Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38211 | ||
Entity Registrant Name | ROKU, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-2087865 | ||
Entity Address, Address Line One | 1155 Coleman Avenue | ||
Entity Address, City or Town | San Jose | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95110 | ||
City Area Code | 408 | ||
Local Phone Number | 556-9040 | ||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value | ||
Trading Symbol | ROKU | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 53,234,001,409 | ||
Documents Incorporated by Reference | Part III incorporates by reference certain information from the Registrant’s definitive proxy statement (the “2021 Proxy Statement”) for the 2022 Annual Meeting of Stockholders. The 2021 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2021. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001428439 | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 119,086,923 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 16,215,344 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Location | San Jose, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 2,146,043 | $ 1,092,815 |
Accounts receivable, net of allowances | 752,393 | 523,852 |
Inventories | 50,276 | 53,895 |
Prepaid expenses and other current assets | 105,795 | 27,078 |
Total current assets | 3,054,507 | 1,697,640 |
Property and equipment, net | 177,567 | 155,197 |
Operating lease right-of-use assets | 345,660 | 266,197 |
Intangible assets, net | 84,126 | 62,181 |
Goodwill | 161,519 | 73,058 |
Other non-current assets | 258,766 | 16,269 |
Total Assets | 4,082,145 | 2,270,542 |
Current Liabilities: | ||
Accounts payable | 124,921 | 112,314 |
Accrued liabilities | 549,055 | 347,668 |
Current portion of long-term debt | 9,883 | 4,874 |
Deferred revenue, current portion | 45,760 | 55,465 |
Total current liabilities | 729,619 | 520,321 |
Long-term debt, non-current portion | 79,985 | 89,868 |
Deferred revenue, non-current portion | 28,726 | 21,283 |
Operating lease liability, non-current portion | 394,724 | 307,936 |
Other long-term liabilities | 82,485 | 3,119 |
Total Liabilities | 1,315,539 | 942,527 |
Commitments and contingencies (Note 12) | ||
Stockholders’ Equity: | ||
Common stock | 14 | 13 |
Additional paid-in capital | 2,856,572 | 1,660,379 |
Accumulated other comprehensive income | 41 | 29 |
Accumulated deficit | (90,021) | (332,406) |
Total stockholders’ equity | 2,766,606 | 1,328,015 |
Total Liabilities and Stockholders’ Equity | $ 4,082,145 | $ 2,270,542 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable, allowances | $ 56,827 | $ 41,236 |
Common stock, par value (in dollars per share) | $ 0.1000 | $ 0.1000 |
Common stock, shares authorized (in shares) | 1,150,000 | 1,150,000 |
Common stock, shares issued (in shares) | 135,137 | 128,004 |
Common stock, shares outstanding (in shares) | 135,137 | 128,004 |
Class A Common Stock | ||
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 118,767 | 110,645 |
Common stock, shares outstanding (in shares) | 118,767 | 110,645 |
Class B Common Stock | ||
Common stock, shares authorized (in shares) | 150,000 | 150,000 |
Common stock, shares issued (in shares) | 16,370 | 17,359 |
Common stock, shares outstanding (in shares) | 16,370 | 17,359 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Revenue: | |||
Total net revenue | $ 2,764,584 | $ 1,778,388 | $ 1,128,921 |
Cost of Revenue: | |||
Total cost of revenue | 1,355,984 | 970,169 | 633,697 |
Gross Profit (Loss): | |||
Total gross profit | 1,408,600 | 808,219 | 495,224 |
Operating Expenses: | |||
Research and development | 461,602 | 355,784 | 265,011 |
Sales and marketing | 455,601 | 299,457 | 178,855 |
General and administrative | 256,297 | 173,231 | 116,417 |
Total operating expenses | 1,173,500 | 828,472 | 560,283 |
Income (Loss) from Operations | 235,100 | (20,253) | (65,059) |
Other Income (Expense), Net: | |||
Interest expense | (2,980) | (3,432) | (2,366) |
Other income (expense), net | 4,467 | 5,233 | 6,506 |
Total other income (expense), net | 1,487 | 1,801 | 4,140 |
Income (Loss) Before Income Taxes | 236,587 | (18,452) | (60,919) |
Income tax benefit | (5,798) | (945) | (982) |
Net Income (Loss) | $ 242,385 | $ (17,507) | $ (59,937) |
Net income (loss) per share—basic (in dollars per share) | $ 1.83 | $ (0.14) | $ (0.52) |
Net income (loss) per share—diluted (in dollars per share) | $ 1.71 | $ (0.14) | $ (0.52) |
Weighted-average common shares outstanding —basic (in shares) | 132,710 | 123,978 | 115,218 |
Weighted-average common shares outstanding - diluted (in shares) | 141,668 | 123,978 | 115,218 |
Platform | Services | |||
Net Revenue: | |||
Total net revenue | $ 2,284,925 | $ 1,267,744 | $ 740,776 |
Cost of Revenue: | |||
Total cost of revenue | 823,924 | 503,177 | 262,655 |
Gross Profit (Loss): | |||
Total gross profit | 1,461,001 | 764,567 | 478,121 |
Player | Goods | |||
Net Revenue: | |||
Total net revenue | 479,659 | 510,644 | 388,145 |
Cost of Revenue: | |||
Total cost of revenue | 532,060 | 466,992 | 371,042 |
Gross Profit (Loss): | |||
Total gross profit | $ (52,401) | $ 43,652 | $ 17,103 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) | $ 242,385 | $ (17,507) | $ (59,937) |
Other comprehensive gain, net of tax: | |||
Unrealized gain on short-term investments, net of tax | 0 | 0 | 17 |
Foreign currency translation adjustment | 12 | 0 | 29 |
Other comprehensive gain, net of tax | 12 | 0 | 46 |
Comprehensive Net Income (Loss) | $ 242,397 | $ (17,507) | $ (59,891) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Adoption of ASU 2016-13 | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitAdoption of ASU 2016-13 |
Beginning balance (in shares) at Dec. 31, 2018 | 109,770 | ||||||
Beginning balance at Dec. 31, 2018 | $ 244,651 | $ 11 | $ 498,553 | $ (17) | $ (253,896) | ||
Vesting of early exercised stock options | 86 | 86 | |||||
Share repurchases (in shares) | (2) | ||||||
Issuance of common stock pursuant to equity incentive plans, net of taxes (in shares) | 6,169 | ||||||
Issuance of common stock pursuant to equity incentive plans | 28,182 | $ 1 | 28,181 | ||||
Issuance of common stock pursuant in connection with at-the-market offerings, net of issuance costs (in shares) | 3,389 | ||||||
Issuance of common stock pursuant in connection with at-the-market offerings, net of issuance costs | 330,539 | 330,539 | |||||
Issuance of common stock in connection with acquisition (in shares) | 571 | ||||||
Issuance of common stock in connection with acquisition | 69,684 | 69,684 | |||||
Stock-based compensation expense | 85,175 | 85,175 | |||||
Unrealized gain on short-term investments | 17 | 17 | |||||
Foreign currency translation adjustment | $ 29 | 29 | |||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 | ||||||
Net income (loss) | $ (59,937) | (59,937) | |||||
Ending balance (in shares) at Dec. 31, 2019 | 119,897 | ||||||
Ending balance at Dec. 31, 2019 | 698,426 | $ (1,066) | $ 12 | 1,012,218 | 29 | (313,833) | $ (1,066) |
Vesting of early exercised stock options | 38 | 38 | |||||
Issuance of common stock pursuant to equity incentive plans, net of taxes (in shares) | 4,107 | ||||||
Issuance of common stock pursuant to equity incentive plans | 16,806 | $ 1 | 16,805 | ||||
Issuance of common stock pursuant in connection with at-the-market offerings, net of issuance costs (in shares) | 4,000 | ||||||
Issuance of common stock pursuant in connection with at-the-market offerings, net of issuance costs | 497,242 | 497,242 | |||||
Stock-based compensation expense | 134,076 | 134,076 | |||||
Unrealized gain on short-term investments | 0 | ||||||
Foreign currency translation adjustment | 0 | ||||||
Net income (loss) | (17,507) | (17,507) | |||||
Ending balance (in shares) at Dec. 31, 2020 | 128,004 | ||||||
Ending balance at Dec. 31, 2020 | 1,328,015 | $ 13 | 1,660,379 | 29 | (332,406) | ||
Vesting of early exercised stock options | 4 | 4 | |||||
Issuance of common stock pursuant to equity incentive plans, net of taxes (in shares) | 4,496 | ||||||
Issuance of common stock pursuant to equity incentive plans | 18,532 | $ 1 | 18,531 | ||||
Issuance of common stock pursuant in connection with at-the-market offerings, net of issuance costs (in shares) | 2,637 | ||||||
Issuance of common stock pursuant in connection with at-the-market offerings, net of issuance costs | 989,615 | 989,615 | |||||
Stock-based compensation expense | 188,043 | 188,043 | |||||
Unrealized gain on short-term investments | 0 | ||||||
Foreign currency translation adjustment | 12 | 12 | |||||
Net income (loss) | 242,385 | 242,385 | |||||
Ending balance (in shares) at Dec. 31, 2021 | 135,137 | ||||||
Ending balance at Dec. 31, 2021 | $ 2,766,606 | $ 14 | $ 2,856,572 | $ 41 | $ (90,021) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Issuance costs | $ 10,400 | $ 6,800 | $ 6,400 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 242,385 | $ (17,507) | $ (59,937) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 42,621 | 36,206 | 15,669 |
Stock-based compensation expense | 187,532 | 134,076 | 85,175 |
Amortization of right-of-use assets | 31,024 | 28,743 | 22,328 |
Amortization of content assets | 95,570 | 22,392 | 2,914 |
Provision for (recoveries of) doubtful accounts | (904) | 3,801 | 704 |
Other items, net | (101) | 524 | 1,101 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (221,768) | (196,046) | (110,225) |
Inventories | 3,619 | (4,181) | (14,129) |
Prepaid expenses and other current assets | (67,240) | (3,450) | (9,934) |
Deferred cost of revenue | 0 | 0 | 1,143 |
Other non-current assets | (102,957) | (1,128) | (3,060) |
Accounts payable | 8,428 | 6,410 | 9,409 |
Accrued liabilities | 38,279 | 103,218 | 74,512 |
Operating lease liabilities | (20,083) | 12,999 | 11,658 |
Other long-term liabilities | (1,100) | 618 | (3,024) |
Deferred revenue | (7,224) | 21,517 | (10,597) |
Net cash provided by operating activities | 228,081 | 148,192 | 13,707 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (40,041) | (82,382) | (77,180) |
Purchase of business, net of cash acquired | (136,778) | 0 | (68,132) |
Proceeds from escrows associated with acquisition | 0 | 1,058 | 0 |
Purchase of intangible assets | 0 | 0 | (7,428) |
Purchases of short-term investments | 0 | 0 | (12,365) |
Sales/maturities of short-term investments | 0 | 0 | 54,810 |
Net cash used in investing activities | (176,819) | (81,324) | (110,295) |
Cash flows from financing activities: | |||
Proceeds from borrowings, net of issuance costs | 0 | 69,325 | 99,608 |
Repayments of borrowings | (5,000) | (74,325) | 0 |
Proceeds from equity issued under incentive plans | 18,532 | 16,806 | 28,181 |
Proceeds from equity issued under at-the-market offerings, net of offering costs | 989,615 | 497,242 | 330,539 |
Net cash provided by financing activities | 1,003,147 | 509,048 | 458,328 |
Net increase in cash, cash equivalents and restricted cash | 1,054,409 | 575,916 | 361,740 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 12 | 0 | 29 |
Cash, cash equivalents and restricted cash —Beginning of period | 1,093,249 | 517,333 | 155,564 |
Cash, cash equivalents and restricted cash —End of period | 2,147,670 | 1,093,249 | 517,333 |
Cash, cash equivalents and restricted cash at end of period: | |||
Cash and cash equivalents | 2,146,043 | 1,092,815 | 515,479 |
Restricted cash, current | 0 | 434 | 1,854 |
Restricted cash, non-current | 1,627 | 0 | 0 |
Cash, cash equivalents and restricted cash —End of period | 2,147,670 | 1,093,249 | 517,333 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 2,578 | 3,470 | 3,095 |
Cash paid for income taxes | 1,363 | 1,014 | 759 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Non-cash consideration for business combination | 21,400 | 0 | 0 |
Services to be received as part of a business combination | 6,500 | 0 | 0 |
Issuance of common stock for business combinations | 0 | 0 | 69,684 |
Unpaid portion of property and equipment purchases | 3,073 | 1,242 | 10,762 |
Unpaid portion of acquisition related expenses | 0 | 0 | 2,190 |
Unpaid portion of purchased intangibles | 0 | 0 | 400 |
Unpaid portion of at-the-market offering costs | $ 0 | $ 0 | $ 144 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | THE COMPANY Organization and Description of BusinessRoku, Inc. (the “Company” or “Roku”), was formed in October 2002 as Roku LLC under the laws of the State of Delaware. On February 1, 2008, Roku LLC was converted into Roku, Inc., a Delaware corporation. The Company operates in two reportable segments and generates platform revenue from the sale of digital advertising and related services including the OneView ad platform, content distribution services (such as subscription and transaction revenue shares, media and entertainment promotional spending, the sale of Premium Subscriptions, and the sale of branded channel buttons on remote controls), and licensing arrangements with service operators and TV brands and player revenue from the sale of streaming players and audio products. |
Significant Accounting Policies
Significant Accounting Policies and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Basis of Presentation | SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION Basis of Presentation and Principles of Consolidation The consolidated financial statements, which include the accounts of Roku, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. Reclassification of Prior Year Presentation Certain prior period amounts in the consolidated balance sheets and notes to consolidated financial statements have been reclassified to conform to current period presentation. Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates and assumptions include: • revenue recognition: determining the nature and timing of satisfaction of performance obligations, variable consideration, determining the stand-alone selling prices of performance obligations, gross versus net revenue recognition, and evaluation of customer versus vendor relationships; • the impairment of intangible assets; • valuation of assets acquired and liabilities assumed in connection with business combinations; • useful lives of tangible and intangible assets; • allowances for sales returns and sales incentives; and • the valuation of deferred income tax assets. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates and assumptions. Comprehensive Income (Loss) Comprehensive income for the year ended December 31, 2021 includes foreign currency translation adjustments. Comprehensive loss is equal to the net loss for the year ended December 31, 2020. Comprehensive loss for the year ended December 31, 2019 includes unrealized gains on the Company’s short-term investments and foreign currency translation adjustments. Income taxes on the unrealized gains are not material. Foreign Currency The Company uses the U.S. dollar as the functional currency for most of its foreign subsidiaries. Monetary assets and liabilities of these subsidiaries are remeasured into U.S. dollars from the local currency at rates in effect at period-end and non-monetary assets and liabilities are remeasured at historical rates. Revenue and expenses are remeasured at average exchange rates in effect during each period. Foreign currency gains or losses from re-measurement and transaction gains or losses are recorded as Other income (expense), net in the consolidated statements of operations. The Company recorded a foreign currency loss of $1.2 million, gain of $1.3 million, and loss of $0.2 million during the years ended December 31, 2021, 2020, and 2019, respectively. For those foreign subsidiaries where the local currency is designated as the functional currency, the Company records translation of their assets and liabilities into U.S. dollars at the balance sheet dates as translation adjustments and includes them as a component of Accumulated other comprehensive income (loss). Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Two financial institutions managed 30% and 27% of cash and cash equivalents as of December 31, 2021 and 46% and 26% as of December 31, 2020. Accounts Receivable, net Accounts receivable are typically unsecured and are derived from revenue earned from customers. They are stated at invoice value less estimated allowances for sales returns, sales incentives, doubtful accounts, and other miscellaneous allowances. The Company performs ongoing credit evaluations of its customers to determine allowances for potential credit losses and doubtful accounts. The Company considers historical experience, ongoing promotional activities, historical claim rates, and other factors to determine the allowances for sales returns and sales incentives. Allowance for Sales Returns : Allowance for sales returns consist of the following activities (in thousands): Years Ended December 31, 2021 2020 2019 Beginning balance $ 5,912 $ 6,550 $ 7,335 Add: Charged to revenue 16,181 14,594 15,541 Less: Utilization of sales return reserve (16,078) (15,232) (16,326) Ending balance $ 6,015 $ 5,912 $ 6,550 Allowance for Sales Incentives : Allowance for sales incentives consisted of the following activities (in thousands): Years Ended December 31, 2021 2020 2019 Beginning balance $ 30,838 $ 19,476 $ 13,750 Add: Charged to revenue 90,530 68,315 65,676 Less: Utilization of sales incentive reserve (72,957) (56,953) (59,950) Ending balance $ 48,411 $ 30,838 $ 19,476 Allowance for Doubtful Accounts : Allowance for doubtful accounts consisted of the following activities (in thousands): Years Ended December 31, 2021 2020 2019 Beginning balance $ 4,181 $ 1,140 $ 686 Impact of adoption of ASU 2016-13 — 1,066 — Adjusted beginning balance $ 4,181 $ 2,206 $ 686 Provision for (recoveries of) doubtful accounts (904) 3,801 704 Adjustments for recovery and write-off (1,119) (1,826) (250) Ending balance $ 2,158 $ 4,181 $ 1,140 The Company did not have any customer that accounted for more than 10% of its accounts receivable, net balance as of December 31, 2021. Customer H accounted for 11% of the accounts receivable, net balance as of December 31, 2020. Business Combinations The Company determines whether a transaction meets the definition of a business combination before applying the acquisition method of accounting to that transaction. The Company allocates the fair value of the purchase consideration of its acquisitions to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. The operating results of acquired businesses are included in the Company’s consolidated statements of operations from their effective acquisition date. Acquisition-related expenses and certain acquisition restructuring and other related charges are recognized separately from the business combination and are expensed as incurred. Contingent consideration classified as a liability is recognized at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to consideration transferred, and the assets acquired and liabilities assumed with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions and records any adjustments to the Company’s preliminary estimates with a corresponding offset to goodwill during the measurement period. Upon the conclusion of the measurement period or final determination of the values of consideration transferred, and assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Intangible Assets Intangible assets acquired through business combinations are recorded at their fair values as of the acquisition date. Intangible assets are amortized using the straight-line method over their estimated useful lives. The Company evaluates the estimated remaining useful lives of its intangible assets annually and when events or changes in circumstances warrant a revision to the remaining periods of amortization. Impairment Assessments The Company evaluates goodwill for possible impairment at least annually during the fourth quarter of each fiscal year or more often, if and when circumstances indicate that goodwill may be impaired. This includes but is not limited to significant adverse changes in the business climate, market conditions, or other events that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. In performing its annual assessment, the Company can opt to perform a qualitative assessment to test a reporting unit’s goodwill for impairment or it can directly perform a quantitative assessment. Based on the Company’s qualitative assessment, if it is determined that the fair value of the reporting unit is, more likely than not, less than its carrying amount, then the quantitative assessment is performed. Any excess of the reporting unit’s carrying amount over its fair value is recorded as an impairment loss, limited to the total amount of goodwill allocated to the reporting unit. The Company reviews long-lived assets and intangible assets with finite lives for impairment when events or changes in business circumstances indicate that the carrying amount of the asset or asset group may not be fully recoverable or that the useful lives of the asset or asset group are no longer appropriate. The Company assesses these asset or asset groups for impairment based on their estimated undiscounted future cash flows. If the carrying value of the asset or asset group exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the asset group. The Company did not recognize any impairment for goodwill or intangible assets in any periods reported. The impairments of operating right-of-use assets during the years ended December 31, 2021, 2020, and 2019 were not material. Content Assets The Company records content assets as Other non-current assets. The amortization expense for licensed content is recorded based on the pattern of monetization of such content which is primarily straight-line. The amortization of produced content is recorded over the applicable content life cycle based upon the ratio of current period revenue to the estimated total revenue to be earned. Licensed and produced content assets are primarily monetized together as a unit, referred to as a film group. The film group is evaluated for impairment whenever an event occurs, or circumstances change, indicating the fair value is less than the carrying value. The Company reviews various qualitative factors and indicators to assess whether the film group is impaired. The Company did not recognize any impairment of content assets in any periods reported. Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company’s contracts include various product or services or a combination of both, which are generally capable of being distinct and are accounted for as separate performance obligations. The Company’s contracts often contain multiple distinct performance obligations. The Company estimates the transaction price of a contract based on the expected value for which a significant reversal of revenue is not expected to occur. The estimate of the variable consideration is based on the assessment of historical, current, and forecasted performance noted and expected from the performance obligation. In arrangements with multiple performance obligations, the estimated transaction price of each contract is allocated to each distinct performance obligation based on relative stand-alone selling price (“SSP”). For performance obligations routinely sold separately, the SSP is determined by evaluating such stand-alone sales. For those performance obligations that are not routinely sold separately, the Company determines SSP based on market conditions and other observable inputs. When the Company sells third-party goods and services, it evaluates whether the Company is the principal, and reports revenue on a gross basis, or an agent, and reports revenue on a net basis. In this assessment, the Company considers if it obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. Revenue is recorded net of taxes collected from customers which are subsequently remitted to the relevant government authority. The Company does not capitalize any cost associated with contract acquisition because it applies a practical expedient and expenses commissions when incurred as most direct contract acquisition costs relate to contracts that are recognized over a period of one year or less. Sales commissions are included in Sales and marketing expenses in the consolidated statements of operations. The as-invoiced practical expedient is applied when the amount of consideration the Company has a right to invoice corresponds directly with the value to the customer of the entity’s performance completed to date. Nature of Products and Services Platform segment: The Company generates platform revenue from the sale of digital advertising and related services including the OneView ad platform, content distribution services (such as subscription and transaction revenue shares, media and entertainment promotional spending, the sale of Premium Subscriptions, and sale of branded channel buttons on remote controls), and licensing arrangements with service operators and TV brands. The Company sells digital advertising to advertisers directly or through advertising agencies and to content publishers for their media and entertainment promotions via various campaign tools. Advertising arrangements include video and display advertising delivered through advertising impressions. Advertising arrangements include multiple performance obligations as they contain distinct advertising products or services. For such arrangements, the Company allocates revenue to each distinct performance obligation based on their relative SSP. The Company also generates revenue from customers using its ad platform. For such arrangements, it charges a platform fee, which is a percentage of a customer’s advertising inventory spend during the month, along with data and any add-on features purchased through the platform. The Company recognizes revenue on either a gross or net basis for digital advertising based on its determination as to whether it is acting as the principal in the revenue generation process or as an agent. Where the Company is the principal, it controls the advertising inventory before it is transferred to its customers. This is further supported by the Company being primarily responsible to its customers for the fulfillment and having a level of discretion in establishing pricing. Advertising arrangements comprised of multiple performance obligations are recognized either at a point in time or over time depending on the nature of the distinct performance obligation. The Company’s content distribution revenue sharing arrangements include cash or non-cash consideration. The revenue sharing arrangements generally apply to new subscriptions for accounts that sign up for new services and at the time of a movie rental or purchase. Revenue is recognized on a net basis as the Company is deemed to be the agent between content publishers and end users. Revenue is recognized on a time elapsed basis, by day, as the services are delivered over the contractual distribution term. Non-cash consideration is usually in the form of advertising inventory, the fair value of which is determined based on relevant internal and third-party data. The Company sells monthly subscriptions for premium content on The Roku Channel for varying fees for different content. Revenue from such Premium Subscription fees is recognized on a gross basis over the service period as the Company is deemed to be the principal in the relationship with the end user. The Company obtains control of the content before transferring to the end user and has latitude in establishing pricing. The Company pays fixed fees per subscriber or fixed percentage of revenue share to the providers of premium content on The Roku Channel based on the contractual arrangement and recognizes that in Cost of revenue, platform. The Company sells branded channel buttons on remote controls of streaming devices that provide one-touch access to a publisher’s content. The Company typically receives a fixed fee per button for each unit sold over a defined distribution period. Revenue is recognized on a time elapsed basis, by day, over the distribution term. The Company licenses the Roku OS, including updates and upgrades, to TV brands and service operators. The licensing revenue is recognized at a point in time, when the Company makes the intellectual property available and the control transfers to the customer. The revenue allocated to unspecified upgrades and updates is recognized on a time elapsed basis, by day, over the service period. Professional services revenue is recognized as services are provided or accepted. Hosting fees are recognized on a time elapsed basis, by day, over the service period. Player segment: The Company sells the majority of its streaming players and audio products to retail distribution channels in the U.S. including brick and mortar and online retailers, as well as through the Company’s website. Player revenue primarily consists of hardware, embedded software, and unspecified upgrades and updates on a when and if-available basis. The hardware and embedded software are considered as one performance obligation and revenue is recognized at a point in time when the control transfers to the customer. Unspecified upgrades and updates are available to customers on a when-and-if available basis. The Company records the allocated value of the unspecified upgrades and updates as deferred revenue and recognizes it as player revenue ratably on a time elapsed basis over the estimated economic life of the associated players products. The Company’s player revenue includes allowances for sales returns and sales incentives in the estimated transaction price. These estimates are based on historical experience and anticipated performance. Shipping charges billed to customers are included in Player revenue and the related shipping costs are included in Cost of revenue, player. Leases The Company determines if an arrangement contains a lease at its inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued liabilities, and operating lease liability in our consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future lease payments. The Company takes into consideration its credit rating and the length of the lease when calculating the incremental borrowing rate. The Company considers the options to extend or terminate the lease in determining the lease term, when it is reasonably certain to exercise one of the options. The Company combines lease and non-lease components into a single lease component for its real estate and equipment leases. Fair Value of Financial Instruments The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements. The carrying amounts reported in the consolidated financial statements for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. The carrying amount of debt approximates fair value due to its variable interest rates. Inventories The Company’s inventories consist primarily of finished goods and are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. Provisions are made if the cost of the inventories exceeds their net realizable value. The Company evaluates inventory levels and purchase commitments for excess and obsolete products, based on management’s assessment of future demand and market conditions. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of the assets, generally ranging between eighteen months and five years. Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives, which range from five The Company capitalizes costs to develop its internal-use software. Costs that relate to the planning and post-implementation phases of development are expensed as incurred. Costs are capitalized when preliminary efforts are successfully completed, management has authorized and committed to funding the project, and it is probable that the project will be completed and will be used as intended. Costs incurred for enhancements that are expected to result in additional material functionality are capitalized. During the years ended December 31, 2021, 2020, and 2019, the Company capitalized internal-use software development costs of $0.5 million, $2.2 million, and $0.1 million, respectively. Capitalized costs are amortized using the straight-line method over the estimated useful life of the asset, which is generally two Deferred Revenue The Company’s deferred revenue reflects fees received in advance that will be recognized as revenue over time or as services are rendered. Deferred revenue balances consist of the amount of player revenue allocated to unspecified upgrades and updates on a when-and-if available basis, licensing and services fees received from service operators and TV brands, and advance payments from advertisers and content publishers where performance obligations are not yet fulfilled. Deferred revenue expected to be realized within one year is classified as a current liability and the remaining is recorded as a non-current liability. Advertising Costs Advertising costs are expensed when incurred and are included in Sales and marketing expense in the consolidated statements of operations. The Company incurred advertising costs of $35.2 million, $7.1 million, and $7.3 million for the years December 31, 2021, 2020, and 2019, respectively. Stock-Based Compensation The Company measures compensation expense for all stock-based awards, including restricted stock units and stock options granted to employees, based on the estimated fair value of the award on the date of grant. For restricted stock units, the grant date fair value is based on the closing market price of the Company’s Class A common stock on the date of grant. The fair value of each stock option is estimated using the Black-Scholes option pricing model. The Company accounts for forfeitures as they occur. Stock-based compensation is recognized on a straight-line basis over the requisite vesting period. The Black-Scholes option pricing model used to fair value stock options include the following assumptions: • Fair Value of Our Common Stock . The Company uses the closing market price of its Class A common stock as reported on The Nasdaq Global Select Market on the date of grant. • Expected Term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. The Company uses the simplified calculation of the expected term, which reflects weighted-average time to vest and the contractual life of the stock options granted, in absence of its own historical exercise data. • Volatility. The expected volatility is derived from an average of the historical volatilities of several peer companies which are similar in size and operational and economic activities. • Risk-free Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term for each of our stock options. • Dividend Yield. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. Income Taxes The Company accounts for income taxes using an asset and liability approach. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not to be realized. Recently Adopted Accounting Standards On January 1, 2021, the Company adopted the guidance issued in Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles and also simplifies areas such as franchise taxes, step-up in tax basis of goodwill, separate entity financial statements, and interim recognition of enactment of tax laws or rate changes. The adoption did not have a material impact on the Company’s consolidated financial statements. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) that is expected to be discontinued, subject to meeting certain criteria. The guidance is effective as of March 12, 2020 through December 31, 2022. The Company made a policy election in the second quarter of 2020 to elect a different reference rate for the Credit Agreement (as defined below) when LIBOR is discontinued. On January 1, 2020, the Company adopted the guidance in ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , using the modified retrospective adoption method and recorded a cumulative-effect adjustment to the beginning balance of accumulated deficit of approximately $1.1 million. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. This impact mainly relates to credit losses recognized on the Company’s doubtful accounts. As the Company did not have any available-for-sale debt securities as of the adoption date, there was no additional impact to accumulated deficit. On January 1, 2020, the Company adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials , in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 required that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, ASU 2019-02 required that an entity test films and license agreements for program material for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. There was no material impact to the Company’s consolidated financial statements. Recent Accounting Standards Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE The Company’s disaggregated revenue is represented by the two reportable segments discussed in Note 17. The contract balances include the following (in thousands): As of December 31, 2021 2020 2019 Accounts receivable, net $ 752,393 $ 523,852 $ 332,673 Contract assets (included in Prepaid expenses and other current assets) 46,952 7,431 3,588 Deferred revenue, current portion 45,760 55,465 39,861 Deferred revenue, non-current portion 28,726 21,283 15,370 Total deferred revenue $ 74,486 $ 76,748 $ 55,231 Accounts receivable are recorded at the amount invoiced, net of an allowance for sales returns, sales incentives, and doubtful accounts. Payment terms can vary by customer and contract. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are created when invoicing occurs subsequent to revenue recognition. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. The Company’s contract assets are current in nature and are included in Prepaid expenses and other current assets. Contract assets increased by $39.5 million during the year ended December 31, 2021 and by $3.8 million during the year ended December 31, 2020 primarily due to an increase in the growth of platform revenue combined with the timing of billing which falls into a subsequent period. Deferred revenue reflects consideration invoiced prior to the completion of performance obligations and revenue recognition. Deferred revenue decreased by approximately $2.3 million during the year ended December 31, 2021 primarily due to the timing of fulfillment of performance obligations related to content arrangements offset by an increase in deferred revenue from advertising arrangements due to growth in the platform business and an increase in the deferral period of player revenue for its unspecified upgrades. Deferred revenue increased by approximately $21.5 million during the year ended December 31, 2020 due to the increase in estimated values of content publisher and licensing partner arrangements and change in the timing of fulfillment of performance obligations of approximately $12.4 million, and higher growth in the player segment, resulting in a net increase in deferred revenue related to unspecified upgrades and updates of approximately $8.4 million. Revenue recognized during the year ended December 31, 2021 from amounts included in the total deferred revenue as of December 31, 2020 was $56.2 million. Revenue recognized during the year ended December 31, 2020 from amounts included in the total deferred revenue as of December 31, 2019 was $42.9 million. Revenue allocated to remaining performance obligations represents estimated contracted revenue that has not yet been recognized which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Estimated contracted revenue was $1,148.3 million as of December 31, 2021 of which the Company expects to recognize approximately 43% over the next 12 months and the remainder thereafter. The Company recognized $28.6 million and $14.4 million during the years ended December 31, 2021 and 2020, respectively, from performance obligations that were satisfied in previous periods due to the changes in the estimated transaction price of its revenue contracts . The Company did not have any customer that accounted for more than 10% of its total net revenue as of December 31, 2021. Customer C accounted for 12% and 14% of the total net revenue during the years ended December 31, 2020 and 2019, respectively. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Nielsen’s Advanced Video Advertising Business On February 28, 2021, the Company entered into an Asset and Stock Purchase Agreement (the “ASPA”) to purchase the Advanced Video Advertising (“AVA”) business from Nielsen Holdings PLC (“Nielsen”). The AVA business consists primarily of video automatic content recognition and dynamic ad insertion technologies. On April 15, 2021, the Company closed the transaction, acquiring from Nielsen the AVA business, consisting of certain assets and liabilities and all of the equity interests in a subsidiary associated with the AVA business (the “Acquisition”). In conjunction with the Acquisition, the Company and Nielsen entered into a strategic commercial arrangement under which the parties will provide certain advertising measurement solutions to each other. The Company acquired Nielsen’s AVA business to accelerate its launch of an end-to-end linear ad replacement solution and to further integrate Nielsen’s ad and content measurement products into the Company’s ad platform. The total purchase consideration for Nielsen’s AVA business was $53.4 million, which consisted of (i) $38.5 million paid in cash and (ii) $21.4 million of non-cash consideration related to obligations to deliver services to Nielsen, offset by (iii) $6.5 million of services to be received from Nielsen. The obligations to deliver services to Nielsen were recorded at fair value using the incremental cash flow method. The services to be delivered to Nielsen are recognized within Other income (expense), net in the consolidated statements of operations over the six year service period. The services to be received from Nielsen represent contract terms that the Company entered into for future goods and services that were recorded at fair value using the incremental cash flow method. These services are recognized as Cost of revenue, platform in the consolidated statements of operations over the six year service period. In addition, there are earn-out conditions in the ASPA which may trigger an additional payment to Nielsen. As of December 31, 2021, no contingent consideration conditions have been triggered. The Company incurred $3.9 million in acquisition-related expenses and has recorded them in General and administrative expenses in the consolidated statements of operations. During the fourth quarter of 2021, the Company obtained additional information regarding facts and circumstances in existence as of the acquisition date. As a result, the Company recorded a measurement period adjustment in the fourth quarter of 2021 consisting of a $6.0 million increase to purchase consideration, $4.2 million decrease to intangible assets acquired, $4.5 million increase to other long-term liabilities, and $14.7 million increase to goodwill. The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed, reflecting measurement period adjustments through December 31, 2021, is based on estimated fair values and is as follows (in thousands): Fair Values Assets acquired Cash and cash equivalents $ 3,057 Prepaid expenses and other current assets 85 Property and equipment, net 584 Intangible assets: Developed technology 11,000 IPR&D technology 7,500 Goodwill 36,790 Operating lease right-of-use assets 1,235 Other non-current assets 1,905 Total assets acquired 62,156 Liabilities assumed Accounts payable and accrued liabilities (1,168) Operating lease liabilities, non-current portion (830) Other long-term liabilities (6,767) Total liabilities assumed (8,765) Total purchase consideration $ 53,391 The excess of the total consideration over the tangible assets, intangible assets, and liabilities assumed is recorded as goodwill. Goodwill is primarily attributable to expected synergies in advertising offerings and cross-selling opportunities. The majority of the goodwill recorded is deductible for tax purposes. The fair value of the developed technology has been estimated using the relief-from-royalty method. The key valuation assumptions include the Company’s estimates of expected future earnings and royalty rate. The Company amortizes the fair value of the developed technology on a straight-line basis over its useful life. The fair value of the in-process research and development (“IPR&D”) technology has been estimated using the multi-period-excess-earnings method. The key valuation assumptions include the Company’s estimates of expected future revenue and margin. Once the project reaches technological feasibility, the Company will amortize the fair value of the IPR&D technology on a straight-line basis over its useful life. The valuation of the intangible assets acquired from Nielsen’s AVA business along with their estimated useful lives, is as follows (in thousands, except years): Estimated Fair Value Estimated Weighted-Average Useful Lives Developed technology $ 11,000 5.9 IPR&D technology 7,500 Estimated fair value of acquired intangible assets $ 18,500 5.9 The operations of Nielsen’s AVA business are included in the Company’s operating results beginning on the date of acquisition. The revenue, cost of revenue, and gross profit recorded by the Company in its consolidated statements of operations from the acquisition date to December 31, 2021 are not material. This Old House On March 19, 2021, the Company acquired all outstanding shares of TOH Intermediate Holdings, LLC (“This Old House”), a home improvement media business, according to the terms and conditions of the Equity Purchase Agreement. The Company acquired the This Old House business because the Company believes the content aligns with The Roku Channel’s ad-supported growth strategy. The total purchase consideration for This Old House was $97.8 million, paid entirely in cash. The Company incurred $2.4 million in acquisition-related expenses that are recorded in General and administrative expenses in the consolidated statements of operations. The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed, reflecting measurement period adjustments through December 31, 2021, is based on estimated fair values and is as follows (in thousands): Fair Values Assets acquired Cash and cash equivalents $ 7 Accounts receivable 5,830 Prepaid expenses and other current assets 7,310 Property and equipment, net 307 Intangible assets: Tradename 20,000 Customer relationships 700 Goodwill 46,671 Operating lease right-of-use assets 5,498 Other non-current assets 23,487 Total assets acquired 109,810 Liabilities assumed Accounts payable and accrued liabilities (2,747) Deferred revenue, current portion (4,146) Operating lease liabilities, non-current portion (4,262) Deferred revenue, non-current portion (816) Other long-term liabilities (28) Total liabilities assumed (11,999) Total purchase consideration $ 97,811 Other non-current assets include $22.5 million of content assets acquired. The fair value of the content assets has been estimated using the income approach. Amortization expense related to the content assets is recorded on an accelerated basis according to the pattern of monetization. The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Goodwill is primarily attributable to expected synergies in the advertising offerings as the Company brings more free ad-supported content to the users. The goodwill recorded is deductible for tax purposes. The fair value of the tradename has been estimated using the relief-from-royalty method. The key valuation assumptions include the Company’s estimates of expected future revenue and royalty rate. The Company amortizes the fair value of the tradename on a straight-line basis over its useful life. The valuation of the intangible assets acquired from This Old House along with their estimated useful lives, is as follows (in thousands, except years): Estimated Fair Value Estimated Weighted-Average Useful Lives Tradename $ 20,000 10.0 Customer relationships 700 4.0 Estimated fair value of acquired intangible assets $ 20,700 9.8 The operations of This Old House were included in the Company’s operating results beginning on the date of acquisition. The Company recorded platform revenue of $18.7 million, cost of revenue, platform, of $11.8 million and gross profit of $6.9 million in its consolidated statements of operations from the acquisition date to December 31, 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill represents the excess of purchase consideration in a business combination over the fair value of tangible and intangible assets acquired net of the liabilities assumed. All goodwill relates to the platform segment. The following table reflects the carrying value of goodwill (in thousands): Carrying Value Balance as of December 31, 2019 $ 74,116 Adjustments: Dataxu working capital adjustment (1,058) Balance as of December 31, 2020 $ 73,058 Additions: This Old House acquisition 46,671 Nielsen AVA business acquisition 36,790 Other immaterial acquisition 5,000 Balance as of December 31, 2021 $ 161,519 Goodwill is evaluated for impairment annually. No impairment was recognized during the years ended December 31, 2021, 2020, and 2019. Intangible Assets The following table is the summary of Company’s intangible assets (in thousands): As of December 31, 2021 Gross Accumulated Amortization Net Weighted-Average Useful Lives Developed technology $ 73,367 $ (25,350) $ 48,017 5.9 Customer relationships 14,100 (7,395) 6,705 4.0 Tradename 20,400 (1,966) 18,434 9.8 Patents 4,076 (606) 3,470 14.0 Intangible assets subject to amortization $ 111,943 $ (35,317) $ 76,626 6.7 IPR&D technology 7,500 — 7,500 Total Intangible assets $ 119,443 $ (35,317) $ 84,126 As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Lives (in years) Developed technology $ 62,367 $ (13,439) $ 48,928 5.9 Customer relationships 13,400 (3,908) 9,492 4.0 Tradename 400 (400) — 0.5 Patents 4,076 (315) 3,761 14.0 Total Intangible assets $ 80,243 $ (18,062) $ 62,181 6.0 The Company recorded expenses of $17.3 million, $14.5 million, and $2.8 million for amortization of intangible assets during the years ended December 31, 2021, 2020, and 2019, respectively. During the years ended December 31, 2021, 2020, and 2019, the Company recorded amortization of developed technology in Cost of revenue, platform and Research and development expenses. The Company recorded amortization of customer relationships and tradenames in Sales and marketing expenses, and recorded amortization of patents in General and administrative expenses in the consolidated statements of operations. As of December 31, 2021, the estimated future amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands): Year Ending December 31, 2022 $ 17,745 2023 17,066 2024 14,275 2025 12,571 2026 4,074 Thereafter 10,895 Total $ 76,626 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | BALANCE SHEET COMPONENTS Accounts Receivable, net : Accounts receivable, net consisted of the following (in thousands): As of December 31, 2021 2020 Accounts receivable, gross $ 809,220 $ 565,088 Less: Allowances Allowance for sales returns 6,015 5,912 Allowance for sales incentives 48,411 30,838 Allowance for doubtful accounts 2,158 4,181 Other allowances 243 305 Total allowances 56,827 41,236 Accounts Receivable, net $ 752,393 $ 523,852 Property and Equipment, net : Property and equipment, net consisted of the following (in thousands): As of December 31, 2021 2020 Computers and equipment $ 38,473 $ 30,859 Leasehold improvements 182,229 144,013 Internal-use software 7,274 6,744 Office equipment and furniture 20,829 19,661 Property and equipment, gross 248,805 201,277 Accumulated depreciation and amortization (71,238) (46,080) Property and Equipment, net $ 177,567 $ 155,197 Depreciation and amortization expense, for property and equipment assets, for the years ended December 31, 2021, 2020, and 2019 was $25.4 million, $21.7 million, and $12.8 million, respectively. Accrued Liabilities : Accrued liabilities consisted of the following (in thousands): As of December 31, 2021 2020 Payments due to content publishers $ 165,894 $ 106,576 Accrued cost of revenue 142,014 98,285 Marketing, retail and merchandising costs 47,428 43,645 Operating lease liability, current 37,116 35,647 Content liability, current 70,462 6,165 Other accrued expenses 86,141 57,350 Total Accrued Liabilities $ 549,055 $ 347,668 Deferred Revenue : Deferred revenue consisted of the following (in thousands): As of December 31, 2021 2020 Platform, current $ 22,240 $ 27,587 Player, current 23,520 27,878 Total deferred revenue, current 45,760 55,465 Platform, non-current 9,324 9,909 Player, non-current 19,402 11,374 Total deferred revenue, non-current 28,726 21,283 Total Deferred Revenue $ 74,486 $ 76,748 Other Long-term Liabilities : Other Long-term liabilities consisted of the following (in thousands): As of December 31, 2021 2020 Content liability, non-current $ 51,211 $ 1,380 Other long-term liabilities 31,274 1,739 Total Other long-term liabilities $ 82,485 $ 3,119 |
Content Assets
Content Assets | 12 Months Ended |
Dec. 31, 2021 | |
Capitalized Licensed Content Costs [Abstract] | |
Content Assets | CONTENT ASSETS Content assets, net recorded as part of Other non-current assets consisted of the following (in thousands): As of December 31, 2021 2020 Licensed content, net $ 199,290 $ 7,907 Produced content: Released, less amortization 20,030 — Completed, not released 881 — In production 3,512 — Total produced content, net 24,423 $ — Total Content Assets, net $ 223,713 $ 7,907 On January 8, 2021, the Company entered into an agreement with the mobile-first video distribution service known as Quibi to acquire certain content rights. The transaction was accounted for as an asset acquisition. As discussed in Note 4, the Company also acquired content assets as part of the This Old House acquisition. The increase of $215.8 million in content assets during the year ended December 31, 2021 includes content assets acquired from Quibi and This Old House, programming content licensed from various other content publishers, as well as content produced during the year. Amortization of content assets is included in Cost of revenue, platform in the consolidated statements of operations and is reflected in the table below (in thousands): Years Ended December 31, 2021 2020 Licensed content $ 84,133 $ 22,392 Produced content 11,437 — Total amortization costs $ 95,570 $ 22,392 The following table reflects the amortization expense for the next three years for content assets, net (in thousands): Year Ending December 31, Licensed content Produced content Total 2022 $ 86,584 $ 4,055 $ 90,639 2023 38,861 4,202 43,063 2024 23,293 3,951 27,244 Total $ 148,738 $ 12,208 $ 160,946 |
Fair Value Disclosure
Fair Value Disclosure | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosure | FAIR VALUE DISCLOSURE The Company’s financial assets measured at fair value are as follows (in thousands): As of December 31, 2021 As of December 31, 2020 Fair Value Level 1 Fair Value Level 1 Assets: Cash and cash equivalents: Cash $ 1,130,172 $ 1,130,172 $ 1,021,022 $ 1,021,022 Money market funds 1,015,871 1,015,871 71,793 71,793 Restricted cash, current — — 434 434 Restricted cash, non-current 1,627 1,627 — — Total assets measured and recorded at fair value $ 2,147,670 $ 2,147,670 $ 1,093,249 $ 1,093,249 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs in measuring fair value, and utilizes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows: Level 1 —Quoted prices in active markets for identical assets or liabilities. Financial assets and liabilities measured using Level 1 inputs include cash equivalents including restricted cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities. The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. The Company measured money market funds of $1,015.9 million and $71.8 million as cash equivalents as of December 31, 2021 and 2020, respectively, using Level 1 inputs. Level 2 —Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. The Company did not have any Level 2 instruments as of December 31, 2021 and 2020. Level 3 —Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company did not have any Level 3 instruments as of December 31, 2021 and 2020. Assets and liabilities that are measured at fair value on a non-recurring basis |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | LEASES The Company has entered into operating leases primarily for office real estate. The leases have remaining terms ranging from one year to 10 years and may include options to extend or terminate the lease. The depreciable life of ROU assets is limited by the expected lease term. The components of lease expense are as follows (in thousands): Years Ended December 31, 2021 2020 2019 Operating lease cost (1) $ 46,410 $ 42,127 $ 27,596 Variable lease cost 15,080 12,116 4,928 Net operating lease cost $ 61,490 $ 54,243 $ 32,524 (1) Operating lease cost is presented net of sublease income. Sublease income for the years ended December 31, 2021, 2020, and 2019 was not material. Supplemental cash flow information related to leases is as follows (in thousands): Years Ended December 31, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 51,657 $ 30,664 $ 17,721 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 110,845 $ 12,031 $ 267,048 Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate): As of December 31, 2021 2020 Operating lease right-of-use assets $ 345,660 $ 266,197 Included in accounts payable and accrued liabilities: Operating lease liability, current 37,116 35,647 Operating lease liability, non-current 394,724 307,936 Total operating lease liability $ 431,840 $ 343,583 Weighted-average remaining lease term: Operating leases (in years) 8.38 9.05 Weighted-average discount rate: Operating leases 3.98 % 4.60 % Future lease payments under operating leases as of December 31, 2021 are as follows (in thousands): Year Ending December 31, Operating Leases 2022 $ 52,636 2023 63,548 2024 62,162 2025 61,649 2026 60,044 Thereafter 218,954 Total future lease payments 518,993 Less: imputed interest (79,073) Less: expected tenant improvement allowance (8,080) Total $ 431,840 As of December 31, 2021, the Company’s commitment relating to operating leases that have not yet commenced was $198.4 million. These operating leases will two |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The Company’s outstanding debt as of December 31, 2021 and 2020 is as follows (in thousands): As of December 31, 2021 2020 Amount Effective Interest Rate Amount Effective Interest Rate Term Loan A Facility $ 90,000 2.0 % $ 95,000 2.0 % Less: Debt issuance costs (132) (258) Net carrying amount of debt $ 89,868 $ 94,742 The carrying amount of debt approximates fair value due to its variable interest rates. The interest expense for the years ended December 31, 2021 and 2020 relating to the Credit Agreement is $2.2 million and $2.6 million, respectively. Senior Secured Term Loan A and Revolving Credit Facilities On February 19, 2019, the Company entered into a Credit Agreement with Morgan Stanley Senior Funding, Inc. (as amended on May 3, 2019, the “Credit Agreement”), which provides for (i) a four-year revolving credit facility in the aggregate principal amount of up to $100.0 million (the “Revolving Credit Facility”), (ii) a four-year delayed draw term loan A facility in the aggregate principal amount of up to $100.0 million (the “Term Loan A Facility”), and (iii) an uncommitted incremental facility, subject to the satisfaction of certain financial and other conditions, in the amount of up to (v) $50.0 million, plus (w) 1.0x of the Company’s EBITDA for the most recently completed four fiscal quarter period, plus (x) an additional amount at the Company’s discretion, so long as, on a pro forma basis at the time of incurrence, the Company’s secured leverage ratio does not exceed 1.50 to 1.00, plus (y) voluntary prepayments of the Revolving Credit Facility and Term Loan A Facility to the extent accompanied by concurrent reductions to the applicable Credit Facility (together with the Revolving Credit Facility and the Term Loan A Facility, collectively, the “Credit Facility”). On November 18, 2019, the Company borrowed the Term Loan A facility in the aggregate principal amount of $100.0 million. In March 2020, the Company borrowed the available balance of $69.3 million from the Revolving Credit Facility. For both borrowings, the Company elected an interest rate equal to the adjusted one-month LIBOR rate plus an applicable margin of 1.75% based on the Company’s secured leverage ratio. In May 2020, the Company repaid the outstanding balance on the Revolving Credit Facility. Loans under the Term Loan A Facility amortize in equal quarterly installments beginning on March 31, 2020, in an aggregate annual amount equal to (i) on or prior to December 31, 2021, 1.25% of the drawn principal amount of the Term Loan Facility or $1.25 million and (ii) thereafter, 2.50% of the drawn principal amount of the Term Loan Facility or $2.5 million, with the remaining balance payable on the maturity date of the Term Loan A Facility in February 2023. The Revolving Credit Facility may be borrowed, repaid, and reborrowed until the fourth anniversary of the Closing Date in February 2023, at which time all outstanding balances of the Revolving Credit Facility are due to be repaid. The Company had outstanding letters of credit against the Revolving Credit Facility of $38.0 million and $30.8 million as of December 31, 2021 and 2020, respectively. The Company’s obligations under the Credit Agreement are secured by substantially all of its assets. In the future, certain of its direct and indirect subsidiaries may be required to guarantee the Credit Agreement. The Company may prepay, and in certain circumstances would be required to prepay, loans under the Credit Agreement without payment of a premium. The Credit Agreement contains customary representations and warranties, customary affirmative and negative covenants, a financial covenant that is tested quarterly and requires the Company to maintain a certain adjusted quick ratio of at least 1.00 to 1.00, and customary events of default. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Preferred Stock The Company has 10 million shares of undesignated preferred stock authorized but not issued with rights and preferences determined by the Company’s Board of Directors at the time of issuance of such shares. As of December 31, 2021 and 2020, there were no shares of preferred stock issued and outstanding. Common Stock The Company has two classes of authorized common stock, Class A common stock and Class B common stock. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders and holders of Class B common stock are entitled to ten votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of the Company’s Class A common stock upon sale or transfer. Shares issued in connection with exercises of stock options, vesting of restricted stock units, or shares purchased under the employee stock purchase plan are generally automatically converted into shares of the Company’s Class A common stock. At-the-Market Offerings On March 2, 2021, the Company entered into an Equity Distribution Agreement with Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., and Evercore Group L.L.C., as its sales agents, pursuant to which the Company could offer and sell from time-to-time shares of its Class A common stock for aggregate gross proceeds of up to $1,000.0 million. In March 2021, the Company sold approximately 2.6 million shares of Class A common stock at an average selling price of $379.26 per share, for aggregate gross proceeds of $1,000.0 million and incurred issuance costs of $10.4 million. On May 13, 2020, the Company entered into an Equity Distribution Agreement with Morgan Stanley & Co. LLC and Citigroup Global Markets Inc., as its sales agents, pursuant to which the Company sold an aggregate of 4.0 million shares of the Company’s Class A common stock at an average selling price of $126.01 per share, for aggregate gross proceeds of $504.0 million and incurred issuance costs of $6.8 million. On November 19, 2019, the Company entered into an Equity Distribution Agreement with Citigroup Global Markets Inc., as its sales agent, pursuant to which the Company sold an aggregate of 1.0 million shares of the Company’s Class A common stock at an average selling price of $153.99 per share, for aggregate gross proceeds of $154.0 million and incurred issuance costs of $2.8 million. On May 16, 2019, the Company entered into an Equity Distribution Agreement with Morgan Stanley & Co. LLC, as its sales agent, pursuant to which the Company sold an aggregate of 1.0 million shares of the Company’s Class A common stock at an average selling price of $82.90 per share, for aggregate gross proceeds of $82.9 million and incurred issuance costs of $1.6 million. On March 12, 2019, the Company entered into an Equity Distribution Agreement with Citigroup Global Markets Inc., as its sales agent, pursuant to which the Company sold approximately 1.4 million shares of the Company’s Class A common stock at an average selling price of $72.00 per share, for aggregate gross proceeds of $100.0 million and incurred issuance costs of $2.0 million. Common Stock Reserved For Issuance At December 31, 2021, the Company’s common stock reserved for issuance in the future is as follows (in thousands): As of December 31, 2021 Common stock awards granted under equity incentive plans 9,460 Common stock awards available for issuance under the 2017 Employee Stock Purchase Plan * 5,089 Common stock awards available for issuance under the 2017 Equity Incentive Plan 27,011 Total reserved shares of common stock 41,560 * The Company has not issued any common stock pursuant to the 2017 Employee Stock Purchase Plan. Equity Incentive Plans The Company has two equity incentive plans, the 2008 Equity Incentive Plan (the “2008 Plan”) and the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan became effective September 2017 in connection with the Company’s initial public offering (“IPO”). No additional equity grants have been made pursuant to the 2008 Plan subsequent to the IPO. The 2017 Plan provides for the grant of incentive stock options to the Company’s employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of equity compensation to the Company’s employees, directors, and consultants. Restricted stock units granted under the 2017 Plan are subject to continuous service. Stock options granted under the 2017 Plan generally are granted at a price per share equivalent to the fair market value on the date of grant. Recipients of option grants who possess more than 10% of the combined voting power of the Company are subject to certain limitations, and incentive stock options granted to such recipients are at a price no less than 110% of the fair market value at the date of grant. Restricted Stock Units Restricted stock unit activity for the year ended December 31, 2021 is as follows (in thousands, except per share data): Number of Shares Weighted-Average Grant Date Fair Value Per Share Balance, December 31, 2020 4,355 $ 92.91 Awarded 983 348.62 Released (1,655) 81.95 Forfeited (397) 135.44 Balance, December 31, 2021 - Outstanding 3,286 $ 169.76 The grant date fair value of restricted stock units granted during the years ended December 31, 2021, 2020, and 2019 was $342.6 million, $210.1 million, and $195.2 million, respectively. The fair value of restricted stock units that vested during the years ended December 31, 2021, 2020, and 2019 was $135.6 million, $83.7 million, and $40.5 million, respectively. The unrecognized stock-based compensation expense related to restricted stock units awarded to employees as of December 31, 2021 was $463.7 million, which the Company expects to recognize over a weighted-average period of approximately 2.08 years. Stock Options The following table summarizes the Company’s stock option activities under the 2008 Plan and 2017 Plan (in thousands, except years and per share data): Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Weighted-Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Balance, December 31, 2020 8,733 $ 26.19 5.7 — Granted 320 356.55 — $ 139.76 Exercised (2,841) 6.51 — — Forfeited and expired (38) 104.47 — — Balance, December 31, 2021 - Outstanding 6,174 $ 51.87 5.8 — $ 1,129,748 Balance, December 31, 2021- Exercisable 4,548 $ 14.73 4.9 — $ 973,186 The weighted-average grant date fair value of options granted during the years ended December 31, 2021, 2020, and 2019 was $139.76, $54.39, and $39.23, respectively. The intrinsic value for stock options exercised in the years ended December 31, 2021, 2020, and 2019 was $997.6 million $470.8 million, and $474.2 million, respectively. Intrinsic value represents the difference between the fair values of the Company’s common stock and the stock options’ exercise price on the date of grant. As of December 31, 2021, the Company had $67.5 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 2.0 years. Stock-based Compensation The Company measures the cost of employee services received in exchange for an equity award based on the grant date fair value of the award. Generally, stock options granted to employees under the 2008 Plan vest 25% after one year and then 1/48 th monthly thereafter and have a term of ten years. Restricted stock units generally vest over 4 years. For the years ended December 31, 2021, 2020, and 2019, the amount of stock-based compensation capitalized as part of internal-use software was not material. The following table shows total stock-based compensation expense for the years ended December 31, 2021, 2020, and 2019 (in thousands): Years Ended December 31, 2021 2020 2019 Cost of revenue, platform $ 827 $ 847 $ 342 Cost of revenue, player 2,035 1,407 1,072 Research and development 77,770 58,412 40,036 Sales and marketing 63,503 42,846 24,179 General and administrative 43,397 30,564 19,546 Total stock-based compensation $ 187,532 $ 134,076 $ 85,175 The fair value of stock options granted under the 2008 Plan and 2017 Plan is estimated on the grant date using the Black-Scholes option-valuation model. The assumptions used to value stock options granted during the years ended December 31, 2021, 2020, and 2019 are as follows: Years Ended December 31, 2021 2020 2019 Expected term (in years) 5.0 - 6.8 5.0 - 6.7 5.0 - 6.7 Risk-free interest rate 0.36 - 1.20% 0.22 - 1.67% 1.35 - 2.56% Expected volatility 38 - 39% 36 - 39% 35 - 36% Dividend rate — — — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Manufacturing Purchase Commitments The Company has various manufacturing contracts with vendors in the conduct of the normal course of its business. In order to manage future demand for its products, the Company enters into agreements with manufacturers and suppliers to procure inventory based upon certain criteria and timing. Some of these commitments are non-cancelable. As of December 31, 2021, the Company had $195.2 million of non-cancelable purchase commitments for inventory. The Company records a liability for non-cancelable purchase commitments in excess of projected demand forecasts. The Company recorded $0.2 million and $1.2 million for these purchase commitments in Accrued liabilities as of December 31, 2021 and 2020, respectively. Licensed Content Commitments The Company enters into contracts with content publishers to license content for streaming. When a title becomes available, the Company records an asset and a liability on the consolidated balance sheets. As of December 31, 2021, the Company’s total obligation for licensed content is $421.0 million, of which the Company recorded $92.1 million in Current liabilities and $51.2 million in Other long-term liabilities in the consolidated balance sheets. The remaining $277.7 million is not yet recognized on the consolidated balance sheets as the content does not meet the criteria for asset recognition. The expected timing of payments for these content obligations are as follows (in thousands): Year Ending December 31, 2022 $ 212,355 2023 99,848 2024 59,544 2025 36,731 2026 8,715 Thereafter 3,815 Total content liabilities $ 421,008 The Company also licenses content under arrangements where the payments are variable and based on the revenue earned by the Company. Since those amounts cannot be determined as of December 31, 2021, they are not included in the obligations above. In connection with the acquisition of certain content rights during the quarter ended March 31, 2021, the Company assumed liabilities related to certain costs of the development and use of certain assets that had been incurred but not paid at the time assumed. Escrow arrangements were put in place such that selling shareholders would cover such costs. Accordingly, the Company recognized both an indemnification asset and liability of $81.4 million, respectively, as of March 31, 2021. As of December 31, 2021, $77.5 million of both the indemnification asset and liability were released related to payments made for a portion of the liabilities assumed. The remaining indemnification balance as of December 31, 2021 is $3.9 million, with the indemnification asset recorded as part of Prepaid expenses and other current assets and the indemnification liability recorded as part of Accrued liabilities in the consolidated balance sheets. Letters of Credit As of December 31, 2021 and 2020, the Company had irrevocable letters of credit outstanding in the amount of $38.0 million and $30.9 million, respectively, related to facilities leases. The letters of credit have various expiration dates through 2030. Contingencies The Company accrues for loss contingencies, including liabilities for intellectual property licensing claims, when it believes such losses are probable and reasonably estimable. These contingencies are reviewed at least quarterly and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events. The resolution of these contingencies and of other legal proceedings can be, however, inherently unpredictable and subject to significant uncertainties. From time to time, the Company is subject to legal proceedings, claims, and investigations in the ordinary course of business, including claims relating to employee relations, business practices, and patent infringement. The Company is involved in litigation matters not listed herein. Although the results of these proceedings, claims, and investigations cannot be predicted with certainty, the Company does not believe that the final outcome of any matters that it is currently involved in are reasonably likely to have a material adverse effect on its business, financial condition, or results of operations. During the year ended December 31, 2021 the Company recorded expenses of $4.8 million in Cost of revenue, player, $1.8 million in Cost of revenue, platform, and $3.4 million in General and administrative expenses for claims related to patent infringement. During the year ended December 31, 2020 the Company did not have any loss contingencies that were material. During the year ended December 31, 2019, the Company recorded expenses of $9.9 million, in Cost of revenue, player for various claims related to patent infringements. Indemnification In the ordinary course of business, the Company has entered into contractual arrangements which provide indemnification provisions of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. The Company’s obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The components of income (loss) before income taxes consist of the following (in thousands): Years Ended December 31, 2021 2020 2019 United States $ 240,560 $ (21,107) $ (63,453) Foreign (3,973) 2,655 2,534 Net income (loss) before income taxes $ 236,587 $ (18,452) $ (60,919) The income tax (benefit) expense consisted of the following (in thousands): Years Ended December 31, 2021 2020 2019 Current: Federal $ — $ (219) $ (47) State 589 620 244 Foreign 490 743 108 1,079 1,144 305 Deferred: Federal 193 — — State 256 — — Foreign (7,326) (2,089) (1,287) (6,877) (2,089) (1,287) Total $ (5,798) $ (945) $ (982) The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: Years Ended December 31, 2021 2020 2019 U.S. federal income tax at statutory rate 21.0 % 21.0 % 21.0 % U.S. state and local income taxes 0.2 (3.2) (0.4) Change in valuation allowance 140.0 (698.4) (213.4) Federal research and development tax credit (30.7) 102.9 30.8 Stock-based compensation (114.3) 577.8 158.0 Discrete tax benefit due to IP transfer (19.1) — — Meals and entertainment 0.1 (1.6) (1.4) Foreign rate differential 0.1 — (0.6) Acquisition costs — — (1.3) Section 162(m) limitation 1.1 (7.2) (1.4) State apportionment change — 4.4 1.3 Tax rate change (0.7) — (0.4) Provision to return true-up (0.1) 9.4 9.9 Other (0.1) 0.1 (0.5) Effective tax rate (2.5) % 5.2 % 1.6 % Significant components of the Company’s deferred income tax assets and liabilities consist of the following (in thousands): As of December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 563,173 $ 379,613 Reserves and accruals 20,969 14,131 Research and development credits 166,940 104,110 Operating lease liabilities 107,228 91,373 Stock-based compensation 36,350 28,318 Depreciation and amortization 40,583 — Total deferred tax assets 935,243 617,545 Deferred tax liabilities: Operating lease right-of-use assets (85,713) (70,755) Depreciation and amortization — (11,707) Total deferred tax liabilities (85,713) (82,462) Valuation allowance (838,949) (530,887) Net deferred tax assets $ 10,581 $ 4,196 A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized through future operations. As a result of the Company’s analysis of all available objective evidence, both positive and negative, as of December 31, 2021, management believes it is more likely than not that the U.S. and Netherlands deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its U.S. and Netherlands deferred tax assets. The Company’s U.S. federal and state valuation allowance increased by $261.8 million and $169.7 million during the years ended December 31, 2021 and 2020, respectively, primarily due to U.S. federal and state tax losses and credits incurred during the period. The change in the valuation allowance, during the year ended December 31, 2021, is primarily attributable to an increase in domestic net operating loss carryforwards, primarily due to stock-based compensation expense, and an increase of approximately $46.2 million in deferred tax assets that are not realizable, related to the IP transfer completed during 2021, giving rise to foreign amortizable assets. For federal and state income tax reporting purposes, respective net operating loss carryforwards of $2,169.9 million and $1,824.3 million are available to reduce future taxable income, if any. These net operating loss carryforwards will begin to expire in 2028 for federal and certain state net operating losses have expired in 2021. The federal net operating loss generated subsequent to 2017 can be carried forward indefinitely. For Brazil, Denmark, Netherlands, and U.K. income tax reporting purposes, the net operating loss carryforwards of $2.8 million, $2.8 million, $6.1 million, and $33.9 million, respectively, are available to reduce future taxable income, if any, in those countries. Brazil, Denmark, and U.K. net operating losses can be carried forward indefinitely. Netherlands net operating losses can be carried back one year and carried forward indefinitely. The Company also has U.K. research and development tax credit carryforwards of $0.5 million, which can be carried forward indefinitely. As of December 31, 2021, the Company has research and development tax credit carryforwards of $133.8 million and $97.4 million for federal and state income tax purposes, respectively. If not utilized, the federal and state carryforwards will begin to expire in 2028 and 2035, respectively. The Internal Revenue Code of 1986, as amended (the “Code”), contains provisions that may limit the net operating loss and credit carryforwards available for use in any given period upon the occurrence of certain events, including a statutorily defined significant change in ownership. Utilization of the net operating loss and tax credit carryforwards is subject to an annual limitation due to an ownership change, as defined by section 382 of the Code. The Company completed a recent study to assess whether any section 382 ownership change has occurred since the Company’s formation. Based on the study, the Company had a section 382 ownership change on December 18, 2009 and tax attributes generated by the Company through the ownership change date are subject to the limitation. A section 382 study was completed for dataxu, which the Company acquired in November 2019, covering the period from inception beginning May 1, 2008 through the acquisition date of November 8, 2019. Based on the study, the Company identified four ownership changes for section 382 purposes. As such, tax attributes generated by dataxu through the ownership change dates are subject to the limitation. The total amount of unrecognized tax benefits as of December 31, 2021 is $66.2 million, of which $48.7 million is composed of research and development credits and $17.5 million is related to international activities. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): As of December 31, 2021 2020 Unrecognized tax benefits at beginning of year $ 29,175 $ 19,487 Gross increase for tax positions of current year 36,198 9,959 Gross decrease due to statute expiration (330) (75) Gross increase (decrease) for tax positions of prior years 1,107 (196) Unrecognized tax benefits balance at end of year $ 66,150 $ 29,175 The Company recognizes interest and penalties related to unrecognized tax benefits as a component of its income tax expense. As of December 31, 2021, the Company recorded $0.4 million of accrued interest and penalties related to uncertain tax positions. Change in the Company’s unrecognized tax benefits, if any, would have an immaterial impact on its effective tax rate. The Company does not expect its gross unrecognized tax benefits to change significantly within the next 12 months. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is currently under examination by the Texas Comptroller for calendar tax years 2015, 2016, and 2017. All tax years remain subject to examination by federal and state authorities. These audits include questioning the timing and amount of deductions; the nexus of income among various tax jurisdictions; and compliance with federal, state, and local tax laws. The Company will continue to indefinitely reinvest earnings from its foreign subsidiaries, which are not significant. While federal income tax expense has been recognized as a result of the Tax Cuts and Jobs Act of 2017, the Company has not provided any additional deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss. It is not practicable for the Company to determine the amount of unrecognized tax expense on these reinvested international earnings. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | RELATED-PARTY TRANSACTIONS The Company did not engage in any material related party transactions for the years ended December 31, 2021 and 2020. In the year ended December 31, 2019, the Company engaged in transactions with one of its strategic investors. With respect to this investor, the Company recorded revenue of $8.5 million and expenses of $1.3 million for the year ended December 31, 2019. During the years ended December 31, 2021 and 2020, the Company did not consider this investor to be a related party, as this investor did not meet the defined criteria. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plans | RETIREMENT PLANS The Company maintains a 401(k) tax deferred saving plan (the “Savings Plan”) for the benefit of qualified employees. Qualified employees may elect to make contributions to the Savings Plan on a biweekly basis, subject to certain limitations. The Company may make contributions to the Savings Plan at the discretion of the Board of Directors. No contributions were made for the years ended December 31, 2021, 2020, and 2019. In 2014, the Company established a defined contribution plan in the U.K. for its U.K.-based employees. The Company contributed $1.3 million, $0.7 million, and $0.5 million to the plan for the years ended December 31, 2021, 2020, and 2019, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NET INCOME (LOSS) PER SHARE The Company’s basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding for the period. The Company uses the two-class method to calculate net income (loss) per share. Except with respect to certain voting, conversion, and transfer rights and as otherwise expressly provided in the Company’s amended and restated certificate of incorporation or required by applicable law, shares of the Company’s Class A common stock and Class B common stock have the same rights and privileges and rank equally, share ratably, and are identical in all respects as to all matters. Accordingly, basic and diluted net income (loss) per share are the same for both classes. For purposes of the calculation of diluted net income (loss) per share, options to purchase common stock, restricted stock units, and unvested shares of common stock issued upon the early exercise of stock options are considered common stock equivalents. Dilutive shares of common stock are determined by applying the treasury stock method. The dilutive shares are excluded from the calculation of diluted net loss per share in the period of net loss, as their effect is antidilutive. The following table presents the calculation of basic and diluted net income (loss) per share as follows (in thousands, except per share data): Years Ended December 31, 2021 2020 2019 Numerator: Net income (loss) $ 242,385 $ (17,507) $ (59,937) Denominator: Basic net income (loss) per share: Weighted-average common shares outstanding — basic 132,710 123,978 115,218 Net income (loss) per share — basic $ 1.83 $ (0.14) $ (0.52) Diluted net income (loss) per share: Weighted-average common shares outstanding — basic 132,710 123,978 115,218 Effect of potentially dilutive securities: Restricted stock units 2,744 — — Stock options 6,214 — — Weighted-average common shares outstanding — diluted 141,668 123,978 115,218 Net income (loss) per share — diluted $ 1.71 $ (0.14) $ (0.52) Common stock equivalents excluded from the calculation of diluted net income (loss) per share because of their anti-dilutive effect are as follows (in thousands): Years Ended December 31, 2021 2020 2019 Equity awards to purchase common stock 1,128 13,088 15,668 Unvested shares of common stock issued upon early exercise of stock options and business acquisition — 1 31 Total 1,128 13,089 15,699 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION An operating segment is defined as a component of an entity for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is its Chief Executive Officer, and the CODM evaluates performance and makes decisions about allocating resources to its operating segments based on financial information presented on a consolidated basis and on revenue and gross profit for each operating segment. The Company uses the management approach to determine the segment financial information that should be disaggregated and presented separately in the Company’s notes to its consolidated financial statements. The management approach is based on the manner by which management has organized the segments within the Company for making operating decisions, allocating resources, and assessing performance. The Company reports its financial results consistent with the manner in which financial information is viewed by management for decision-making purposes. The Company does not manage operating expenses such as research and development, sales and marketing and general and administrative expenses at the segment level. The Company does not allocate property and equipment or any other assets or capital expenditures to reportable segments. The Company is organized into two reportable segments as follows: Platform Consists of revenue generated from the sale of digital advertising and related services including the demand-side platform, content distribution services (such as subscription and transaction revenue shares, media and entertainment promotional spending, the sale of Premium Subscriptions, and the sale of branded channel buttons on remote controls), and licensing arrangements with service operators and TV brands. Player Consists of revenue generated from sale of streaming players, audio products and accessories through retailers and distributors, as well as directly to customers through the Company’s website. Customers accounting for 10% or more of segment revenue, net, were as follows: Years Ended December 31, 2021 2020 2019 Platform segment revenue Customer H 10 % 13 % * Player segment revenue Customer A * 10 % 16 % Customer B 23 % 18 % 17 % Customer C 37 % 40 % 39 % * Less than 10% Revenue in international markets was less than 10% in each of the periods presented. Substantially all Company assets were held in the United States and were attributable to the operations in the United States as of December 31, 2021 and 2020. |
Significant Accounting Polici_2
Significant Accounting Policies and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of ConsolidationThe consolidated financial statements, which include the accounts of Roku, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year PresentationCertain prior period amounts in the consolidated balance sheets and notes to consolidated financial statements have been reclassified to conform to current period presentation. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates and assumptions include: • revenue recognition: determining the nature and timing of satisfaction of performance obligations, variable consideration, determining the stand-alone selling prices of performance obligations, gross versus net revenue recognition, and evaluation of customer versus vendor relationships; • the impairment of intangible assets; • valuation of assets acquired and liabilities assumed in connection with business combinations; • useful lives of tangible and intangible assets; • allowances for sales returns and sales incentives; and • the valuation of deferred income tax assets. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income for the year ended December 31, 2021 includes foreign currency translation adjustments. Comprehensive loss is equal to the net loss for the year ended December 31, 2020. Comprehensive loss for the year ended December 31, 2019 includes unrealized gains on the Company’s short-term investments and foreign currency translation adjustments. Income taxes on the unrealized gains are not material. |
Foreign Currency | Foreign Currency The Company uses the U.S. dollar as the functional currency for most of its foreign subsidiaries. Monetary assets and liabilities of these subsidiaries are remeasured into U.S. dollars from the local currency at rates in effect at period-end and non-monetary assets and liabilities are remeasured at historical rates. Revenue and expenses are remeasured at average exchange rates in effect during each period. Foreign currency gains or losses from re-measurement and transaction gains or losses are recorded as Other income (expense), net in the consolidated statements of operations. The Company recorded a foreign currency loss of $1.2 million, gain of $1.3 million, and loss of $0.2 million during the years ended December 31, 2021, 2020, and 2019, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Two financial institutions managed 30% and 27% of cash and cash equivalents as of December 31, 2021 and 46% and 26% as of December 31, 2020. |
Accounts Receivable, Net | Accounts Receivable, net Accounts receivable are typically unsecured and are derived from revenue earned from customers. They are stated at invoice value less estimated allowances for sales returns, sales incentives, doubtful accounts, and other miscellaneous allowances. The Company performs ongoing credit evaluations of its customers to determine allowances for potential credit losses and doubtful accounts. The Company considers historical experience, ongoing promotional activities, historical claim rates, and other factors to determine the allowances for sales returns and sales incentives. |
Business Combinations | Business Combinations The Company determines whether a transaction meets the definition of a business combination before applying the acquisition method of accounting to that transaction. The Company allocates the fair value of the purchase consideration of its acquisitions to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. The operating results of acquired businesses are included in the Company’s consolidated statements of operations from their effective acquisition date. Acquisition-related expenses and certain acquisition restructuring and other related charges are recognized separately from the business combination and are expensed as incurred. Contingent consideration classified as a liability is recognized at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to consideration transferred, and the assets acquired and liabilities assumed with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions and records any adjustments to the Company’s preliminary estimates with a corresponding offset to goodwill during the measurement period. Upon the conclusion of the measurement period or final determination of the values of consideration transferred, and assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. |
Intangible Assets | Intangible AssetsIntangible assets acquired through business combinations are recorded at their fair values as of the acquisition date. Intangible assets are amortized using the straight-line method over their estimated useful lives. The Company evaluates the estimated remaining useful lives of its intangible assets annually and when events or changes in circumstances warrant a revision to the remaining periods of amortization. |
Impairment Assessments | Impairment Assessments The Company evaluates goodwill for possible impairment at least annually during the fourth quarter of each fiscal year or more often, if and when circumstances indicate that goodwill may be impaired. This includes but is not limited to significant adverse changes in the business climate, market conditions, or other events that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. In performing its annual assessment, the Company can opt to perform a qualitative assessment to test a reporting unit’s goodwill for impairment or it can directly perform a quantitative assessment. Based on the Company’s qualitative assessment, if it is determined that the fair value of the reporting unit is, more likely than not, less than its carrying amount, then the quantitative assessment is performed. Any excess of the reporting unit’s carrying amount over its fair value is recorded as an impairment loss, limited to the total amount of goodwill allocated to the reporting unit. The Company reviews long-lived assets and intangible assets with finite lives for impairment when events or changes in business circumstances indicate that the carrying amount of the asset or asset group may not be fully recoverable or that the useful lives of the asset or asset group are no longer appropriate. The Company assesses these asset or asset groups for impairment based on their estimated undiscounted future cash flows. If the carrying value of the asset or asset group exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the asset group. |
Content Assets | Content Assets The Company records content assets as Other non-current assets. The amortization expense for licensed content is recorded based on the pattern of monetization of such content which is primarily straight-line. The amortization of produced content is recorded over the applicable content life cycle based upon the ratio of current period revenue to the estimated total revenue to be earned. Licensed and produced content assets are primarily monetized together as a unit, referred to as a film group. The film group is evaluated for impairment whenever an event occurs, or circumstances change, indicating the fair value is less |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company’s contracts include various product or services or a combination of both, which are generally capable of being distinct and are accounted for as separate performance obligations. The Company’s contracts often contain multiple distinct performance obligations. The Company estimates the transaction price of a contract based on the expected value for which a significant reversal of revenue is not expected to occur. The estimate of the variable consideration is based on the assessment of historical, current, and forecasted performance noted and expected from the performance obligation. In arrangements with multiple performance obligations, the estimated transaction price of each contract is allocated to each distinct performance obligation based on relative stand-alone selling price (“SSP”). For performance obligations routinely sold separately, the SSP is determined by evaluating such stand-alone sales. For those performance obligations that are not routinely sold separately, the Company determines SSP based on market conditions and other observable inputs. When the Company sells third-party goods and services, it evaluates whether the Company is the principal, and reports revenue on a gross basis, or an agent, and reports revenue on a net basis. In this assessment, the Company considers if it obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price. Revenue is recorded net of taxes collected from customers which are subsequently remitted to the relevant government authority. The Company does not capitalize any cost associated with contract acquisition because it applies a practical expedient and expenses commissions when incurred as most direct contract acquisition costs relate to contracts that are recognized over a period of one year or less. Sales commissions are included in Sales and marketing expenses in the consolidated statements of operations. The as-invoiced practical expedient is applied when the amount of consideration the Company has a right to invoice corresponds directly with the value to the customer of the entity’s performance completed to date. Nature of Products and Services Platform segment: The Company generates platform revenue from the sale of digital advertising and related services including the OneView ad platform, content distribution services (such as subscription and transaction revenue shares, media and entertainment promotional spending, the sale of Premium Subscriptions, and sale of branded channel buttons on remote controls), and licensing arrangements with service operators and TV brands. The Company sells digital advertising to advertisers directly or through advertising agencies and to content publishers for their media and entertainment promotions via various campaign tools. Advertising arrangements include video and display advertising delivered through advertising impressions. Advertising arrangements include multiple performance obligations as they contain distinct advertising products or services. For such arrangements, the Company allocates revenue to each distinct performance obligation based on their relative SSP. The Company also generates revenue from customers using its ad platform. For such arrangements, it charges a platform fee, which is a percentage of a customer’s advertising inventory spend during the month, along with data and any add-on features purchased through the platform. The Company recognizes revenue on either a gross or net basis for digital advertising based on its determination as to whether it is acting as the principal in the revenue generation process or as an agent. Where the Company is the principal, it controls the advertising inventory before it is transferred to its customers. This is further supported by the Company being primarily responsible to its customers for the fulfillment and having a level of discretion in establishing pricing. Advertising arrangements comprised of multiple performance obligations are recognized either at a point in time or over time depending on the nature of the distinct performance obligation. The Company’s content distribution revenue sharing arrangements include cash or non-cash consideration. The revenue sharing arrangements generally apply to new subscriptions for accounts that sign up for new services and at the time of a movie rental or purchase. Revenue is recognized on a net basis as the Company is deemed to be the agent between content publishers and end users. Revenue is recognized on a time elapsed basis, by day, as the services are delivered over the contractual distribution term. Non-cash consideration is usually in the form of advertising inventory, the fair value of which is determined based on relevant internal and third-party data. The Company sells monthly subscriptions for premium content on The Roku Channel for varying fees for different content. Revenue from such Premium Subscription fees is recognized on a gross basis over the service period as the Company is deemed to be the principal in the relationship with the end user. The Company obtains control of the content before transferring to the end user and has latitude in establishing pricing. The Company pays fixed fees per subscriber or fixed percentage of revenue share to the providers of premium content on The Roku Channel based on the contractual arrangement and recognizes that in Cost of revenue, platform. The Company sells branded channel buttons on remote controls of streaming devices that provide one-touch access to a publisher’s content. The Company typically receives a fixed fee per button for each unit sold over a defined distribution period. Revenue is recognized on a time elapsed basis, by day, over the distribution term. The Company licenses the Roku OS, including updates and upgrades, to TV brands and service operators. The licensing revenue is recognized at a point in time, when the Company makes the intellectual property available and the control transfers to the customer. The revenue allocated to unspecified upgrades and updates is recognized on a time elapsed basis, by day, over the service period. Professional services revenue is recognized as services are provided or accepted. Hosting fees are recognized on a time elapsed basis, by day, over the service period. Player segment: The Company sells the majority of its streaming players and audio products to retail distribution channels in the U.S. including brick and mortar and online retailers, as well as through the Company’s website. Player revenue primarily consists of hardware, embedded software, and unspecified upgrades and updates on a when and if-available basis. The hardware and embedded software are considered as one performance obligation and revenue is recognized at a point in time when the control transfers to the customer. Unspecified upgrades and updates are available to customers on a when-and-if available basis. The Company records the allocated value of the unspecified upgrades and updates as deferred revenue and recognizes it as player revenue ratably on a time elapsed basis over the estimated economic life of the associated players products. The Company’s player revenue includes allowances for sales returns and sales incentives in the estimated transaction price. These estimates are based on historical experience and anticipated performance. Shipping charges billed to customers are included in Player revenue and the related shipping costs are included in Cost of revenue, player. |
Leases | Leases The Company determines if an arrangement contains a lease at its inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued liabilities, and operating lease liability in our consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future lease payments. The Company takes into consideration its credit rating and the length of the lease when calculating the incremental borrowing rate. The Company considers the options to extend or terminate the lease in determining the lease term, when it is reasonably certain to exercise one of the options. The Company combines lease and non-lease components into a single lease component for its real estate and equipment leases. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements. The carrying amounts reported in the consolidated financial statements for cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. The carrying amount of debt approximates fair value due to its variable interest rates. |
Inventories | Inventories The Company’s inventories consist primarily of finished goods and are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. Provisions are made if the cost of the inventories exceeds their net realizable value. The Company evaluates inventory levels and purchase commitments for excess and obsolete products, based on management’s assessment of future demand and market conditions. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of the assets, generally ranging between eighteen months and five years. Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives, which range from five two |
Deferred Revenue | Deferred Revenue The Company’s deferred revenue reflects fees received in advance that will be recognized as revenue over time or as services are rendered. Deferred revenue balances consist of the amount of player revenue allocated to unspecified upgrades and updates on a when-and-if available basis, licensing and services fees received from service operators and TV brands, and advance payments from advertisers and content publishers where performance obligations are not yet fulfilled. Deferred revenue expected to be realized within one year is classified as a current liability and the remaining is recorded as a non-current liability. |
Advertising Costs | Advertising Costs Advertising costs are expensed when incurred and are included in Sales and marketing expense in the consolidated statements of operations. The Company incurred advertising costs of $35.2 million, $7.1 million, and $7.3 million for the years December 31, 2021, 2020, and 2019, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company measures compensation expense for all stock-based awards, including restricted stock units and stock options granted to employees, based on the estimated fair value of the award on the date of grant. For restricted stock units, the grant date fair value is based on the closing market price of the Company’s Class A common stock on the date of grant. The fair value of each stock option is estimated using the Black-Scholes option pricing model. The Company accounts for forfeitures as they occur. Stock-based compensation is recognized on a straight-line basis over the requisite vesting period. The Black-Scholes option pricing model used to fair value stock options include the following assumptions: • Fair Value of Our Common Stock . The Company uses the closing market price of its Class A common stock as reported on The Nasdaq Global Select Market on the date of grant. • Expected Term. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. The Company uses the simplified calculation of the expected term, which reflects weighted-average time to vest and the contractual life of the stock options granted, in absence of its own historical exercise data. • Volatility. The expected volatility is derived from an average of the historical volatilities of several peer companies which are similar in size and operational and economic activities. • Risk-free Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term for each of our stock options. • Dividend Yield. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. |
Income Taxes | Income Taxes The Company accounts for income taxes using an asset and liability approach. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax basis of assets and liabilities using |
Recently Adopted Accounting Standards and Recent Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards On January 1, 2021, the Company adopted the guidance issued in Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles and also simplifies areas such as franchise taxes, step-up in tax basis of goodwill, separate entity financial statements, and interim recognition of enactment of tax laws or rate changes. The adoption did not have a material impact on the Company’s consolidated financial statements. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) that is expected to be discontinued, subject to meeting certain criteria. The guidance is effective as of March 12, 2020 through December 31, 2022. The Company made a policy election in the second quarter of 2020 to elect a different reference rate for the Credit Agreement (as defined below) when LIBOR is discontinued. On January 1, 2020, the Company adopted the guidance in ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , using the modified retrospective adoption method and recorded a cumulative-effect adjustment to the beginning balance of accumulated deficit of approximately $1.1 million. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. This impact mainly relates to credit losses recognized on the Company’s doubtful accounts. As the Company did not have any available-for-sale debt securities as of the adoption date, there was no additional impact to accumulated deficit. On January 1, 2020, the Company adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials , in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 required that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, ASU 2019-02 required that an entity test films and license agreements for program material for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. There was no material impact to the Company’s consolidated financial statements. Recent Accounting Standards Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Fair Value Disclosure | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs in measuring fair value, and utilizes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows: Level 1 —Quoted prices in active markets for identical assets or liabilities. Financial assets and liabilities measured using Level 1 inputs include cash equivalents including restricted cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities. The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. The Company measured money market funds of $1,015.9 million and $71.8 million as cash equivalents as of December 31, 2021 and 2020, respectively, using Level 1 inputs. Level 2 —Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. The Company did not have any Level 2 instruments as of December 31, 2021 and 2020. Level 3 —Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company did not have any Level 3 instruments as of December 31, 2021 and 2020. Assets and liabilities that are measured at fair value on a non-recurring basis |
Significant Accounting Polici_3
Significant Accounting Policies and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Sales Returns | Allowance for sales returns consist of the following activities (in thousands): Years Ended December 31, 2021 2020 2019 Beginning balance $ 5,912 $ 6,550 $ 7,335 Add: Charged to revenue 16,181 14,594 15,541 Less: Utilization of sales return reserve (16,078) (15,232) (16,326) Ending balance $ 6,015 $ 5,912 $ 6,550 |
Schedule of Allowance for Sales Incentives | Allowance for sales incentives consisted of the following activities (in thousands): Years Ended December 31, 2021 2020 2019 Beginning balance $ 30,838 $ 19,476 $ 13,750 Add: Charged to revenue 90,530 68,315 65,676 Less: Utilization of sales incentive reserve (72,957) (56,953) (59,950) Ending balance $ 48,411 $ 30,838 $ 19,476 |
Schedule of Allowance for Doubtful Accounts | Allowance for doubtful accounts consisted of the following activities (in thousands): Years Ended December 31, 2021 2020 2019 Beginning balance $ 4,181 $ 1,140 $ 686 Impact of adoption of ASU 2016-13 — 1,066 — Adjusted beginning balance $ 4,181 $ 2,206 $ 686 Provision for (recoveries of) doubtful accounts (904) 3,801 704 Adjustments for recovery and write-off (1,119) (1,826) (250) Ending balance $ 2,158 $ 4,181 $ 1,140 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Balances | The contract balances include the following (in thousands): As of December 31, 2021 2020 2019 Accounts receivable, net $ 752,393 $ 523,852 $ 332,673 Contract assets (included in Prepaid expenses and other current assets) 46,952 7,431 3,588 Deferred revenue, current portion 45,760 55,465 39,861 Deferred revenue, non-current portion 28,726 21,283 15,370 Total deferred revenue $ 74,486 $ 76,748 $ 55,231 As of December 31, 2021 2020 Platform, current $ 22,240 $ 27,587 Player, current 23,520 27,878 Total deferred revenue, current 45,760 55,465 Platform, non-current 9,324 9,909 Player, non-current 19,402 11,374 Total deferred revenue, non-current 28,726 21,283 Total Deferred Revenue $ 74,486 $ 76,748 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Purchase Consideration to Tangible and Intangible Assets Acquired and Liabilities Assumed on Acquisition Date | The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed, reflecting measurement period adjustments through December 31, 2021, is based on estimated fair values and is as follows (in thousands): Fair Values Assets acquired Cash and cash equivalents $ 3,057 Prepaid expenses and other current assets 85 Property and equipment, net 584 Intangible assets: Developed technology 11,000 IPR&D technology 7,500 Goodwill 36,790 Operating lease right-of-use assets 1,235 Other non-current assets 1,905 Total assets acquired 62,156 Liabilities assumed Accounts payable and accrued liabilities (1,168) Operating lease liabilities, non-current portion (830) Other long-term liabilities (6,767) Total liabilities assumed (8,765) Total purchase consideration $ 53,391 The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed, reflecting measurement period adjustments through December 31, 2021, is based on estimated fair values and is as follows (in thousands): Fair Values Assets acquired Cash and cash equivalents $ 7 Accounts receivable 5,830 Prepaid expenses and other current assets 7,310 Property and equipment, net 307 Intangible assets: Tradename 20,000 Customer relationships 700 Goodwill 46,671 Operating lease right-of-use assets 5,498 Other non-current assets 23,487 Total assets acquired 109,810 Liabilities assumed Accounts payable and accrued liabilities (2,747) Deferred revenue, current portion (4,146) Operating lease liabilities, non-current portion (4,262) Deferred revenue, non-current portion (816) Other long-term liabilities (28) Total liabilities assumed (11,999) Total purchase consideration $ 97,811 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The valuation of the intangible assets acquired from Nielsen’s AVA business along with their estimated useful lives, is as follows (in thousands, except years): Estimated Fair Value Estimated Weighted-Average Useful Lives Developed technology $ 11,000 5.9 IPR&D technology 7,500 Estimated fair value of acquired intangible assets $ 18,500 5.9 The valuation of the intangible assets acquired from This Old House along with their estimated useful lives, is as follows (in thousands, except years): Estimated Fair Value Estimated Weighted-Average Useful Lives Tradename $ 20,000 10.0 Customer relationships 700 4.0 Estimated fair value of acquired intangible assets $ 20,700 9.8 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Value of Goodwill | The following table reflects the carrying value of goodwill (in thousands): Carrying Value Balance as of December 31, 2019 $ 74,116 Adjustments: Dataxu working capital adjustment (1,058) Balance as of December 31, 2020 $ 73,058 Additions: This Old House acquisition 46,671 Nielsen AVA business acquisition 36,790 Other immaterial acquisition 5,000 Balance as of December 31, 2021 $ 161,519 |
Summary of Intangible Assets | The following table is the summary of Company’s intangible assets (in thousands): As of December 31, 2021 Gross Accumulated Amortization Net Weighted-Average Useful Lives Developed technology $ 73,367 $ (25,350) $ 48,017 5.9 Customer relationships 14,100 (7,395) 6,705 4.0 Tradename 20,400 (1,966) 18,434 9.8 Patents 4,076 (606) 3,470 14.0 Intangible assets subject to amortization $ 111,943 $ (35,317) $ 76,626 6.7 IPR&D technology 7,500 — 7,500 Total Intangible assets $ 119,443 $ (35,317) $ 84,126 As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Lives (in years) Developed technology $ 62,367 $ (13,439) $ 48,928 5.9 Customer relationships 13,400 (3,908) 9,492 4.0 Tradename 400 (400) — 0.5 Patents 4,076 (315) 3,761 14.0 Total Intangible assets $ 80,243 $ (18,062) $ 62,181 6.0 |
Schedule of Estimated Future Amortization Expense for Intangible Asset | As of December 31, 2021, the estimated future amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands): Year Ending December 31, 2022 $ 17,745 2023 17,066 2024 14,275 2025 12,571 2026 4,074 Thereafter 10,895 Total $ 76,626 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consisted of the following (in thousands): As of December 31, 2021 2020 Accounts receivable, gross $ 809,220 $ 565,088 Less: Allowances Allowance for sales returns 6,015 5,912 Allowance for sales incentives 48,411 30,838 Allowance for doubtful accounts 2,158 4,181 Other allowances 243 305 Total allowances 56,827 41,236 Accounts Receivable, net $ 752,393 $ 523,852 |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): As of December 31, 2021 2020 Computers and equipment $ 38,473 $ 30,859 Leasehold improvements 182,229 144,013 Internal-use software 7,274 6,744 Office equipment and furniture 20,829 19,661 Property and equipment, gross 248,805 201,277 Accumulated depreciation and amortization (71,238) (46,080) Property and Equipment, net $ 177,567 $ 155,197 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): As of December 31, 2021 2020 Payments due to content publishers $ 165,894 $ 106,576 Accrued cost of revenue 142,014 98,285 Marketing, retail and merchandising costs 47,428 43,645 Operating lease liability, current 37,116 35,647 Content liability, current 70,462 6,165 Other accrued expenses 86,141 57,350 Total Accrued Liabilities $ 549,055 $ 347,668 |
Schedule of Deferred Revenue | The contract balances include the following (in thousands): As of December 31, 2021 2020 2019 Accounts receivable, net $ 752,393 $ 523,852 $ 332,673 Contract assets (included in Prepaid expenses and other current assets) 46,952 7,431 3,588 Deferred revenue, current portion 45,760 55,465 39,861 Deferred revenue, non-current portion 28,726 21,283 15,370 Total deferred revenue $ 74,486 $ 76,748 $ 55,231 As of December 31, 2021 2020 Platform, current $ 22,240 $ 27,587 Player, current 23,520 27,878 Total deferred revenue, current 45,760 55,465 Platform, non-current 9,324 9,909 Player, non-current 19,402 11,374 Total deferred revenue, non-current 28,726 21,283 Total Deferred Revenue $ 74,486 $ 76,748 |
Schedule of Other Long Term Liabilities | Other Long-term liabilities consisted of the following (in thousands): As of December 31, 2021 2020 Content liability, non-current $ 51,211 $ 1,380 Other long-term liabilities 31,274 1,739 Total Other long-term liabilities $ 82,485 $ 3,119 |
Content Assets (Tables)
Content Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Capitalized Licensed Content Costs [Abstract] | |
Schedule Of Content Assets Net | Content assets, net recorded as part of Other non-current assets consisted of the following (in thousands): As of December 31, 2021 2020 Licensed content, net $ 199,290 $ 7,907 Produced content: Released, less amortization 20,030 — Completed, not released 881 — In production 3,512 — Total produced content, net 24,423 $ — Total Content Assets, net $ 223,713 $ 7,907 |
Schedule Of Amortization Of Content Assets | Amortization of content assets is included in Cost of revenue, platform in the consolidated statements of operations and is reflected in the table below (in thousands): Years Ended December 31, 2021 2020 Licensed content $ 84,133 $ 22,392 Produced content 11,437 — Total amortization costs $ 95,570 $ 22,392 |
Schedule of Amortization Expense for Capitalized Licensed Content Assets | The following table reflects the amortization expense for the next three years for content assets, net (in thousands): Year Ending December 31, Licensed content Produced content Total 2022 $ 86,584 $ 4,055 $ 90,639 2023 38,861 4,202 43,063 2024 23,293 3,951 27,244 Total $ 148,738 $ 12,208 $ 160,946 |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value | The Company’s financial assets measured at fair value are as follows (in thousands): As of December 31, 2021 As of December 31, 2020 Fair Value Level 1 Fair Value Level 1 Assets: Cash and cash equivalents: Cash $ 1,130,172 $ 1,130,172 $ 1,021,022 $ 1,021,022 Money market funds 1,015,871 1,015,871 71,793 71,793 Restricted cash, current — — 434 434 Restricted cash, non-current 1,627 1,627 — — Total assets measured and recorded at fair value $ 2,147,670 $ 2,147,670 $ 1,093,249 $ 1,093,249 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense are as follows (in thousands): Years Ended December 31, 2021 2020 2019 Operating lease cost (1) $ 46,410 $ 42,127 $ 27,596 Variable lease cost 15,080 12,116 4,928 Net operating lease cost $ 61,490 $ 54,243 $ 32,524 (1) Operating lease cost is presented net of sublease income. Sublease income for the years ended December 31, 2021, 2020, and 2019 was not material. |
Schedule of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow information related to leases is as follows (in thousands): Years Ended December 31, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 51,657 $ 30,664 $ 17,721 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 110,845 $ 12,031 $ 267,048 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate): As of December 31, 2021 2020 Operating lease right-of-use assets $ 345,660 $ 266,197 Included in accounts payable and accrued liabilities: Operating lease liability, current 37,116 35,647 Operating lease liability, non-current 394,724 307,936 Total operating lease liability $ 431,840 $ 343,583 Weighted-average remaining lease term: Operating leases (in years) 8.38 9.05 Weighted-average discount rate: Operating leases 3.98 % 4.60 % |
Schedule of Future Lease Payments under Operating Leases | Future lease payments under operating leases as of December 31, 2021 are as follows (in thousands): Year Ending December 31, Operating Leases 2022 $ 52,636 2023 63,548 2024 62,162 2025 61,649 2026 60,044 Thereafter 218,954 Total future lease payments 518,993 Less: imputed interest (79,073) Less: expected tenant improvement allowance (8,080) Total $ 431,840 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The Company’s outstanding debt as of December 31, 2021 and 2020 is as follows (in thousands): As of December 31, 2021 2020 Amount Effective Interest Rate Amount Effective Interest Rate Term Loan A Facility $ 90,000 2.0 % $ 95,000 2.0 % Less: Debt issuance costs (132) (258) Net carrying amount of debt $ 89,868 $ 94,742 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance | At December 31, 2021, the Company’s common stock reserved for issuance in the future is as follows (in thousands): As of December 31, 2021 Common stock awards granted under equity incentive plans 9,460 Common stock awards available for issuance under the 2017 Employee Stock Purchase Plan * 5,089 Common stock awards available for issuance under the 2017 Equity Incentive Plan 27,011 Total reserved shares of common stock 41,560 * The Company has not issued any common stock pursuant to the 2017 Employee Stock Purchase Plan. |
Summary of Restricted Stock Unit Activity | Restricted stock unit activity for the year ended December 31, 2021 is as follows (in thousands, except per share data): Number of Shares Weighted-Average Grant Date Fair Value Per Share Balance, December 31, 2020 4,355 $ 92.91 Awarded 983 348.62 Released (1,655) 81.95 Forfeited (397) 135.44 Balance, December 31, 2021 - Outstanding 3,286 $ 169.76 |
Schedule of Stock Option Activity | The following table summarizes the Company’s stock option activities under the 2008 Plan and 2017 Plan (in thousands, except years and per share data): Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Weighted-Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Balance, December 31, 2020 8,733 $ 26.19 5.7 — Granted 320 356.55 — $ 139.76 Exercised (2,841) 6.51 — — Forfeited and expired (38) 104.47 — — Balance, December 31, 2021 - Outstanding 6,174 $ 51.87 5.8 — $ 1,129,748 Balance, December 31, 2021- Exercisable 4,548 $ 14.73 4.9 — $ 973,186 |
Schedule of Share-based Compensation Expense | The following table shows total stock-based compensation expense for the years ended December 31, 2021, 2020, and 2019 (in thousands): Years Ended December 31, 2021 2020 2019 Cost of revenue, platform $ 827 $ 847 $ 342 Cost of revenue, player 2,035 1,407 1,072 Research and development 77,770 58,412 40,036 Sales and marketing 63,503 42,846 24,179 General and administrative 43,397 30,564 19,546 Total stock-based compensation $ 187,532 $ 134,076 $ 85,175 |
Summary of Assumptions Used to Value Stock Options Granted | The assumptions used to value stock options granted during the years ended December 31, 2021, 2020, and 2019 are as follows: Years Ended December 31, 2021 2020 2019 Expected term (in years) 5.0 - 6.8 5.0 - 6.7 5.0 - 6.7 Risk-free interest rate 0.36 - 1.20% 0.22 - 1.67% 1.35 - 2.56% Expected volatility 38 - 39% 36 - 39% 35 - 36% Dividend rate — — — |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Payments for Content Liabilties | The expected timing of payments for these content obligations are as follows (in thousands): Year Ending December 31, 2022 $ 212,355 2023 99,848 2024 59,544 2025 36,731 2026 8,715 Thereafter 3,815 Total content liabilities $ 421,008 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Loss Before Income Taxes | The components of income (loss) before income taxes consist of the following (in thousands): Years Ended December 31, 2021 2020 2019 United States $ 240,560 $ (21,107) $ (63,453) Foreign (3,973) 2,655 2,534 Net income (loss) before income taxes $ 236,587 $ (18,452) $ (60,919) |
Schedule of Income Tax (Benefit) Expense | The income tax (benefit) expense consisted of the following (in thousands): Years Ended December 31, 2021 2020 2019 Current: Federal $ — $ (219) $ (47) State 589 620 244 Foreign 490 743 108 1,079 1,144 305 Deferred: Federal 193 — — State 256 — — Foreign (7,326) (2,089) (1,287) (6,877) (2,089) (1,287) Total $ (5,798) $ (945) $ (982) |
Schedule of Reconciliation of Statutory Federal Income Tax Rate to Effective Tax Rate | The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: Years Ended December 31, 2021 2020 2019 U.S. federal income tax at statutory rate 21.0 % 21.0 % 21.0 % U.S. state and local income taxes 0.2 (3.2) (0.4) Change in valuation allowance 140.0 (698.4) (213.4) Federal research and development tax credit (30.7) 102.9 30.8 Stock-based compensation (114.3) 577.8 158.0 Discrete tax benefit due to IP transfer (19.1) — — Meals and entertainment 0.1 (1.6) (1.4) Foreign rate differential 0.1 — (0.6) Acquisition costs — — (1.3) Section 162(m) limitation 1.1 (7.2) (1.4) State apportionment change — 4.4 1.3 Tax rate change (0.7) — (0.4) Provision to return true-up (0.1) 9.4 9.9 Other (0.1) 0.1 (0.5) Effective tax rate (2.5) % 5.2 % 1.6 % |
Summary of Significant Components of Deferred Income Tax Assets and Liabilities | Significant components of the Company’s deferred income tax assets and liabilities consist of the following (in thousands): As of December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 563,173 $ 379,613 Reserves and accruals 20,969 14,131 Research and development credits 166,940 104,110 Operating lease liabilities 107,228 91,373 Stock-based compensation 36,350 28,318 Depreciation and amortization 40,583 — Total deferred tax assets 935,243 617,545 Deferred tax liabilities: Operating lease right-of-use assets (85,713) (70,755) Depreciation and amortization — (11,707) Total deferred tax liabilities (85,713) (82,462) Valuation allowance (838,949) (530,887) Net deferred tax assets $ 10,581 $ 4,196 |
Summary of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): As of December 31, 2021 2020 Unrecognized tax benefits at beginning of year $ 29,175 $ 19,487 Gross increase for tax positions of current year 36,198 9,959 Gross decrease due to statute expiration (330) (75) Gross increase (decrease) for tax positions of prior years 1,107 (196) Unrecognized tax benefits balance at end of year $ 66,150 $ 29,175 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net income (loss) per share as follows (in thousands, except per share data): Years Ended December 31, 2021 2020 2019 Numerator: Net income (loss) $ 242,385 $ (17,507) $ (59,937) Denominator: Basic net income (loss) per share: Weighted-average common shares outstanding — basic 132,710 123,978 115,218 Net income (loss) per share — basic $ 1.83 $ (0.14) $ (0.52) Diluted net income (loss) per share: Weighted-average common shares outstanding — basic 132,710 123,978 115,218 Effect of potentially dilutive securities: Restricted stock units 2,744 — — Stock options 6,214 — — Weighted-average common shares outstanding — diluted 141,668 123,978 115,218 Net income (loss) per share — diluted $ 1.71 $ (0.14) $ (0.52) |
Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | Common stock equivalents excluded from the calculation of diluted net income (loss) per share because of their anti-dilutive effect are as follows (in thousands): Years Ended December 31, 2021 2020 2019 Equity awards to purchase common stock 1,128 13,088 15,668 Unvested shares of common stock issued upon early exercise of stock options and business acquisition — 1 31 Total 1,128 13,089 15,699 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Customer Accounting for 10% or More of Segment Revenue | Customers accounting for 10% or more of segment revenue, net, were as follows: Years Ended December 31, 2021 2020 2019 Platform segment revenue Customer H 10 % 13 % * Player segment revenue Customer A * 10 % 16 % Customer B 23 % 18 % 17 % Customer C 37 % 40 % 39 % * Less than 10% |
The Company (Details)
The Company (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Significant Accounting Polici_4
Significant Accounting Policies and Basis of Presentation - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)institution | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Foreign currency gains (loss) | $ (1,200,000) | $ 1,300,000 | $ (200,000) |
Goodwill impairment loss | 0 | 0 | 0 |
Impairment of intangible assets | 0 | 0 | 0 |
Impairment of long-lived assets | 0 | 0 | 0 |
Impairment of capitalized licensed content assets | $ 0 | $ 0 | 0 |
Estimated useful life | 6 years 8 months 12 days | 6 years | |
Advertising costs | $ 35,200,000 | $ 7,100,000 | 7,300,000 |
Accumulated deficit | 90,021,000 | 332,406,000 | |
Adoption of ASU 2016-13 | Accounting Standards Update 2016-13 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Accumulated deficit | 1,100,000 | ||
Internal-use software | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Capitalized costs | 500,000 | 2,200,000 | 100,000 |
Amortized expenses | $ 1,000,000 | $ 500,000 | $ 1,600,000 |
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 5 years | ||
Maximum | Leasehold improvements | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 10 years | ||
Maximum | Internal-use software | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful life | 3 years | ||
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 18 months | ||
Minimum | Leasehold improvements | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful lives | 5 years | ||
Minimum | Internal-use software | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful life | 2 years | ||
Financial Institution Risk | Cash And Cash Equivalents | Financial Institution One | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 30.00% | 46.00% | |
Financial Institution Risk | Cash And Cash Equivalents | Financial Institution Two | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 27.00% | 26.00% | |
Customer 1 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of financial institutions which manage cash balances | institution | 2 | ||
Customer 2 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of financial institutions which manage cash balances | institution | 2 | ||
Customer H | Customer Concentration Risk | Net Accounts Receivable | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 11.00% |
Significant Accounting Polici_5
Significant Accounting Policies and Basis of Presentation - Schedule of Allowance for Sales Returns (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 41,236 | ||
Ending balance | 56,827 | $ 41,236 | |
Allowance for Sales Returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 5,912 | 6,550 | $ 7,335 |
Add: Charged to revenue | 16,181 | 14,594 | 15,541 |
Less: Utilization of sales return reserve | (16,078) | (15,232) | (16,326) |
Ending balance | $ 6,015 | $ 5,912 | $ 6,550 |
Significant Accounting Polici_6
Significant Accounting Policies and Basis of Presentation - Schedule of Allowance for Sales Incentives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 41,236 | ||
Ending balance | 56,827 | $ 41,236 | |
Allowance for Sales Incentives | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 30,838 | 19,476 | $ 13,750 |
Add: Charged to revenue | 90,530 | 68,315 | 65,676 |
Less: Utilization of sales incentive reserve | (72,957) | (56,953) | (59,950) |
Ending balance | $ 48,411 | $ 30,838 | $ 19,476 |
Significant Accounting Polici_7
Significant Accounting Policies and Basis of Presentation - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 41,236 | ||
Ending balance | 56,827 | $ 41,236 | |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 4,181 | 1,140 | $ 686 |
Provision for (recoveries of) doubtful accounts | (904) | 3,801 | 704 |
Adjustments for recovery and write-off | (1,119) | (1,826) | (250) |
Ending balance | 2,158 | 4,181 | 1,140 |
Allowance for Doubtful Accounts | Adjusted beginning balance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 4,181 | 2,206 | 686 |
Ending balance | 4,181 | 2,206 | |
Allowance for Doubtful Accounts | Accounting Standards Update 2016-13 | Adoption of ASU 2016-13 | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 0 | 1,066 | 0 |
Ending balance | $ 0 | $ 1,066 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | |||
Number of reportable segment | segment | 2 | ||
Contract with customer assets increase (decrease) | $ 39.5 | $ 3.8 | |
Increase (decrease) in deferred revenue | (2.3) | 21.5 | |
Increase (decrease) in deferred revenue due to change in timing of fulfillment of performance obligations | 12.4 | ||
Increase (decrease) in deferred revenue recognized related to unspecified upgrades | 8.4 | ||
Deferred revenue recognized | 56.2 | 42.9 | |
Estimated contracted revenue | 1,148.3 | ||
Revenue recognized from performance obligation satisfied in previous period | $ 28.6 | $ 14.4 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue remaining performance obligation percentage of revenue expected to be recognized | 43.00% | ||
Remaining performance period | 12 months | ||
Customer Concentration Risk | Net Revenue | Customer C | |||
Disaggregation Of Revenue [Line Items] | |||
Concentration risk | 12.00% | 14.00% |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule Of Contract Balances [Line Items] | |||
Accounts receivable, net | $ 752,393 | $ 523,852 | $ 332,673 |
Deferred revenue, current portion | 45,760 | 55,465 | 39,861 |
Deferred revenue, non-current portion | 28,726 | 21,283 | 15,370 |
Total deferred revenue | 74,486 | 76,748 | 55,231 |
Prepaid Expenses and Other Current Assets | |||
Schedule Of Contract Balances [Line Items] | |||
Contract assets (included in Prepaid expenses and other current assets) | $ 46,952 | $ 7,431 | $ 3,588 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Apr. 15, 2021 | Mar. 19, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||
Content assets acquired | $ 215,800 | ||||||
Revenue | 2,764,584 | $ 1,778,388 | $ 1,128,921 | ||||
Cost of revenue | 1,355,984 | 970,169 | 633,697 | ||||
Gross profit | $ 1,408,600 | $ 808,219 | $ 495,224 | ||||
Other Non-current Assets | |||||||
Business Acquisition [Line Items] | |||||||
Content assets acquired | $ 22,500 | ||||||
Nielsen AVA business acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration | $ 53,400 | ||||||
Business combination, aggregate cash consideration | 38,500 | ||||||
Noncash consideration related to deliver services | 21,400 | ||||||
Services received | $ 6,500 | ||||||
Other income service period | 6 years | ||||||
Cost of revenue service period | 6 years | ||||||
Purchase consideration | $ 6,000 | ||||||
Intangible assets | 4,200 | ||||||
Other long-term liabilities | 4,500 | ||||||
Goodwill | $ 14,700 | ||||||
Nielsen AVA business acquisition | General and administrative | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related expenses | $ 3,900 | ||||||
TOH Intermediate Holdings, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration | 97,800 | ||||||
TOH Intermediate Holdings, LLC | Platform | |||||||
Business Acquisition [Line Items] | |||||||
Revenue | $ 18,700 | ||||||
Cost of revenue | 11,800 | ||||||
Gross profit | $ 6,900 | ||||||
TOH Intermediate Holdings, LLC | General and administrative | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related expenses | $ 2,400 |
Business Combinations - Schedul
Business Combinations - Schedule of Preliminary Allocation of Purchase Consideration to Tangible and Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 15, 2021 | Mar. 19, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets acquired | |||||
Goodwill | $ 161,519 | $ 73,058 | $ 74,116 | ||
Nielsen AVA business acquisition | |||||
Assets acquired | |||||
Cash and cash equivalents | $ 3,057 | ||||
Prepaid expenses and other current assets | 85 | ||||
Property and equipment, net | 584 | ||||
Intangible assets: | 18,500 | ||||
Goodwill | 36,790 | ||||
Operating lease right-of-use assets | 1,235 | ||||
Other non-current assets | 1,905 | ||||
Total assets acquired | 62,156 | ||||
Liabilities assumed | |||||
Accounts payable and accrued liabilities | (1,168) | ||||
Operating lease liabilities, non-current portion | (830) | ||||
Other long-term liabilities | (6,767) | ||||
Total liabilities assumed | (8,765) | ||||
Total purchase consideration | 53,391 | ||||
TOH Intermediate Holdings, LLC | |||||
Assets acquired | |||||
Cash and cash equivalents | $ 7 | ||||
Accounts receivable | 5,830 | ||||
Prepaid expenses and other current assets | 7,310 | ||||
Property and equipment, net | 307 | ||||
Intangible assets: | 20,700 | ||||
Goodwill | 46,671 | ||||
Operating lease right-of-use assets | 5,498 | ||||
Other non-current assets | 23,487 | ||||
Total assets acquired | 109,810 | ||||
Liabilities assumed | |||||
Accounts payable and accrued liabilities | (2,747) | ||||
Deferred revenue, current portion | (4,146) | ||||
Operating lease liabilities, non-current portion | (4,262) | ||||
Deferred revenue, non-current portion | (816) | ||||
Other long-term liabilities | (28) | ||||
Total liabilities assumed | (11,999) | ||||
Total purchase consideration | 97,811 | ||||
Customer relationships | TOH Intermediate Holdings, LLC | |||||
Assets acquired | |||||
Intangible assets: | 700 | ||||
IPR&D technology | Nielsen AVA business acquisition | |||||
Assets acquired | |||||
Intangible assets: | 7,500 | ||||
Developed technology | Nielsen AVA business acquisition | |||||
Assets acquired | |||||
Intangible assets: | $ 11,000 | ||||
Tradename | TOH Intermediate Holdings, LLC | |||||
Assets acquired | |||||
Intangible assets: | $ 20,000 |
Business Combinations - Summary
Business Combinations - Summary of Preliminary Valuation of Intangible Assets Acquired (Details) - Nielsen AVA business acquisition $ in Thousands | Apr. 15, 2021USD ($) |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 18,500 |
Estimated Weighted-Average Useful Lives (in years) | 5 years 10 months 24 days |
Developed technology | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 11,000 |
Estimated Weighted-Average Useful Lives (in years) | 5 years 10 months 24 days |
IPR&D technology | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 7,500 |
Estimated Weighted-Average Useful Lives (in years) |
Business Combinations - Summa_2
Business Combinations - Summary of Valuation of Intangible Assets Acquired (Details) - TOH Intermediate Holdings, LLC $ in Thousands | Mar. 19, 2021USD ($) |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 20,700 |
Estimated Weighted-Average Useful Lives (in years) | 9 years 9 months 18 days |
Tradename | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 20,000 |
Estimated Weighted-Average Useful Lives (in years) | 10 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Estimated Fair Value | $ 700 |
Estimated Weighted-Average Useful Lives (in years) | 4 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 73,058 | $ 74,116 |
Ending Balance | 161,519 | 73,058 |
Dataxu working capital adjustment | ||
Goodwill [Line Items] | ||
Goodwill | $ (1,058) | |
This Old House acquisition | ||
Goodwill [Line Items] | ||
Additions: | 46,671 | |
Nielsen AVA business acquisition | ||
Goodwill [Line Items] | ||
Additions: | 36,790 | |
Other immaterial acquisition | ||
Goodwill [Line Items] | ||
Additions: | $ 5,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Amortization of intangible assets | $ 17,300,000 | $ 14,500,000 | $ 2,800,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 111,943 | $ 80,243 |
Accumulated Amortization | (35,317) | (18,062) |
Total | $ 76,626 | $ 62,181 |
Weighted-Average Useful Lives (in years) | 6 years 8 months 12 days | 6 years |
Total Intangible assets | $ 119,443 | |
Intangible assets, net | 84,126 | $ 62,181 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 73,367 | 62,367 |
Accumulated Amortization | (25,350) | (13,439) |
Total | $ 48,017 | $ 48,928 |
Weighted-Average Useful Lives (in years) | 5 years 10 months 24 days | 5 years 10 months 24 days |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 14,100 | $ 13,400 |
Accumulated Amortization | (7,395) | (3,908) |
Total | $ 6,705 | $ 9,492 |
Weighted-Average Useful Lives (in years) | 4 years | 4 years |
Tradename | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,400 | $ 400 |
Accumulated Amortization | (1,966) | (400) |
Total | $ 18,434 | $ 0 |
Weighted-Average Useful Lives (in years) | 9 years 9 months 18 days | 6 months |
Patents | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,076 | $ 4,076 |
Accumulated Amortization | (606) | (315) |
Total | $ 3,470 | $ 3,761 |
Weighted-Average Useful Lives (in years) | 14 years | 14 years |
IPR&D technology | ||
Finite Lived Intangible Assets [Line Items] | ||
IPR&D technology | $ 7,500 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense for Intangible Asset (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 17,745 | |
2023 | 17,066 | |
2024 | 14,275 | |
2025 | 12,571 | |
2026 | 4,074 | |
Thereafter | 10,895 | |
Total | $ 76,626 | $ 62,181 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Accounts receivable, gross | $ 809,220 | $ 565,088 | ||
Allowance | 56,827 | 41,236 | ||
Accounts Receivable, net | 752,393 | 523,852 | ||
Allowance for Sales Returns | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Allowance | 6,015 | 5,912 | $ 6,550 | $ 7,335 |
Allowance for Sales Incentives | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Allowance | 48,411 | 30,838 | 19,476 | 13,750 |
Allowance for Doubtful Accounts | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Allowance | 2,158 | 4,181 | $ 1,140 | $ 686 |
Other Allowances | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Allowance | $ 243 | $ 305 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 248,805 | $ 201,277 |
Accumulated depreciation and amortization | (71,238) | (46,080) |
Property and Equipment, net | 177,567 | 155,197 |
Computers and equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 38,473 | 30,859 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 182,229 | 144,013 |
Internal-use software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 7,274 | 6,744 |
Office equipment and furniture | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 20,829 | $ 19,661 |
Balance Sheet Components - Narr
Balance Sheet Components - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation and amortization | $ 25.4 | $ 21.7 | $ 12.8 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Payments due to content publishers | $ 165,894 | $ 106,576 |
Accrued cost of revenue | 142,014 | 98,285 |
Marketing, retail and merchandising costs | 47,428 | 43,645 |
Operating lease liability, current | 37,116 | 35,647 |
Content liability, current | 70,462 | 6,165 |
Other accrued expenses | 86,141 | 57,350 |
Total Accrued Liabilities | $ 549,055 | $ 347,668 |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue, current portion | $ 45,760 | $ 55,465 | $ 39,861 |
Total deferred revenue, non-current | 28,726 | 21,283 | $ 15,370 |
Total Deferred Revenue | 74,486 | 76,748 | |
Platform | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue, current portion | 22,240 | 27,587 | |
Total deferred revenue, non-current | 9,324 | 9,909 | |
Player | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue, current portion | 23,520 | 27,878 | |
Total deferred revenue, non-current | $ 19,402 | $ 11,374 |
Balance Sheet Components - Sc_5
Balance Sheet Components - Schedule of Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Content liability, non-current | $ 51,211 | $ 1,380 |
Other long-term liabilities | 31,274 | 1,739 |
Total Other long-term liabilities | $ 82,485 | $ 3,119 |
Content Assets - Schedule of Co
Content Assets - Schedule of Content Assets Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Licensed Content Assets [Line Items] | ||
Total Content Assets, net | $ 223,713 | $ 7,907 |
Licensed content | ||
Licensed Content Assets [Line Items] | ||
Content Assets | 199,290 | 7,907 |
Released, less amortization | ||
Licensed Content Assets [Line Items] | ||
Content Assets | 20,030 | 0 |
Completed, not released | ||
Licensed Content Assets [Line Items] | ||
Content Assets | 881 | 0 |
In production | ||
Licensed Content Assets [Line Items] | ||
Content Assets | 3,512 | 0 |
Produced content | ||
Licensed Content Assets [Line Items] | ||
Content Assets | $ 24,423 | $ 0 |
Content Assets - Narrative (Det
Content Assets - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Licensed Content Assets [Line Items] | |
Content assets acquired | $ 215.8 |
Content Assets - Schedule Of Am
Content Assets - Schedule Of Amortization Of Content Assets Included In Cost Of Revenue In Condensed Consolidated Statement Of Operation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | |||
Amortization of content assets | $ 84,133 | $ 22,392 | |
Produced content | 11,437 | 0 | |
Total amortization costs | $ 95,570 | $ 22,392 | $ 2,914 |
Content Assets - Schedule of _2
Content Assets - Schedule of Amortization Expense for Licensed Content Assets (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Licensed Content Assets [Line Items] | |
2022 | $ 90,639 |
2023 | 43,063 |
2024 | 27,244 |
Total | 160,946 |
Licensed content | |
Licensed Content Assets [Line Items] | |
2022 | 86,584 |
2023 | 38,861 |
2024 | 23,293 |
Total | 148,738 |
Produced content | |
Licensed Content Assets [Line Items] | |
2022 | 4,055 |
2023 | 4,202 |
2024 | 3,951 |
Total | $ 12,208 |
Fair Value Disclosure - Schedul
Fair Value Disclosure - Schedule of Financial Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | |||
Restricted cash, current | $ 0 | $ 434 | $ 1,854 |
Restricted cash, non-current | 1,627 | 0 | $ 0 |
Total assets measured and recorded at fair value | 2,147,670 | 1,093,249 | |
Level 1 | |||
Assets: | |||
Restricted cash, current | 0 | 434 | |
Restricted cash, non-current | 1,627 | 0 | |
Total assets measured and recorded at fair value | 2,147,670 | 1,093,249 | |
Cash | |||
Assets: | |||
Cash and cash equivalents: | 1,130,172 | 1,021,022 | |
Cash | Level 1 | |||
Assets: | |||
Cash and cash equivalents: | 1,130,172 | 1,021,022 | |
Money market funds | |||
Assets: | |||
Cash and cash equivalents: | 1,015,871 | 71,793 | |
Money market funds | Level 1 | |||
Assets: | |||
Cash and cash equivalents: | $ 1,015,871 | $ 71,793 |
Fair Value Disclosure - Narrati
Fair Value Disclosure - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Money market funds | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 1,015.9 | $ 71.8 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Leases [Line Items] | |
Commitment relating to operating lease, that have not yet commenced | $ 198.4 |
Minimum | |
Leases [Line Items] | |
Remaining lease term, operating lease | 1 year |
Operating leases that have not yet commenced, lease terms | 2 years |
Maximum | |
Leases [Line Items] | |
Remaining lease term, operating lease | 10 years |
Operating leases that have not yet commenced, lease terms | 12 years |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease cost | $ 46,410 | $ 42,127 | $ 27,596 |
Variable lease cost | 15,080 | 12,116 | 4,928 |
Net operating lease cost | $ 61,490 | $ 54,243 | $ 32,524 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflows from operating leases | $ 51,657 | $ 30,664 | $ 17,721 |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | $ 110,845 | $ 12,031 | $ 267,048 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 345,660 | $ 266,197 |
Operating lease liability, current | $ 37,116 | $ 35,647 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Operating lease liability, non-current | $ 394,724 | $ 307,936 |
Total operating lease liability | $ 431,840 | $ 343,583 |
Weighted-average remaining lease term: | ||
Operating leases (in years) | 8 years 4 months 17 days | 9 years 18 days |
Weighted-average discount rate: | ||
Operating leases | 3.98% | 4.60% |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Payments under Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 52,636 | |
2023 | 63,548 | |
2024 | 62,162 | |
2025 | 61,649 | |
2026 | 60,044 | |
Thereafter | 218,954 | |
Total future lease payments | 518,993 | |
Less: imputed interest | (79,073) | |
Less: expected tenant improvement allowance | (8,080) | |
Total | $ 431,840 | $ 343,583 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt (Details) - Term Loan A Facility - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Amount | $ 90,000 | $ 95,000 |
Less: Debt issuance costs | (132) | (258) |
Net carrying amount of debt | $ 89,868 | $ 94,742 |
Effective Interest Rate | 2.00% | 2.00% |
Debt - Narrative (Details)
Debt - Narrative (Details) | Nov. 18, 2019USD ($) | May 03, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||
Letters of credit outstanding | $ 38,000,000 | $ 30,900,000 | |||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 2,200,000 | 2,600,000 | |||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Minimum | |||||
Debt Instrument [Line Items] | |||||
Adjusted quick ratio | 1.00% | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument term, years | 4 years | ||||
Maximum borrowing capacity | $ 100,000,000 | ||||
Amount borrowed under debt facility | $ 69,300,000 | ||||
Letters of credit outstanding | $ 38,000,000 | $ 30,800,000 | |||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Revolving Credit Facility | Adjusted One-Month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin on variable rate | 1.75% | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Term Loan A Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument term, years | 4 years | ||||
Maximum borrowing capacity | $ 100,000,000 | ||||
Amount borrowed under debt facility | $ 100,000,000 | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Term Loan A Facility | On or Prior to December 31, 2021 | |||||
Debt Instrument [Line Items] | |||||
Percentage of amortization on drawn principal amount | 1.25% | ||||
Amortization, aggregate principal amount | $ 1,250,000 | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Term Loan A Facility | Thereafter December 31, 2021 | |||||
Debt Instrument [Line Items] | |||||
Percentage of amortization on drawn principal amount | 2.50% | ||||
Amortization, aggregate principal amount | $ 2,500,000 | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Term Loan A Facility | Adjusted One-Month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, applicable margin on variable rate | 1.75% | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Uncommitted Incremental Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | ||||
EBITDA ratio | 1 | ||||
Credit Agreement | Morgan Stanley Senior Funding, Inc | Uncommitted Incremental Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Secured leverage ratio | 1.50% |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Equity [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 12 Months Ended |
Dec. 31, 2021voteClass | |
Class Of Stock [Line Items] | |
Number of classes | Class | 2 |
Class A Common Stock | |
Class Of Stock [Line Items] | |
Number of votes for each share held | 1 |
Class B Common Stock | |
Class Of Stock [Line Items] | |
Number of votes for each share held | 10 |
Stockholders' Equity - At-the-M
Stockholders' Equity - At-the-Market Offering (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Mar. 02, 2021 | May 13, 2020 | Nov. 19, 2019 | May 16, 2019 | Mar. 12, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Class Of Stock [Line Items] | ||||||||
Issuance costs | $ 10,400 | $ 6,800 | $ 6,400 | |||||
At-the-Market Offerings | Class A Common Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Aggregate shares of common stock, sold (in shares) | 2.6 | 4 | 1 | 1 | 1.4 | |||
Gross proceeds from issuance of common stock | $ 1,000,000 | $ 504,000 | $ 154,000 | $ 82,900 | $ 100,000 | |||
Average selling price per share (in dollars per share) | $ 379.26 | $ 126.01 | $ 153.99 | $ 82.90 | $ 72 | |||
Issuance costs | $ 10,400 | $ 6,800 | $ 2,800 | $ 1,600 | $ 2,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Reserved Shares of Common Stock for Issuance (Details) shares in Thousands | Dec. 31, 2021shares |
Class Of Stock [Line Items] | |
Total reserved shares of common stock (in shares) | 41,560 |
Equity Incentive Plan | |
Class Of Stock [Line Items] | |
Common stock awards granted under equity incentive plans (in shares) | 9,460 |
2017 Employee Stock Purchase Plan | |
Class Of Stock [Line Items] | |
Common stock awards available for issuance (in shares) | 5,089 |
2017 Equity Incentive Plan | |
Class Of Stock [Line Items] | |
Common stock awards available for issuance (in shares) | 27,011 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) | 12 Months Ended |
Dec. 31, 2021Plan | |
Class Of Stock [Line Items] | |
Number of equity incentive plans | 2 |
Employee Stock Option | |
Class Of Stock [Line Items] | |
Percentage of voting rights | 10.00% |
Employee Stock Option | 10% Shareholder | Minimum | |
Class Of Stock [Line Items] | |
Stock option fair market value at the date of grant, percent | 110.00% |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units shares in Thousands | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of Shares | |
Beginning balance Number of Shares, outstanding (in shares) | shares | 4,355 |
Number of Shares, Awarded (in shares) | shares | 983 |
Number of Shares, Released (in shares) | shares | (1,655) |
Number of Shares, Forfeited (in shares) | shares | (397) |
Ending balance, Number of Shares outstanding (in shares) | shares | 3,286 |
Weighted Average Grant Date Fair Value Per Share | |
Weighted Average Grant Date Fair Value Per Share, Beginning balance (in dollars per share) | $ / shares | $ 92.91 |
Weighted Average Grant Date Fair Value Per Share, Awarded (in dollars per share) | $ / shares | 348.62 |
Weighted Average Grant Date Fair Value Per Share, Released (in dollars per share) | $ / shares | 81.95 |
Weighted Average Grant Date Fair Value Per Share, Forfeited (in dollars per share) | $ / shares | 135.44 |
Weighted Average Grant Date Fair Value Per Share, Ending balance (in dollars per share) | $ / shares | $ 169.76 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected weighted average period to recognize unrecognized stock compensation expense | 2 years | ||
Restricted Stock Units | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Grant-date fair value of restricted stock units granted | $ 342.6 | $ 210.1 | $ 195.2 |
Fair value of restricted stock units vested | 135.6 | $ 83.7 | $ 40.5 |
Unrecognized stock compensation expense | $ 463.7 | ||
Expected weighted average period to recognize unrecognized stock compensation expense | 2 years 29 days |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Beginning balance, Number of Shares (in shares) | 8,733 | ||
Granted, Number of Shares (in shares) | 320 | ||
Exercised, Number of Shares (in shares) | (2,841) | ||
Forfeited and expired, Number of Shares (in shares) | (38) | ||
Ending balance, Number of Shares (in shares) | 6,174 | 8,733 | |
Weighted Average Exercise Price | |||
Beginning balance, Weighted Average Exercise Price (in dollars per share) | $ 26.19 | ||
Granted, Weighted Average Exercise Price (in dollars per share) | 356.55 | ||
Exercised, Weighted Average Exercise Price (in dollars per share) | 6.51 | ||
Forfeited and expired, Weighted Average Exercise Price (in dollars per share) | 104.47 | ||
Ending balance, Weighted Average Exercise Price (in dollars per share) | $ 51.87 | $ 26.19 | |
Stock Options Additional Disclosures | |||
Balance, Weighted Average Remaining Contractual Life (Years) | 5 years 9 months 18 days | 5 years 8 months 12 days | |
Granted, Weighted Average Grant Date Fair Value Per Share (in dollars per share) | $ 139.76 | $ 54.39 | $ 39.23 |
Outstanding, ending balance | $ 1,129,748 | ||
Options exercisable at ending balance, Number of Shares (in shares) | 4,548 | ||
Options exercisable at ending balance, Weighted Average Exercise Price (in dollars per share) | $ 14.73 | ||
Options exercisable at December 31, 2020, Weighted Average Remaining Contractual Life (Years) | 4 years 10 months 24 days | ||
Options exercisable, ending balance | $ 973,186 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Plan (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant-date fair value of stock options granted (in dollars per share) | $ 139.76 | $ 54.39 | $ 39.23 |
Intrinsic value of stock options exercised | $ 997.6 | $ 470.8 | $ 474.2 |
Unrecognized stock compensation expense | $ 67.5 | ||
Expected weighted average period to recognize unrecognized stock compensation expense | 2 years |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Employee Stock Option | |
Class Of Stock [Line Items] | |
Stock option term | 10 years |
Employee Stock Option | Tranche One | |
Class Of Stock [Line Items] | |
Stock granted to employees vesting rights, percentage | 25.00% |
Vesting period | 1 year |
Employee Stock Option | Tranche Two | |
Class Of Stock [Line Items] | |
Stock granted to employees vesting rights, percentage | 2.08% |
Restricted Stock Units | |
Class Of Stock [Line Items] | |
Vesting period | 4 years |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | $ 187,532 | $ 134,076 | $ 85,175 |
Cost of Revenue | Platform | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 827 | 847 | 342 |
Cost of Revenue | Player | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 2,035 | 1,407 | 1,072 |
Research and development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 77,770 | 58,412 | 40,036 |
Sales and marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 63,503 | 42,846 | 24,179 |
General and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | $ 43,397 | $ 30,564 | $ 19,546 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Assumptions Used to Value Stock Options Granted (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Risk-free interest rate, Minimum | 0.36% | 0.22% | 1.35% |
Risk-free interest rate, Maximum | 1.20% | 1.67% | 2.56% |
Expected volatility, Minimum | 38.00% | 36.00% | 35.00% |
Expected volatility, Maximum | 39.00% | 39.00% | 36.00% |
Dividend rate | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 5 years | 5 years | 5 years |
Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 9 months 18 days | 6 years 8 months 12 days | 6 years 8 months 12 days |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | |
Commitments And Contingencies [Line Items] | |||||
Unrecorded purchase commitment | $ 277,700 | $ 277,700 | |||
Indemnification liability | 3,900 | 3,900 | |||
Indemnification asset | 3,900 | 3,900 | |||
Letters of credit outstanding | 38,000 | 38,000 | $ 30,900 | ||
General and administrative | |||||
Commitments And Contingencies [Line Items] | |||||
Expense related to patent infringements | 3,400 | ||||
Player | Cost of Revenue | |||||
Commitments And Contingencies [Line Items] | |||||
Expense related to patent infringements | 4,800 | $ 9,900 | |||
Platform | Cost of Revenue | |||||
Commitments And Contingencies [Line Items] | |||||
Expense related to patent infringements | 1,800 | ||||
Manufacturing | |||||
Commitments And Contingencies [Line Items] | |||||
Total content liabilities | 195,200 | 195,200 | |||
Manufacturing | Accrued Liabilities | |||||
Commitments And Contingencies [Line Items] | |||||
Loss on purchase obligation for inventory | 200 | $ 1,200 | |||
Content Publishers | |||||
Commitments And Contingencies [Line Items] | |||||
Total content liabilities | 421,008 | 421,008 | |||
Content Publishers | Accounts Payable | |||||
Commitments And Contingencies [Line Items] | |||||
Total content liabilities | 92,100 | 92,100 | |||
Content Publishers | Other Long-Term Liabilities | |||||
Commitments And Contingencies [Line Items] | |||||
Total content liabilities | 51,200 | $ 51,200 | |||
Licensed Content | |||||
Commitments And Contingencies [Line Items] | |||||
Indemnification liability released for payment of portion of liabilities assumed | 77,500 | ||||
Indemnification asset released for payment of portion of liabilities assumed | $ 77,500 | ||||
Indemnification liability | $ 81,400 | ||||
Indemnification asset | $ 81,400 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Payments for Content Obligations (Details) - Content Publishers $ in Thousands | Dec. 31, 2021USD ($) |
Commitments And Contingencies [Line Items] | |
2022 | $ 212,355 |
2023 | 99,848 |
2024 | 59,544 |
2025 | 36,731 |
2026 | 8,715 |
Thereafter | 3,815 |
Total content liabilities | $ 421,008 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 240,560 | $ (21,107) | $ (63,453) |
Foreign | (3,973) | 2,655 | 2,534 |
Income (Loss) Before Income Taxes | $ 236,587 | $ (18,452) | $ (60,919) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 0 | $ (219) | $ (47) |
State | 589 | 620 | 244 |
Foreign | 490 | 743 | 108 |
Current income tax expense | 1,079 | 1,144 | 305 |
Deferred: | |||
Federal | 193 | 0 | 0 |
State | 256 | 0 | 0 |
Foreign | (7,326) | (2,089) | (1,287) |
Deferred income tax | (6,877) | (2,089) | (1,287) |
Income tax benefit | $ (5,798) | $ (945) | $ (982) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Federal Income Tax Rate to Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax at statutory rate | 21.00% | 21.00% | 21.00% |
U.S. state and local income taxes | 0.20% | (3.20%) | (0.40%) |
Change in valuation allowance | 140.00% | (698.40%) | (213.40%) |
Federal research and development tax credit | (30.70%) | 102.90% | 30.80% |
Stock-based compensation | (114.30%) | 577.80% | 158.00% |
Discrete tax benefit due to IP transfer | (19.10%) | 0.00% | 0.00% |
Meals and entertainment | 0.10% | (1.60%) | (1.40%) |
Foreign rate differential | 0.10% | 0.00% | (0.60%) |
Acquisition costs | 0.00% | 0.00% | (1.30%) |
Section 162(m) limitation | 1.10% | (7.20%) | (1.40%) |
State apportionment change | 0.00% | 4.40% | 1.30% |
Tax rate change | (0.70%) | 0.00% | (0.40%) |
Provision to return true-up | (0.10%) | 9.40% | 9.90% |
Other | (0.10%) | 0.10% | (0.50%) |
Effective tax rate | (2.50%) | 5.20% | 1.60% |
Income Taxes - Summary of Signi
Income Taxes - Summary of Significant Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 563,173 | $ 379,613 |
Reserves and accruals | 20,969 | 14,131 |
Research and development credits | 166,940 | 104,110 |
Operating lease liabilities | 107,228 | 91,373 |
Stock-based compensation | 36,350 | 28,318 |
Depreciation and amortization | 40,583 | 0 |
Total deferred tax assets | 935,243 | 617,545 |
Deferred tax liabilities: | ||
Operating lease right-of-use assets | (85,713) | (70,755) |
Depreciation and amortization | 0 | (11,707) |
Total deferred tax liabilities | (85,713) | (82,462) |
Valuation allowance | (838,949) | (530,887) |
Net deferred tax assets | $ 10,581 | $ 4,196 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)Ownership | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Income Taxes Disclosure [Line Items] | |||
Increased in valuation allowance | $ 261,800 | $ 169,700 | |
Increase in valuation allowance not realizable | 46,200 | ||
Research and development tax credit carryforwards | 166,940 | 104,110 | |
Unrecognized tax benefits | 66,150 | $ 29,175 | $ 19,487 |
Accrued interest and penalties | 400 | ||
Research and Development Credits | |||
Income Taxes Disclosure [Line Items] | |||
Unrecognized tax benefits | 48,700 | ||
Federal | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 2,169,900 | ||
Research and development tax credit carryforwards | 133,800 | ||
State | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 1,824,300 | ||
Research and development tax credit carryforwards | 97,400 | ||
Brazil | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 2,800 | ||
Denmark | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 2,800 | ||
Netherlands | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 6,100 | ||
UK | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforwards | 33,900 | ||
Research and development tax credit carryforwards | $ 500 | ||
Section 382 | |||
Income Taxes Disclosure [Line Items] | |||
Number of ownership changes for income tax purposes | Ownership | 4 | ||
International | |||
Income Taxes Disclosure [Line Items] | |||
Unrecognized tax benefits | $ 17,500 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits at beginning of year | $ 29,175 | $ 19,487 |
Gross increase for tax positions of current year | 36,198 | 9,959 |
Gross decrease due to statute expiration | (330) | (75) |
Gross increase for tax positions of prior years | 1,107 | |
Gross decrease for tax positions of prior years | (196) | |
Unrecognized tax benefits balance at end of year | $ 66,150 | $ 29,175 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
CEO Holds Majority Voting Interest | |
Related Party Transaction [Line Items] | |
Related party transaction expense | $ 1,200,000 |
Strategic Investors | |
Related Party Transaction [Line Items] | |
Revenue from related parties | 8,500,000 |
Related party transaction expense | $ 1,300,000 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Savings Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution amount to plan | $ 0 | $ 0 | $ 0 |
UK Employees Defined Contribution Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution amount to plan | $ 1,300,000 | $ 700,000 | $ 500,000 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net Income (Loss) | $ 242,385 | $ (17,507) | $ (59,937) |
Denominator: | |||
Weighted-average common shares outstanding —basic (in shares) | 132,710 | 123,978 | 115,218 |
Net income (loss) per share - basic (in dollars per share) | $ 1.83 | $ (0.14) | $ (0.52) |
Weighted-average common shares outstanding — diluted (in shares) | 141,668 | 123,978 | 115,218 |
Net income (loss) per share - diluted (in dollars per share) | $ 1.71 | $ (0.14) | $ (0.52) |
Restricted Stock Units | |||
Denominator: | |||
Common stock equivalents (in shares) | 2,744 | 0 | 0 |
Employee Stock Option | |||
Denominator: | |||
Common stock equivalents (in shares) | 6,214 | 0 | 0 |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of diluted net loss per share (in shares) | 1,128 | 13,089 | 15,699 |
Equity awards to purchase common stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of diluted net loss per share (in shares) | 1,128 | 13,088 | 15,668 |
Unvested shares of common stock issued upon early exercise of stock options and business acquisition | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of diluted net loss per share (in shares) | 0 | 1 | 31 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Customer Accounting for 10% or More of Segment Revenue (Details) - Net Revenue - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Customer C | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk | 12.00% | 14.00% | |
Platform | Customer H | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk | 10.00% | 13.00% | |
Player | Customer A | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk | 10.00% | 16.00% | |
Player | Customer B | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk | 23.00% | 18.00% | 17.00% |
Player | Customer C | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk | 37.00% | 40.00% | 39.00% |