Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 03, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ROKU | |
Entity Registrant Name | Roku, Inc. | |
Entity Central Index Key | 1,428,439 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 48,906,481 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 52,680,176 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 160,750 | $ 177,250 |
Accounts receivable, net of allowances | 106,094 | 120,553 |
Inventories | 38,062 | 32,740 |
Prepaid expenses and other current assets | 30,546 | 11,367 |
Deferred cost of revenue, current portion | 1,359 | 3,007 |
Total current assets | 336,811 | 344,917 |
Property and equipment, net | 16,835 | 14,736 |
Deferred cost of revenue, non-current portion | 5,403 | |
Intangible assets, net | 1,892 | 2,030 |
Goodwill | 1,382 | 1,382 |
Other non-current assets | 3,560 | 3,429 |
Total Assets | 360,480 | 371,897 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 111,776 | 128,757 |
Deferred revenue, current portion | 33,948 | 34,501 |
Total current liabilities | 145,724 | 163,258 |
Deferred revenue, non-current portion | 13,549 | 48,511 |
Other long-term liabilities | 7,731 | 7,849 |
Total Liabilities | 167,004 | 219,618 |
Commitments and Contingencies (Note 7) | ||
Stockholders’ Equity: | ||
Preferred stock, $0.0001 par value | ||
Common stock, $0.0001 par value | 10 | 10 |
Additional paid-in capital | 445,139 | 435,607 |
Accumulated deficit | (251,673) | (283,338) |
Total stockholders’ equity | 193,476 | 152,279 |
Total Liabilities and Stockholders’ Equity | $ 360,480 | $ 371,897 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Revenue: | ||
Total net revenue | $ 136,576 | $ 100,093 |
Cost of Revenue: | ||
Total cost of revenue | 73,464 | 61,253 |
Gross Profit: | ||
Total gross profit | 63,112 | 38,840 |
Operating Expenses: | ||
Research and development | 34,126 | 22,342 |
Sales and marketing | 20,318 | 14,055 |
General and administrative | 15,570 | 10,278 |
Total operating expenses | 70,014 | 46,675 |
Loss from Operations | (6,902) | (7,835) |
Other Income (Expense), Net: | ||
Interest expense | (51) | (167) |
Change in fair value of preferred stock warrant liability | (735) | |
Other income, net | 448 | 83 |
Total other income (expense), net | 397 | (819) |
Loss Before Income Taxes | (6,505) | (8,654) |
Income tax expense | 129 | 48 |
Net Loss Attributable to Common Stockholders | $ (6,634) | $ (8,702) |
Net loss per share attributable to common stockholders—basic and diluted | $ (0.07) | $ (1.79) |
Weighted-average shares used in computing net loss per share attributable to common stockholders—basic and diluted | 99,488 | 4,850 |
Player | ||
Net Revenue: | ||
Total net revenue, Goods | $ 61,499 | $ 63,678 |
Cost of Revenue: | ||
Total cost of revenue, Goods | 51,798 | 52,910 |
Gross Profit: | ||
Total gross profit | 9,701 | 10,768 |
Platform | ||
Net Revenue: | ||
Total net revenue, Services | 75,077 | 36,415 |
Cost of Revenue: | ||
Total cost of revenue, Services | 21,666 | 8,343 |
Gross Profit: | ||
Total gross profit | $ 53,411 | $ 28,072 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit |
Balance at Dec. 31, 2017 | $ 152,279 | $ 10 | $ 436,278 | $ (671) | $ (283,338) |
Balance, Shares at Dec. 31, 2017 | 99,157 | ||||
Vesting of early exercised stock options | 106 | 106 | |||
Issuance of common stock upon exercise of stock options, net | $ 4,997 | 5,049 | (52) | ||
Issuance of common stock upon exercise of stock options, net, Shares | 1,670 | 1,670 | |||
Issuance of common stock pursuant to exercise of common warrants, net, Shares | 141 | ||||
Stock-based compensation expense | $ 4,429 | 4,429 | |||
Cumulative effect change in accounting principle | Accounting Standards Update 2016-16 | (40) | (40) | |||
Cumulative effect change in accounting principle | Accounting Standards Update 2014-09 | 38,339 | 38,339 | |||
Net loss | (6,634) | (6,634) | |||
Balance at Mar. 31, 2018 | $ 193,476 | $ 10 | $ 445,862 | $ (723) | $ (251,673) |
Balance, Shares at Mar. 31, 2018 | 100,968 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (6,634) | $ (8,702) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,656 | 1,247 |
Stock-based compensation expense | 4,429 | 2,175 |
Provision for doubtful accounts | 201 | 161 |
Change in fair value of preferred stock warrant liability | 735 | |
Noncash interest expense | 20 | |
Loss from exit of facilities | 129 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 26,986 | 18,251 |
Inventories | (5,430) | 5,712 |
Prepaid expenses and other current assets | (11,643) | (2,572) |
Deferred cost of revenue | 2,090 | (425) |
Other noncurrent assets | (353) | (2,949) |
Accounts payable and accrued liabilities | (18,474) | (2,892) |
Other long-term liabilities | (118) | 3,797 |
Deferred revenue | (7,476) | 11,681 |
Net cash provided by (used in) operating activities | (14,637) | 26,239 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (3,407) | (1,560) |
Net cash used in investing activities | (3,407) | (1,560) |
Cash flows from financing activities: | ||
Repayments of borrowings | (15,000) | |
Proceeds from exercise of stock options, net of repurchases | 1,544 | 473 |
Net cash provided by (used in) financing activities | 1,544 | (14,527) |
Net Increase (Decrease) In Cash | (16,500) | 10,152 |
Cash—Beginning of period | 177,250 | 34,562 |
Cash—End of period | 160,750 | 44,714 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 136 | |
Cash paid for income taxes | 180 | 29 |
Supplemental disclosures of noncash investing and financing activities: | ||
Unpaid portion of property and equipment purchases | $ 1,460 | $ 1,166 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company | 1. THE COMPANY Organization and Description of Business Roku, 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’s TV streaming platform allows users to easily discover and access a wide variety of movies and TV episodes, as well as live sports, music, news and more. The Company operates in two reportable segments and generates revenue through the sale of streaming players, advertising, subscription and transaction revenue sharing, as well as through licensing arrangements with TV brands and cable, satellite, and telecommunication service operators (“service operators”). Initial Public Offering On October 2, 2017, the Company completed its initial public offering (“IPO”) of Class A common stock, in which it sold 10.4 million shares, including 1.4 million shares pursuant to the underwriters’ over-allotment option. The shares were sold at an IPO price of $14.00 per share for net proceeds of $134.8 million, after deducting underwriting discounts and commissions of $10.1 million. Upon the closing of the Company’s IPO, all outstanding shares of its convertible preferred stock automatically converted into 80.8 million shares of Class B common stock and all outstanding convertible preferred stock warrants automatically converted to Class B common stock warrants on a one-for-one basis. The Company has two classes of authorized common stock – Class A common stock and Class B common stock. Class A common stock entitles holders to one vote per share, and Class B common stock entitles holders to 10 votes per share. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results to be expected for the full year or any future periods. There have been no material changes in the Company’s significant accounting policies, other than the adoption of Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), Income taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) Use of Judgements and 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 and liabilities and related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and includes the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Comprehensive Loss Comprehensive loss is equal to the net loss for all periods presented. Therefore, the consolidated statements of comprehensive loss has been omitted from the condensed consolidated financial statements. Concentrations Customers accounting for 10% or more of the Company’s net revenue were as follows: Three Months Ended March 31, 2018 March 31, 2017 Customer B 10 % 13 % Customer C 17 21 Customer E * 13 Customer G 11 * Customers accounting for 10% or more of the Company’s accounts receivable were as follows: As of March 31, 2018 December 31, 2017 Customer C 11 % * % Customer D 16 16 * Less than 10% Content Licensing Fees The Company licenses content for viewing on The Roku Channel. The licensing arrangements can be for a fixed fee and/or advertising revenue share with specific windows of content availability. The Company capitalizes the content fees and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the content is known and the content is accepted and available for streaming. The Company amortizes licensed content assets into “Cost of Revenue, Platform” over the contractual window of availability . As of March 31, 2018, $0.1 million content met these requirements and is included in “Prepaid expenses and other current assets ” . Adoption of New Accounting Standards On January 1, 2018, the Company adopted guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) On January 1, 2018, the Company adopted guidance in ASU 2016-16, Income taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) Recently Issued Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and should recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, with early adoption permitted. The guidance should be applied prospectively. The Company is evaluating the impact of this new guidance on the consolidated financial statements and the related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), related to new accounting and reporting guidelines for leasing arrangements. The guidance requires recognition of right-to-use lease assets and lease liabilities for all leases (with the exception of short-term leases) on the balance sheet of lessees. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. The new standard is to be applied using a modified retrospective approach. The Company is evaluating the impact of this new guidance on the consolidated financial statements and the related disclosures. Fair Value Measurements Level 1 —Quoted prices in active markets for identical assets or liabilities. Financial assets and liabilities measured using Level 1 inputs include accounts receivable, prepaid expenses, accounts payable and accrued liabilities. 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 does not use Level 2 inputs to measure any assets or liabilities. 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 does not use Level 3 inputs to measure any assets or liabilities as of March 31, 2018 and December 31, 2017. During the year ended December 31, 2017, Level 3 instruments consisted of the Company’s preferred stock warrant liability in which the fair value was measured upon issuance and at each reporting date. Pursuant to the IPO, all preferred stock warrants were converted into Class B common stock warrants, which did not require further re-measurements as they were deemed permanent equity. Inputs used to determine the estimated fair value of the convertible preferred stock warrant liability as of the valuation date included remaining contractual term of the warrants, the risk-free interest rate, the volatility of comparable public companies over the remaining term, and the fair value of underlying shares. The significant unobservable inputs used in the fair value measurement of the convertible preferred stock warrant liability were the fair value of the underlying stock at the valuation date for periods prior to the IPO and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term resulted in a directionally similar impact to the fair value measurement. The following table represents the activity of the fair value of Level 3 instruments (in thousands): Three Months Ended March 31, 2017 Convertible preferred stock warrant liability — beginning balance $ 9,990 Fair value of new warrants issued — Change in fair value of preferred stock warrant liability 735 Convertible preferred stock warrant liability — ending balance $ 10,725 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | 3. BUSINESS COMBINATIONS On September 6, 2017, the Company acquired all of the outstanding shares of a privately held technology company located in Denmark to enhance the Company’s product offerings, for an aggregate purchase price of $3.5 million. The Company paid $3.0 million of the aggregate purchase price at the time of acquisition with $0.5 million payable one year after the acquisition date. In addition, the Company issued 0.1 million shares of its Class B common stock to two of the founders as part of a continuing services arrangement. The shares are subject to a right of repurchase which lapses over a three year period at varying prices per share. The purchase price allocation includes $1.4 million of goodwill and $2.2 million of identifiable intangible assets, which primarily consist of developed technology, with an expected useful life of |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 4. Balance sheet components Accounts Receivable, Net —Accounts receivable, net, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Gross accounts receivable $ 115,851 $ 138,292 Allowance for sales returns (3,799 ) (6,907 ) Allowance for sales incentives (5,433 ) (10,442 ) Other allowances (525 ) (390 ) Total allowances (9,757 ) (17,739 ) Total Accounts Receivable—net $ 106,094 $ 120,553 Allowance for Sales Returns —Allowance for sales returns consisted of the following activities (in thousands): March 31, 2018 December 31, 2017 Beginning balance $ (6,907 ) $ (6,916 ) Charged to revenue (1,587 ) (19,089 ) Utilization of sales return reserve 4,695 19,098 Ending balance $ (3,799 ) $ (6,907 ) Allowance for Sales Incentives —Allowance for sales incentives consisted of the following activities (in thousands): March 31, 2018 December 31, 2017 Beginning balance $ (10,442 ) $ (8,503 ) Charged to revenue (8,067 ) (44,264 ) Utilization of sales incentive reserve 13,076 42,325 Ending balance $ (5,433 ) $ (10,442 ) Property and Equipment, Net —Property and equipment, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Computers and equipment $ 12,296 $ 11,631 Leasehold improvements 10,122 8,437 Website and internal-use software 6,299 5,461 Office equipment and furniture 2,393 1,987 Total property and equipment 31,110 27,516 Accumulated depreciation and amortization (14,275 ) (12,780 ) Property and Equipment, net $ 16,835 $ 14,736 Depreciation and amortization expense for the three months ended March 31, 2018 and 2017 was $1.5 million and $1.2 Accounts Payable and Accrued Liabilities —Accounts payable and accrued liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Accounts payable $ 41,148 $ 56,413 Accrued royalty expense 14,501 17,165 Accrued inventory 3,574 2,382 Accrued payroll and related expenses 9,879 8,699 Accrued cost of revenue 9,577 12,210 Accrued payments to content publishers 23,590 24,037 Taxes and related liabilities 1,218 1,463 Customer prepayments 1,887 545 Other accrued expenses 6,402 5,843 Total Accounts Payable and Accrued Liabilities $ 111,776 $ 128,757 Deferred Revenue —Deferred revenue consisted of the following (in thousands): March 31, 2018 December 31, 2017 Platform, current $ 19,110 $ 19,022 Player, current 14,838 15,479 Total deferred revenue, current 33,948 34,501 Platform, non-current 8,047 42,674 Player, non-current 5,502 5,837 Total deferred revenue, non-current 13,549 48,511 Total Deferred Revenue (See Note 10) $ 47,497 $ 83,012 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 5. DEBT The Company did not have any outstanding debt as of March 31, 2018 and December 31, 2017. Line of credit The Company first entered into a loan and security agreement (the “LSA”) with Silicon Valley Bank (“Bank’) in July 2011. The LSA was amended and restated in subsequent periods. The amended and restated loan and security agreement (the “Restated 2014 LSA”) entered into in November 2014, provides advances under a revolving line of credit up to $30.0 million and provides for letters of credit to be issued up to the lesser of the available line of credit, reduced by outstanding advances and drawn but unreimbursed letters of credit, or $5.0 million. The financial and non-financial covenants as well as the term of the agreement were updated in subsequent amendments to the Restated 2014 LSA. In June 2017, the Company entered into a second amendment to the Restated 2014 LSA. The advances under the second amendment carry a floating per annum interest rate equal to, at the Company’s option, (1) the prime rate or (2) LIBOR plus 2.75%, or the prime rate plus 1% depending on certain ratios. The amendment further changed the financial covenant to maintain a current ratio (calculated as current assets, divided by current liabilities less deferred revenue) greater than or equal to 1.25. The revolving line of credit terminates on June 30, 2019 at which time all outstanding advances becomes due and payable. As of March 31, 2018 and December 31, 2017, the Company was in compliance with all of the covenants in the amended Restated 2014 LSA. The Company did not have any borrowings outstanding on the revolving line of credit as of March 31, 2018 and December 31, 2017. The Company had $2.2 million and $1.5 million outstanding in letters of credit as of March 31, 2018 and December 31, 2017, respectively. The interest rate on the line of credit was 4.63% and 4.31% as of March 31, 2018 and December 31, 2017, respectively. Term loan In June 2017, the Company entered into a subordinated loan agreement (“2017 Agreement”) with the Bank. The 2017 Agreement provided for a term loan borrowing of $40.0 million, with a minimum of $25.0 million to be initially drawn at the close of the agreement with the remaining amount available for a 24 month period, to be drawn in no less than $5.0 million increments. Advances under the term loan incur a facility fee equal to 1% of the drawn borrowings, in addition to interest payments at an interest rate equal to, at the Company’s option, (1) the prime rate plus 3.5% or (2) LIBOR plus 6.5%, subject to a 1% LIBOR floor. Additionally, the borrowings incur payment in kind interest fees equal to 2.5%, accruing to the unpaid borrowings balance, compounded monthly. Payment in kind interest may be settled in cash, at the Company’s election, during the term or at maturity. The Company is also obligated to pay final payment fees ranging from 1% to 4% depending on the timing of the payment. On October 31, 2017 the Company repaid the entire amount outstanding, and subsequently terminated the 2017 Agreement. In connection with the 2017 Agreement the Company issued 0.4 million warrants to purchase shares of Series H convertible preferred stock, with an exercise price of $9.17340. The warrants are exercisable up to ten years from the date of issuance. Upon the repayment of the amounts borrowed and the subsequent termination of the 2017 Agreement, the Company cancelled 0.1 million warrants that were contingent on future borrowings. The Bank exercised 0.1 million warrants during the year ended December 31, 2017 and 0.2 million warrants during the three months ended March 31, 2018. There were no outstanding warrants as of March 31, 2018. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | 6. STOCKHOLDERS’ DEFICIT Preferred Stock The Company had outstanding convertible preferred stock before its IPO. Upon the closing of the Company’s IPO, all outstanding shares of its convertible preferred stock automatically converted into 80.8 million shares of Class B common stock on a one-to-one basis. On October 2, 2017, the Company filed an Amended and Restated Certificate of Incorporation, which changed the capital structure of the Company. The Company is now authorized to issue 10.0 million shares of undesignated preferred stock with rights and preferences determined by the Company’s Board of Directors (the “Board”) at the time of issuance of such shares. As of March 31, 2018 and December 31, 2017, there were no shares of preferred stock issued and outstanding. Common Stock The Company’s Amended and Restated Certificate of Incorporation filed on October 2, 2017, established two classes of authorized common stock, Class A common stock and Class B common stock. All shares of common stock outstanding immediately prior to the IPO, including shares of common stock issued upon the conversion of the convertible preferred stock, were converted into an equivalent number of shares of 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. Common stock options held prior to the IPO can be exercised into Class B or Class A common stock at the option of the holder. Warrants to purchase common stock held prior to the IPO were exercised into Class B common stock. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are automatically converted into shares of the Company's Class A common stock upon sale or transfer. All stock options and restricted stock units granted after the IPO are exercised or vested into shares of Class A common stock. The Company has reserved the following shares of common stock for future issuances (in thousands): March 31, 2018 Common stock awards granted under equity incentive plans 24,933 Common stock awards available for grant under equity incentive plan 17,096 Total reserved shares of common stock 42,029 Equity Incentive Plans The 2008 Equity Incentive Plan (the “2008 Plan”) became effective in February 2008. The 2008 Plan allowed for the grant of incentive stock options to employees and for the grant of non-statutory stock options and restricted stock awards to employees, directors and consultants. Options granted under the 2008 Plan were granted at a price per share equivalent to the fair market value on the date of grant. Recipients of option grants under the 2008 Plan who possess more than 10% of the combined voting power of the Company (a “10% Shareholder”) are subject to certain limitations, and incentive stock options granted to such recipients were at a price no less than 110% of the fair market value at the date of grant. Options under the 2008 Plan generally vest over four years and have a term of 10 years. Commensurate with the Company’s IPO, the Company’s Board of Directors adopted the 2017 Equity Incentive Plan (the “2017 Plan”) which became effective in September 2017. No further equity awards can be granted under the 2008 Plan. The 2017 Plan provides for the grant of incentive stock options to 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 employees, directors and consultants. Options and restricted stock units under the 2017 Plan generally vest over four years and have a term of 10 years. Stock-Based Compensation The Company measures the cost awards granted under equity incentive plans based on the grant date fair value of the award. The Company uses the straight-line method for expense recognition. The Company recognizes forfeitures as they occur. The following table shows total stock-based compensation expense for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 March 31, 2017 Cost of platform revenue $ 19 $ 21 Cost of player revenue 44 36 Research and development 2,296 888 Sales and marketing 1,110 601 General and administrative 960 629 Total stock-based compensation $ 4,429 $ 2,175 Stock Options The summary of the Company’s stock option activity is as follows (in thousands, except price 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, 2017 - outstanding 26,336 $ 4.59 6.4 — Granted 82 45.96 — $ 19.32 Exercised (1,670 ) 3.04 — — Forfeited and expired (302 ) 6.37 — — Balance, March 31, 2018 - outstanding 24,446 $ 4.81 6.4 — $ 644,801 Options exercisable at March 31, 2018 14,583 $ 3.16 4.8 — $ 407,437 The intrinsic value for options exercised during the three months ended March 31, 2018 and 2017, was $56.2 million and $0.1 million, respectively, representing the difference between the fair values of the Company’s common stock underlying these options at the dates of exercise and the exercise prices paid. As of March 31, 2018, the Company had $29.3 million of unrecognized stock compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 2.5 years. The fair value of options granted under the equity incentive plans is estimated on the grant date using the Black-Scholes option-valuation model. The assumptions used in the Black-Scholes model are as follows: Three Months Ended March 31, 2018 March 31, 2017 Dividend rate — — Expected term (in years) 6.1 6.1 - 6.5 Risk-free interest rate 2.32 - 2.67% 2.18 - 2.25% Expected volatility 39 - 40% 43 - 44% Restricted Stock Units Pursuant to the 2017 Plan, the Company issued restricted stock units to employees. The summary of the Company’s restricted stock unit activity is as follows (in thousands, except price per share data): Number of Shares Weighted Average Grant Date Fair Value Per Share Balance, December 31, 2017 - outstanding 272 $ 43.55 Awarded 227 42.98 Released — — Forfeited (12 ) 43.55 Balance, March 31, 2018 - outstanding 487 $ 43.29 The unrecognized compensation cost related to restricted stock units as of March 31, 2018 was $19.7 million, which the Company expects to recognize over 3.7 years. No restricted stock units vested during the three months ended March 31, 2018. Warrants On March 31, 2018, the Company had no outstanding warrants. As of December 31, 2017, the Company had outstanding warrants to purchase 0.2 million shares of Class B common stock. Convertible preferred stock warrants issued and outstanding at the time of the Company’s IPO were automatically converted into Class B common stock warrants at the time of the Company’s IPO. Prior to the IPO the fair value of these convertible preferred stock warrants was recorded as a liability and remeasured at the end of each balance sheet date using the Black-Scholes option pricing model. The changes in the fair value during the year were recognized in the condensed consolidated statements of operations. The assumptions used to value the preferred stock warrants outstanding during the three months ended March 31, 2017 as follows: Three Months Ended March 31, 2017 Dividend rate $ — Expected term (in years) 3.2 - 3.4 Risk-free interest rate 1.5% - 1.6% Expected volatility 45.3% - 45.9% |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. COMMITMENTS AND CONTINGENCIES Office Space The Company has operating lease agreements for office, research and development and sales and marketing space in the United States, the United Kingdom (U.K.), Denmark, and China, with various expiration dates up to November 2024. Rent expense for the three months ended March 31, 2018 and 2017 was $2.2 million and $1.5 million, respectively. Manufacturing Purchase Commitments The Company has contracts with vendors for the manufacture of inventory and related items in the normal course of business. As of March 31, 2018, the Company had $72.0 million purchase commitments for inventory and related items. The Company records a liability for noncancelable purchase commitments in excess of its future demand forecasts. The Company recorded $0.9 million and $0.6 million for these purchase commitments in “Accrued liabilities” as of March 31, 2018 and December 31, 2017, respectively. Content Licensing The Company licenses certain content for users to access through The Roku Channel. The Company records an obligation for licensing of content when it enters into an agreement to obtain future titles and the cost of the content is known. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. As of March 31, 2018, the Company had $0.1 million of obligations recorded in “Accrued liabilities” for license purchase commitments. As of March 31, 2018, the Company has $0.7 million of obligations that are not reflected on the financial statements as they do not yet meet the criteria for asset recognition. Letters of Credit As of March 31, 2018 and December 31, 2017, the Company had irrevocable letters of credit outstanding in the amount of $ 2.2 million and $ 1.5 million, respectively, related to facilities leases. The letters of credit have various expiration dates through 2019. Contingencies The Company may be involved in disputes or litigation matters that arise in the ordinary course of business. Management is not aware of any dispute that it believes would have a material adverse effect on its business, operating results, cash flows or financial condition. Indemnification Many of the Company’s agreements include certain provisions for indemnifying content publishers, licensees, contract manufacturers and suppliers if the Company’s products or services infringe a third party’s intellectual property rights. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the consolidated financial statements. Player Warranties Upon issuance of a standard player warranty, the Company recognizes a liability for the obligation it assumes under the warranty. As of March 31, 2018 and December 31, 2017, the accrued warranty reserve was immaterial. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries. The Company has not yet made a determination of indefinite reinvestment assertion in light of the Tax Act and considers the conclusion to be incomplete under guidance issued by SEC. The Company expects to reach a final determination within the measurement period in accordance with Staff Accounting Bulletin 118. The Company recorded an income tax expense of $0.1 million and $0.1 million for the three months ended March 31, 2018 and 2017, respectively, related to foreign income taxes and state minimum taxes. Based on the available objective evidence during the three months ended March 31, 2018, the Company believes it is more likely than not that the tax benefits of the U.S. losses incurred may not be realized. Accordingly, the Company recorded a full valuation allowance against the tax benefits of the U.S. losses incurred. The primary difference between the effective tax rate and the local statutory tax rate relates to the valuation allowance on the Company’s U.S. losses. Effective January 1, 2018, the Company adopted the new revenue standard which results in a change to deferred revenues. The change in deferred revenues impacts the deferred tax asset arising out of deferring revenues for GAAP compared to for tax. The deferred tax asset is equally offset by the full valuation allowance. The Tax Cuts and Job Act (TCJA) of 2017, enacted on December 22, 2017, contains significant changes to U.S. tax law, including lowering the U.S. corporate income tax rate to 21% and implementing a territorial tax system. TCJA creates a new requirement that global intangible low-taxed income (GILTI) earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (i) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (ii) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). The Company’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing the global income to determine whether the Company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. The Company has included GILTI in the annual effective tax rate calculation, however, it has not made a policy decision regarding whether to record deferred taxes on GILTI. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 9. RELATED-PARTY TRANSACTIONS The Company has agreements with one of the Company’s strategic investors. The Company recorded revenues of $1.0 million for the three months ended March 31, 2018 related to this investor. The revenues and expenses with this investor were not material for the three months ended March 31, 2017. The Company had accounts receivable balance of $1.3 million and $0.5 million as of March 31, 2018 and December 31, 2017, respectively, related to sales to this investor. In addition, a member of the Company’s Board of Directors is a senior vice president at an operating unit of one of the strategic investors. The Company had no significant transactions with this investor for the three months ended March 31, 2018 and 2017, respectively. The Company did had insignificant balances outstanding with this investor as of March 31, 2018 and December 31, 2017, respectively. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 10. REVENUE On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (the “new revenue standard”) using the modified retrospective method. The Company applied the new revenue standard to all contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those prior periods. Practical expedients and exemptions The Company reflected the aggregate effect of all modifications that occurred prior to the date of adoption. The Company expensed sales commissions when incurred because the amortization period is less than one year. The sales commissions are included in “Sales and marketing” expenses in the condensed consolidated statements of operations. Impact on beginning balances The cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows (in thousands): As of Adjustment on As of Balance Sheet line items impacted December 31, 2017 adoption of new revenue standard January 1, 2018 Assets: Accounts receivables, net $ 120,553 $ 12,728 $ 133,281 Inventories 32,740 (108 ) 32,632 Prepaid expenses and other current assets 11,367 4,113 15,480 Deferred cost of revenue, current portion 3,007 (1,076 ) 1,931 Deferred cost of revenue, non-current portion 5,403 (3,885 ) 1,518 Other non-current assets 3,429 (222 ) 3,207 Liabilities: Accounts payable and accrued liabilities 128,757 1,250 130,007 Deferred revenue, current portion 34,501 8,449 42,950 Deferred revenue, non-current portion 48,511 (36,488 ) 12,023 Equity: Accumulated deficit (283,338 ) 38,339 (244,999 ) Revenue recognition Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. This is achieved by applying the following five-step approach: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. The majority of the Company’s revenue recognized in the condensed consolidated statements of operations is revenue from contracts with customers. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Shipping charges billed to customers are included in revenue and the related shipping costs are included in cost of revenue. Revenue is recorded net of taxes collected or accrued. Sales taxes are recorded as current liabilities until remitted to the relevant government authority. The Company does not have any capitalized costs associated with contract acquisition because most direct contract acquisition costs relate to contracts that are recognized over a period of one year or less. Arrangements with multiple performance obligations The Company’s contracts may contain multiple distinct performance obligations. The transaction price is allocated to each performance obligation based on a relative stand-alone selling price (“SSP”). For performance obligations that the Company routinely sells 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 a market assessment approach, or on an expected cost-plus margin approach. Nature of products and services Platform segment: The Company’s platform segment generates revenue from advertising sales, subscription and transaction revenue share, sales of branded channel buttons on remote controls and licensing arrangements with TV brands and service operators. The Company’s advertising revenue is mostly generated through video and display advertising delivered through advertising impressions. The Company enters into arrangements with advertising agencies that purchase advertising on its platform on behalf of the agencies’ clients. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order (“IO”) that specifies the terms of the arrangement such as the type of ad product, pricing, insertion dates, and number of impressions in a stated period. Revenue is recognized over time based on the number of impressions delivered. IOs may include multiple performance obligations as they generally contain several different advertising products that each represent a separately identifiable promise within the contract. For such arrangements, the Company allocates revenue to each performance obligation on a relative stand-alone selling price basis. Stand-alone selling prices are based on the prices charged to customers. In addition, advertising revenue is also recognized as a distinct performance obligation as part of a content distribution arrangement with content publishers. The Company earns revenue share from content publishers based on user subscriptions activated or billed through the Company’s platform and from purchases or renting of publishers’ media. The Company’s revenue share is generally equal to a fixed percentage of the price charged by the content publisher or a contractual flat fee. The Company sells branded channel buttons on player and TV remote controls that provide one-touch access to the publishers’ content. The Company typically receives a fixed fee per button unit over a defined distribution period. The Company licenses its technology and proprietary operating system to service operators and TV brands. Arrangements with service operators generally include performance obligations comprised of a license to the technology and proprietary operating system, unspecified upgrades or enhancements, hosting of a branded channel store, and engineering and support services. The Company has determined that the license for the technology and the operating system is one performance obligation. Licensing fees from service operators are mostly generated from unit activations or flat fees and ongoing maintenance. Arrangements with TV brands commonly include license to technology and proprietary operating system over a specified term including updates and upgrades. Licensing revenues from TV brands are generated on a flat fee basis or from per unit licensing fees earned. These arrangements may also include marketing development funds generated on a flat fee basis or a per unit basis. These incentive fees are included as a reduction to the estimated transaction price for these licensing arrangements and associated remaining performance obligations. Nature of performance obligations Revenue recognition Digital advertising Digital advertising is comprised of performance obligations that are recognized either at a point in time or over time depending on the nature of the advertising product. Content distribution services The revenue share from the content publishers included in the estimated transaction price is 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 of the content publishers’ applications. Revenue is recognized on a time elapsed basis, by day, over the contractual distribution term. Branded channel buttons The button fees included in the estimated transaction price are 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 Company’s assessment of historical, current, and forecasted player and Roku TV volumes. Revenue is recognized on a time elapsed basis, by day, over the distribution term. License of technology and operating system The revenue for licensing of technology and operating system is recognized at a point in time, when the control has transferred to the customer, which usually occurs when the Company makes the IP available to the customer. Unspecified upgrades to the IP The revenue allocated to unspecified upgrades is recognized on a time elapsed basis, by day, over the service period. Hosting services Hosting fees are recognized on a time elapsed basis, by day, over the service period. Professional services The professional services revenue is recognized as the services are provided or accepted. Player segment: The Company sells the majority of its players through retail distribution channels, including brick and mortar and online retailers, and through the Company’s website. The Company includes allowances for returns and sales incentives in the estimated transaction price. These estimates are based on historical experience, anticipated performance and the Company’s best estimate at the time. The Company’s player sales include two performance obligations: • hardware, which includes embedded software, and • unspecified upgrades or enhancements on a when-and-if available basis. The Company has determined that its hardware and embedded software be considered as one performance obligation because the customer cannot benefit from the hardware or the embedded software either on its own or together with other resources that are readily available to the customer. Nature of performance obligations Revenue recognition Players Revenue recognition occurs at a point in time when control has transferred to the customer, which is based on the contractual terms. Unspecified upgrades to the software embedded in the hardware The Company initially records the allocated value of the unspecified upgrades as deferred revenue and recognizes it into player revenue ratably on a time elapsed basis, by day, over the estimated economic life of the associated players. Revenue disaggregation The Company’s disaggregated revenues are represented by the two reportable segments discussed in Note 12. The disaggregation is based on the evaluations that are regularly performed 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. Transaction price allocated to future performance obligations The estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied, excluding contracts with original durations of one year or less, amounts in accordance with ASC 606-10-55-18, or amounts of variable consideration attributable to royalties, at the end of the March 31, 2018 is $53.7 million, of which the Company expects to recognize approximately 51% of the revenue over the next 12 months and the remainder thereafter, through 2024. Contract balances Accounts receivable are recorded at the amount invoiced, net of an allowance for doubtful accounts, with payment terms ranging from 30 to 90 days. Since the timing of revenue recognition differs from the timing of invoicing to customers, it gives rise to contract balances. Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed. The contract assets are transferred to the receivables when the rights become unconditional. The Company’s contract assets are current in nature and are included in “Prepaid expenses and other current assets ”. The contract liabilities are recorded as deferred revenue and primarily relate to the advance consideration received from customers. Revenue is recognized when the performance obligation is completed and transfer of control occurs. The table below reflects contract balances of the Company (in thousands): As of As of adoption March 31, 2018 January 1, 2018 Accounts receivable, net $ 106,094 $ 133,281 Contract assets, current portion 3,945 4,113 Deferred revenue, current portion 33,948 42,950 Deferred revenue, non-current portion 13,549 12,023 Revenue recognized during the three months ended March 31, 2018, from amounts included in deferred revenue at the beginning of the period was approximately $21.3 million. Of this amount, approximately $12.4 million related to the delivery of intellectual property. This delivery also resulted in an increase to contract assets of approximately $2.7 million during the three months ended March 31, 2018. Impact of adoption for three months ended March 31, 2018 The impact of adoption of the new revenue standard on January 1, 2018, on the condensed consolidated balance sheet and statements of operations is reflected in the table below (in thousands): As of March 31, 2018 Impact on balance sheet line items As Reported Balances without adoption of the new revenue standard Impact of adoption Higher / (Lower) Assets: Accounts receivable, net $ 106,094 $ 94,070 $ 12,024 Inventories 38,062 38,062 — Prepaid expenses and other current assets 30,546 26,831 3,715 Deferred cost of revenue, current portion 1,359 4,466 (3,107 ) Deferred cost of revenue, non-current portion — 5,248 (5,248 ) Liabilities: Accounts payable and accrued liabilities 111,776 110,526 1,250 Deferred revenue, current portion 33,948 32,089 1,859 Deferred revenue, non-current portion 13,549 48,196 (34,647 ) Equity: Accumulated Deficit (251,673 ) (290,595 ) 38,922 Three Months Ended March 31, 2018 Impact on statements of operations line items As Reported Balances without adoption of the new revenue standard Impact of adoption Higher / (Lower) Net Revenue: Platform $ 75,077 $ 71,864 $ 3,213 Player 61,499 59,449 2,050 Total net revenue 136,576 131,313 5,263 Cost of Revenue: Platform 21,666 18,475 3,191 Player 51,798 50,309 1,489 Total cost of revenue 73,464 68,784 4,680 Gross Profit: Platform 53,411 53,389 22 Player 9,701 9,140 561 Total gross profit 63,112 62,529 583 Operating Expenses: Research and development 34,126 34,126 — Sales and marketing 20,318 20,318 — General and administrative 15,570 15,570 — Total operating expenses 70,014 70,014 — Loss from Operations (6,902 ) (7,485 ) 583 Net income (loss) $ (6,634 ) $ (7,217 ) $ 583 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 11. NET LOSS PER SHARE Basic and diluted net loss per share of common stock allocable to common stockholders is calculated by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of employee stock-based awards and warrants. Because the Company has reported a net loss for the three months ended March 31, 2018 and 2017, diluted net loss per common share is the same as the basic net loss per share for those periods. The Company calculates its basic and diluted net loss per share allocable to common stockholders in conformity with the two-class method required for companies with participating securities. In computing diluted net loss allocable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. The Company’s basic net loss per share allocable to common stockholders is calculated by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. For purposes of the calculation of diluted net loss per share allocable to common stockholders, unvested shares of common stock issued upon the early exercise of stock options, options to purchase common stock, common stock warrants and securities like convertible preferred stock and convertible preferred stock warrants that were issued and outstanding before the Company’s IPO, are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share allocable to common stockholders as their effect is antidilutive. The Company considers all series of its convertible preferred stock that were outstanding before the Company’s IPO, to be participating securities as they were entitled to receive noncumulative dividends prior and in preference to any dividends on shares of common stock. Due to the Company’s net losses, there is no impact on the loss per share calculation in applying the two-class method since the participating securities have no legal obligation to share in any losses. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended March 31, 2018 March 31, 2017 Numerator: Net loss allocable to common stockholders $ (6,634 ) $ (8,702 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 99,488 4,850 Net loss per share, basic and diluted $ (0.07 ) $ (1.79 ) The potential common shares that would be excluded from the calculation of diluted net loss per share because of their anti-dilutive effect are as follows (in thousands): Three Months Ended March 31, 2018 March 31, 2017 Equity awards to purchase common stock 24,933 23,380 Unvested shares of common stock issued upon early exercise of stock options and business acquisition 126 2 Warrants to purchase common stock — 375 Warrants to purchase convertible preferred stock — 1,817 Convertible preferred stock — 80,844 Total 25,059 106,418 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 12. SEGMENT INFORMATION The Company is organized into two reportable segments as follows: Platform —Consists primarily of fees received from advertisers and content publishers, and from licensing the Company’s technology and proprietary operating system with TV brands and service operators. Platform revenue primarily includes fees earned from the sale of digital advertising and revenue share from new or recurring user subscriptions activated through the Company’s platform and revenue share from user purchases of content publishers’ media through its platform. The Company also earns revenue from the sale of branded channel buttons on remote controls. Player —Consists primarily of net sales of streaming media players and accessories through retailers and distributors, as well as directly to customers through the Company’s website. Customers accounting for 10% or more of the segment revenues were as follows: Three Months Ended March 31, 2018 March 31, 2017 Platform segment revenue Customer E * % 15 % Customer G 20 * Player segment revenue Customer A 13 % 10 % Customer B 19 15 Customer C 36 32 Customer E * 12 * Less than 10% of segment revenues Substantially all of the Company’s assets were held in the United States and were attributable to the operations in the United States as of March 31, 2018 and December 31, 2017. Revenue in international markets was 16% for the three months ended March 31, 2018 and was less than 10% for the period ended March 31, 2017. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results to be expected for the full year or any future periods. There have been no material changes in the Company’s significant accounting policies, other than the adoption of Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), Income taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) |
Use of Judgments and Estimates | Use of Judgements and 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 and liabilities and related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and includes the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is equal to the net loss for all periods presented. Therefore, the consolidated statements of comprehensive loss has been omitted from the condensed consolidated financial statements. |
Concentrations | Concentrations Customers accounting for 10% or more of the Company’s net revenue were as follows: Three Months Ended March 31, 2018 March 31, 2017 Customer B 10 % 13 % Customer C 17 21 Customer E * 13 Customer G 11 * Customers accounting for 10% or more of the Company’s accounts receivable were as follows: As of March 31, 2018 December 31, 2017 Customer C 11 % * % Customer D 16 16 * Less than 10% |
Content Licensing Fees | Content Licensing Fees The Company licenses content for viewing on The Roku Channel. The licensing arrangements can be for a fixed fee and/or advertising revenue share with specific windows of content availability. The Company capitalizes the content fees and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the content is known and the content is accepted and available for streaming. The Company amortizes licensed content assets into “Cost of Revenue, Platform” over the contractual window of availability . As of March 31, 2018, $0.1 million content met these requirements and is included in “Prepaid expenses and other current assets ” . |
Adoption of New Accounting Standards and Recently Issued Accounting Pronouncements Not Yet Adopted | Adoption of New Accounting Standards On January 1, 2018, the Company adopted guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) On January 1, 2018, the Company adopted guidance in ASU 2016-16, Income taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) Recently Issued Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and should recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, with early adoption permitted. The guidance should be applied prospectively. The Company is evaluating the impact of this new guidance on the consolidated financial statements and the related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), related to new accounting and reporting guidelines for leasing arrangements. The guidance requires recognition of right-to-use lease assets and lease liabilities for all leases (with the exception of short-term leases) on the balance sheet of lessees. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. The new standard is to be applied using a modified retrospective approach. The Company is evaluating the impact of this new guidance on the consolidated financial statements and the related disclosures. |
Fair Value Measurements | Fair Value Measurements Level 1 —Quoted prices in active markets for identical assets or liabilities. Financial assets and liabilities measured using Level 1 inputs include accounts receivable, prepaid expenses, accounts payable and accrued liabilities. 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 does not use Level 2 inputs to measure any assets or liabilities. 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 does not use Level 3 inputs to measure any assets or liabilities as of March 31, 2018 and December 31, 2017. During the year ended December 31, 2017, Level 3 instruments consisted of the Company’s preferred stock warrant liability in which the fair value was measured upon issuance and at each reporting date. Pursuant to the IPO, all preferred stock warrants were converted into Class B common stock warrants, which did not require further re-measurements as they were deemed permanent equity. Inputs used to determine the estimated fair value of the convertible preferred stock warrant liability as of the valuation date included remaining contractual term of the warrants, the risk-free interest rate, the volatility of comparable public companies over the remaining term, and the fair value of underlying shares. The significant unobservable inputs used in the fair value measurement of the convertible preferred stock warrant liability were the fair value of the underlying stock at the valuation date for periods prior to the IPO and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term resulted in a directionally similar impact to the fair value measurement. The following table represents the activity of the fair value of Level 3 instruments (in thousands): Three Months Ended March 31, 2017 Convertible preferred stock warrant liability — beginning balance $ 9,990 Fair value of new warrants issued — Change in fair value of preferred stock warrant liability 735 Convertible preferred stock warrant liability — ending balance $ 10,725 |
Revenue Recognition | On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (the “new revenue standard”) using the modified retrospective method. The Company applied the new revenue standard to all contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those prior periods. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. This is achieved by applying the following five-step approach: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Fair Value of Level 3 Instruments | The following table represents the activity of the fair value of Level 3 instruments (in thousands): Three Months Ended March 31, 2017 Convertible preferred stock warrant liability — beginning balance $ 9,990 Fair value of new warrants issued — Change in fair value of preferred stock warrant liability 735 Convertible preferred stock warrant liability — ending balance $ 10,725 |
Net Revenue | |
Schedules of Customer Concentration by Risk Factor | Customers accounting for 10% or more of the Company’s net revenue were as follows: Three Months Ended March 31, 2018 March 31, 2017 Customer B 10 % 13 % Customer C 17 21 Customer E * 13 Customer G 11 * |
Accounts Receivable | |
Schedules of Customer Concentration by Risk Factor | Customers accounting for 10% or more of the Company’s accounts receivable were as follows: As of March 31, 2018 December 31, 2017 Customer C 11 % * % Customer D 16 16 * Less than 10% |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Gross accounts receivable $ 115,851 $ 138,292 Allowance for sales returns (3,799 ) (6,907 ) Allowance for sales incentives (5,433 ) (10,442 ) Other allowances (525 ) (390 ) Total allowances (9,757 ) (17,739 ) Total Accounts Receivable—net $ 106,094 $ 120,553 |
Schedule of Allowance for Sales Returns | Allowance for sales returns consisted of the following activities (in thousands): March 31, 2018 December 31, 2017 Beginning balance $ (6,907 ) $ (6,916 ) Charged to revenue (1,587 ) (19,089 ) Utilization of sales return reserve 4,695 19,098 Ending balance $ (3,799 ) $ (6,907 ) |
Schedule of Allowance for Sales Incentives | Allowance for sales incentives consisted of the following activities (in thousands): March 31, 2018 December 31, 2017 Beginning balance $ (10,442 ) $ (8,503 ) Charged to revenue (8,067 ) (44,264 ) Utilization of sales incentive reserve 13,076 42,325 Ending balance $ (5,433 ) $ (10,442 ) |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Computers and equipment $ 12,296 $ 11,631 Leasehold improvements 10,122 8,437 Website and internal-use software 6,299 5,461 Office equipment and furniture 2,393 1,987 Total property and equipment 31,110 27,516 Accumulated depreciation and amortization (14,275 ) (12,780 ) Property and Equipment, net $ 16,835 $ 14,736 |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Accounts payable $ 41,148 $ 56,413 Accrued royalty expense 14,501 17,165 Accrued inventory 3,574 2,382 Accrued payroll and related expenses 9,879 8,699 Accrued cost of revenue 9,577 12,210 Accrued payments to content publishers 23,590 24,037 Taxes and related liabilities 1,218 1,463 Customer prepayments 1,887 545 Other accrued expenses 6,402 5,843 Total Accounts Payable and Accrued Liabilities $ 111,776 $ 128,757 |
Schedule of Deferred Revenue | Deferred revenue consisted of the following (in thousands): March 31, 2018 December 31, 2017 Platform, current $ 19,110 $ 19,022 Player, current 14,838 15,479 Total deferred revenue, current 33,948 34,501 Platform, non-current 8,047 42,674 Player, non-current 5,502 5,837 Total deferred revenue, non-current 13,549 48,511 Total Deferred Revenue (See Note 10) $ 47,497 $ 83,012 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Reserved Shares of Common Stock for Future Issuances | The Company has reserved the following shares of common stock for future issuances (in thousands): March 31, 2018 Common stock awards granted under equity incentive plans 24,933 Common stock awards available for grant under equity incentive plan 17,096 Total reserved shares of common stock 42,029 |
Summary of Recognized Employee Stock-Based Compensation Expense | The following table shows total stock-based compensation expense for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 March 31, 2017 Cost of platform revenue $ 19 $ 21 Cost of player revenue 44 36 Research and development 2,296 888 Sales and marketing 1,110 601 General and administrative 960 629 Total stock-based compensation $ 4,429 $ 2,175 |
Schedule of Activity Under Equity Incentive Plan | The summary of the Company’s stock option activity is as follows (in thousands, except price 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, 2017 - outstanding 26,336 $ 4.59 6.4 — Granted 82 45.96 — $ 19.32 Exercised (1,670 ) 3.04 — — Forfeited and expired (302 ) 6.37 — — Balance, March 31, 2018 - outstanding 24,446 $ 4.81 6.4 — $ 644,801 Options exercisable at March 31, 2018 14,583 $ 3.16 4.8 — $ 407,437 |
Summary of Assumptions Used to Value Stock-Based Awards Granted | The fair value of options granted under the equity incentive plans is estimated on the grant date using the Black-Scholes option-valuation model. The assumptions used in the Black-Scholes model are as follows: Three Months Ended March 31, 2018 March 31, 2017 Dividend rate — — Expected term (in years) 6.1 6.1 - 6.5 Risk-free interest rate 2.32 - 2.67% 2.18 - 2.25% Expected volatility 39 - 40% 43 - 44% |
Summary of Restricted Stock Unit Activity | Pursuant to the 2017 Plan, the Company issued restricted stock units to employees. The summary of the Company’s restricted stock unit activity is as follows (in thousands, except price per share data): Number of Shares Weighted Average Grant Date Fair Value Per Share Balance, December 31, 2017 - outstanding 272 $ 43.55 Awarded 227 42.98 Released — — Forfeited (12 ) 43.55 Balance, March 31, 2018 - outstanding 487 $ 43.29 |
Preferred Stock Warrants | |
Summary of Assumptions Used to Value Stock-Based Awards Granted | The assumptions used to value the preferred stock warrants outstanding during the three months ended March 31, 2017 as follows: Three Months Ended March 31, 2017 Dividend rate $ — Expected term (in years) 3.2 - 3.4 Risk-free interest rate 1.5% - 1.6% Expected volatility 45.3% - 45.9% |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Contract Balances | The table below reflects contract balances of the Company (in thousands): As of As of adoption March 31, 2018 January 1, 2018 Accounts receivable, net $ 106,094 $ 133,281 Contract assets, current portion 3,945 4,113 Deferred revenue, current portion 33,948 42,950 Deferred revenue, non-current portion 13,549 12,023 |
Accounting Standards Update 2014-09 | |
Schedule of Cumulative Effect of Changes Made to Consolidated Balance Sheet for Adoption of New Revenue Standard | The cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows (in thousands): As of Adjustment on As of Balance Sheet line items impacted December 31, 2017 adoption of new revenue standard January 1, 2018 Assets: Accounts receivables, net $ 120,553 $ 12,728 $ 133,281 Inventories 32,740 (108 ) 32,632 Prepaid expenses and other current assets 11,367 4,113 15,480 Deferred cost of revenue, current portion 3,007 (1,076 ) 1,931 Deferred cost of revenue, non-current portion 5,403 (3,885 ) 1,518 Other non-current assets 3,429 (222 ) 3,207 Liabilities: Accounts payable and accrued liabilities 128,757 1,250 130,007 Deferred revenue, current portion 34,501 8,449 42,950 Deferred revenue, non-current portion 48,511 (36,488 ) 12,023 Equity: Accumulated deficit (283,338 ) 38,339 (244,999 ) |
Summary of Impact of Adoption of New Revenue Standards On Our Statements | The impact of adoption of the new revenue standard on January 1, 2018, on the condensed consolidated balance sheet and statements of operations is reflected in the table below (in thousands): As of March 31, 2018 Impact on balance sheet line items As Reported Balances without adoption of the new revenue standard Impact of adoption Higher / (Lower) Assets: Accounts receivable, net $ 106,094 $ 94,070 $ 12,024 Inventories 38,062 38,062 — Prepaid expenses and other current assets 30,546 26,831 3,715 Deferred cost of revenue, current portion 1,359 4,466 (3,107 ) Deferred cost of revenue, non-current portion — 5,248 (5,248 ) Liabilities: Accounts payable and accrued liabilities 111,776 110,526 1,250 Deferred revenue, current portion 33,948 32,089 1,859 Deferred revenue, non-current portion 13,549 48,196 (34,647 ) Equity: Accumulated Deficit (251,673 ) (290,595 ) 38,922 Three Months Ended March 31, 2018 Impact on statements of operations line items As Reported Balances without adoption of the new revenue standard Impact of adoption Higher / (Lower) Net Revenue: Platform $ 75,077 $ 71,864 $ 3,213 Player 61,499 59,449 2,050 Total net revenue 136,576 131,313 5,263 Cost of Revenue: Platform 21,666 18,475 3,191 Player 51,798 50,309 1,489 Total cost of revenue 73,464 68,784 4,680 Gross Profit: Platform 53,411 53,389 22 Player 9,701 9,140 561 Total gross profit 63,112 62,529 583 Operating Expenses: Research and development 34,126 34,126 — Sales and marketing 20,318 20,318 — General and administrative 15,570 15,570 — Total operating expenses 70,014 70,014 — Loss from Operations (6,902 ) (7,485 ) 583 Net income (loss) $ (6,634 ) $ (7,217 ) $ 583 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 loss per share (in thousands, except per share data): Three Months Ended March 31, 2018 March 31, 2017 Numerator: Net loss allocable to common stockholders $ (6,634 ) $ (8,702 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 99,488 4,850 Net loss per share, basic and diluted $ (0.07 ) $ (1.79 ) |
Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | The potential common shares that would be excluded from the calculation of diluted net loss per share because of their anti-dilutive effect are as follows (in thousands): Three Months Ended March 31, 2018 March 31, 2017 Equity awards to purchase common stock 24,933 23,380 Unvested shares of common stock issued upon early exercise of stock options and business acquisition 126 2 Warrants to purchase common stock — 375 Warrants to purchase convertible preferred stock — 1,817 Convertible preferred stock — 80,844 Total 25,059 106,418 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Customer Accounting for 10% or More of Segment Revenues | Customers accounting for 10% or more of the segment revenues were as follows: Three Months Ended March 31, 2018 March 31, 2017 Platform segment revenue Customer E * % 15 % Customer G 20 * Player segment revenue Customer A 13 % 10 % Customer B 19 15 Customer C 36 32 Customer E * 12 * Less than 10% of segment revenues |
The Company - Additional Inform
The Company - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions | Oct. 02, 2017USD ($)Vote$ / sharesshares | Mar. 31, 2018segment |
Entity Wide Revenue Major Customer [Line Items] | ||
Conversion date | Feb. 1, 2008 | |
Number of reportable segments operates | segment | 2 | |
Class A Common Stock | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Number of votes per share | Vote | 1 | |
Class B Common Stock | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Number of votes per share | Vote | 10 | |
Initial Public Offering | Class B Common Stock Warrants | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Warrants conversion ratio | 100.00% | |
Initial Public Offering | Class A Common Stock | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Initial public offering completed date | Oct. 2, 2017 | |
Number of shares sold | 10.4 | |
Share sold price per share | $ / shares | $ 14 | |
Net proceeds from shares sold | $ | $ 134.8 | |
Underwriting discounts and commissions | $ | $ 10.1 | |
Initial Public Offering | Class B Common Stock | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Convertible preferred stock, Shares converted | 80.8 | |
Stock conversion ratio | 100.00% | |
Over-Allotment Option | Class A Common Stock | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Number of shares sold | 1.4 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Schedules of Customer Concentration by Risk Factor (Details) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Net Revenue | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration risk | 10.00% | 13.00% | |
Net Revenue | Customer C | |||
Concentration Risk [Line Items] | |||
Concentration risk | 17.00% | 21.00% | |
Net Revenue | Customer E | |||
Concentration Risk [Line Items] | |||
Concentration risk | 13.00% | ||
Net Revenue | Customer G | |||
Concentration Risk [Line Items] | |||
Concentration risk | 11.00% | ||
Accounts Receivable | Customer C | |||
Concentration Risk [Line Items] | |||
Concentration risk | 11.00% | ||
Accounts Receivable | Customer D | |||
Concentration Risk [Line Items] | |||
Concentration risk | 16.00% | 16.00% |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | Mar. 31, 2018USD ($) |
Licenses | Prepaid Expenses and Other Current Assets | |
Finite Lived Intangible Assets [Line Items] | |
Content assets | $ 0.1 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Schedule of Fair Value of Level 3 Instruments (Details) - Convertible Preferred Stock Warrant Liability $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Convertible preferred stock warrant liability — beginning balance | $ 9,990 |
Change in fair value of preferred stock warrant liability | 735 |
Convertible preferred stock warrant liability — ending balance | $ 10,725 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands, shares in Millions | Sep. 06, 2017USD ($)Foundershares | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,382 | $ 1,382 | |
Denmark | |||
Business Acquisition [Line Items] | |||
Date of acquisition | Sep. 6, 2017 | ||
Aggregate purchase price | $ 3,500 | ||
Aggregate purchase price, paid | $ 3,000 | ||
Aggregate purchase price, payable | $ 500 | ||
Number of founders who received shares | Founder | 2 | ||
Repurchase period for shares issued under business acquisition | 3 years | ||
Goodwill | $ 1,400 | ||
Identifiable intangible assets acquired | $ 2,200 | ||
Identifiable intangible assets, expected useful life | 4 years | ||
Denmark | Class B Common Stock | |||
Business Acquisition [Line Items] | |||
Shares of common stock issued | shares | 0.1 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Gross accounts receivable | $ 115,851 | $ 138,292 | |
Allowance for accounts receivable | (9,757) | (17,739) | |
Total Accounts Receivable—net | 106,094 | 120,553 | |
Allowance for Sales Returns | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Allowance for accounts receivable | (3,799) | (6,907) | $ (6,916) |
Allowance for Sales Incentives | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Allowance for accounts receivable | (5,433) | (10,442) | $ (8,503) |
Other Allowances | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Allowance for accounts receivable | $ (525) | $ (390) |
Balance Sheet Components - Sc32
Balance Sheet Components - Schedule of Allowance for Sales Returns (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ (17,739) | |
Ending balance | (9,757) | $ (17,739) |
Allowance for Sales Returns | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | (6,907) | (6,916) |
Charged to revenue | (1,587) | (19,089) |
Utilization of sales return/incentive reserve | 4,695 | 19,098 |
Ending balance | $ (3,799) | $ (6,907) |
Balance Sheet Components - Sc33
Balance Sheet Components - Schedule of Allowance for Sales Incentives (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ (17,739) | |
Ending balance | (9,757) | $ (17,739) |
Allowance for Sales Incentives | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | (10,442) | (8,503) |
Charged to revenue | (8,067) | (44,264) |
Utilization of sales return/incentive reserve | 13,076 | 42,325 |
Ending balance | $ (5,433) | $ (10,442) |
Balance Sheet Components - Sc34
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 31,110 | $ 27,516 |
Accumulated depreciation and amortization | (14,275) | (12,780) |
Property and Equipment, net | 16,835 | 14,736 |
Computer and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 12,296 | 11,631 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 10,122 | 8,437 |
Website and Internal-Use Software | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 6,299 | 5,461 |
Office Equipment and Furniture | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 2,393 | $ 1,987 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | ||
Depreciation and amortization | $ 1.5 | $ 1.2 |
Balance Sheet Components - Sc36
Balance Sheet Components - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Abstract] | ||
Accounts payable | $ 41,148 | $ 56,413 |
Accrued royalty expense | 14,501 | 17,165 |
Accrued inventory | 3,574 | 2,382 |
Accrued payroll and related expenses | 9,879 | 8,699 |
Accrued cost of revenue | 9,577 | 12,210 |
Accrued payments to content publishers | 23,590 | 24,037 |
Taxes and related liabilities | 1,218 | 1,463 |
Customer prepayments | 1,887 | 545 |
Other accrued expenses | 6,402 | 5,843 |
Total Accounts Payable and Accrued Liabilities | $ 111,776 | $ 128,757 |
Balance Sheet Components - Sc37
Balance Sheet Components - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue, current portion | $ 33,948 | $ 42,950 | $ 34,501 |
Deferred revenue, non-current | 13,549 | $ 12,023 | 48,511 |
Total Deferred Revenue (See Note 10) | 47,497 | 83,012 | |
Platform | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue, current portion | 19,110 | 19,022 | |
Deferred revenue, non-current | 8,047 | 42,674 | |
Player | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue, current portion | 14,838 | 15,479 | |
Deferred revenue, non-current | $ 5,502 | $ 5,837 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Outstanding debt | $ 0 | $ 0 | ||
Letters of credit outstanding | $ 2,200,000 | 1,500,000 | ||
Warrants outstanding | 0 | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Duration of remaining amount available | 24 months | |||
Second Amendment To Restated 2014 Loan and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Minimum current ratio required under financial covenant | 1.25% | |||
Letters of credit outstanding | $ 2,200,000 | $ 1,500,000 | ||
Interest rate on line of credit | 4.63% | 4.31% | ||
Second Amendment To Restated 2014 Loan and Security Agreement | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.75% | |||
Second Amendment To Restated 2014 Loan and Security Agreement | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
2017 Subordinated Loan Agreement | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 40,000,000 | |||
Subordinated loan agreement minimum borrowing capacity | $ 25,000,000 | |||
Facility fee, percentage | 1.00% | |||
LIBOR Floor rate | 1.00% | |||
Payment in kind interest fees, percent | 2.50% | |||
Warrants outstanding | 0 | |||
Warrants cancelled | 100,000 | |||
Warrants exercised | 200,000 | 100,000 | ||
2017 Subordinated Loan Agreement | Term Loan | Series H Convertible Preferred Stock Warrants | ||||
Debt Instrument [Line Items] | ||||
Warrants outstanding | 400,000 | |||
Warrants, exercise price | $ 9.17340 | |||
Warrants, exercisable period | 10 years | |||
2017 Subordinated Loan Agreement | Term Loan | Minimum | ||||
Debt Instrument [Line Items] | ||||
Remaining amount to be drawn as installment | $ 5,000,000 | |||
Line of credit facility final payment fees, percent | 1.00% | |||
2017 Subordinated Loan Agreement | Term Loan | Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility final payment fees, percent | 4.00% | |||
2017 Subordinated Loan Agreement | LIBOR | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 6.50% | |||
2017 Subordinated Loan Agreement | Prime Rate | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.50% | |||
Silicon Valley Bank | Restated 2014 LSA | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 5,000,000 | |||
Revolving Credit Facility | Second Amendment To Restated 2014 Loan and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Line of credit outstanding | 0 | $ 0 | ||
Revolving Credit Facility | Silicon Valley Bank | Restated 2014 LSA | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 30,000,000 |
Stockholder's Deficit - Preferr
Stockholder's Deficit - Preferred Stock - Additional Information (Details) - shares | Oct. 02, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | ||
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Initial Public Offering | Class B Common Stock | |||
Class Of Stock [Line Items] | |||
Convertible preferred stock, Shares converted | 80,800,000 | ||
Stock conversion ratio | 100.00% |
Stockholders' Deficit - Common
Stockholders' Deficit - Common Stock - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018Class | |
Class Of Stock [Line Items] | |
Number of classes | 2 |
Class A Common Stock | |
Class Of Stock [Line Items] | |
Common stock, voting right | one vote for each share |
Class B Common Stock | |
Class Of Stock [Line Items] | |
Common stock, voting right | ten votes for each share |
Stockholder's Deficit - Schedul
Stockholder's Deficit - Schedule of Reserved Shares of Common Stock for Future Issuances (Details) shares in Thousands | Mar. 31, 2018shares |
Class Of Stock [Line Items] | |
Total reserved shares of common stock | 42,029 |
Equity Incentive Plan | |
Class Of Stock [Line Items] | |
Common stock awards granted under equity incentive plans | 24,933 |
Common stock awards available for grant under equity incentive plan | 17,096 |
Stockholders' Deficit - Equity
Stockholders' Deficit - Equity Incentive Plans - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018 | |
2008 Plan | |
Class Of Stock [Line Items] | |
Percentage Of Voting Rights | 10.00% |
Stock option vesting period | 4 years |
Stock options expiration term | 10 years |
2008 Plan | Minimum | 10% Shareholder | |
Class Of Stock [Line Items] | |
Stock option fair market value at the date of grant, percent | 110.00% |
2017 Plan | |
Class Of Stock [Line Items] | |
Stock option vesting period | 4 years |
Stock options expiration term | 10 years |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 4,429 | $ 2,175 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 2,296 | 888 |
Sales and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,110 | 601 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 960 | 629 |
Player | Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 44 | 36 |
Platform | Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 19 | $ 21 |
Stockholder's Deficit - Summary
Stockholder's Deficit - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Balance, Number of shares | 26,336 | |
Granted, Number of shares | 82 | |
Exercised, Number of shares | (1,670) | |
Forfeited and expired, Number of shares | (302) | |
Balance, Number of shares | 24,446 | 26,336 |
Options exercisable at March 31, 2018, Number of shares | 14,583 | |
Balance, Weighted average remaining contractual life | 6 years 4 months 24 days | 6 years 4 months 24 days |
Options exercisable at March 31, 2018, Weighted average remaining contractual life | 4 years 9 months 18 days | |
Granted, Weighted average grant date fair value per share | $ 19.32 | |
Outstanding, ending balance | $ 644,801 | |
Options exercisable, ending balance | $ 407,437 | |
Balance, Weighted average exercise price | $ 4.59 | |
Granted, Weighted average exercise price | 45.96 | |
Exercised, Weighted average exercise price | 3.04 | |
Forfeited and expired, Weighted average exercise price | 6.37 | |
Balance, Weighted average exercise price | 4.81 | $ 4.59 |
Options exercisable at March 31, 2018, Weighted average exercise price | $ 3.16 |
Stockholder's Deficit - Stock O
Stockholder's Deficit - Stock Option Plan - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Intrinsic value of options exercised | $ 56.2 | $ 0.1 |
Unrecognized stock compensation expense | $ 29.3 | |
Expected weighted average period to recognize unrecognized stock compensation expense | 2 years 6 months |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Assumptions Used to Value Fair Value of Options Granted Under Equity Incentive Plans Using Black-Scholes option-valuation Model (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 1 month 6 days | |
Risk-free interest rate, Minimum | 2.32% | 2.18% |
Risk-free interest rate, Maximum | 2.67% | 2.25% |
Expected volatility, Minimum | 39.00% | 43.00% |
Expected volatility, Maximum | 40.00% | 44.00% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 1 month 6 days | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 6 months |
Stockholders' Deficit - Summa47
Stockholders' Deficit - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance Number of Shares, outstanding | 272,000 |
Number of Shares, Awarded | 227,000 |
Number of Shares, Released | 0 |
Number of Shares, Forfeited | (12,000) |
Ending balance, Number of Shares outstanding | 487,000 |
Weighted Average Grant Date Fair Value Per Share, Beginning balance | $ / shares | $ 43.55 |
Weighted Average Grant Date Fair Value Per Share, Awarded | $ / shares | 42.98 |
Weighted Average Grant Date Fair Value Per Share, Forfeited | $ / shares | 43.55 |
Weighted Average Grant Date Fair Value Per Share, Ending balance | $ / shares | $ 43.29 |
Stockholders' Deficit - Restric
Stockholders' Deficit - Restricted Stock Units - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unrecognized stock compensation expense | $ 29.3 |
Expected weighted average period to recognize unrecognized stock compensation expense | 2 years 6 months |
Restricted Stock Units | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unrecognized stock compensation expense | $ 19.7 |
Expected weighted average period to recognize unrecognized stock compensation expense | 3 years 8 months 12 days |
Restricted stock units vested during the period | shares | 0 |
Stockholder's Deficit - Warrant
Stockholder's Deficit - Warrants - Additional Information (Details) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding | 0 | |
Class B Common Stock | ||
Class Of Warrant Or Right [Line Items] | ||
Outstanding warrants to purchase | 200,000 |
Stockholder's Deficit - Summa50
Stockholder's Deficit - Summary of Assumptions Used to Value Preferred Stock Warrants (Details) - Preferred Stock Warrants | 3 Months Ended |
Mar. 31, 2017 | |
Minimum | |
Class Of Warrant Or Right [Line Items] | |
Expected term (in years) | 3 years 2 months 12 days |
Risk-free interest rate | 1.50% |
Expected volatility | 45.30% |
Maximum | |
Class Of Warrant Or Right [Line Items] | |
Expected term (in years) | 3 years 4 months 24 days |
Risk-free interest rate | 1.60% |
Expected volatility | 45.90% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments And Contingencies [Line Items] | |||
Letters of credit outstanding | $ 2.2 | $ 1.5 | |
Letters of credit expiration date | Dec. 31, 2019 | ||
Office Space | |||
Commitments And Contingencies [Line Items] | |||
Rent expense | $ 2.2 | $ 1.5 | |
Operating lease latest expiration date | Nov. 30, 2024 | ||
Manufacturing | |||
Commitments And Contingencies [Line Items] | |||
Purchase commitments for inventory | $ 72 | ||
Manufacturing | Accrued Liabilities | |||
Commitments And Contingencies [Line Items] | |||
Loss on purchase obligation for inventory | 0.9 | $ 0.6 | |
Content License | |||
Commitments And Contingencies [Line Items] | |||
Purchase obligation that do not yet Meet criteria for asset recognition | 0.7 | ||
Content License | Accrued Liabilities | |||
Commitments And Contingencies [Line Items] | |||
Purchase commitments for inventory | $ 0.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes Disclosure [Line Items] | ||
Income tax expense (benefit) | $ 129 | $ 48 |
Federal | ||
Income Taxes Disclosure [Line Items] | ||
US federal corporate tax rate | 21.00% |
Related Party Disclosures - Add
Related Party Disclosures - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)RelatedParty | Mar. 31, 2017RelatedParty | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | |||
Significant transactions with related parties | RelatedParty | 0 | 0 | |
Strategic Investors | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 1 | ||
Receivable from related parties | $ 1.3 | $ 0.5 |
Revenue - Schedule of Cumulativ
Revenue - Schedule of Cumulative Effect of Changes Made to Consolidated Balance Sheet for Adoption of New Revenue Standard (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Accounts receivables, net | $ 106,094 | $ 120,553 | |
Inventories | 38,062 | 32,740 | |
Prepaid expenses and other current assets | 30,546 | 11,367 | |
Deferred cost of revenue, current portion | 1,359 | 3,007 | |
Deferred cost of revenue, non-current portion | 5,403 | ||
Other non-current assets | 3,560 | 3,429 | |
Liabilities: | |||
Accounts payable and accrued liabilities | 111,776 | 128,757 | |
Deferred revenue, current portion | 33,948 | $ 42,950 | 34,501 |
Deferred revenue, non-current portion | 13,549 | 12,023 | 48,511 |
Equity: | |||
Accumulated deficit | (251,673) | $ (283,338) | |
Accounting Standards Update 2014-09 | |||
Assets | |||
Accounts receivables, net | 133,281 | ||
Inventories | 32,632 | ||
Prepaid expenses and other current assets | 15,480 | ||
Deferred cost of revenue, current portion | 1,931 | ||
Deferred cost of revenue, non-current portion | 1,518 | ||
Other non-current assets | 3,207 | ||
Liabilities: | |||
Accounts payable and accrued liabilities | 130,007 | ||
Deferred revenue, current portion | 42,950 | ||
Deferred revenue, non-current portion | 12,023 | ||
Equity: | |||
Accumulated deficit | (244,999) | ||
Accounting Standards Update 2014-09 | Adjustment on Adoption of New Revenue Standard | |||
Assets | |||
Accounts receivables, net | 12,024 | 12,728 | |
Inventories | (108) | ||
Prepaid expenses and other current assets | 3,715 | 4,113 | |
Deferred cost of revenue, current portion | (3,107) | (1,076) | |
Deferred cost of revenue, non-current portion | (5,248) | (3,885) | |
Other non-current assets | (222) | ||
Liabilities: | |||
Accounts payable and accrued liabilities | 1,250 | 1,250 | |
Deferred revenue, current portion | 1,859 | 8,449 | |
Deferred revenue, non-current portion | (34,647) | (36,488) | |
Equity: | |||
Accumulated deficit | $ 38,922 | $ 38,339 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018USD ($)segmentPerformanceObligation | |
Segment Reporting Information [Line Items] | |
Contract acquisition cost recognition, description | most direct contract acquisition costs relate to contracts that are recognized over a period of one year or less. |
Contract acquisition, capitalized cost | $ 0 |
Number of reportable segments operates | segment | 2 |
Revenue expected to be recognised | $ 53,700,000 |
Revenue, remaining performance obligation, expected timing of satisfaction, Description | The estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied, excluding contracts with original durations of one year or less, amounts in accordance with ASC 606-10-55-18, or amounts of variable consideration attributable to royalties, at the end of the March 31, 2018 is $53.7 million, of which the Company expects to recognize approximately 51% of the revenue over the next 12 months and the remainder thereafter, through 2024. |
Revenue remaining performance obligation percentage of revenue expected to be recognized | 51.00% |
Deferred revenue recognized | $ 21,300,000 |
Contract with customer assets increase (decreaie) | 2,700,000 |
Intellectual Property | |
Segment Reporting Information [Line Items] | |
Deferred revenue recognized | $ 12,400,000 |
Minimum | |
Segment Reporting Information [Line Items] | |
Accounts receivable payment term period | 30 days |
Maximum | |
Segment Reporting Information [Line Items] | |
Accounts receivable payment term period | 90 days |
Platform | |
Segment Reporting Information [Line Items] | |
Number of performance obligations | PerformanceObligation | 1 |
Player | |
Segment Reporting Information [Line Items] | |
Number of performance obligations | PerformanceObligation | 2 |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Contract With Customer Asset Net [Abstract] | |||
Accounts receivable, net | $ 106,094 | $ 133,281 | |
Contract assets, current portion | 3,945 | 4,113 | |
Deferred revenue, current portion | 33,948 | 42,950 | $ 34,501 |
Deferred revenue, non-current portion | $ 13,549 | $ 12,023 | $ 48,511 |
Revenue - Summary of Impact of
Revenue - Summary of Impact of Adoption of New Revenue Standards On Our Statements (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Assets | ||||
Accounts receivable, net | $ 106,094 | $ 120,553 | ||
Inventories | 38,062 | 32,740 | ||
Prepaid expenses and other current assets | 30,546 | 11,367 | ||
Deferred cost of revenue, current portion | 1,359 | 3,007 | ||
Deferred cost of revenue, non-current portion | 5,403 | |||
Liabilities: | ||||
Accounts payable and accrued liabilities | 111,776 | 128,757 | ||
Deferred revenue, current portion | 33,948 | $ 42,950 | 34,501 | |
Deferred revenue, non-current portion | 13,549 | 12,023 | 48,511 | |
Equity: | ||||
Accumulated deficit | (251,673) | (283,338) | ||
Net Revenue: | ||||
Total net revenue | 136,576 | $ 100,093 | ||
Cost of Revenue: | ||||
Total cost of revenue | 73,464 | 61,253 | ||
Gross Profit: | ||||
Total gross profit | 63,112 | 38,840 | ||
Operating Expenses: | ||||
Research and development | 34,126 | 22,342 | ||
Sales and marketing | 20,318 | 14,055 | ||
General and administrative | 15,570 | 10,278 | ||
Total operating expenses | 70,014 | 46,675 | ||
Loss from Operations | (6,902) | (7,835) | ||
Net loss | (6,634) | (8,702) | ||
Platform | ||||
Liabilities: | ||||
Deferred revenue, current portion | 19,110 | 19,022 | ||
Deferred revenue, non-current portion | 8,047 | 42,674 | ||
Net Revenue: | ||||
Total net revenue, Services | 75,077 | 36,415 | ||
Cost of Revenue: | ||||
Total cost of revenue, Services | 21,666 | 8,343 | ||
Gross Profit: | ||||
Total gross profit | 53,411 | 28,072 | ||
Player | ||||
Liabilities: | ||||
Deferred revenue, current portion | 14,838 | 15,479 | ||
Deferred revenue, non-current portion | 5,502 | $ 5,837 | ||
Net Revenue: | ||||
Total net revenue, Goods | 61,499 | 63,678 | ||
Cost of Revenue: | ||||
Total cost of revenue, Goods | 51,798 | 52,910 | ||
Gross Profit: | ||||
Total gross profit | 9,701 | $ 10,768 | ||
Accounting Standards Update 2014-09 | ||||
Assets | ||||
Accounts receivable, net | 133,281 | |||
Inventories | 32,632 | |||
Prepaid expenses and other current assets | 15,480 | |||
Deferred cost of revenue, current portion | 1,931 | |||
Deferred cost of revenue, non-current portion | 1,518 | |||
Liabilities: | ||||
Accounts payable and accrued liabilities | 130,007 | |||
Deferred revenue, current portion | 42,950 | |||
Deferred revenue, non-current portion | 12,023 | |||
Equity: | ||||
Accumulated deficit | (244,999) | |||
Accounting Standards Update 2014-09 | Balances Without Adoption of The New Revenue Standard | ||||
Assets | ||||
Accounts receivable, net | 94,070 | |||
Inventories | 38,062 | |||
Prepaid expenses and other current assets | 26,831 | |||
Deferred cost of revenue, current portion | 4,466 | |||
Deferred cost of revenue, non-current portion | 5,248 | |||
Liabilities: | ||||
Accounts payable and accrued liabilities | 110,526 | |||
Deferred revenue, current portion | 32,089 | |||
Deferred revenue, non-current portion | 48,196 | |||
Equity: | ||||
Accumulated deficit | (290,595) | |||
Net Revenue: | ||||
Total net revenue | 131,313 | |||
Cost of Revenue: | ||||
Total cost of revenue | 68,784 | |||
Gross Profit: | ||||
Total gross profit | 62,529 | |||
Operating Expenses: | ||||
Research and development | 34,126 | |||
Sales and marketing | 20,318 | |||
General and administrative | 15,570 | |||
Total operating expenses | 70,014 | |||
Loss from Operations | (7,485) | |||
Net loss | (7,217) | |||
Accounting Standards Update 2014-09 | Balances Without Adoption of The New Revenue Standard | Platform | ||||
Net Revenue: | ||||
Total net revenue, Services | 71,864 | |||
Cost of Revenue: | ||||
Total cost of revenue, Services | 18,475 | |||
Gross Profit: | ||||
Total gross profit | 53,389 | |||
Accounting Standards Update 2014-09 | Balances Without Adoption of The New Revenue Standard | Player | ||||
Net Revenue: | ||||
Total net revenue, Goods | 59,449 | |||
Cost of Revenue: | ||||
Total cost of revenue, Goods | 50,309 | |||
Gross Profit: | ||||
Total gross profit | 9,140 | |||
Accounting Standards Update 2014-09 | Impact of Adoption Higher / (Lower) | ||||
Assets | ||||
Accounts receivable, net | 12,024 | 12,728 | ||
Inventories | (108) | |||
Prepaid expenses and other current assets | 3,715 | 4,113 | ||
Deferred cost of revenue, current portion | (3,107) | (1,076) | ||
Deferred cost of revenue, non-current portion | (5,248) | (3,885) | ||
Liabilities: | ||||
Accounts payable and accrued liabilities | 1,250 | 1,250 | ||
Deferred revenue, current portion | 1,859 | 8,449 | ||
Deferred revenue, non-current portion | (34,647) | (36,488) | ||
Equity: | ||||
Accumulated deficit | 38,922 | $ 38,339 | ||
Net Revenue: | ||||
Total net revenue | 5,263 | |||
Cost of Revenue: | ||||
Total cost of revenue | 4,680 | |||
Gross Profit: | ||||
Total gross profit | 583 | |||
Operating Expenses: | ||||
Loss from Operations | 583 | |||
Net loss | 583 | |||
Accounting Standards Update 2014-09 | Impact of Adoption Higher / (Lower) | Platform | ||||
Net Revenue: | ||||
Total net revenue, Services | 3,213 | |||
Cost of Revenue: | ||||
Total cost of revenue, Services | 3,191 | |||
Gross Profit: | ||||
Total gross profit | 22 | |||
Accounting Standards Update 2014-09 | Impact of Adoption Higher / (Lower) | Player | ||||
Net Revenue: | ||||
Total net revenue, Goods | 2,050 | |||
Cost of Revenue: | ||||
Total cost of revenue, Goods | 1,489 | |||
Gross Profit: | ||||
Total gross profit | $ 561 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net loss allocable to common stockholders | $ (6,634) | $ (8,702) |
Denominator: | ||
Weighted-average shares used in computing net loss per share, basic and diluted | 99,488 | 4,850 |
Net loss per share, basic and diluted | $ (0.07) | $ (1.79) |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net loss per share | 25,059 | 106,418 |
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 | 24,933 | 23,380 |
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 | 126 | 2 |
Warrants 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 | 375 | |
Warrants to Purchase Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net loss per share | 1,817 | |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of diluted net loss per share | 80,844 |
Segment Information - Additiona
Segment Information - Additional Information (Details) - segment | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments operates | 2 | |
Net Revenue | Geographic Concentration Risk [Member] | International Market [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 16.00% | |
Net Revenue | Geographic Concentration Risk [Member] | International Market [Member] | Maximum | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 10.00% |
Segment Information - Schedule
Segment Information - Schedule of Customer Accounting for 10% or More of Segment Revenues (Details) - Net Revenue - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Customer B | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 10.00% | 13.00% |
Customer G | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 11.00% | |
Customer C | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 17.00% | 21.00% |
Customer E | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 13.00% | |
Player | Customer A | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 13.00% | 10.00% |
Player | Customer B | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 19.00% | 15.00% |
Player | Customer C | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 36.00% | 32.00% |
Player | Customer E | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 12.00% | |
Platform | Customer G | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 20.00% | |
Platform | Customer E | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk | 15.00% |