bonds 139,386 (2,339) — 137,047 1,332 103,577 32,138 217,773 (2,665) 8 215,116 5,017 177,961 32,138 $ 1,152,970 $ (3,241) $ 10 $ 1,149,739 $ 789,990 $ 251,165 $ 32,138 December 31, 2021 Cash $ 214,771 $ — $ — $ 214,771 $ 214,771 $ — $ — Level 1 Money market funds 556,427 — — 556,427 556,427 — — U.S. Government and agency securities 60,311 (55) 11 60,267 — 52,632 7,635 616,738 (55) 11 616,694 556,427 52,632 7,635 Level 2 Certificate of deposit 20,709 (7) 1 20,703 — 20,703 — Commercial paper 25,235 (14) 1 25,222 8,998 16,224 — Corporate bonds 192,727 (481) 10 192,256 — 114,857 77,399 238,671 (502) 12 238,181 8,998 151,784 77,399 $ 1,070,180 $ (557) $ 23 $ 1,069,646 $ 780,196 $ 204,416 $ 85,034 (1) $76.4 million of money market funds were classified as funds receivable and seller accounts as of September 30, 2022. |
Schedule of Unrealized Loss and Fair Value of Debt Securities Available-for-Sale | The table below shows the gross unrealized loss and fair value of the following investments in debt securities that are available-for-sale classified by the length of time that the securities have been in a continuous unrealized loss position at September 30, 2022 (in thousands): Gross Fair Value Less than 12 months in a continuous unrealized loss position Corporate bonds $ (1,373) $ 115,340 U.S. Government and agency securities (527) 56,374 $ (1,900) $ 171,714 12 months or longer in a continuous unrealized loss position Corporate bonds $ (966) $ 21,707 U.S. Government and agency securities (49) 5,951 $ (1,015) $ 27,658 |
Schedule of Estimated Fair Value Liability Component | The following table presents the carrying value and estimated fair value of the Notes as of the dates indicated (in thousands): As of September 30, 2022 As of December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value 2021 Notes $ 989,154 $ 779,400 $ 987,729 $ 1,165,519 2020 Notes 644,133 586,755 643,237 862,774 2019 Notes 645,243 878,383 644,390 1,644,869 2018 Notes (1) 55 151 62 375 $ 2,278,585 $ 2,244,689 $ 2,275,418 $ 3,673,537 (1) Contemporaneously with the partial repurchase of the 2018 Notes in the third quarter of 2020, the Company agreed with the counterparties to the associated capped call instrument (the “2018 Capped Call Transactions”) that the 2018 Capped Call Transactions would remain outstanding with a maturity of March 2023 and there was no exchange of any consideration for such agreement. See “Note 9—Debt” for more information on the Company’s capped call transactions. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following as of the dates indicated (in thousands): As of September 30, As of December 31, Pass-through marketplace tax collection obligation $ 94,260 $ 136,360 Vendor accruals 93,654 115,593 Employee compensation-related liabilities 52,694 66,477 Taxes payable 9,356 9,688 Total accrued expenses $ 249,964 $ 328,118 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table presents the outstanding principal amount and carrying value of the Notes as of the dates indicated (in thousands): As of September 30, 2022 2021 Notes 2020 Notes 2019 Notes 2018 Notes Total Principal $ 1,000,000 $ 650,000 $ 649,932 $ 55 $ 2,299,987 Unamortized debt issuance costs 10,846 5,867 4,689 — 21,402 Net carrying value $ 989,154 $ 644,133 $ 645,243 $ 55 $ 2,278,585 As of December 31, 2021 2021 Notes 2020 Notes 2019 Notes 2018 Notes Total Principal $ 1,000,000 $ 650,000 $ 649,958 $ 62 $ 2,300,020 Unamortized debt issuance costs 12,271 6,763 5,568 — 24,602 Net carrying value $ 987,729 $ 643,237 $ 644,390 $ 62 $ 2,275,418 |
Schedule of Maturities of Convertible Notes | The Notes will mature at their maturity date unless earlier converted or repurchased. The terms of the Notes are summarized below: Convertible Notes Maturity Date Contractual Convertibility Date (1) Initial Conversion Rate per $1,000 Principal Initial Conversion Price Annual Effective Interest Rate 2021 Notes June 15, 2028 February 15, 2028 4.0518 $ 246.80 0.4 % 2020 Notes September 1, 2027 May 1, 2027 5.0007 199.97 0.3 % 2019 Notes October 1, 2026 June 1, 2026 11.4040 87.69 0.3 % 2018 Notes March 1, 2023 November 1, 2022 27.5691 36.27 — % (1) During any calendar quarter preceding the respective convertibility date of each series of Notes, in which the closing price of the Company’s common stock exceeds 130% of the applicable conversion price of the 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 Notes. Based on the daily closing prices of the Company’s stock during the quarter ended September 30, 2022, holders of the remaining 2018 Notes are eligible to convert their 2018 Notes, and holders of the 2021 Notes, 2020 Notes, and 2019 Notes are not eligible to convert their 2021 Notes, 2020 Notes, and remaining 2019 Notes, respectively, during the fourth quarter of 2022. |
Schedule of Interest Expense | Interest expense, which consists of coupon interest and amortization of debt issuance costs, related to each of the Notes for the periods presented below was as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 2021 Notes $ 1,100 $ 1,100 $ 3,300 $ 1,318 2020 Notes 502 502 1,505 1,505 2019 Notes 497 497 1,489 1,489 2018 Notes — — — 44 Total interest expense $ 2,099 $ 2,099 $ 6,294 $ 4,356 |
Schedule of Capped Call Transactions | The initial terms of the Company’s Capped Call Transactions are presented below: Capped Call Transactions Maturity Date Initial Cap Price per Share Cap Price Premium 2021 Capped Call Transactions June 13, 2028 $ 340.42 100 % 2020 Capped Call Transactions September 1, 2027 327.83 150 % 2019 Capped Call Transactions October 1, 2026 148.63 150 % 2018 Capped Call Transactions March 1, 2023 52.76 100 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Class of Treasury Stock | The following table summarizes the Company’s cumulative share repurchase activity under the programs 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 January 1, 2022 $ 127,217 Repurchases of common stock for the three months ended: March 31, 2022 420,398 $ 148.83 $ 62,574 (62,574) June 30, 2022 690,992 89.97 62,178 (62,178) New Authorization as of May 3, 2022 — — — 600,000 Repurchases of common stock for the three months ended: September 30, 2022 1,503,505 100.15 150,595 (150,595) Balance as of September 30, 2022 2,614,895 $ 105.28 $ 275,347 $ 451,870 (1) Average price paid per share excludes broker commissions. Value of shares repurchased includes broker commissions. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Unvested RSU Activity | The following table summarizes the activity for the Company’s unvested RSUs, which includes Financial PBRSUs and TSR PBRSUs, during the nine months ended September 30, 2022: Shares Weighted-Average Unvested at December 31, 2021 3,506,721 $ 137.87 Granted 4,895,738 120.39 Vested (897,273) 105.23 Forfeited/Canceled (500,420) 157.15 Unvested at September 30, 2022 7,004,766 128.29 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for the periods presented below is as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue $ 6,089 $ 3,587 $ 16,545 $ 8,985 Marketing 5,083 4,102 14,552 7,639 Product development 34,106 17,345 88,656 40,588 General and administrative 7,627 17,222 46,780 32,835 Stock-based compensation expense $ 52,905 $ 42,256 $ 166,533 $ 90,047 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Elo7 | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of finite-lived intangible assets and other long-lived assets | $ 0 |
Depop | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of finite-lived intangible assets and other long-lived assets | $ 0 |
Revenue - Summary of Revenue by
Revenue - Summary of Revenue by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 594,469 | $ 532,429 | $ 1,758,870 | $ 1,611,975 |
Marketplace revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 443,489 | 395,503 | 1,310,729 | 1,204,608 |
Services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 150,980 | $ 136,926 | $ 448,141 | $ 407,367 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Apr. 10, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenue recognized in the period | $ 12.3 | ||
Marketplace revenue | |||
Disaggregation of Revenue [Line Items] | |||
Transaction fee (as a percent) | 5% | 6.50% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | (1.80%) | |
Unrecognized tax benefits, period increase | $ 1.4 | |
Unrecognized tax benefits | 30.2 | $ 28.8 |
Unrecognized tax benefits that would impact effective tax rate favorably | 29.3 | |
Decrease in unrecognized tax benefits | $ 3.7 |
Net (Loss) Income Per Share - C
Net (Loss) Income Per Share - Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | Aug. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2018 | |
Numerator: | |||||||||
Net (loss) income | $ (963,068) | $ 89,930 | $ (803,836) | $ 331,950 | |||||
Add back interest expense, net of tax attributable to assumed conversion of convertible senior notes | 0 | 1,594 | 0 | 3,312 | |||||
Net (loss) income attributable to common stockholders—diluted | $ (963,068) | $ 91,524 | $ (803,836) | $ 335,262 | |||||
Denominator: | |||||||||
Weighted average common shares outstanding—basic (in shares) | 126,349,250 | 126,633,789 | 126,985,731 | 126,753,641 | |||||
Dilutive effect of assumed conversion of convertible senior notes (in shares) | 0 | 14,716,766 | 0 | 12,840,779 | |||||
Weighted average common shares outstanding - diluted (in shares) | 126,349,250 | 147,413,915 | 126,985,731 | 145,866,797 | |||||
Net income per share attributable to common stockholders—basic (in dollars per shares) | $ (7.62) | $ 0.71 | $ (6.33) | $ 2.62 | |||||
Net income per share attributable to common stockholders—diluted (in dollars per share) | $ (7.62) | $ 0.62 | $ (6.33) | $ 2.30 | |||||
Convertible Debt | |||||||||
Denominator: | |||||||||
Principal | $ 2,299,987 | $ 2,299,987 | $ 2,300,020 | ||||||
Convertible Debt | 2021 Notes | |||||||||
Denominator: | |||||||||
Principal | 1,000,000 | 1,000,000 | 1,000,000 | $ 1,000,000 | |||||
Debt instrument, interest rate (as a percent) | 0.25% | ||||||||
Convertible Debt | 2020 Notes | |||||||||
Denominator: | |||||||||
Principal | 650,000 | 650,000 | 650,000 | $ 650,000 | |||||
Debt instrument, interest rate (as a percent) | 0.125% | ||||||||
Convertible Debt | 2019 Notes | |||||||||
Denominator: | |||||||||
Principal, net of conversion notices | 649,932 | 649,932 | 649,958 | $ 649,900 | |||||
Debt instrument, interest rate (as a percent) | 0.125% | ||||||||
Convertible Debt | 2018 Notes | |||||||||
Denominator: | |||||||||
Principal, net of conversion notices | $ 55 | $ 55 | $ 62 | ||||||
Debt instrument, interest rate (as a percent) | 0% | ||||||||
Stock Options | |||||||||
Denominator: | |||||||||
Dilutive effect of assumed conversion (in shares) | 0 | 4,126,970 | 0 | 4,229,632 | |||||
Restricted stock units | |||||||||
Denominator: | |||||||||
Dilutive effect of assumed conversion (in shares) | 0 | 1,936,390 | 0 | 2,042,745 |
Net (Loss) Income Per Share - S
Net (Loss) Income Per Share - Schedule of Shares Excluded from the Calculation of Diluted Net Income Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 23,737,030 | 248,108 | 23,291,906 | 610,654 |
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) | 2,999,502 | 193,919 | 3,197,330 | 135,179 |
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) | 6,021,635 | 54,189 | 5,377,776 | 475,475 |
Convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 14,715,893 | 0 | 14,716,800 | 0 |
Net (Loss) Income Per Share - N
Net (Loss) Income Per Share - Narrative (Details) - Convertible Debt - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Aug. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2018 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Principal | $ 2,299,987 | $ 2,300,020 | |||
2020 Notes | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Principal | $ 650,000 | $ 650,000 | $ 650,000 | ||
Debt instrument, interest rate (as a percent) | 0.125% | ||||
2019 Notes | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Debt instrument, interest rate (as a percent) | 0.125% | ||||
2018 Notes | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Debt instrument, interest rate (as a percent) | 0% |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jul. 12, 2021 | Jul. 02, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||||
Acquisition of businesses, net of cash acquired | $ 0 | $ 1,690,823 | ||||
Depop | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of consideration transferred | $ 1,493,000 | |||||
Acquisition of businesses, net of cash acquired | 1,489,000 | |||||
Non-cash consideration, replacement equity awards | $ 4,800 | |||||
Elo7 | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of consideration transferred | $ 212,100 | |||||
Acquisition of businesses, net of cash acquired | 211,300 | |||||
Non-cash consideration, replacement equity awards | $ 800 | |||||
Depop and Elo7 | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition-related expenses | $ 500 | $ 25,000 | $ 2,100 | 35,000 | ||
Non-recurring acquisition-related expenses | 107,332 | 326,205 | ||||
Depop and Elo7 | Acquisition-related Costs | ||||||
Business Acquisition [Line Items] | ||||||
Non-recurring acquisition-related expenses | $ 44,200 | $ 58,400 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 12, 2021 | Jul. 02, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 135,922 | $ 1,371,064 | $ 140,810 | ||
Depop | |||||
Business Acquisition [Line Items] | |||||
Current assets | $ 4,288 | ||||
Goodwill | 1,118,855 | ||||
Current liabilities | (18,878) | ||||
Non-current liabilities | (27,957) | ||||
Deferred tax liability, net | (78,872) | ||||
Total purchase price | 1,492,823 | ||||
Depop | Trademark | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 249,820 | ||||
Estimated Useful Life (in years) | 20 years | ||||
Depop | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 148,504 | ||||
Estimated Useful Life (in years) | 13 years | ||||
Depop | Property and equipment other | |||||
Business Acquisition [Line Items] | |||||
Property and equipment | $ 1,299 | ||||
Depop | Property and equipment other | Minimum | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Life (in years) | 2 years | ||||
Depop | Property and equipment other | Maximum | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Life (in years) | 5 years | ||||
Depop | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Property and equipment | $ 95,764 | ||||
Estimated Useful Life (in years) | 5 years | ||||
Elo7 | |||||
Business Acquisition [Line Items] | |||||
Current assets | $ 2,721 | ||||
Goodwill | 157,187 | ||||
Non-current assets | 2,412 | ||||
Current liabilities | (3,406) | ||||
Non-current liabilities | (2,691) | ||||
Deferred tax liability, net | (22,727) | ||||
Total purchase price | 212,141 | ||||
Elo7 | Trademark | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 22,187 | ||||
Estimated Useful Life (in years) | 15 years | ||||
Elo7 | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 44,374 | ||||
Estimated Useful Life (in years) | 15 years | ||||
Elo7 | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Property and equipment | $ 12,084 | ||||
Estimated Useful Life (in years) | 5 years |
Business Combinations - Unaudit
Business Combinations - Unaudited Supplemental Pro Forma Information (Details) - Depop and Elo7 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Revenue | $ 534,395 | $ 1,656,426 |
Net income | $ 107,332 | $ 326,205 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||||
Balance as of the beginning of the period | $ 1,371,064 | $ 140,810 | $ 140,810 | ||
Business combinations | 0 | 1,276,042 | |||
Impairment | $ (1,045,022) | $ 0 | (1,045,022) | $ 0 | 0 |
Foreign currency translation adjustments | (190,120) | (45,788) | |||
Balance as of the end of the period | $ 135,922 | $ 135,922 | $ 1,371,064 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Number of operating segments | segment | 4 | ||||
Number of reportable segments | segment | 1 | ||||
Goodwill impairment | $ 1,045,022 | $ 0 | $ 1,045,022 | $ 0 | $ 0 |
Depop | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 897,900 | ||||
Impairment of finite-lived intangible assets and other long-lived assets | 0 | ||||
Elo7 | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 147,100 | ||||
Impairment of finite-lived intangible assets and other long-lived assets | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Values Company’s Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | $ 1,152,970 | $ 1,070,180 |
Gross Unrealized Holding Loss | (3,241) | (557) |
Gross Unrealized Holding Gain | 10 | 23 |
Fair Value | 1,149,739 | 1,069,646 |
Cash and Cash Equivalents | 789,990 | 780,196 |
Short-term Investments | 251,165 | 204,416 |
Long-term Investments | 32,138 | 85,034 |
Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 289,768 | 214,771 |
Gross Unrealized Holding Loss | 0 | 0 |
Gross Unrealized Holding Gain | 0 | 0 |
Fair Value | 289,768 | 214,771 |
Cash and Cash Equivalents | 289,768 | 214,771 |
Short-term Investments | 0 | 0 |
Long-term Investments | 0 | 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 645,429 | 616,738 |
Gross Unrealized Holding Loss | (576) | (55) |
Gross Unrealized Holding Gain | 2 | 11 |
Fair Value | 644,855 | 616,694 |
Cash and Cash Equivalents | 495,205 | 556,427 |
Short-term Investments | 73,204 | 52,632 |
Long-term Investments | 0 | 7,635 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 571,727 | 556,427 |
Gross Unrealized Holding Loss | 0 | 0 |
Gross Unrealized Holding Gain | 0 | 0 |
Fair Value | 571,727 | 556,427 |
Cash and Cash Equivalents | 495,205 | 556,427 |
Short-term Investments | 76 | 0 |
Long-term Investments | 0 | 0 |
Funds receivable and seller accounts | 76,400 | |
Level 1 | U.S. Government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 73,702 | 60,311 |
Gross Unrealized Holding Loss | (576) | (55) |
Gross Unrealized Holding Gain | 2 | 11 |
Fair Value | 73,128 | 60,267 |
Cash and Cash Equivalents | 0 | 0 |
Short-term Investments | 73,128 | 52,632 |
Long-term Investments | 0 | 7,635 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 217,773 | 238,671 |
Gross Unrealized Holding Loss | (2,665) | (502) |
Gross Unrealized Holding Gain | 8 | 12 |
Fair Value | 215,116 | 238,181 |
Cash and Cash Equivalents | 5,017 | 8,998 |
Short-term Investments | 177,961 | 151,784 |
Long-term Investments | 32,138 | 77,399 |
Level 2 | Certificate of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 33,990 | 20,709 |
Gross Unrealized Holding Loss | (206) | (7) |
Gross Unrealized Holding Gain | 7 | 1 |
Fair Value | 33,791 | 20,703 |
Cash and Cash Equivalents | 2,190 | 0 |
Short-term Investments | 31,601 | 20,703 |
Long-term Investments | 0 | 0 |
Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 44,397 | 25,235 |
Gross Unrealized Holding Loss | (120) | (14) |
Gross Unrealized Holding Gain | 1 | 1 |
Fair Value | 44,278 | 25,222 |
Cash and Cash Equivalents | 1,495 | 8,998 |
Short-term Investments | 42,783 | 16,224 |
Long-term Investments | 0 | 0 |
Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost | 139,386 | 192,727 |
Gross Unrealized Holding Loss | (2,339) | (481) |
Gross Unrealized Holding Gain | 0 | 10 |
Fair Value | 137,047 | 192,256 |
Cash and Cash Equivalents | 1,332 | 0 |
Short-term Investments | 103,577 | 114,857 |
Long-term Investments | $ 32,138 | $ 77,399 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gross Unrealized Holding Loss | $ 1,015 | $ 0 |
Fair Value | $ 27,658 | $ 0 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, investment maturity | 12 months | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities, investment maturity | 37 months |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Unrealized Loss and Fair Value of Debt Securities Available-for-Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Less than 12 months in a continuous unrealized loss position | ||
Gross Unrealized Holding Loss | $ (1,900) | |
Fair Value | 171,714 | |
12 months or longer in a continuous unrealized loss position | ||
Gross Unrealized Holding Loss | (1,015) | $ 0 |
Fair Value | 27,658 | $ 0 |
Corporate bonds | ||
Less than 12 months in a continuous unrealized loss position | ||
Gross Unrealized Holding Loss | (1,373) | |
Fair Value | 115,340 | |
12 months or longer in a continuous unrealized loss position | ||
Gross Unrealized Holding Loss | (966) | |
Fair Value | 21,707 | |
U.S. Government and agency securities | ||
Less than 12 months in a continuous unrealized loss position | ||
Gross Unrealized Holding Loss | (527) | |
Fair Value | 56,374 | |
12 months or longer in a continuous unrealized loss position | ||
Gross Unrealized Holding Loss | (49) | |
Fair Value | $ 5,951 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Estimated Fair Value Liability Component (Details) - Level 2 - Convertible Debt - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 2,278,585 | $ 2,275,418 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 2,244,689 | 3,673,537 |
2021 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 989,154 | 987,729 |
2021 Notes | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 779,400 | 1,165,519 |
2020 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 644,133 | 643,237 |
2020 Notes | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 586,755 | 862,774 |
2019 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 645,243 | 644,390 |
2019 Notes | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 878,383 | 1,644,869 |
2018 Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 55 | 62 |
2018 Notes | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 151 | $ 375 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Pass-through marketplace tax collection obligation | $ 94,260 | $ 136,360 |
Vendor accruals | 93,654 | 115,593 |
Employee compensation-related liabilities | 52,694 | 66,477 |
Taxes payable | 9,356 | 9,688 |
Total accrued expenses | $ 249,964 | $ 328,118 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Aug. 31, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | |||||
Long-term debt, net | $ 2,278,585 | $ 2,275,418 | |||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal | 2,299,987 | 2,300,020 | |||
Unamortized debt issuance costs | 21,402 | 24,602 | |||
Long-term debt, net | 2,278,585 | 2,275,418 | |||
2021 Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal | 1,000,000 | 1,000,000 | $ 1,000,000 | ||
Unamortized debt issuance costs | 10,846 | 12,271 | |||
Long-term debt, net | 989,154 | 987,729 | |||
2020 Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal | 650,000 | 650,000 | $ 650,000 | ||
Unamortized debt issuance costs | 5,867 | 6,763 | |||
Long-term debt, net | 644,133 | 643,237 | |||
2019 Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal, net of conversion notices | 649,932 | 649,958 | $ 649,900 | ||
Unamortized debt issuance costs | 4,689 | 5,568 | |||
Long-term debt, net | 645,243 | 644,390 | |||
2018 Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal, net of conversion notices | 55 | 62 | |||
Unamortized debt issuance costs | 0 | 0 | |||
Long-term debt, net | $ 55 | $ 62 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Convertible Notes (Details) - Convertible Debt | 1 Months Ended | ||||
Jun. 30, 2021 $ / shares | Aug. 31, 2020 $ / shares | Sep. 30, 2019 $ / shares | Mar. 31, 2018 $ / shares | Sep. 30, 2022 | |
2021 Notes | |||||
Debt Instrument [Line Items] | |||||
Conversion ratio | 0.0040518 | ||||
Conversion price (in dollars per share) | $ 246.80 | ||||
Effective interest rate | 0.40% | ||||
2020 Notes | |||||
Debt Instrument [Line Items] | |||||
Conversion ratio | 0.0050007 | ||||
Conversion price (in dollars per share) | $ 199.97 | ||||
Effective interest rate | 0.30% | ||||
2019 Notes | |||||
Debt Instrument [Line Items] | |||||
Conversion ratio | 0.0114040 | ||||
Conversion price (in dollars per share) | $ 87.69 | ||||
Effective interest rate | 0.30% | ||||
2018 Notes | |||||
Debt Instrument [Line Items] | |||||
Conversion ratio | 0.0275691 | ||||
Conversion price (in dollars per share) | $ 36.27 | ||||
Effective interest rate | 0% |
Debt - Terms of the Notes (Deta
Debt - Terms of the Notes (Details) - Convertible Debt - day | 1 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2022 | |
Debt Instrument, Redemption, Period One | ||
Debt Instrument [Line Items] | ||
Threshold percentage of stock price trigger | 130% | |
Threshold trading days | 20 | |
Threshold consecutive trading days | 30 | |
2021 Notes | Debt Instrument, Redemption, Period One | ||
Debt Instrument [Line Items] | ||
Threshold percentage of stock price trigger | 130% | |
Threshold trading days | 20 | |
Threshold consecutive trading days | 30 | |
2021 Notes | Debt Instrument, Redemption, Period Two | ||
Debt Instrument [Line Items] | ||
Redemption price percent | 100% |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Non-cash interest expense | $ 2,099 | $ 2,099 | $ 6,294 | $ 4,356 |
2021 Notes | ||||
Debt Instrument [Line Items] | ||||
Non-cash interest expense | 1,100 | 1,100 | 3,300 | 1,318 |
2020 Notes | ||||
Debt Instrument [Line Items] | ||||
Non-cash interest expense | 502 | 502 | 1,505 | 1,505 |
2019 Notes | ||||
Debt Instrument [Line Items] | ||||
Non-cash interest expense | 497 | 497 | 1,489 | 1,489 |
2018 Notes | ||||
Debt Instrument [Line Items] | ||||
Non-cash interest expense | $ 0 | $ 0 | $ 0 | $ 44 |
Debt - Schedule of Capped Call
Debt - Schedule of Capped Call Transactions (Details) - Convertible Debt - $ / shares | Jun. 08, 2021 | Aug. 19, 2020 | Sep. 18, 2019 | Mar. 08, 2018 | Aug. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2018 |
2021 Capped Call Transactions | |||||||
Line of Credit Facility [Line Items] | |||||||
Transaction price cap (in dollars per share) | $ 340.42 | ||||||
Cap premium percentage over reported sales price | 100% | ||||||
2020 Capped Call Transactions | |||||||
Line of Credit Facility [Line Items] | |||||||
Transaction price cap (in dollars per share) | $ 327.83 | ||||||
Cap premium percentage over reported sales price | 150% | ||||||
2019 Capped Call Transactions | |||||||
Line of Credit Facility [Line Items] | |||||||
Transaction price cap (in dollars per share) | $ 148.63 | ||||||
Cap premium percentage over reported sales price | 150% | ||||||
2018 Capped Call Transactions | |||||||
Line of Credit Facility [Line Items] | |||||||
Transaction price cap (in dollars per share) | $ 52.76 | ||||||
Cap premium percentage over reported sales price | 100% |
Debt - 2019 Credit Agreement (D
Debt - 2019 Credit Agreement (Details) - Credit Agreement - USD ($) $ in Millions | Feb. 25, 2019 | Sep. 30, 2022 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 200 | |
Maximum unrestricted cash | $ 100 | |
Line of credit facility, amount outstanding | $ 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% | |
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 | |
Bridge Loan | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 10 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands | May 03, 2022 | Dec. 31, 2020 |
Equity [Abstract] | ||
Stock repurchase program, authorized amount | $ 600,000 | $ 250,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity of Shares Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | May 03, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||||||
Remaining Amount Authorized | $ 451,870 | $ 451,870 | $ 127,217 | ||||
Shares Repurchased (in shares) | 1,503,505 | 690,992 | 420,398 | 2,614,895 | |||
Average Price Paid per Share (in dollars per share) | $ 100.15 | $ 89.97 | $ 148.83 | $ 105.28 | |||
Stock repurchased and retired during period, value, including broker fees | $ 150,595 | $ 62,178 | $ 62,574 | $ 275,347 | |||
Stock repurchase program, authorized amount | $ 600,000 | $ 250,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jan. 03, 2022 | Jul. 12, 2021 | Sep. 30, 2022 | |
Depop | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation | $ 44 | ||
Vesting period (In years) | 3 years | ||
Depop | Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Deferred purchase price for post-combination share-based service arrangement | $ 44 | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation | $ 730.3 | ||
Total unrecognized compensation, period of recognition (in years) | 3 years 1 month 9 days | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation, period of recognition (in years) | 2 years 25 days | ||
Total unrecognized compensation | $ 17.1 | ||
Unvested Deferred Consideration | Depop | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation | $ 5.4 | ||
Total unrecognized compensation, period of recognition (in years) | 1 year 9 months 10 days | ||
2015 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of additional shares issued annually (in shares) | 6,351,106 | ||
Number of shares authorized (in shares) | 50,391,850 | ||
Number of shares available for grant (in shares) | 32,035,675 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Unvested RSUs (Details) - RSUs - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Shares | ||
Beginning balance, Unvested (in shares) | 3,506,721 | |
Granted (in shares) | 4,895,738 | |
Vested (in shares) | (897,273) | |
Forfeited/Cancelled (in shares) | (500,420) | |
Ending balance, Unvested (in shares) | 7,004,766 | |
Weighted-Average Grant Date Fair Value | ||
Unvested, balance (in dollars per share) | $ 128.29 | $ 137.87 |
Granted (in dollars per share) | 120.39 | |
Vested (in dollars per share) | 105.23 | |
Forfeited/Cancelled (in dollars per share) | $ 157.15 |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocated Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 52,905 | $ 42,256 | $ 166,533 | $ 90,047 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 6,089 | 3,587 | 16,545 | 8,985 |
Marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 5,083 | 4,102 | 14,552 | 7,639 |
Product development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 34,106 | 17,345 | 88,656 | 40,588 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 7,627 | $ 17,222 | $ 46,780 | $ 32,835 |
Uncategorized Items - etsy-2022
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |