Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 25, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TWTR | |
Entity Registrant Name | TWITTER, INC. | |
Entity Central Index Key | 1,418,091 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 752,666,518 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,601,028 | $ 1,638,413 |
Short-term investments | 2,927,803 | 2,764,689 |
Accounts receivable, net of allowance for doubtful accounts of $4,961 and $5,430 as of March 31, 2018 and December 31, 2017, respectively | 611,840 | 664,268 |
Prepaid expenses and other current assets | 268,564 | 254,514 |
Total current assets | 5,409,235 | 5,321,884 |
Property and equipment, net | 801,912 | 773,715 |
Intangible assets, net | 44,794 | 49,654 |
Goodwill | 1,190,932 | 1,188,935 |
Other assets | 92,568 | 78,289 |
Total assets | 7,539,441 | 7,412,477 |
Current liabilities: | ||
Accounts payable | 137,968 | 170,969 |
Accrued and other current liabilities | 304,115 | 327,333 |
Capital leases, short-term | 86,571 | 84,976 |
Total current liabilities | 528,654 | 583,278 |
Convertible notes | 1,650,064 | 1,627,460 |
Capital leases, long-term | 71,970 | 81,308 |
Deferred and other long-term tax liabilities, net | 15,535 | 13,240 |
Other long-term liabilities | 62,782 | 59,973 |
Total liabilities | 2,329,005 | 2,365,259 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $0.000005 par value-- 200,000 shares authorized; none issued and outstanding | ||
Common stock, $0.000005 par value-- 5,000,000 shares authorized; 752,037 and 746,902 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 4 | 4 |
Additional paid-in capital | 7,831,429 | 7,750,522 |
Accumulated other comprehensive loss | (22,325) | (31,579) |
Accumulated deficit | (2,598,672) | (2,671,729) |
Total stockholders' equity | 5,210,436 | 5,047,218 |
Total liabilities and stockholders' equity | $ 7,539,441 | $ 7,412,477 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 4,961 | $ 5,430 |
Preferred stock, par value | $ 0.000005 | $ 0.000005 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.000005 | $ 0.000005 |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, shares issued | 752,037,000 | 746,902,000 |
Common stock, shares outstanding | 752,037,000 | 746,902,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Income Statement [Abstract] | |||
Revenue | $ 664,871 | $ 548,251 | [1] |
Costs and expenses | |||
Cost of revenue | 222,823 | 220,339 | |
Research and development | 123,346 | 128,728 | |
Sales and marketing | 178,059 | 169,594 | |
General and administrative | 65,718 | 69,868 | |
Total costs and expenses | 589,946 | 588,529 | |
Income (loss) from operations | 74,925 | (40,278) | |
Interest expense | (27,015) | (25,409) | |
Interest income | 16,181 | 8,520 | |
Other expense, net | (209) | (1,198) | |
Income (loss) before income taxes | 63,882 | (58,365) | |
Provision for income taxes | 2,885 | 3,194 | |
Net income (loss) | $ 60,997 | $ (61,559) | |
Net income (loss) per share attributable to common stockholders: | |||
Basic | $ 0.08 | $ (0.09) | |
Diluted | $ 0.08 | $ (0.09) | |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | |||
Basic | 747,697 | 722,048 | |
Diluted | 765,861 | 722,048 | |
[1] | Prior period amounts have not been adjusted due to adoption of the new revenue standard under the modified retrospective method. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ 60,997 | $ (61,559) |
Other comprehensive income (loss), net of tax: | ||
Change in unrealized gain (loss) on investments in available-for-sale securities | (1,829) | (229) |
Change in foreign currency translation adjustment | 11,083 | 8,123 |
Net change in accumulated other comprehensive loss | 9,254 | 7,894 |
Comprehensive income (loss) | $ 70,251 | $ (53,665) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net income (loss) | $ 60,997 | $ (61,559) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 96,846 | 102,792 |
Stock-based compensation expense | 73,266 | 116,997 |
Amortization of discount on convertible notes | 20,722 | 19,248 |
Changes in bad debt provision | 259 | 1,318 |
Deferred income taxes | (670) | (240) |
Other adjustments | 93 | (9,533) |
Changes in assets and liabilities: | ||
Accounts receivable | 61,166 | 153,348 |
Prepaid expenses and other assets | (22,892) | (24,000) |
Accounts payable | (26,948) | (36,950) |
Accrued and other liabilities | (20,166) | (57,973) |
Net cash provided by operating activities | 242,673 | 203,448 |
Cash flows from investing activities | ||
Purchases of property and equipment | (93,091) | (39,881) |
Proceeds from sales of property and equipment | 1,763 | |
Purchases of marketable securities | (831,882) | (701,964) |
Proceeds from maturities of marketable securities | 660,056 | 659,450 |
Proceeds from sales of marketable securities | 5,512 | 74,798 |
Proceeds from sales of long-lived assets | 35,000 | |
Other investing activities | (1,350) | (10,006) |
Net cash provided by (used in) investing activities | (258,992) | 17,397 |
Cash flows from financing activities | ||
Taxes paid related to net share settlement of equity awards | (7,557) | (3,090) |
Payments of capital lease obligations | (24,247) | (27,084) |
Proceeds from exercise of stock options | 2,768 | 6,522 |
Net cash used in financing activities | (29,036) | (23,652) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (45,355) | 197,193 |
Foreign exchange effect on cash, cash equivalents and restricted cash | 1,950 | 4,184 |
Cash, cash equivalents and restricted cash at beginning of period | 1,673,857 | 1,027,633 |
Cash, cash equivalents and restricted cash at end of period | 1,630,452 | 1,229,010 |
Supplemental disclosures of non-cash investing and financing activities | ||
Equipment purchases under capital leases | 16,086 | 37,434 |
Changes in accrued property and equipment purchases | (2,798) | 4,890 |
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flows | ||
Cash and cash equivalents | 1,601,028 | 1,191,566 |
Restricted cash included in prepaid expenses and other current assets | 2,747 | 7,871 |
Restricted cash included in other assets | 26,677 | 29,573 |
Cash, cash equivalents and restricted cash at end of period | $ 1,630,452 | $ 1,229,010 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1. Description of Business and Summary of Significant Accounting Policies Twitter, Inc. (“Twitter” or the “Company”) was incorporated in Delaware in April 2007, and is headquartered in San Francisco, California. Twitter offers products and services for users, advertisers, developers and platform and data partners. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results expected for the full fiscal year or any other period. The accompanying interim consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Certain prior period amounts have been reclassified to conform to the current period presentation. Recent Accounting Pronouncements Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard update on revenue recognition from contracts with customers (Topic 606). The new guidance replaces all current GAAP guidance on this topic and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted this new accounting standard on January 1, 2018 using the modified retrospective method. See Note 2 – Revenue for further details. In January 2016, the FASB issued a new accounting standard update on the classification and measurement of financial instruments. The new guidance principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. The Company adopted this new accounting standard prospectively for its non-marketable equity securities during the three months ended March 31, 2018. The Company has elected to use the measurement alternative for its non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. non-marketable equity securities In August 2016, the FASB issued a new accounting standard update on the statement of cash flows. The new guidance clarifies classification of certain cash receipts and cash payments in the statement of cash flows. The Company adopted this new accounting standard retrospectively during the three months ended March 31, 2018 and the adoption did not have a material impact on the Company’s financial statements. In October 2016, the FASB issued a new accounting standard update on simplifying the accounting for income taxes related to intra-entity asset transfers. The new guidance requires an entity to recognize the tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfers occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The Company adopted this new accounting standard on January 1, 2018 using the modified retrospective method. Upon adoption, the Company recognized a deferred tax asset of $29.5 million related to a prior period intra-entity transfer, which was offset by a full valuation allowance. Therefore, the recognition of the deferred tax asset upon adoption did not have an impact on the Company’s accumulated deficit. In November 2016, the FASB issued a new accounting standard update on the presentation of restricted cash in the statement of cash flows. The new guidance requires an entity to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows, and an entity will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted this new accounting standard retrospectively during the three months ended March 31, 2018. As a result of the adoption, net cash provided by investing activities was adjusted to exclude the changes in restricted cash, resulting in a decrease of $1.6 million in the previously-reported amount for the three months ended March 31, 2017. Restricted cash balances are primarily cash deposits secured against letters of credit related to certain property leases. In January 2017, the FASB issued a new accounting standard update on narrowing the definition of a business. The new guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. The Company adopted this new accounting standard retrospectively during the three months ended March 31, 2018 and the adoption did not have a material impact on the Company’s financial statements. Recently issued accounting pronouncements not yet adopted In February 2018, the FASB issued a new accounting standard update to give entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings (accumulated deficits). The new guidance also requires entities to make additional disclosures, regardless of whether reclassification of tax effects is elected. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting standard update on its financial statements and related disclosures. With the exception of the standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2018, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, that are of significance or potential significance to the Company. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | Note 2. Revenue Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts not yet substantially completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historical accounting practices. Revenue Recognition Revenue is recognized when the control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company identifies its contracts with customers and all performance obligations within those contracts. The Company then determines the transaction price and allocates the transaction price to the performance obligations within the Company's contracts with customers, recognizing revenue when, or as, the Company satisfies its performance obligations. While the majority of the Company's revenue transactions are based on standard business terms and conditions, the Company also enters into sales agreements with advertisers and data partners that sometimes involve multiple performance obligations and occasionally include non-standard terms or conditions. Revenue by geography is based on the billing addresses of the customers. The following table sets forth revenue by services and revenue by geographic area (in thousands): Three Months Ended March 31, 2018 2017 (1) Revenue by services: Advertising services $ 575,156 $ 473,780 Data licensing and other 89,715 74,471 Total revenue $ 664,871 $ 548,251 Three Months Ended March 31, 2018 2017 (1) Revenue by geographic area: United States $ 346,570 $ 340,584 Japan 116,826 72,593 Rest of World 201,475 135,074 Total revenue $ 664,871 $ 548,251 (1) Revenue Recognition Accounting Policy The Company generates the substantial majority of its revenue from the sale of advertising services with the balance from data licensing and other arrangements. The Company generates its advertising revenue primarily from the sale of its Promoted Products: (i) Promoted Tweets, (ii) Promoted Accounts and (iii) Promoted Trends. Promoted Tweets and Promoted Accounts are pay-for-performance advertising products or pay on impressions delivered, each priced through an auction. Promoted Trends are featured by geography and offered on a fixed-fee-per-day basis. Advertisers are obligated to pay when a user engages with a Promoted Tweet, follows a Promoted Account, when an impression is delivered, or when a Promoted Trend is displayed. These advertising services may be sold in combination as a bundled arrangement or separately on a stand-alone basis. For the Company's Promoted Product arrangements, significant judgments are (i) determining whether the Company is the principal or the agent in arrangements where another party is involved in providing specified services to a customer, (ii) identifying the performance obligations in the contract, (iii) determining the basis for allocating contract consideration to performance obligations, and (iv) estimating the transaction price to be allocated for contracts with tiered rebate provisions. The Company may generate revenue from the sale of certain Promoted Tweets through placement by Twitter of advertiser ads against third-party publisher content. The Company will pay the third-party publisher a revenue share fee for its right to monetize their content. In such transactions, advertisers are contracting to obtain a single integrated advertising service, the Promoted Tweet combined with the third-party publisher content, and the Company obtains control of the third-party publisher content displayed on Twitter that it then combines with the advertiser ads within the Promoted Tweet. Therefore, the Company reports advertising revenue generated from these transactions on a gross basis and records the related third-party content monetization fees as cost of revenue. The Company also generates advertising revenue by selling services in which the Company places ads on third-party publishers’ websites, applications or other offerings. To fulfill these transactions, the Company purchases advertising inventory from third-party publishers’ websites and applications where the Company has identified the advertisers’ targeted audience and therefore incurs traffic acquisition costs prior to transferring the advertising service to its customers. At such point, the Company has the sole ability to monetize the third-party publishers advertising inventory. In such transactions, the Company obtains control of a right to a service to be performed by the third-party publishers, which gives the Company the ability to direct those publishers to provide the services to the Company's customers on the Company's behalf. Therefore, the Company reports advertising revenue generated from these transactions on a gross basis and records the related traffic acquisition costs as cost of revenue. Fees for the advertising services above are recognized in the period when advertising is delivered as evidenced by a user engaging with a Promoted Tweet or an ad on a third-party publisher website or application in a manner satisfying the types of engagement selected by the advertisers, such as Tweet engagements (e.g., retweets, replies and likes), website clicks, mobile application installs or engagements, obtaining new followers, or video views, following a Promoted Account, delivery of impressions, or through the display of a Promoted Trend on the Company's platform. The Company has concluded that data licensing arrangements, which grant customers a right to access Twitter intellectual property for a defined period of time, may contain a single performance obligation or may contain multiple performance obligations satisfied over the same period of time. In some of the Company's data licensing arrangements, pricing is a fixed monthly fee over a specified term. In such arrangements, data licensing revenue is recognized on a straight-line basis over the period in which the Company provides data access. In other data licensing arrangements, the Company charges customers based on the amount of sales they generate from downstream customers using Twitter data. Certain of those royalty-based data licensing arrangements are subject to minimum guarantees. The Company recognizes revenue for minimum guarantees on a straight-line basis over the period in which the Company provides data access. Royalties in excess of minimum guarantees, if any, are recognized as revenue in the period that the related downstream sales occur. Other revenue is primarily generated from service fees from transactions completed on the Company's mobile ad exchange. The Company's mobile ad exchange enables buyers and sellers to purchase and sell advertising inventory by matching them in the exchange. The Company has determined it is not the principal in the purchase and sale of advertising inventory in transactions between third-party buyers and sellers on the exchange because the Company does not obtain control of the advertising inventory. The Company reports revenue related to its ad exchange services on a net basis for the fees paid by buyers net of costs related to acquiring the advertising inventory paid to sellers. Arrangements involving multiple performance obligations primarily consist of combinations of the Company's pay-for-performance products, Promoted Tweets and Promoted Accounts, which are priced through an auction, and Promoted Trends, which are priced on a fixed-fee-per day, per geography basis. For arrangements that include a combination of these products, the Company develops an estimate of the standalone selling price for these products in order to allocate any potential discount to all performance obligations in the arrangement. The estimate of standalone selling price for pay-for-performance auction based products is determined based on the winning bid price. The estimate of standalone selling price for Promoted Trends is based on Promoted Trends sold on a standalone basis and/or separately priced in a bundled arrangement by reference to a list price by geography, which is updated and approved periodically. For other arrangements involving multiple performance obligations where neither auction pricing nor standalone sales provide sufficient evidence of standalone selling price, the Company estimates standalone selling price using either an adjusted market assessment approach or an expected cost plus margin approach. The Company believes the use of its estimation approach and allocation of the transaction price on a relative standalone selling price basis to each performance obligation results in revenue recognition in a manner consistent with the underlying economics of the transaction and the allocation principle included in Topic 606. Impact of Adoption The Company recorded a net reduction to opening accumulated deficit of $12.1 million, an increase to unbilled revenue of $8.0 million, and a reduction to deferred revenue of $4.1 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to its data licensing arrangements. The impact for the quarter ended March 31, 2018 was an increase to revenue of $5.9 million, an increase to unbilled revenue of $4.0 million, and a reduction to deferred revenue of $1.9 million as a result of applying the new revenue standard, with the impact primarily related to the Company’s data licensing arrangements. Practical Expedients and Exemptions The Company expenses sales commissions when incurred because the amortization period is one year or less. Sales commission expenses are recorded within sales and marketing in the consolidated statements of operations. The Company applied the practical expedient to not disclose the value of remaining performance obligations not yet satisfied as of period end for contracts with an original expected duration of one year or less. The Company applied the practical expedient to not disclose the value of remaining performance obligations not yet satisfied as of period end for variable consideration in the form of sales-based royalties promised in exchange for access licenses to its intellectual property in data licensing contracts. Contract Balances The Company enters into contracts with its customers, which may give rise to contract liabilities (deferred revenue) and contract assets (unbilled revenue). The payment terms and conditions within the Company’s contracts vary by the type and location of its customer and products or services purchased, the substantial majority of which are due in less than one year. When the timing of revenue recognition differs from the timing of payments made by customers, the Company recognizes either unbilled revenue (its performance precedes billing date) or deferred revenue (customer payment is received in advance of performance). Deferred Revenue (Contract Liabilities) The Company records deferred revenue within accrued and other current liabilities in the consolidated balance sheets. The Company's deferred revenue balance consists of performance obligations given to customers based on their spend on its services, which the Company defers for as they represent material rights. The Company recognizes deferred revenue based on the amount of customer spend and the relative standalone selling price of the material rights. Unbilled Revenue (Contract Assets) The Company records unbilled revenue within prepaid expenses and other current assets and other assets in the consolidated balance sheets. The Company's unbilled revenue primarily consists of amounts that have yet to be billed under contracts with escalating fee structures. Specifically, because the Company generally recognizes revenue on a straight-line basis for data licensing arrangements with escalating fee structures, revenue recognized exceeds amounts the Company has a right to bill during early portions of such contracts, resulting in unbilled revenue. The following table presents contract balances (in thousands): January 1, March 31, 2018 2018 Unbilled Revenue $ 7,980 $ 12,117 Deferred Revenue $ 25,869 $ 29,073 The amount of revenue recognized in the period that was included in the opening deferred revenue balance was $11.4 million. This revenue consists primarily of revenue recognized as a result of the utilization of bonus media inventory earned by customers in prior periods. The amount of revenue recognized from obligations satisfied (or partially satisfied) in prior periods was not material. The increase in unbilled revenue balance from January 1, 2018 to March 31, 2018 was attributable to differences between revenue recognized and amounts billed in the Company's data licensing arrangements with escalating fee structures due to recognizing such fees as revenue on a straight-line basis. The increase in deferred revenue balance from January 1, 2018 to March 31, 2018 was primarily due to bonus media inventory earned by customers during the period, offset by the utilization of such bonus media inventory earned in prior periods. Remaining Performance Obligations As of March 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations in contracts with an original expected duration exceeding one year is $263.3 million. This total amount primarily consists of long-term data licensing contracts and excludes deferred revenue related to the Company’s short-term Promoted Products arrangements. The Company expects to recognize this amount as revenue over the following time periods (in thousands): Remaining Performance Obligations Total 2018 2019 2020 and Thereafter Revenue expected to be recognized on remaining performance obligations $ 263,303 $ 99,128 $ 95,493 $ 68,682 |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 3 Months Ended |
Mar. 31, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | Note 3. Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments consist of the following (in thousands): March 31, December 31, 2018 2017 Cash and cash equivalents: Cash $ 315,430 $ 301,684 Money market funds 739,915 981,681 U.S. government and agency securities including treasury bills 60,412 — Corporate notes, commercial paper and certificates of deposit 485,271 355,048 Total cash and cash equivalents $ 1,601,028 $ 1,638,413 Short-term investments: U.S. government and agency securities including treasury bills $ 1,113,914 $ 1,064,957 Corporate notes, commercial paper and certificates of deposit 1,813,889 1,699,732 Total short-term investments $ 2,927,803 $ 2,764,689 The contractual maturities of securities classified as available-for-sale as of March 31, 2018 were as follows (in thousands): March 31, 2018 Due within one year $ 2,418,600 Due after one year through two years 509,203 Total $ 2,927,803 The following tables summarize unrealized gains and losses related to available-for-sale securities classified as short-term investments on the Company’s consolidated balance sheets (in thousands): March 31, 2018 Gross Gross Gross Aggregated Amortized Unrealized Unrealized Estimated Costs Gains Losses Fair Value U.S. government and agency securities including treasury bills $ 1,115,729 $ 130 $ (1,945 ) $ 1,113,914 Corporate notes, commercial paper and certificates of deposit 1,817,429 44 (3,584 ) 1,813,889 Total available-for-sale securities classified as short-term investments $ 2,933,158 $ 174 $ (5,529 ) $ 2,927,803 December 31, 2017 Gross Gross Gross Aggregated Amortized Unrealized Unrealized Estimated Costs Gains Losses Fair Value U.S. government and agency securities including treasury bills $ 1,067,047 $ 133 $ (2,223 ) $ 1,064,957 Corporate notes, commercial paper and certificates of deposit 1,701,168 72 (1,508 ) 1,699,732 Total available-for-sale securities classified as short-term investments $ 2,768,215 $ 205 $ (3,731 ) $ 2,764,689 The gross unrealized loss on securities in a continuous loss position for 12 months or longer was not material as of March 31, 2018 and December 31, 2017. Investments are reviewed periodically to identify possible other-than-temporary impairments. No impairment loss has been recorded on the securities included in the tables above as the Company believes that the decrease in fair value of these securities is temporary and expects to recover the initial cost of investment for these securities. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4. Fair Value Measurements The Company measures its cash equivalents, short-term investments and derivative financial instruments at fair value. The Company classifies its cash equivalents, short-term investments and derivative financial instruments within Level 1 or Level 2 because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The fair value of the Company’s Level 1 financial assets is based on quoted market prices of the identical underlying security. The fair value of the Company’s Level 2 financial assets is based on inputs that are directly or indirectly observable in the market, including the readily-available pricing sources for the identical underlying security that may not be actively traded. The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 based on the three-tier fair value hierarchy (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 739,915 $ — $ — $ 739,915 Treasury bills 60,412 — — 60,412 Commercial paper — 479,273 — 479,273 Certificates of deposit — 5,998 — 5,998 Short-term investments: Treasury bills — 24,980 — 24,980 U.S. government securities — 708,401 — 708,401 Agency securities — 380,533 — 380,533 Corporate notes — 815,728 — 815,728 Commercial paper — 255,968 — 255,968 Certificates of deposit — 742,193 — 742,193 Other current assets: Foreign currency contracts — 1,600 — 1,600 Total $ 800,327 $ 3,414,674 $ — $ 4,215,001 Liabilities Other current liabilities: Foreign currency contracts — 744 — 744 Total $ — $ 744 $ — $ 744 December 31, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 981,681 $ — $ — $ 981,681 Commercial paper — 346,968 — 346,968 Certificates of deposit — 8,080 — 8,080 Short-term investments: U.S. government securities — 669,552 — 669,552 Agency securities — 395,405 — 395,405 Corporate notes — 745,915 — 745,915 Commercial paper — 299,675 — 299,675 Certificates of deposit — 654,142 — 654,142 Other current assets: Foreign currency contracts — 2,237 — 2,237 Total $ 981,681 $ 3,121,974 $ — $ 4,103,655 Liabilities Other current liabilities: Foreign currency contracts — 601 — 601 Total $ — $ 601 $ — $ 601 In 2014, the Company issued $935.0 million principal amount of 0.25% convertible senior notes due in 2019 (the “2019 Notes”) and $954.0 million principal amount of 1.00% convertible senior notes due in 2021 (the “2021 Notes” and together with the 2019 Notes, the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Refer to Note 9 – Convertible Notes for further details on the Notes. The estimated fair value of the 2019 Notes and 2021 Notes based on a market approach as of March 31, 2018 was approximately $895.4 million and $893.2 million, respectively, which represents a Level 2 valuation. The estimated fair value was determined based on the estimated or actual bids and offers of the Notes in an over-the-counter market on the last business day of the period. Derivative Financial Instruments The Company enters into foreign currency forward contracts with financial institutions to reduce the risk that its earnings may be adversely affected by the impact of exchange rate fluctuations on monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. These contracts do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the hedged foreign currency denominated assets and liabilities. These foreign currency forward contracts are not designated as hedging instruments. The Company recognizes these derivative instruments as either assets or liabilities in the consolidated balance sheets at fair value based on a Level 2 valuation. The Company records changes in the fair value (i.e., gains or losses) of the derivatives as other expense, net in the consolidated statements of operations. The notional principal of foreign currency contracts outstanding was equivalent to $388.0 million and $326.1 million at March 31, 2018 and December 31, 2017, respectively. The fair values of outstanding derivative instruments for the periods presented on a gross basis are as follows (in thousands): March 31, December 31, Balance Sheet Location 2018 2017 Assets Foreign currency contracts not designated as hedging instruments Other current assets $ 1,600 $ 2,237 Liabilities Foreign currency contracts not designated as hedging instruments Other current liabilities $ 744 $ 601 The Company recognized $2.8 million and $3.2 million of net losses on the foreign currency contracts in the three months ended March 31, 2018 and 2017, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | Note 5. Property and Equipment, Net The following table presents the detail of property and equipment, net for the periods presented (in thousands): March 31, December 31, 2018 2017 Property and equipment, net Equipment $ 1,152,795 $ 1,091,672 Furniture and leasehold improvements 319,047 314,852 Capitalized software 495,982 472,147 Construction in progress 59,525 49,417 Total 2,027,349 1,928,088 Less: Accumulated depreciation and amortization (1,225,437 ) (1,154,373 ) Property and equipment, net $ 801,912 $ 773,715 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 6. Goodwill and Intangible Assets The following table presents the goodwill activities for the periods presented (in thousands): Goodwill Balance as of December 31, 2017 $ 1,188,935 Foreign currency translation adjustment and other 1,997 Balance as of March 31, 2018 $ 1,190,932 For each of the periods presented, gross goodwill balance equaled the net balance since no impairment charges have been recorded. The following table presents the detail of intangible assets for the periods presented (in thousands): Gross Carrying Accumulated Net Carrying Value Amortization Value March 31, 2018: Patents and developed technologies $ 93,953 $ (51,174 ) $ 42,779 Publisher and advertiser relationships 9,300 (7,285 ) 2,015 Total $ 103,253 $ (58,459 ) $ 44,794 December 31, 2017: Patents and developed technologies $ 93,511 $ (46,337 ) $ 47,174 Publisher and advertiser relationships 9,300 (6,820 ) 2,480 Total $ 102,811 $ (53,157 ) $ 49,654 Amortization expense associated with intangible assets for the three months ended March 31, 2018 and 2017 was $4.9 million and $16.2 million, respectively. Estimated future amortization expense as of March 31, 2018 is as follows (in thousands): Remainder of 2018 $ 11,210 2019 8,537 2020 6,263 2021 5,867 2022 4,290 Thereafter 8,627 Total $ 44,794 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables And Accruals [Abstract] | |
Accrued and Other Current Liabilities | Note 7. Accrued and Other Current Liabilities The following table presents the detail of accrued and other current liabilities for the periods presented (in thousands): March 31, December 31, 2018 2017 Accrued compensation $ 92,642 $ 98,553 Accrued tax liabilities 29,988 36,097 Accrued publisher, content and ad network costs 29,432 32,462 Accrued restructuring 21,821 28,761 Deferred revenue 29,073 27,824 Accrued other 101,159 103,636 Total $ 304,115 $ 327,333 |
Investments in Privately-Held C
Investments in Privately-Held Companies | 3 Months Ended |
Mar. 31, 2018 | |
Investments All Other Investments [Abstract] | |
Investments in Privately-Held Companies | Note 8. Investments in Privately-Held Companies The Company makes strategic investments in privately-held companies. The Company also evaluates each investee to determine if the investee is a variable interest entity and, if so, whether the Company is the primary beneficiary of the variable interest entity. The Company has determined, as of March 31, 2018, there were no variable interest entities required to be consolidated in the Company’s consolidated financial statements. The Company’s investments in privately-held companies are primarily non-marketable equity securities without readily determinable fair values. Prior to January 1, 2018, the Company accounted for its non-marketable equity securities at cost less impairment. Realized gains and losses on non-marketable securities sold or impaired were recognized in other income (expense), net. On January 1, 2018, the Company adopted the new standard which changed the way it accounts for non-marketable securities. The Company now adjusts the carrying value of its non-marketable equity securities to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. The Company’s non-marketable equity securities had a carrying value of $27.6 million as of March 31, 2018 and December 31, 2017. The maximum loss the Company can incur for its investments is their carrying value. These investments in privately-held companies are included within Other Assets on the consolidated balance sheets. The Company periodically evaluates the carrying value of the investments in privately-held companies when events and circumstances indicate that the carrying amount of the investment may not be recovered. The Company estimates the fair value of the investments to assess whether impairment losses shall be recorded using Level 3 inputs. These investments include the Company’s holdings in privately-held companies that are not exchange traded and therefore not supported with observable market prices; hence, the Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the privately-held companies, the amount of cash that the privately-held companies have on-hand, the ability to obtain additional financing and overall market conditions in which the privately-held companies operate or based on the price observed from the most recent completed financing. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Note 9. Convertible Notes In 2014, the Company issued $935.0 million principal amount of 2019 Notes and $954.0 million principal amount of 2021 Notes. The total net proceeds from this offering were approximately $1.86 billion, after deducting $28.3 million of initial purchasers’ discount and $0.5 million debt issuance costs in connection with the 2019 Notes and the 2021 Notes. The March 31, 2018 and 2017 The Notes consisted of the following (in thousands): March 31, 2018 December 31, 2017 2019 Notes 2021 Notes 2019 Notes 2021 Notes Principal amounts: Principal $ 935,000 $ 954,000 $ 935,000 $ 954,000 Unamortized initial purchasers' discount and debt discount (1) (76,112 ) (162,824 ) (88,359 ) (173,181 ) Net carrying amount $ 858,888 $ 791,176 $ 846,641 $ 780,819 Carrying amount of the equity component (2) $ 222,826 $ 283,283 $ 222,826 $ 283,283 (1) (2) As of March 31, 2018, the remaining life of the 2019 Notes and 2021 Notes is approximately 17 months and 41 months, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Note 10. Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing total net income (loss) attributable to common stockholders by the weighted-average common shares outstanding during the period. The weighted-average common shares outstanding is adjusted for shares subject to repurchase such as unvested restricted stock granted to employees in connection with acquisitions, contingently returnable shares and escrowed shares supporting indemnification obligations that are issued in connection with acquisitions and unvested stock options exercised. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, during the period, including potential dilutive common stock instruments. In the three months ended March 31, 2017, the Company’s potential common stock instruments such as stock options, restricted stock units (“RSUs”), shares to be purchased under the 2013 Employee Stock Purchase Plan (“ESPP”), shares subject to repurchases, conversion feature of the Notes and the warrants were not included in the computation of diluted net income (loss) per share as the effect of including these shares in the calculation would have been anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per share for periods presented (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Basic net income (loss) per share: Numerator Net income (loss) $ 60,997 $ (61,559 ) Denominator Weighted-average common shares outstanding 750,349 726,463 Weighted-average restricted stock subject to repurchase (2,652 ) (4,415 ) Weighted-average shares used to compute basic net income (loss) per share 747,697 722,048 Basic net income (loss) per share attributable to common stockholders $ 0.08 $ (0.09 ) Dilutive net income (loss) per share: Numerator Net income (loss) $ 60,997 $ (61,559 ) Denominator Number of shares used in basic computation 747,697 722,048 Weighted average effect of dilutive securities: RSUs 13,387 — Stock options 2,754 — Other 2,023 — Weighted-average shares used to compute diluted net income (loss) per share 765,861 722,048 Dilutive net income (loss) per share attributable to common stockholders $ 0.08 $ (0.09 ) The following number of potential common shares at the end of each period were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended March 31, 2018 2017 RSUs 1,765 38,523 Warrants 24,329 24,329 Stock options 1,244 5,866 Shares subject to repurchase and others 310 6,310 Since the Company expects to settle the principal amount of the outstanding Notes in cash, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread of 24.3 million shares will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversion price of $77.64 per share for the Notes. If the average market price of the common stock exceeds the exercise price of the warrants, $105.28, the warrants will have a dilutive effect on the earnings per share assuming that the Company is profitable. Since the average market price of the common stock is below $105.28, the warrants are anti-dilutive. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | Note 11. Stockholders’ Equity Equity Incentive Plans The Company’s 2013 Equity Incentive Plan became effective upon the completion of the Company’s initial public offering and serves as the successor to the 2007 Equity Incentive Plan. Initially, 68.3 million shares were reserved under the 2013 Equity Incentive Plan and any shares subject to options or other similar awards granted under the 2007 Equity Incentive Plan that expire, are forfeited, are repurchased by the Company or otherwise terminate unexercised will become available under the 2013 Equity Incentive Plan. The number of shares of the Company’s common stock available for issuance under the 2013 Equity Incentive Plan were and will be increased on the first day of each fiscal year beginning with the 2014 fiscal year, in an amount equal to the least of (i) 60,000,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year or (iii) such number of shares determined by the Company’s Board of Directors. No additional awards were issued under the 2007 Equity Incentive Plan or the 2016 Equity Incentive Plan during the three months ended March 31, 2018. Employee Stock Purchase Plan The number of shares available for sale under the ESPP were and will be increased on the first day of each fiscal year beginning with the 2014 fiscal year, in an amount equal to the least of (i) 11.3 million shares, (ii) 1% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year or (iii) such other amount as determined by the Company’s Board of Directors. Restricted Common Stock The Company has granted restricted common stock to certain continuing employees in connection with certain of its acquisitions. Vesting of this stock is dependent on the respective employee’s continued employment at the Company during the requisite service period, which is generally up to four years from the issuance date, and the Company has the right to repurchase the unvested shares upon termination of employment. The fair value of the restricted common stock issued to employees is recorded as compensation expense on a straight-line basis over the requisite service period. The Company had 2.5 million and 2.8 million shares of unvested restricted common stock as of March 31, 2018 and December 31, 2017, respectively. The Company’s restricted common stock activity was not material during the three months ended March 31, 2018. Stock Option Activity The Company had 4.4 million and 4.8 million shares of stock options outstanding as of March 31, 2018 and December 31, 2017, respectively. The Company’s stock option activity was not material during the three months ended March 31, 2018. Performance Restricted Stock Units Activity The Company grants restricted stock units to certain of its executive officers periodically that vest based on the Company’s attainment of the annual financial performance goals and the executives’ continued employment through the vesting date, approximately one year (“PRSUs”). These PRSUs are granted when the annual performance targets are set and the awards are approved by the Compensation Committee of the Board of Directors, generally in the first quarter of each financial year. The Company did not grant any PRSUs during the three months ended March 31, 2018. During the year ended December 31, 2017, the Company granted 345,622 PRSUs, at the 100% target level, of which 646,313 vested in 2018. The total fair value of PRSUs vested during the three months ended March 31, 2018 was $20.4 million. The Company also grants restricted stock units to certain of its executive officers that vest based on Twitter stock price performance relative to a broad-market index over a performance period of two calendar years and the executives continued employment through the vesting date (“TSR RSUs”). The Company did not grant any TSR RSUs during the three months ended March 31, 2018. The Company had 146,067 shares of TSR RSUs outstanding as of March 31, 2018 and December 31, 2017. In addition, there are 2,533,867 additional PRSUs and TSR RSUs that will vest based on performance goals and Total Shareholder Return (“TSR”) targets to be granted from 2018 to 2020, if achieved, at target levels. RSU Activity The following table summarizes the activity related to the Company’s RSUs, excluding PRSUs, for the three months ended March 31, 2018. For purposes of this table, vested RSUs represent the shares for which the service condition had been fulfilled as of each respective date (in thousands, except per share data): RSUs Outstanding Weighted- Average Grant- Date Fair Value Shares Per Share Unvested and outstanding at December 31, 2017 33,123 $ 19.80 Granted 1,872 $ 26.61 Vested (4,451 ) $ 21.11 Canceled (1,954 ) $ 21.27 Unvested and outstanding at March 31, 2018 28,590 $ 19.94 The total fair value of RSUs vested during the three months ended March 31, 2018 and 2017 was $116.9 million and $100.9 million, respectively. In April 2018, the Company granted 8.7 million shares of RSUs to its employees as part of the Company’s annual equity refresh plan, with a total fair value of approximately $246.1 million. These RSUs will generally vest over the next five years. Stock-Based Compensation Expense Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. Total stock-based compensation expense by function is as follows (in thousands): Three Months Ended March 31, 2018 2017 Cost of revenue $ 4,799 $ 5,952 Research and development 41,946 64,386 Sales and marketing 14,822 25,089 General and administrative 11,699 21,570 Total stock-based compensation expense $ 73,266 $ 116,997 The Company capitalized $12.4 million and $16.1 million of stock-based compensation expense associated with the cost for developing software for internal use in the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $507.9 million of gross unamortized stock-based compensation expense related to unvested awards which is expected to be recognized over a weighted-average period of 2.4 years. The Company accounts for forfeitures as they occur. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes The Company is subject to taxation in the United States and various state and foreign jurisdictions. Earnings from non-US activities are subject to local country income tax. The material jurisdictions in which the Company is subject to potential examination by taxing authorities include the United States, California and Ireland. The Company is currently under a Federal income tax examination by the Internal Revenue Service (IRS) for tax years 2011 through 2013, and under examination in California for tax years 2013 through 2015. The Company believes that adequate amounts have been reserved in these jurisdictions. The Company does not provide for income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are to be reinvested indefinitely outside the U.S. The Company computes its quarterly income tax provision by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. The Company recorded an income tax provision of $2.9 million and $3.2 million for the three months ended March 31, 2018 and 2017, respectively. The primary difference between the effective tax rate and the federal statutory tax rate relates to the valuation allowances on the Company’s net operating losses and foreign tax rate differences. During the three months ended March 31, 2018, the amount of gross unrecognized tax benefits increased by $13.6 million. As of March 31, 2018, the Company has $273.4 million of unrecognized tax benefits, including $258.2 million of unrecognized tax benefits which, if recognized, will not affect the annual effective tax rate as these unrecognized tax benefits would increase deferred tax assets which would be subject to a full valuation allowance, while the remaining $15.2 million of unrecognized tax benefits, if recognized, would affect the annual effective tax rate. In December 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law and the new legislation contains several key tax provisions that affected the Company, including a reduction of the federal corporate income tax rate to 21% effective January 1, 2018, among others. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as re-measuring its U.S. deferred tax assets and liabilities as well as its valuation allowance against its net U.S. deferred tax assets. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the 2017 Tax Cuts and Jobs Act (SAB 118), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The Company recognized provisional tax impacts related to the revaluation of deferred tax assets and liabilities and corresponding valuation allowances in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from those provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. Any adjustments made to the provisional amounts under SAB 118 should be recorded as discrete adjustments in the period identified (not to extend beyond the one-year measurement provided in SAB 118). During the three months ended March 31, 2018, the Company did not make any adjustments to its provisional amounts included in its consolidated financial statements for the year ended December 31, 2017. Any adjustments are expected to be completed when the 2017 U.S. corporate income tax return is filed in 2018. As of March 31, 2018, the Company was not able to reasonably estimate, and therefore has not recorded, deferred taxes for the Global Intangible Low-taxed Income (or GILTI) provisions. The Company has not yet determined its policy election with respect to whether to record deferred taxes for basis differences expected to reverse as a result of the GILTI provisions in future periods or use the period cost method. The Company has, however, included an estimate of the current GILTI impact in its tax provision for 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Credit Facility The Company has a revolving credit agreement with certain lenders, which provides for a $1.0 billion revolving unsecured credit facility maturing on October 22, 2018. The Company is obligated to pay interest on loans under the credit facility and other customary fees for a credit facility of this size and type, including an upfront fee and an unused commitment fee. Obligations under the credit facility are guaranteed by one of the Company’s wholly-owned subsidiaries. In addition, the credit facility contains restrictions on payments including cash payments of dividends. As of March 31, 2018, no amounts had been drawn under the credit facility. Operating and Capital Leases The Company has entered into various non-cancelable operating lease agreements for certain offices and data center facilities with contractual lease periods expiring through 2028. Under the terms of certain leases, the Company is committed to pay for certain taxes, insurance, maintenance and management expenses. Certain of these arrangements have free rent periods or escalating rent payment provisions, and the Company recognizes rent expense under such arrangements on a straight-line basis. The Company also entered into several sublease agreements for office space that the Company is not fully utilizing. The Company also has lease arrangements for certain server and networking equipment A summary of gross lease commitments and sublease income as of March 31, 2018 is as follows (in thousands): Operating Sublease Capital Leases Income Leases Years Ending December 31, Remainder of 2018 $ 114,463 $ (20,512 ) $ 69,891 2019 145,756 (20,961 ) 70,133 2020 129,988 (11,814 ) 23,845 2021 93,326 (11,043 ) 569 2022 75,483 (960 ) — Thereafter 216,740 — — $ 775,756 $ (65,290 ) 164,438 Less: Amounts representing interest 5,897 Total capital lease obligation 158,541 Less: Short-term portion 86,571 Long-term portion $ 71,970 Rent expense, net of sublease income, under the Company’s operating leases, including co-location arrangements for the Company’s data centers, was $33.3 million and $29.2 million for the three months ended March 31, 2018 and 2017, respectively. Contractual Obligations Our principal commitments consist of obligations under the Notes (including principal and coupon interest), capital and operating leases for equipment, office space and co-located data center facilities, as well as non-cancellable contractual commitments. The following table summarizes our commitments to settle contractual obligations in cash as of March 31, 2018: Payments Due by Fiscal Year Remainder of Total 2018 2019-2020 2021-2022 Thereafter (In thousands) 2019 Notes $ 938,516 $ 1,178 $ 937,338 $ — $ — 2021 Notes 987,455 4,809 19,106 963,540 — Operating lease obligations (1) 775,756 114,463 275,744 168,809 216,740 Capital lease obligations 164,438 69,891 93,978 569 — Other contractual commitments (2) 358,703 70,353 75,325 134,237 78,788 Total contractual obligations $ 3,224,868 $ 260,694 $ 1,401,491 $ 1,267,155 $ 295,528 (1) (2) Legal Proceedings The Company is currently a party to a consolidated shareholder class action lawsuit (captioned Doris Shenwick, et al. v. Twitter, Inc., et al. and Claire Degenhardt, et al. v. Twitter, Inc., et al.) that was filed in September 2016 in the U.S. District Court for the Northern District of California. Plaintiffs allege false and misleading statements in violation of securities laws, naming the Company and two former officers as defendants and seek unspecified damages. The Company filed a motion to dismiss, which was granted in part and denied in part. The Company disputes the claims and intends to continue to defend the lawsuit vigorously. The Company is also currently involved in, and may in the future be involved in, legal proceedings, claims, investigations, and government inquiries arising in the ordinary course of business. These proceedings, which include both individual and class action litigation and administrative proceedings, have included, but are not limited to matters involving content on the platform, intellectual property, privacy, securities, employment and contractual rights. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Litigation accruals are recorded when and if it is determined that a loss related matter is both probable and reasonably estimable. Material loss contingencies that are reasonably possible of occurrence, if any, are subject to disclosure. As of March 31, 2018 and December 31, 2017, there was no litigation or contingency with at least a reasonable possibility of a material loss. No material losses have been recorded during the three months ended March 31, 2018 and 2017 with respect to litigation or loss contingencies. Non-Income Taxes The Company is under audit by various domestic and foreign tax authorities and currently involved in a number of tax disputes related to non-income tax matters. The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the sale of the Company’s products and services in these jurisdictions and the tax treatment of certain employee benefits. The Company accrues non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, it discloses the reasonably possible loss or range of loss. The Company believes these matters are without merit and it is defending itself vigorously. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from the Company’s expectations. Indemnification In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its customers, partners, suppliers and vendors. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties. These provisions may limit the time within which an indemnification claim can be made. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company has never incurred significant expense defending its licensees against third-party claims, nor has it ever incurred significant expense under its standard service warranties or arrangements with its customers, partners, suppliers and vendors. Accordingly, the Company had no liabilities recorded for these provisions as of March 31, 2018 and December 31, 2017. |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Geographical Information | Note 14. Geographical Information Revenue See Note 2 – Revenue for further details. The following table sets forth property and equipment, net by geographic area (in thousands): March 31, December 31, 2018 2017 Property and equipment, net: United States $ 760,268 $ 730,262 International 41,644 43,453 Total property and equipment, net $ 801,912 $ 773,715 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15. Related Party Transactions The Company has a partnership agreement for no consideration with Square, Inc., for which Jack Dorsey (the Company’s Chief Executive Officer) serves as Chief Executive Officer, to enable U.S. political donations through Tweets. Neither Square, Inc. nor the Company will pay each other any amounts in connection with the agreement. The agreement has no impact on the Company’s financial statements. Certain of the Company’s directors have affiliations with customers of the Company. The Company recognized revenue under contractual obligations from such customers of $6.9 million and $5.0 million for the three months ended March 31, 2018 and 2017, respectively. The Company had outstanding receivable balances of $4.2 million from such customers as of March 31, 2018 and December 31, 2017. |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges | Note 16. Restructuring Charges On October 25, 2016, the Board of Directors of the Company approved a reduction in force plan (“2016 Plan”) of up to approximately 9% of the Company’s positions globally. The reduction in force was undertaken to eliminate investment in noncore areas and drive toward greater efficiency, while allowing the Company to continue to invest in its highest priorities. The Company completed the reduction in force in 2017. On December 17, 2016, the Board of Directors of the Company approved a lease abandonment plan (“2016 Lease Plan”) to abandon excess office space with lease terms expiring through 2028. The following table summarizes the activities related to the 2016 Lease Plan restructuring charges, as discussed above (in thousands): 2016 Lease Plan Accrued as of December 31, 2017 $ 31,929 Charges (1) (983 ) Cash payment (6,094 ) Non-cash and other adjustments (5 ) Accrued as of March 31, 2018 $ 24,847 Reflected in consolidated balance sheets as of March 31, 2018: Accrued and other current liabilities $ 21,821 Other long-term liabilities $ 3,026 (1) recorded a reduction to restructuring charges related to its 2016 Lease Plan of $0.4 million within sales and marketing, $0.3 million within research and development, $0.2 million within general and administrative and $0.1 million within cost of revenue in the consolidated statements of operations. |
Description of Business and S23
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results expected for the full fiscal year or any other period. The accompanying interim consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard update on revenue recognition from contracts with customers (Topic 606). The new guidance replaces all current GAAP guidance on this topic and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted this new accounting standard on January 1, 2018 using the modified retrospective method. See Note 2 – Revenue for further details. In January 2016, the FASB issued a new accounting standard update on the classification and measurement of financial instruments. The new guidance principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. The Company adopted this new accounting standard prospectively for its non-marketable equity securities during the three months ended March 31, 2018. The Company has elected to use the measurement alternative for its non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. non-marketable equity securities In August 2016, the FASB issued a new accounting standard update on the statement of cash flows. The new guidance clarifies classification of certain cash receipts and cash payments in the statement of cash flows. The Company adopted this new accounting standard retrospectively during the three months ended March 31, 2018 and the adoption did not have a material impact on the Company’s financial statements. In October 2016, the FASB issued a new accounting standard update on simplifying the accounting for income taxes related to intra-entity asset transfers. The new guidance requires an entity to recognize the tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfers occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The Company adopted this new accounting standard on January 1, 2018 using the modified retrospective method. Upon adoption, the Company recognized a deferred tax asset of $29.5 million related to a prior period intra-entity transfer, which was offset by a full valuation allowance. Therefore, the recognition of the deferred tax asset upon adoption did not have an impact on the Company’s accumulated deficit. In November 2016, the FASB issued a new accounting standard update on the presentation of restricted cash in the statement of cash flows. The new guidance requires an entity to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows, and an entity will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted this new accounting standard retrospectively during the three months ended March 31, 2018. As a result of the adoption, net cash provided by investing activities was adjusted to exclude the changes in restricted cash, resulting in a decrease of $1.6 million in the previously-reported amount for the three months ended March 31, 2017. Restricted cash balances are primarily cash deposits secured against letters of credit related to certain property leases. In January 2017, the FASB issued a new accounting standard update on narrowing the definition of a business. The new guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. The Company adopted this new accounting standard retrospectively during the three months ended March 31, 2018 and the adoption did not have a material impact on the Company’s financial statements. Recently issued accounting pronouncements not yet adopted In February 2018, the FASB issued a new accounting standard update to give entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings (accumulated deficits). The new guidance also requires entities to make additional disclosures, regardless of whether reclassification of tax effects is elected. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting standard update on its financial statements and related disclosures. With the exception of the standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2018, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, that are of significance or potential significance to the Company. |
Revenue Recognition | Revenue Recognition Revenue is recognized when the control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company identifies its contracts with customers and all performance obligations within those contracts. The Company then determines the transaction price and allocates the transaction price to the performance obligations within the Company's contracts with customers, recognizing revenue when, or as, the Company satisfies its performance obligations. While the majority of the Company's revenue transactions are based on standard business terms and conditions, the Company also enters into sales agreements with advertisers and data partners that sometimes involve multiple performance obligations and occasionally include non-standard terms or conditions. Revenue Recognition Accounting Policy The Company generates the substantial majority of its revenue from the sale of advertising services with the balance from data licensing and other arrangements. The Company generates its advertising revenue primarily from the sale of its Promoted Products: (i) Promoted Tweets, (ii) Promoted Accounts and (iii) Promoted Trends. Promoted Tweets and Promoted Accounts are pay-for-performance advertising products or pay on impressions delivered, each priced through an auction. Promoted Trends are featured by geography and offered on a fixed-fee-per-day basis. Advertisers are obligated to pay when a user engages with a Promoted Tweet, follows a Promoted Account, when an impression is delivered, or when a Promoted Trend is displayed. These advertising services may be sold in combination as a bundled arrangement or separately on a stand-alone basis. For the Company's Promoted Product arrangements, significant judgments are (i) determining whether the Company is the principal or the agent in arrangements where another party is involved in providing specified services to a customer, (ii) identifying the performance obligations in the contract, (iii) determining the basis for allocating contract consideration to performance obligations, and (iv) estimating the transaction price to be allocated for contracts with tiered rebate provisions. The Company may generate revenue from the sale of certain Promoted Tweets through placement by Twitter of advertiser ads against third-party publisher content. The Company will pay the third-party publisher a revenue share fee for its right to monetize their content. In such transactions, advertisers are contracting to obtain a single integrated advertising service, the Promoted Tweet combined with the third-party publisher content, and the Company obtains control of the third-party publisher content displayed on Twitter that it then combines with the advertiser ads within the Promoted Tweet. Therefore, the Company reports advertising revenue generated from these transactions on a gross basis and records the related third-party content monetization fees as cost of revenue. The Company also generates advertising revenue by selling services in which the Company places ads on third-party publishers’ websites, applications or other offerings. To fulfill these transactions, the Company purchases advertising inventory from third-party publishers’ websites and applications where the Company has identified the advertisers’ targeted audience and therefore incurs traffic acquisition costs prior to transferring the advertising service to its customers. At such point, the Company has the sole ability to monetize the third-party publishers advertising inventory. In such transactions, the Company obtains control of a right to a service to be performed by the third-party publishers, which gives the Company the ability to direct those publishers to provide the services to the Company's customers on the Company's behalf. Therefore, the Company reports advertising revenue generated from these transactions on a gross basis and records the related traffic acquisition costs as cost of revenue. Fees for the advertising services above are recognized in the period when advertising is delivered as evidenced by a user engaging with a Promoted Tweet or an ad on a third-party publisher website or application in a manner satisfying the types of engagement selected by the advertisers, such as Tweet engagements (e.g., retweets, replies and likes), website clicks, mobile application installs or engagements, obtaining new followers, or video views, following a Promoted Account, delivery of impressions, or through the display of a Promoted Trend on the Company's platform. The Company has concluded that data licensing arrangements, which grant customers a right to access Twitter intellectual property for a defined period of time, may contain a single performance obligation or may contain multiple performance obligations satisfied over the same period of time. In some of the Company's data licensing arrangements, pricing is a fixed monthly fee over a specified term. In such arrangements, data licensing revenue is recognized on a straight-line basis over the period in which the Company provides data access. In other data licensing arrangements, the Company charges customers based on the amount of sales they generate from downstream customers using Twitter data. Certain of those royalty-based data licensing arrangements are subject to minimum guarantees. The Company recognizes revenue for minimum guarantees on a straight-line basis over the period in which the Company provides data access. Royalties in excess of minimum guarantees, if any, are recognized as revenue in the period that the related downstream sales occur. Other revenue is primarily generated from service fees from transactions completed on the Company's mobile ad exchange. The Company's mobile ad exchange enables buyers and sellers to purchase and sell advertising inventory by matching them in the exchange. The Company has determined it is not the principal in the purchase and sale of advertising inventory in transactions between third-party buyers and sellers on the exchange because the Company does not obtain control of the advertising inventory. The Company reports revenue related to its ad exchange services on a net basis for the fees paid by buyers net of costs related to acquiring the advertising inventory paid to sellers. Arrangements involving multiple performance obligations primarily consist of combinations of the Company's pay-for-performance products, Promoted Tweets and Promoted Accounts, which are priced through an auction, and Promoted Trends, which are priced on a fixed-fee-per day, per geography basis. For arrangements that include a combination of these products, the Company develops an estimate of the standalone selling price for these products in order to allocate any potential discount to all performance obligations in the arrangement. The estimate of standalone selling price for pay-for-performance auction based products is determined based on the winning bid price. The estimate of standalone selling price for Promoted Trends is based on Promoted Trends sold on a standalone basis and/or separately priced in a bundled arrangement by reference to a list price by geography, which is updated and approved periodically. For other arrangements involving multiple performance obligations where neither auction pricing nor standalone sales provide sufficient evidence of standalone selling price, the Company estimates standalone selling price using either an adjusted market assessment approach or an expected cost plus margin approach. The Company believes the use of its estimation approach and allocation of the transaction price on a relative standalone selling price basis to each performance obligation results in revenue recognition in a manner consistent with the underlying economics of the transaction and the allocation principle included in Topic 606. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue by Services and Revenue by Geographic Area | Revenue by geography is based on the billing addresses of the customers. The following table sets forth revenue by services and revenue by geographic area (in thousands): Three Months Ended March 31, 2018 2017 (1) Revenue by services: Advertising services $ 575,156 $ 473,780 Data licensing and other 89,715 74,471 Total revenue $ 664,871 $ 548,251 Three Months Ended March 31, 2018 2017 (1) Revenue by geographic area: United States $ 346,570 $ 340,584 Japan 116,826 72,593 Rest of World 201,475 135,074 Total revenue $ 664,871 $ 548,251 (1) |
Summary of Contract Balances | The following table presents contract balances (in thousands): January 1, March 31, 2018 2018 Unbilled Revenue $ 7,980 $ 12,117 Deferred Revenue $ 25,869 $ 29,073 |
Summary of Revenue Expected to Recognize on Remaining Performance Obligations Over the Time Periods | The Company expects to recognize this amount as revenue over the following time periods (in thousands): Remaining Performance Obligations Total 2018 2019 2020 and Thereafter Revenue expected to be recognized on remaining performance obligations $ 263,303 $ 99,128 $ 95,493 $ 68,682 |
Cash, Cash Equivalents and Sh25
Cash, Cash Equivalents and Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash and Equivalents and Short-term Investments | Cash, cash equivalents and short-term investments consist of the following (in thousands): March 31, December 31, 2018 2017 Cash and cash equivalents: Cash $ 315,430 $ 301,684 Money market funds 739,915 981,681 U.S. government and agency securities including treasury bills 60,412 — Corporate notes, commercial paper and certificates of deposit 485,271 355,048 Total cash and cash equivalents $ 1,601,028 $ 1,638,413 Short-term investments: U.S. government and agency securities including treasury bills $ 1,113,914 $ 1,064,957 Corporate notes, commercial paper and certificates of deposit 1,813,889 1,699,732 Total short-term investments $ 2,927,803 $ 2,764,689 |
Contractual Maturities of Securities Classified as Available-for-Sale | The contractual maturities of securities classified as available-for-sale as of March 31, 2018 were as follows (in thousands): March 31, 2018 Due within one year $ 2,418,600 Due after one year through two years 509,203 Total $ 2,927,803 |
Summary of Unrealized Gains and Losses Related to Available-for-Sale Securities Classified as Short-term Investments | The following tables summarize unrealized gains and losses related to available-for-sale securities classified as short-term investments on the Company’s consolidated balance sheets (in thousands): March 31, 2018 Gross Gross Gross Aggregated Amortized Unrealized Unrealized Estimated Costs Gains Losses Fair Value U.S. government and agency securities including treasury bills $ 1,115,729 $ 130 $ (1,945 ) $ 1,113,914 Corporate notes, commercial paper and certificates of deposit 1,817,429 44 (3,584 ) 1,813,889 Total available-for-sale securities classified as short-term investments $ 2,933,158 $ 174 $ (5,529 ) $ 2,927,803 December 31, 2017 Gross Gross Gross Aggregated Amortized Unrealized Unrealized Estimated Costs Gains Losses Fair Value U.S. government and agency securities including treasury bills $ 1,067,047 $ 133 $ (2,223 ) $ 1,064,957 Corporate notes, commercial paper and certificates of deposit 1,701,168 72 (1,508 ) 1,699,732 Total available-for-sale securities classified as short-term investments $ 2,768,215 $ 205 $ (3,731 ) $ 2,764,689 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 based on the three-tier fair value hierarchy (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 739,915 $ — $ — $ 739,915 Treasury bills 60,412 — — 60,412 Commercial paper — 479,273 — 479,273 Certificates of deposit — 5,998 — 5,998 Short-term investments: Treasury bills — 24,980 — 24,980 U.S. government securities — 708,401 — 708,401 Agency securities — 380,533 — 380,533 Corporate notes — 815,728 — 815,728 Commercial paper — 255,968 — 255,968 Certificates of deposit — 742,193 — 742,193 Other current assets: Foreign currency contracts — 1,600 — 1,600 Total $ 800,327 $ 3,414,674 $ — $ 4,215,001 Liabilities Other current liabilities: Foreign currency contracts — 744 — 744 Total $ — $ 744 $ — $ 744 December 31, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 981,681 $ — $ — $ 981,681 Commercial paper — 346,968 — 346,968 Certificates of deposit — 8,080 — 8,080 Short-term investments: U.S. government securities — 669,552 — 669,552 Agency securities — 395,405 — 395,405 Corporate notes — 745,915 — 745,915 Commercial paper — 299,675 — 299,675 Certificates of deposit — 654,142 — 654,142 Other current assets: Foreign currency contracts — 2,237 — 2,237 Total $ 981,681 $ 3,121,974 $ — $ 4,103,655 Liabilities Other current liabilities: Foreign currency contracts — 601 — 601 Total $ — $ 601 $ — $ 601 |
Schedule of Fair Values of Outstanding Derivative Instruments | The fair values of outstanding derivative instruments for the periods presented on a gross basis are as follows (in thousands): March 31, December 31, Balance Sheet Location 2018 2017 Assets Foreign currency contracts not designated as hedging instruments Other current assets $ 1,600 $ 2,237 Liabilities Foreign currency contracts not designated as hedging instruments Other current liabilities $ 744 $ 601 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The following table presents the detail of property and equipment, net for the periods presented (in thousands): March 31, December 31, 2018 2017 Property and equipment, net Equipment $ 1,152,795 $ 1,091,672 Furniture and leasehold improvements 319,047 314,852 Capitalized software 495,982 472,147 Construction in progress 59,525 49,417 Total 2,027,349 1,928,088 Less: Accumulated depreciation and amortization (1,225,437 ) (1,154,373 ) Property and equipment, net $ 801,912 $ 773,715 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Activities | The following table presents the goodwill activities for the periods presented (in thousands): Goodwill Balance as of December 31, 2017 $ 1,188,935 Foreign currency translation adjustment and other 1,997 Balance as of March 31, 2018 $ 1,190,932 |
Schedule of Intangible Assets | The following table presents the detail of intangible assets for the periods presented (in thousands): Gross Carrying Accumulated Net Carrying Value Amortization Value March 31, 2018: Patents and developed technologies $ 93,953 $ (51,174 ) $ 42,779 Publisher and advertiser relationships 9,300 (7,285 ) 2,015 Total $ 103,253 $ (58,459 ) $ 44,794 December 31, 2017: Patents and developed technologies $ 93,511 $ (46,337 ) $ 47,174 Publisher and advertiser relationships 9,300 (6,820 ) 2,480 Total $ 102,811 $ (53,157 ) $ 49,654 |
Schedule of Estimated Future Amortization Expenses | Estimated future amortization expense as of March 31, 2018 is as follows (in thousands): Remainder of 2018 $ 11,210 2019 8,537 2020 6,263 2021 5,867 2022 4,290 Thereafter 8,627 Total $ 44,794 |
Accrued and Other Current Lia29
Accrued and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables And Accruals [Abstract] | |
Accrued and Other Current Liabilities | The following table presents the detail of accrued and other current liabilities for the periods presented (in thousands): March 31, December 31, 2018 2017 Accrued compensation $ 92,642 $ 98,553 Accrued tax liabilities 29,988 36,097 Accrued publisher, content and ad network costs 29,432 32,462 Accrued restructuring 21,821 28,761 Deferred revenue 29,073 27,824 Accrued other 101,159 103,636 Total $ 304,115 $ 327,333 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Components of Notes | The Notes consisted of the following (in thousands): March 31, 2018 December 31, 2017 2019 Notes 2021 Notes 2019 Notes 2021 Notes Principal amounts: Principal $ 935,000 $ 954,000 $ 935,000 $ 954,000 Unamortized initial purchasers' discount and debt discount (1) (76,112 ) (162,824 ) (88,359 ) (173,181 ) Net carrying amount $ 858,888 $ 791,176 $ 846,641 $ 780,819 Carrying amount of the equity component (2) $ 222,826 $ 283,283 $ 222,826 $ 283,283 (1) (2) |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income (Loss) Per Share | The following table presents the calculation of basic and diluted net income (loss) per share for periods presented (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Basic net income (loss) per share: Numerator Net income (loss) $ 60,997 $ (61,559 ) Denominator Weighted-average common shares outstanding 750,349 726,463 Weighted-average restricted stock subject to repurchase (2,652 ) (4,415 ) Weighted-average shares used to compute basic net income (loss) per share 747,697 722,048 Basic net income (loss) per share attributable to common stockholders $ 0.08 $ (0.09 ) Dilutive net income (loss) per share: Numerator Net income (loss) $ 60,997 $ (61,559 ) Denominator Number of shares used in basic computation 747,697 722,048 Weighted average effect of dilutive securities: RSUs 13,387 — Stock options 2,754 — Other 2,023 — Weighted-average shares used to compute diluted net income (loss) per share 765,861 722,048 Dilutive net income (loss) per share attributable to common stockholders $ 0.08 $ (0.09 ) |
Summary of Potential Common Shares Excluded from Calculation of Diluted Net Income (Loss) Per Share Attributable to Common Stockholders | The following number of potential common shares at the end of each period were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended March 31, 2018 2017 RSUs 1,765 38,523 Warrants 24,329 24,329 Stock options 1,244 5,866 Shares subject to repurchase and others 310 6,310 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Summary of RSU Activity Excluding PRSU | The following table summarizes the activity related to the Company’s RSUs, excluding PRSUs, for the three months ended March 31, 2018. For purposes of this table, vested RSUs represent the shares for which the service condition had been fulfilled as of each respective date (in thousands, except per share data): RSUs Outstanding Weighted- Average Grant- Date Fair Value Shares Per Share Unvested and outstanding at December 31, 2017 33,123 $ 19.80 Granted 1,872 $ 26.61 Vested (4,451 ) $ 21.11 Canceled (1,954 ) $ 21.27 Unvested and outstanding at March 31, 2018 28,590 $ 19.94 |
Compensation Expense Allocated | Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. Total stock-based compensation expense by function is as follows (in thousands): Three Months Ended March 31, 2018 2017 Cost of revenue $ 4,799 $ 5,952 Research and development 41,946 64,386 Sales and marketing 14,822 25,089 General and administrative 11,699 21,570 Total stock-based compensation expense $ 73,266 $ 116,997 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Minimum Commitments and Sublease Income Under Non-Cancelable Capital and Operating Lease Agreements | A summary of gross lease commitments and sublease income as of March 31, 2018 is as follows (in thousands): Operating Sublease Capital Leases Income Leases Years Ending December 31, Remainder of 2018 $ 114,463 $ (20,512 ) $ 69,891 2019 145,756 (20,961 ) 70,133 2020 129,988 (11,814 ) 23,845 2021 93,326 (11,043 ) 569 2022 75,483 (960 ) — Thereafter 216,740 — — $ 775,756 $ (65,290 ) 164,438 Less: Amounts representing interest 5,897 Total capital lease obligation 158,541 Less: Short-term portion 86,571 Long-term portion $ 71,970 |
Summary of Commitments to Settle Contractual Obligations in Cash | The following table summarizes our commitments to settle contractual obligations in cash as of March 31, 2018: Payments Due by Fiscal Year Remainder of Total 2018 2019-2020 2021-2022 Thereafter (In thousands) 2019 Notes $ 938,516 $ 1,178 $ 937,338 $ — $ — 2021 Notes 987,455 4,809 19,106 963,540 — Operating lease obligations (1) 775,756 114,463 275,744 168,809 216,740 Capital lease obligations 164,438 69,891 93,978 569 — Other contractual commitments (2) 358,703 70,353 75,325 134,237 78,788 Total contractual obligations $ 3,224,868 $ 260,694 $ 1,401,491 $ 1,267,155 $ 295,528 (1) (2) |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Property and Equipment Net by Geographic Area | The following table sets forth property and equipment, net by geographic area (in thousands): March 31, December 31, 2018 2017 Property and equipment, net: United States $ 760,268 $ 730,262 International 41,644 43,453 Total property and equipment, net $ 801,912 $ 773,715 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Summary of Activities Related to Restructuring Charges | The following table summarizes the activities related to the 2016 Lease Plan restructuring charges, as discussed above (in thousands): 2016 Lease Plan Accrued as of December 31, 2017 $ 31,929 Charges (1) (983 ) Cash payment (6,094 ) Non-cash and other adjustments (5 ) Accrued as of March 31, 2018 $ 24,847 Reflected in consolidated balance sheets as of March 31, 2018: Accrued and other current liabilities $ 21,821 Other long-term liabilities $ 3,026 (1) recorded a reduction to restructuring charges related to its 2016 Lease Plan of $0.4 million within sales and marketing, $0.3 million within research and development, $0.2 million within general and administrative and $0.1 million within cost of revenue in the consolidated statements of operations. |
Description of Business and S36
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) - Accounting Standards Update 2016-18 - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Recognized deferred tax asset related to prior period intra-entity transfer offset by valuation allowance | $ 29.5 | |
Increase (Decrease) in net cash provided by investing activities due to adoption of new accounting standard update on presentation of restricted cash in statement of cash flows | $ (1.6) |
Revenue - Revenue by Services a
Revenue - Revenue by Services and Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Revenue: | |||
Revenue | $ 664,871 | $ 548,251 | |
United States | |||
Revenue: | |||
Revenue | 346,570 | 340,584 | |
Japan | |||
Revenue: | |||
Revenue | 116,826 | 72,593 | |
Rest of World | |||
Revenue: | |||
Revenue | 201,475 | 135,074 | |
Advertising Services | |||
Revenue: | |||
Revenue | 575,156 | 473,780 | |
Data Licensing And Other | |||
Revenue: | |||
Revenue | $ 89,715 | $ 74,471 | |
[1] | Prior period amounts have not been adjusted due to adoption of the new revenue standard under the modified retrospective method. |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | [1] |
Revenue From Contracts With Customers [Line Items] | ||||
Increase in revenue | $ 664,871 | $ 548,251 | ||
Deferred revenue, revenue recognized | 11,400 | |||
Aggregate amount of transaction price allocated to remaining performance obligations | 263,303 | |||
Adoption of ASC Topic 606 | ||||
Revenue From Contracts With Customers [Line Items] | ||||
Net reduction in accumulated deficit | $ 12,100 | |||
Increase in unbilled revenue | 8,000 | 4,000 | ||
Increase (decrease) in deferred revenue | $ (4,100) | (1,900) | ||
Increase in revenue | $ 5,900 | |||
[1] | Prior period amounts have not been adjusted due to adoption of the new revenue standard under the modified retrospective method. |
Revenue - Summary of Contract B
Revenue - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 |
Revenues [Abstract] | ||
Unbilled Revenue | $ 12,117 | $ 7,980 |
Deferred Revenue | $ 29,073 | $ 25,869 |
Revenue - Summary of Revenue Ex
Revenue - Summary of Revenue Expected to Recognize on Remaining Performance Obligations Over the Time Periods (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Revenue Performance Obligation [Abstract] | |
Remaining Performance Obligations, Total | $ 263,303 |
Remaining Performance Obligations, 2018 | 99,128 |
Remaining Performance Obligations, 2019 | 95,493 |
Remaining Performance Obligations, 2020 and Thereafter | $ 68,682 |
Cash, Cash Equivalents and Sh41
Cash, Cash Equivalents and Short-term Investments - Cash, Cash and Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Cash and cash equivalents: | |||
Cash | $ 315,430 | $ 301,684 | |
Cash and cash equivalents | 1,601,028 | 1,638,413 | $ 1,191,566 |
Short-term investments: | |||
Short-term investments | 2,927,803 | 2,764,689 | |
Money Market Funds | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | 739,915 | 981,681 | |
U.S. Government and Agency Securities Including Treasury Bills | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | 60,412 | ||
Short-term investments: | |||
Short-term investments | 1,113,914 | 1,064,957 | |
Corporate Notes, Commercial Paper and Certificates of Deposit | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | 485,271 | 355,048 | |
Short-term investments: | |||
Short-term investments | $ 1,813,889 | $ 1,699,732 |
Cash, Cash Equivalents and Sh42
Cash, Cash Equivalents and Short-term Investments - Contractual Maturities of Securities Classified as Available-for-Sale (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cash And Cash Equivalents And Marketable Securities [Abstract] | ||
Due within one year | $ 2,418,600 | |
Due after one year through two years | 509,203 | |
Total | $ 2,927,803 | $ 2,764,689 |
Cash, Cash Equivalents and Sh43
Cash, Cash Equivalents and Short-term Investments - Summary of Unrealized Gains and Losses Related to Available-for-Sale Securities Classified as Short-term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule Of Available For Sale Securities [Line Items] | ||
Gross Amortized Costs | $ 2,933,158 | $ 2,768,215 |
Gross Unrealized Gains | 174 | 205 |
Gross Unrealized Losses | (5,529) | (3,731) |
Aggregated Estimated Fair Value | 2,927,803 | 2,764,689 |
U.S. Government and Agency Securities Including Treasury Bills | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Gross Amortized Costs | 1,115,729 | 1,067,047 |
Gross Unrealized Gains | 130 | 133 |
Gross Unrealized Losses | (1,945) | (2,223) |
Aggregated Estimated Fair Value | 1,113,914 | 1,064,957 |
Corporate Notes, Commercial Paper and Certificates of Deposit | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Gross Amortized Costs | 1,817,429 | 1,701,168 |
Gross Unrealized Gains | 44 | 72 |
Gross Unrealized Losses | (3,584) | (1,508) |
Aggregated Estimated Fair Value | $ 1,813,889 | $ 1,699,732 |
Cash, Cash Equivalents and Sh44
Cash, Cash Equivalents and Short-term Investments - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investments Debt And Equity Securities [Abstract] | ||
Impairment loss on securities | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | $ 2,927,803 | $ 2,764,689 |
Other current assets | 1,600 | 2,237 |
Other current liabilities | 744 | 601 |
Fair Value, Measurements, Recurring | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Total | 4,215,001 | 4,103,655 |
Total | 744 | 601 |
Fair Value, Measurements, Recurring | Agency Securities | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 380,533 | 395,405 |
Fair Value, Measurements, Recurring | Money Market Funds | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 739,915 | 981,681 |
Fair Value, Measurements, Recurring | Treasury Bills | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 60,412 | |
Short-term investments | 24,980 | |
Fair Value, Measurements, Recurring | Corporate Notes | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 815,728 | 745,915 |
Fair Value, Measurements, Recurring | Commercial Paper | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 479,273 | 346,968 |
Short-term investments | 255,968 | 299,675 |
Fair Value, Measurements, Recurring | Certificates of Deposit | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 5,998 | 8,080 |
Short-term investments | 742,193 | 654,142 |
Fair Value, Measurements, Recurring | US Government Securities | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 708,401 | 669,552 |
Fair Value, Measurements, Recurring | Foreign currency contracts | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Other current assets | 1,600 | 2,237 |
Other current liabilities | 744 | 601 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Total | 800,327 | 981,681 |
Level 1 | Fair Value, Measurements, Recurring | Money Market Funds | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 739,915 | 981,681 |
Level 1 | Fair Value, Measurements, Recurring | Treasury Bills | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 60,412 | |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Total | 3,414,674 | 3,121,974 |
Total | 744 | 601 |
Level 2 | Fair Value, Measurements, Recurring | Agency Securities | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 380,533 | 395,405 |
Level 2 | Fair Value, Measurements, Recurring | Treasury Bills | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 24,980 | |
Level 2 | Fair Value, Measurements, Recurring | Corporate Notes | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 815,728 | 745,915 |
Level 2 | Fair Value, Measurements, Recurring | Commercial Paper | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 479,273 | 346,968 |
Short-term investments | 255,968 | 299,675 |
Level 2 | Fair Value, Measurements, Recurring | Certificates of Deposit | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Cash equivalents | 5,998 | 8,080 |
Short-term investments | 742,193 | 654,142 |
Level 2 | Fair Value, Measurements, Recurring | US Government Securities | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Short-term investments | 708,401 | 669,552 |
Level 2 | Fair Value, Measurements, Recurring | Foreign currency contracts | ||
Fair Value, Net Asset (Liability) [Abstract] | ||
Other current assets | 1,600 | 2,237 |
Other current liabilities | $ 744 | $ 601 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2014 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Notional principal of foreign currency contracts outstanding | $ 388,000 | $ 326,100 | ||
Net gain (losses) on foreign currency contracts | (2,800) | $ (3,200) | ||
Convertible Notes | Senior Notes Due 2019 | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Debt instrument, principal amount | $ 935,000 | 935,000 | $ 935,000 | |
Debt Instrument, percentage | 0.25% | 0.25% | ||
Debt Instrument, due date | 2,019 | |||
Convertible Notes | Senior Notes Due 2021 | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Debt instrument, principal amount | $ 954,000 | $ 954,000 | $ 954,000 | |
Debt Instrument, percentage | 1.00% | 1.00% | ||
Debt Instrument, due date | 2,021 | |||
Convertible Notes | Level 2 | Senior Notes Due 2019 | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Estimated fair value of notes based on a market approach | $ 895,400 | |||
Convertible Notes | Level 2 | Senior Notes Due 2021 | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Estimated fair value of notes based on a market approach | $ 893,200 |
Fair Value Measurements - Sch47
Fair Value Measurements - Schedule of Fair Values of Outstanding Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Foreign currency contracts not designated as hedging instruments | $ 1,600 | $ 2,237 |
Liabilities | ||
Foreign currency contracts not designated as hedging instruments | $ 744 | $ 601 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property and equipment, net | ||
Property and equipment, gross | $ 2,027,349 | $ 1,928,088 |
Less: Accumulated depreciation and amortization | (1,225,437) | (1,154,373) |
Property and equipment, net | 801,912 | 773,715 |
Equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 1,152,795 | 1,091,672 |
Furniture and Leasehold Improvements | ||
Property and equipment, net | ||
Property and equipment, gross | 319,047 | 314,852 |
Capitalized Software | ||
Property and equipment, net | ||
Property and equipment, gross | 495,982 | 472,147 |
Construction in Progress | ||
Property and equipment, net | ||
Property and equipment, gross | $ 59,525 | $ 49,417 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Schedule of Goodwill Activities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill | |
Beginning balance | $ 1,188,935 |
Foreign currency translation adjustment and other | 1,997 |
Ending balance | $ 1,190,932 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Impairment charges on goodwill | $ 0 | $ 0 |
Amortization of intangible assets | $ 4,900,000 | $ 16,200,000 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 103,253 | $ 102,811 |
Accumulated Amortization | (58,459) | (53,157) |
Net Carrying Value | 44,794 | 49,654 |
Patents and Developed Technologies | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 93,953 | 93,511 |
Accumulated Amortization | (51,174) | (46,337) |
Net Carrying Value | 42,779 | 47,174 |
Publisher and Advertiser Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 9,300 | 9,300 |
Accumulated Amortization | (7,285) | (6,820) |
Net Carrying Value | $ 2,015 | $ 2,480 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of 2018 | $ 11,210 | |
2,019 | 8,537 | |
2,020 | 6,263 | |
2,021 | 5,867 | |
2,022 | 4,290 | |
Thereafter | 8,627 | |
Net Carrying Value | $ 44,794 | $ 49,654 |
Accrued and Other Current Lia53
Accrued and Other Current Liabilities - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Accrued compensation | $ 92,642 | $ 98,553 |
Accrued tax liabilities | 29,988 | 36,097 |
Accrued publisher, content and ad network costs | 29,432 | 32,462 |
Accrued restructuring | 21,821 | 28,761 |
Deferred revenue | 29,073 | 27,824 |
Accrued other | 101,159 | 103,636 |
Total | $ 304,115 | $ 327,333 |
Investments in Privately-Held54
Investments in Privately-Held Companies - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Schedule Of Investments [Abstract] | |||
Carrying value of investments | $ 27,600,000 | $ 27,600,000 | |
Other than temporary impairment charges | $ 0 | $ 0 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) - Convertible Notes - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2014 | Dec. 31, 2017 | ||
Debt Instrument [Line Items] | |||||
Initial purchasers' discount and debt discount | $ 28,300 | ||||
Debt issuance costs | 500 | ||||
Proceeds from offerings, net of transaction costs | 1,860,000 | ||||
Debt Instrument, frequency of periodic payment | semi-annually | ||||
Debt Instrument, date of first required payment | Mar. 15, 2015 | ||||
Debt Instrument Payment Terms | The interest rates are fixed at 0.25% and 1.00% per annum for the 2019 Notes and the 2021 Notes, respectively, and are payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2015. | ||||
Amortization of initial purchasers' discount and debt discount, prior to capitalization of interest | $ 22,600 | $ 21,400 | |||
Coupon interest expense | 2,900 | $ 2,900 | |||
Senior Notes Due 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, principal amount | 935,000 | $ 935,000 | $ 935,000 | ||
Initial purchasers' discount and debt discount | [1] | $ 76,112 | 88,359 | ||
Debt instrument, interest rate percentage | 0.25% | 0.25% | |||
Remaining period for convertible debt | 17 months | ||||
Senior Notes Due 2021 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, principal amount | $ 954,000 | $ 954,000 | 954,000 | ||
Initial purchasers' discount and debt discount | [1] | $ 162,824 | $ 173,181 | ||
Debt instrument, interest rate percentage | 1.00% | 1.00% | |||
Remaining period for convertible debt | 41 months | ||||
[1] | Included in the consolidated balance sheets within convertible notes and amortized over the remaining lives of the Notes. |
Convertible Notes - Components
Convertible Notes - Components of Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2014 | |
Principal amounts: | ||||
Net carrying amount | $ 1,650,064 | $ 1,627,460 | ||
Convertible Notes | ||||
Principal amounts: | ||||
Unamortized initial purchasers' discount and debt discount | $ (28,300) | |||
Convertible Notes | Senior Notes Due 2019 | ||||
Principal amounts: | ||||
Debt instrument, principal amount | 935,000 | 935,000 | 935,000 | |
Unamortized initial purchasers' discount and debt discount | [1] | (76,112) | (88,359) | |
Net carrying amount | 858,888 | 846,641 | ||
Carrying amount of the equity component | [2] | 222,826 | 222,826 | |
Convertible Notes | Senior Notes Due 2021 | ||||
Principal amounts: | ||||
Debt instrument, principal amount | 954,000 | 954,000 | $ 954,000 | |
Unamortized initial purchasers' discount and debt discount | [1] | (162,824) | (173,181) | |
Net carrying amount | 791,176 | 780,819 | ||
Carrying amount of the equity component | [2] | $ 283,283 | $ 283,283 | |
[1] | Included in the consolidated balance sheets within convertible notes and amortized over the remaining lives of the Notes. | |||
[2] | Included in the consolidated balance sheets within additional paid-in capital. |
Net Income (Loss) Per Share - B
Net Income (Loss) Per Share - Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator | ||
Net income (loss) | $ 60,997 | $ (61,559) |
Denominator | ||
Weighted-average common shares outstanding | 750,349 | 726,463 |
Weighted-average restricted stock subject to repurchase | (2,652) | (4,415) |
Weighted-average shares used to compute basic net income (loss) per share | 747,697 | 722,048 |
Basic | $ 0.08 | $ (0.09) |
Numerator | ||
Net income (loss) | $ 60,997 | $ (61,559) |
Denominator | ||
Basic | 747,697 | 722,048 |
Weighted average effect of dilutive securities: | ||
RSUs | 13,387 | |
Stock options | 2,754 | |
Other | 2,023 | |
Weighted-average shares used to compute diluted net income (loss) per share | 765,861 | 722,048 |
Diluted | $ 0.08 | $ (0.09) |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Potential Common Shares Excluded from Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
RSUs | ||
Earnings Per Share Basic [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | 1,765 | 38,523 |
Warrants | ||
Earnings Per Share Basic [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | 24,329 | 24,329 |
Stock Options | ||
Earnings Per Share Basic [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | 1,244 | 5,866 |
Restricted Common Stock and Others | ||
Earnings Per Share Basic [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | 310 | 6,310 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Earnings Per Share [Abstract] | |
Conversion Price | $ 77.64 |
Conversion spread will have a dilutive impact on diluted net income per share of common stock | shares | 24,300,000 |
Exercise price of the warrants | $ 105.28 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Gross unamortized stock-based compensation expense related to unvested awards | $ 507.9 | |||
Unrecognized share-based compensation expense, weighted average recognition period | 2 years 4 months 24 days | |||
Internal Use Software and Website Development Costs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation, capitalized amount | $ 12.4 | $ 16.1 | ||
Stock Option Activity | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares of stock options outstanding | 4,400,000 | 4,800,000 | ||
Restricted Common Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of unvested restricted common shares | 2,500,000 | 2,800,000 | ||
PRSUs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of Shares, granted | 0 | 345,622,000 | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | |||
Shares granted at target level | 100.00% | |||
Number of Shares, vested | 646,313 | |||
Fair value of stock units vested | $ 20.4 | |||
PRSUs and TSR RSUs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Additional number of shares, that will vest based on performance goals and total shareholder return targets | 2,533,867 | |||
TSR RSUs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of Shares, granted | 0 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 2 years | |||
Number of shares outstanding | 146,067,000 | 146,067,000 | ||
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of unvested restricted common shares | 28,590,000 | 33,123,000 | ||
Number of Shares, granted | 1,872,000 | |||
Number of Shares, vested | 4,451,000 | |||
Fair value of stock units vested | $ 116.9 | $ 100.9 | ||
Restricted Stock Units | Subsequent Event | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of Shares, granted | 8,700,000 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 5 years | |||
Share based compensation arrangement by share based payment award equity instruments other than options grants in period grant date fair value | $ 246.1 | |||
Maximum | Restricted Common Stock | All Acquisitions | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Equity compensation service period | 4 years | |||
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares available for issuance | 11,300,000 | |||
Outstanding shares of common stock percentage | 1.00% | |||
2013 Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares initially reserved | 68,300,000 | |||
Number of shares available for issuance | 60,000,000 | |||
Outstanding shares of common stock percentage | 5.00% | |||
2007 Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Awards issued during the period | 0 | |||
2016 Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Awards issued during the period | 0 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of RSU Activity Excluding PRSU (Details) - RSUs shares in Thousands | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Unvested Shares, beginning of period | shares | 33,123 |
Number of Shares, granted | shares | 1,872 |
Number of Shares, vested | shares | (4,451) |
Number of Shares, Canceled | shares | (1,954) |
Number of Unvested Shares, end of period | shares | 28,590 |
Weighted Average Grant Date Fair Value Per Share, beginning of period | $ / shares | $ 19.80 |
Weighted Average Grant Date Fair Value Per Share, Granted | $ / shares | 26.61 |
Weighted Average Grant Date Fair Value Per Share, Vested | $ / shares | 21.11 |
Weighted Average Grant Date Fair Value Per Share, Canceled | $ / shares | 21.27 |
Weighted Average Grant Date Fair Value Per Share, end of period | $ / shares | $ 19.94 |
Stockholders' Equity - Compensa
Stockholders' Equity - Compensation Expense Allocated (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 73,266 | $ 116,997 |
Cost of Revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 4,799 | 5,952 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 41,946 | 64,386 |
Sales and Marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 14,822 | 25,089 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 11,699 | $ 21,570 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 2,885 | $ 3,194 |
Unrecognized tax benefits, period change | 13,600 | |
Unrecognized tax benefits | 273,400 | |
Unrecognized tax benefits, if recognized would not affect the annual effective tax rate | 258,200 | |
Unrecognized tax benefits, if recognized would affect the annual effective tax rate | $ 15,200 | |
Federal corporate income tax rate | 21.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Commitments [Line Items] | ||
Expiration year of operating lease, last | 2,028 | |
Operating leases, rent expense, net of sublease income | $ 33,300,000 | $ 29,200,000 |
Revolving Credit Facility | ||
Other Commitments [Line Items] | ||
Unsecured revolving credit facility | $ 1,000,000,000 | |
Line of credit facility, expiration date | Oct. 22, 2018 | |
Line of credit facility amount | $ 0 |
Commitments and Contingencies65
Commitments and Contingencies - Minimum Commitments and Sublease Income Under Non-Cancelable Capital and Operating Lease Agreements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Operating Leases Future Minimum Payments Due [Abstract] | ||
Remainder of 2018 | $ 114,463 | |
2,019 | 145,756 | |
2,020 | 129,988 | |
2,021 | 93,326 | |
2,022 | 75,483 | |
Thereafter | 216,740 | |
Total | 775,756 | |
Operating Leases Future Minimum Sublease Income[Abstract] | ||
Remainder of 2018 | (20,512) | |
2,019 | (20,961) | |
2,020 | (11,814) | |
2,021 | (11,043) | |
2,022 | (960) | |
Thereafter | 0 | |
Total | (65,290) | |
Capital Leases Future Minimum Payments Due [Abstract] | ||
Remainder of 2018 | 69,891 | |
2,019 | 70,133 | |
2,020 | 23,845 | |
2,021 | 569 | |
2,022 | 0 | |
Thereafter | 0 | |
Total | 164,438 | |
Less: Amounts representing interest | 5,897 | |
Total capital lease obligation | 158,541 | |
Less: Short-term portion | 86,571 | $ 84,976 |
Long-term portion | $ 71,970 | $ 81,308 |
Commitments and Contingencies66
Commitments and Contingencies - Summary of Commitments to Settle Contractual Obligations in Cash (Details) $ in Thousands | Mar. 31, 2018USD ($) | |
Other Commitments [Line Items] | ||
Total | $ 3,224,868 | |
Payments Due by Fiscal Year Less than 1 year | 260,694 | |
Payments Due by Fiscal Year 1-3 years | 1,401,491 | |
Payments Due by Fiscal Year 3-5 years | 1,267,155 | |
Payments Due by Fiscal Year More than 5 years | 295,528 | |
2019 Notes | ||
Other Commitments [Line Items] | ||
Total | 938,516 | |
Payments Due by Fiscal Year Less than 1 year | 1,178 | |
Payments Due by Fiscal Year 1-3 years | 937,338 | |
2021 Notes | ||
Other Commitments [Line Items] | ||
Total | 987,455 | |
Payments Due by Fiscal Year Less than 1 year | 4,809 | |
Payments Due by Fiscal Year 1-3 years | 19,106 | |
Payments Due by Fiscal Year 3-5 years | 963,540 | |
Operating Lease Obligations | ||
Other Commitments [Line Items] | ||
Total | 775,756 | [1] |
Payments Due by Fiscal Year Less than 1 year | 114,463 | [1] |
Payments Due by Fiscal Year 1-3 years | 275,744 | [1] |
Payments Due by Fiscal Year 3-5 years | 168,809 | [1] |
Payments Due by Fiscal Year More than 5 years | 216,740 | [1] |
Capital Lease Obligations | ||
Other Commitments [Line Items] | ||
Total | 164,438 | |
Payments Due by Fiscal Year Less than 1 year | 69,891 | |
Payments Due by Fiscal Year 1-3 years | 93,978 | |
Payments Due by Fiscal Year 3-5 years | 569 | |
Other Contractual Commitments | ||
Other Commitments [Line Items] | ||
Total | 358,703 | [2] |
Payments Due by Fiscal Year Less than 1 year | 70,353 | [2] |
Payments Due by Fiscal Year 1-3 years | 75,325 | [2] |
Payments Due by Fiscal Year 3-5 years | 134,237 | [2] |
Payments Due by Fiscal Year More than 5 years | $ 78,788 | [2] |
[1] | The Company entered into several sublease agreements for office space that we are not fully utilizing. Under the sublease agreements, we will receive approximately $65.3 million in sublease income over the next five years. | |
[2] | Other contractual commitments are non-cancelable contractual commitments primarily related to our infrastructure services, bandwidth and other services arrangements. |
Commitments and Contingencies67
Commitments and Contingencies - Summary of Commitments to Settle Contractual Obligations in Cash (Parenthetical) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Sublease income | $ 65,290 |
Sublease income term | 5 years |
Geographical Information - Prop
Geographical Information - Property and Equipment Net by Geographic Area (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property and equipment, net: | ||
Property and equipment, net | $ 801,912 | $ 773,715 |
United States | ||
Property and equipment, net: | ||
Property and equipment, net | 760,268 | 730,262 |
International | ||
Property and equipment, net: | ||
Property and equipment, net | $ 41,644 | $ 43,453 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Revenue recognized under contractual obligations from customers | $ 6,900,000 | $ 5,000,000 |
Revenue receivable under contractual obligations from customers | 4,200,000 | $ 4,200,000 |
Square Inc | ||
Related Party Transaction [Line Items] | ||
Agreement consideration amount | $ 0 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Details) | Oct. 25, 2016 | Mar. 31, 2018 |
Restructuring Cost And Reserve [Line Items] | ||
Percentage on employees reduction plan | 9.00% | |
Restructuring and related activities, lease terms expiration year | 2,028 | |
2016 Lease Plan | Abandonment Excess Office Space | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring and related activities, initiation date | Dec. 17, 2016 | |
Restructuring and related activities, lease terms expiration year | 2,028 |
Restructuring Charges - Summary
Restructuring Charges - Summary of Activities Related to Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | ||
Restructuring Cost And Reserve [Line Items] | |||
Accrued restructuring, reflected in accrued and other current liabilities | $ 21,821 | $ 28,761 | |
2016 Lease Plan | |||
Restructuring Cost And Reserve [Line Items] | |||
Accrued as of December 31, 2017 | 31,929 | ||
Charges | [1] | (983) | |
Cash payment | (6,094) | ||
Non-cash and other adjustments | (5) | ||
Accrued as of March 31, 2018 | 24,847 | ||
Accrued restructuring, reflected in accrued and other current liabilities | 21,821 | ||
Accrued restructuring, reflected in other long-term liabilities | $ 3,026 | ||
[1] | For the three months ended March 31, 2018, the Company recorded a reduction to restructuring charges related to its 2016 Lease Plan of $0.4 million within sales and marketing, $0.3 million within research and development, $0.2 million within general and administrative and $0.1 million within cost of revenue in the consolidated statements of operations. |
Restructuring Charges - Summa72
Restructuring Charges - Summary of Activities Related to Restructuring Charges (Parenthetical) (Details) - 2016 Lease Plan $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($) | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges | $ (983) | [1] |
Sales and Marketing | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges | 400 | |
Research and Development | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges | 300 | |
General and Administrative | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges | 200 | |
Cost of Revenue | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges | $ 100 | |
[1] | For the three months ended March 31, 2018, the Company recorded a reduction to restructuring charges related to its 2016 Lease Plan of $0.4 million within sales and marketing, $0.3 million within research and development, $0.2 million within general and administrative and $0.1 million within cost of revenue in the consolidated statements of operations. |