Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Class of Stock [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37622 | |
Entity Registrant Name | Block, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0429876 | |
City Area Code | 415 | |
Local Phone Number | 375-3176 | |
Title of 12(b) Security | Class A common stock, $0.0000001 par value per share | |
Trading Symbol | SQ | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001512673 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 537,419,565 | |
Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 60,651,533 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,331,787 | $ 4,443,669 |
Investments in short-term debt securities | 1,052,973 | 869,283 |
Settlements receivable | 1,761,694 | 1,171,612 |
Customer funds | 2,983,658 | 2,830,995 |
Loans held for sale | 462,980 | 517,940 |
Safeguarding asset related to bitcoin held for other parties | 527,669 | 1,100,596 |
Other current assets | 1,175,873 | 687,429 |
Total current assets | 13,548,761 | 11,621,524 |
Property and equipment, net | 316,378 | 282,140 |
Goodwill | 11,557,984 | 519,276 |
Acquired intangible assets, net | 2,030,876 | 257,049 |
Investments in long-term debt securities | 802,880 | 1,526,430 |
Operating lease right-of-use assets | 425,519 | 449,406 |
Other non-current assets | 438,534 | 370,535 |
Total assets | 29,120,932 | 15,026,360 |
Current liabilities: | ||
Customers payable | 4,891,015 | 3,979,624 |
Settlements payable | 329,796 | 254,611 |
Accrued expenses and other current liabilities | 968,495 | 638,854 |
Current portion of long-term debt (Note 15) | 460,170 | 455 |
Safeguarding obligation liability related to bitcoin held for other parties | 527,669 | 1,100,596 |
Operating lease liabilities, current | 70,304 | 64,027 |
PPP Liquidity Facility advances | 31,116 | 497,533 |
Total current liabilities | 7,278,565 | 6,535,700 |
Deferred tax liabilities | 159,498 | 15,236 |
Warehouse funding facilities | 479,422 | 0 |
Long-term debt (Note 15) | 4,107,245 | 4,559,208 |
Operating lease liabilities, non-current | 369,798 | 395,017 |
Other non-current liabilities | 196,466 | 207,610 |
Total liabilities | 12,590,994 | 11,712,771 |
Commitments and contingencies (Note 20) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at September 30, 2022 and December 31, 2021. None issued and outstanding at September 30, 2022 and December 31, 2021. | 0 | 0 |
Additional paid-in capital | 17,999,192 | 3,317,255 |
Accumulated other comprehensive loss | (1,046,639) | (16,435) |
Accumulated deficit | (454,889) | (27,965) |
Total stockholders’ equity attributable to common stockholders | 16,497,664 | 3,272,855 |
Noncontrolling interests | 32,274 | 40,734 |
Total stockholders’ equity | 16,529,938 | 3,313,589 |
Total liabilities and stockholders’ equity | 29,120,932 | 15,026,360 |
Consumer Portfolio Segment | ||
Current assets: | ||
Consumer receivables, net | 1,252,127 | 0 |
Class A | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Class B | ||
Stockholders’ equity: | ||
Common stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Preferred stock, par value (in USD per share) | $ 0.00 | $ 0.00 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Class A | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.00 | $ 0.00 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 535,879,345 | 403,237,209 |
Common stock, outstanding (in shares) | 535,879,345 | 403,237,209 |
Class B | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.00 | $ 0.00 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 60,657,578 | 61,706,578 |
Common stock, outstanding (in shares) | 60,657,578 | 61,706,578 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Revenue | $ 4,515,541 | $ 3,844,727 | $ 12,880,685 | $ 13,582,669 |
Cost of revenue: | ||||
Amortization of acquired technology assets | 18,506 | 6,351 | 51,874 | 16,056 |
Total cost of revenue | 2,948,452 | 2,711,512 | 8,548,988 | 10,344,889 |
Gross profit | 1,567,089 | 1,133,215 | 4,331,697 | 3,237,780 |
Operating expenses: | ||||
Product development | 548,037 | 360,729 | 1,531,088 | 992,498 |
Sales and marketing | 485,838 | 409,073 | 1,518,227 | 1,132,411 |
General and administrative | 395,437 | 267,348 | 1,235,306 | 683,969 |
Transaction, loan, and consumer receivable losses | 147,586 | 62,306 | 395,433 | 130,874 |
Bitcoin impairment losses | 1,619 | 6,000 | 37,580 | 71,126 |
Amortization of customer and other acquired intangible assets | 37,361 | 4,763 | 103,414 | 11,176 |
Total operating expenses | 1,615,878 | 1,110,219 | 4,821,048 | 3,022,054 |
Operating income (loss) | (48,789) | 22,996 | (489,351) | 215,726 |
Interest expense, net | 6,042 | 13,409 | 34,756 | 20,126 |
Other expense (income), net | (18,798) | 12,011 | (71,036) | (36,249) |
Income (loss) before income tax | (36,033) | (2,424) | (453,071) | 231,849 |
Provision (benefit) for income taxes | (17,289) | 452 | (17,687) | (7,961) |
Net income (loss) | (18,744) | (2,876) | (435,384) | 239,810 |
Less: Net loss attributable to noncontrolling interests | (4,033) | (2,960) | (8,460) | (3,303) |
Net income (loss) attributable to common stockholders | $ (14,711) | $ 84 | $ (426,924) | $ 243,113 |
Net income (loss) per share attributable to common stockholders: | ||||
Basic (in USD per share) | $ (0.02) | $ 0 | $ (0.75) | $ 0.53 |
Diluted (in USD per share) | $ (0.02) | $ 0 | $ (0.75) | $ 0.48 |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||
Basic (in shares) | 592,672 | 460,654 | 572,234 | 457,039 |
Diluted (in shares) | 592,672 | 504,120 | 572,234 | 520,204 |
Transaction-based revenue | ||||
Revenue: | ||||
Revenue | $ 1,517,890 | $ 1,297,040 | $ 4,226,566 | $ 3,484,245 |
Cost of revenue: | ||||
Cost of revenue | 901,990 | 751,794 | 2,493,988 | 1,958,423 |
Subscription and services-based revenue | ||||
Revenue: | ||||
Revenue | 1,191,511 | 694,770 | 3,245,924 | 1,937,629 |
Cost of revenue: | ||||
Cost of revenue | 225,903 | 128,177 | 622,031 | 337,559 |
Hardware revenue | ||||
Revenue: | ||||
Revenue | 43,388 | 37,255 | 128,765 | 109,769 |
Cost of revenue: | ||||
Cost of revenue | 76,002 | 51,150 | 223,160 | 153,035 |
Bitcoin revenue | ||||
Revenue: | ||||
Revenue | 1,762,752 | 1,815,662 | 5,279,430 | 8,051,026 |
Cost of revenue: | ||||
Cost of revenue | $ 1,726,051 | $ 1,774,040 | $ 5,157,935 | $ 7,879,816 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (18,744) | $ (2,876) | $ (435,384) | $ 239,810 |
Net foreign currency translation adjustments | (609,045) | (14,145) | (985,328) | (25,656) |
Net unrealized loss on marketable debt securities | (7,678) | (1,104) | (44,876) | (5,083) |
Total comprehensive income (loss) | $ (635,467) | $ (18,125) | $ (1,465,588) | $ 209,071 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (435,384) | $ 239,810 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 249,616 | 95,707 |
Amortization of discounts and premiums and other non-cash adjustments | (371,298) | 20,368 |
Non-cash lease expense | 70,958 | 61,978 |
Share-based compensation | 794,794 | 429,999 |
Gain on revaluation of equity investments | (43,914) | (41,007) |
Transaction, loan, and consumer receivable losses | 395,433 | 130,874 |
Bitcoin impairment losses | 37,580 | 71,126 |
Change in deferred income taxes | (47,503) | (5,224) |
Changes in operating assets and liabilities: | ||
Settlements receivable | (793,460) | (337,893) |
Purchases and originations of loans | (4,684,598) | (2,285,306) |
Proceeds from payments and forgiveness of loans | 4,643,899 | 1,952,142 |
Customers payable | 599,886 | 235,624 |
Settlements payable | 75,185 | 10,440 |
Other assets and liabilities | (360,660) | 74,838 |
Net cash provided by operating activities | 130,534 | 653,476 |
Cash flows from investing activities: | ||
Purchase of marketable debt securities | (521,692) | (2,343,446) |
Proceeds from maturities of marketable debt securities | 769,276 | 609,377 |
Proceeds from sale of marketable debt securities | 236,524 | 558,724 |
Purchase of marketable debt securities from customer funds | 0 | (488,851) |
Proceeds from maturities of marketable debt securities from customer funds | 73,000 | 456,481 |
Proceeds from sale of marketable debt securities from customer funds | 316,576 | 10,000 |
Originations of consumer receivables | (12,286,091) | 0 |
Principal repayments of consumer receivables | 12,538,992 | 0 |
Purchase of property and equipment | (121,709) | (98,028) |
Purchase of bitcoin investments | 0 | (170,000) |
Purchase of other investments | (39,079) | (47,550) |
Proceeds from sale of equity investments | 0 | 420,644 |
Business combinations, net of cash acquired | 539,453 | |
Business combinations, net of cash acquired | (163,970) | |
Net cash provided by (used in) investing activities | 1,505,250 | (1,256,619) |
Cash flows from financing activities: | ||
Proceeds from issuance of senior notes, net | 0 | 1,971,828 |
Proceeds from PPP Liquidity Facility advances | 0 | 681,542 |
Repayments of PPP Liquidity Facility advances | (466,417) | (419,978) |
Payments to redeem convertible notes | (1,071,788) | 0 |
Proceeds from warehouse facilities borrowings | 711,455 | 0 |
Repayments of warehouse facilities borrowings | (310,729) | 0 |
Proceeds from the exercise of stock options and purchases under the employee stock purchase plan | 49,233 | 84,866 |
Payments for tax withholding related to vesting of restricted stock units | (4,734) | (312,406) |
Other financing activities | 0 | (7,112) |
Net increase in non-interest bearing deposits | 58,909 | 0 |
Change in customer funds, restricted from use in the Company's operations | 152,663 | 611,282 |
Net cash provided by (used in) financing activities | (881,408) | 2,610,022 |
Effect of foreign exchange rate on cash and cash equivalents | (94,972) | (14,311) |
Net increase in cash, cash equivalents, restricted cash, and customer funds | 659,404 | 1,992,568 |
Cash, cash equivalents, restricted cash, and customer funds, beginning of the period | 6,975,090 | 4,793,171 |
Cash, cash equivalents, restricted cash, and customer funds, end of the period | 7,634,494 | 6,785,739 |
Reconciliation of cash, cash equivalents, restricted cash, and customer funds: | ||
Cash and cash equivalents | 4,331,787 | 4,514,609 |
Short-term restricted cash | 246,570 | 14,420 |
Long-term restricted cash | 72,479 | 73,420 |
Customer funds cash and cash equivalents | 2,983,658 | 2,183,290 |
Total | $ 7,634,494 | $ 6,785,739 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Class A and B common stock | Additional paid-in capital | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive income (loss) | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment | Noncontrolling interests |
Beginning balance (in shares) at Dec. 31, 2020 | 456,184,776 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 2,681,569 | $ (399,734) | $ 0 | $ 2,955,464 | $ (502,708) | $ 23,328 | $ (297,223) | $ 102,974 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 39,008 | 39,008 | |||||||
Shares issued in connection with employee stock plans (in shares) | 4,311,094 | ||||||||
Shares issued in connection with employee stock plans | 32,891 | 32,891 | |||||||
Change in other comprehensive income (loss) | (13,129) | (13,129) | |||||||
Share-based compensation | 121,965 | 121,965 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (669,076) | ||||||||
Tax withholding related to vesting of restricted stock units | (152,013) | (152,013) | |||||||
Issuance of common stock in conjunction with the conversion of convertible notes (in shares) | 166,967 | ||||||||
Issuance of common stock in conjunction with the conversion of convertible notes | 3,816 | 3,816 | |||||||
Exercise of bond hedges in conjunction with the conversion of convertible notes (in shares) | (5,325,320) | ||||||||
Ending balance (in shares) at Mar. 31, 2021 | 454,668,441 | ||||||||
Ending balance at Mar. 31, 2021 | 2,314,373 | $ 0 | 2,459,415 | 10,199 | (155,241) | 0 | |||
Beginning balance (in shares) at Dec. 31, 2020 | 456,184,776 | ||||||||
Beginning balance at Dec. 31, 2020 | 2,681,569 | $ (399,734) | $ 0 | 2,955,464 | $ (502,708) | 23,328 | (297,223) | $ 102,974 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 239,810 | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 460,979,653 | ||||||||
Ending balance at Sep. 30, 2021 | 3,004,714 | $ 0 | 2,918,372 | (7,411) | 48,864 | 44,889 | |||
Beginning balance (in shares) at Mar. 31, 2021 | 454,668,441 | ||||||||
Beginning balance at Mar. 31, 2021 | 2,314,373 | $ 0 | 2,459,415 | 10,199 | (155,241) | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 203,678 | 204,021 | (343) | ||||||
Shares issued in connection with employee stock plans (in shares) | 2,410,350 | ||||||||
Shares issued in connection with employee stock plans | 39,526 | 39,526 | |||||||
Change in other comprehensive income (loss) | (2,361) | (2,361) | |||||||
Share-based compensation | 150,367 | 150,367 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (602,961) | ||||||||
Tax withholding related to vesting of restricted stock units | (140,212) | (140,212) | |||||||
Issuance of common stock in connection with business combination (in shares) | 41,138 | ||||||||
Issuance of common stock in connection with business combination | 10,071 | 10,071 | |||||||
Issuance of common stock in conjunction with the conversion of convertible notes (in shares) | 1,456,748 | ||||||||
Issuance of common stock in conjunction with the conversion of convertible notes | 113,067 | 113,067 | |||||||
Exercise of bond hedges in conjunction with the conversion of convertible notes (in shares) | (150,299) | ||||||||
Noncontrolling interests in connection with business combination | 48,192 | 48,192 | |||||||
Ending balance (in shares) at Jun. 30, 2021 | 457,823,417 | ||||||||
Ending balance at Jun. 30, 2021 | 2,736,701 | $ 0 | 2,632,234 | 7,838 | 48,780 | 47,849 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (2,876) | 84 | (2,960) | ||||||
Shares issued in connection with employee stock plans (in shares) | 3,065,151 | ||||||||
Shares issued in connection with employee stock plans | 12,711 | 12,711 | |||||||
Change in other comprehensive income (loss) | (15,249) | (15,249) | |||||||
Share-based compensation | 168,585 | 168,585 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (82,374) | ||||||||
Tax withholding related to vesting of restricted stock units | (20,181) | (20,181) | |||||||
Issuance of common stock in connection with business combination (in shares) | 77,305 | ||||||||
Issuance of common stock in connection with business combination | 18,664 | 18,664 | |||||||
Issuance of common stock in conjunction with the conversion of convertible notes (in shares) | 1,371,519 | ||||||||
Issuance of common stock in conjunction with the conversion of convertible notes | 106,359 | 106,359 | |||||||
Exercise of bond hedges in conjunction with the conversion of convertible notes (in shares) | (1,275,365) | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 460,979,653 | ||||||||
Ending balance at Sep. 30, 2021 | 3,004,714 | $ 0 | 2,918,372 | (7,411) | 48,864 | 44,889 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 464,943,787 | ||||||||
Beginning balance at Dec. 31, 2021 | 3,313,589 | $ 0 | 3,317,255 | (16,435) | (27,965) | 40,734 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (207,363) | (204,199) | (3,164) | ||||||
Shares issued in connection with employee stock plans (in shares) | 2,119,899 | ||||||||
Shares issued in connection with employee stock plans | 4,093 | 4,093 | |||||||
Change in other comprehensive income (loss) | 234,792 | 234,792 | |||||||
Share-based compensation | 279,354 | 279,354 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (16,003) | ||||||||
Tax withholding related to vesting of restricted stock units | (2,456) | (2,456) | |||||||
Issuance of common stock in connection with business combination (in shares) | 113,617,352 | ||||||||
Issuance of common stock in connection with business combination | 13,827,929 | 13,827,929 | |||||||
Issuance of common stock in conjunction with the conversion of convertible notes (in shares) | 19,865 | ||||||||
Issuance of common stock in conjunction with the conversion of convertible notes | 454 | 454 | |||||||
Exercise of bond hedges in conjunction with the conversion of convertible notes (in shares) | (1,188,754) | ||||||||
Ending balance (in shares) at Mar. 31, 2022 | 579,496,146 | ||||||||
Ending balance at Mar. 31, 2022 | 17,450,392 | $ 0 | 17,426,629 | 218,357 | (232,164) | 37,570 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 464,943,787 | ||||||||
Beginning balance at Dec. 31, 2021 | 3,313,589 | $ 0 | 3,317,255 | (16,435) | (27,965) | 40,734 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (435,384) | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 596,536,923 | ||||||||
Ending balance at Sep. 30, 2022 | 16,529,938 | $ 0 | 17,999,192 | (1,046,639) | (454,889) | 32,274 | |||
Beginning balance (in shares) at Mar. 31, 2022 | 579,496,146 | ||||||||
Beginning balance at Mar. 31, 2022 | 17,450,392 | $ 0 | 17,426,629 | 218,357 | (232,164) | 37,570 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (209,277) | (208,014) | (1,263) | ||||||
Shares issued in connection with employee stock plans (in shares) | 2,866,242 | ||||||||
Shares issued in connection with employee stock plans | 39,024 | 39,024 | |||||||
Change in other comprehensive income (loss) | (648,273) | (648,273) | |||||||
Share-based compensation | 261,342 | 261,342 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (14,101) | ||||||||
Tax withholding related to vesting of restricted stock units | (1,797) | (1,797) | |||||||
Issuance of common stock in conjunction with the conversion of convertible notes (in shares) | 182 | ||||||||
Issuance of common stock in connection with the exercise of common stock warrants (in shares) | 3,021,235 | ||||||||
Ending balance (in shares) at Jun. 30, 2022 | 585,369,704 | ||||||||
Ending balance at Jun. 30, 2022 | 16,891,411 | $ 0 | 17,725,198 | (429,916) | (440,178) | 36,307 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (18,744) | (14,711) | (4,033) | ||||||
Shares issued in connection with employee stock plans (in shares) | 3,315,379 | ||||||||
Shares issued in connection with employee stock plans | 6,116 | 6,116 | |||||||
Change in other comprehensive income (loss) | (616,723) | (616,723) | |||||||
Share-based compensation | 268,359 | 268,359 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (7,525) | ||||||||
Tax withholding related to vesting of restricted stock units | (481) | (481) | |||||||
Issuance of common stock in connection with the exercise of common stock warrants (in shares) | 7,859,365 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 596,536,923 | ||||||||
Ending balance at Sep. 30, 2022 | $ 16,529,938 | $ 0 | $ 17,999,192 | $ (1,046,639) | $ (454,889) | $ 32,274 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Block, Inc. (together with its subsidiaries, "Block" or the "Company") creates tools that empower businesses, sellers, and individuals to participate in the economy. Block is comprised of two reportable segments, Square and Cash App. Square is a cohesive commerce ecosystem that helps sellers start, run, and grow their businesses, including enabling sellers to accept card payments, provide reporting and analytics, and facilitating next-day settlement. Square’s point-of-sale software and other business services help sellers manage inventory, locations, and employees; access financing; engage buyers; build a website or online store; and grow sales. Cash App is an ecosystem of financial products and services to help individuals manage their money by providing financial tools that allow individuals to store, send, receive, spend, and invest their money. Cash App seeks to redefine the world’s relationship with money by making it more relatable, instantly available, and universally accessible. On January 31, 2022, the Company completed the acquisition of Afterpay Limited (“Afterpay”), to strengthen its position to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes. See Note 9, Acquisitions for further details. Block was founded in 2009 and has offices globally. The Company does not designate a headquarters location as it adopted a distributed work model in 2021. Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2021 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive income, and cash flows for the interim periods. The condensed consolidated financial statements include the financial statements of Block and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest, which is reported as a component of stockholders' equity on the condensed consolidated balance sheets. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on current and past experience, to the extent that historical experience is predictive of future performance and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these condensed consolidated financial statements include, but are not limited to, those related to accrued transaction losses, contingencies, valuation of loans held for sale, valuation of goodwill and acquired intangible assets, determination of allowance for loan loss reserves for loans held for investment, determination of allowance for credit losses for consumer receivables, pre-acquisition contingencies associated with business combinations, allocation of acquired goodwill to segments, assessing the likelihood of adverse outcomes from claims and disputes, accrued royalties, income and other taxes, operating and financing lease right-of-use assets and related liabilities, and share-based compensation. The Company's estimates of valuation of loans held for sale, allowance for credit losses associated with consumer receivables, and accrued transaction losses are based on historical experience, adjusted for market data relevant to the current economic environment. The Company will continue to update its estimates as developments occur and additional information is obtained. Refer to Note 5, Fair Value Measurements for further details on amortized cost over fair value of the loans, Note 6, Consumer Receivables, net for further details on consumer receivables, and Note 12, Other Consolidated Balance Sheet Components (Current) for further details on transaction losses. Reclassification to Statement of Operations Beginning in the second quarter of 2022, the Company reclassified its consolidated statements of operations to present the amortization of acquired technology assets and amortization of customer and other acquired intangible assets as separate line items. Previously, these expenses were classified within transaction-based costs and subscription and services-based costs in cost of revenue; and product development and general and administrative operating expenses, respectively. The condensed consolidated statements of operations for the three and nine months ended September 30, 2021 have been revised to reflect these reclassifications to the presentation. There were no changes to gross profit, total operating expenses, operating income (loss), income (loss) before income tax, or net income (loss) for the three or nine months ended September 30, 2021 as a result of these reclassifications. Adjustment to Statement of Cash Flows Beginning in the fourth quarter of 2021, the Company adjusted its consolidated statements of cash flows to present changes in customer funds and cash and cash equivalents associated with customers payable as financing activities. Previously, the changes in customer funds and customers payable were presented within operating activities on the Company's consolidated statements of cash flows. The adjustments result in customer funds and the portion of customer funds that is held in cash, cash equivalents, and restricted cash to be included in the beginning and ending period totals of cash, cash equivalents, restricted cash, and customer funds. The Company holds customer funds separate from its corporate funds and does not use customer funds for any corporate purposes. The condensed consolidated statement of cash flows for the nine months ended September 30, 2021 has been revised to reflect these adjustments to the presentation. These changes have been concluded to be immaterial to the condensed consolidated financial statements and have no impact on previously reported condensed consolidated statements of operations and balance sheets. The adjusted presentation shows all changes associated with customer funds on the condensed consolidated statements of cash flows instead of in the notes to the condensed consolidated financial statements. The following table presents the effects of the changes on the presentation of these cash flows to the previously reported condensed consolidated statement of cash flows (in thousands): Nine Months Ended September 30, 2021 As Previously Reported (i) Adjustments As Adjusted Net cash provided by (used in): Operating activities (ii) $ 672,776 $ (19,300) $ 653,476 Investing activities (1,256,619) — (1,256,619) Financing activities (iii) 1,998,740 611,282 2,610,022 Effect of foreign exchange rate on cash and cash equivalents (14,311) — (14,311) Net increase in cash, cash equivalents, restricted cash, and customer funds 1,400,586 591,982 1,992,568 Cash, cash equivalents, restricted cash, and customer funds, beginning of the period 3,201,863 1,591,308 4,793,171 Cash, cash equivalents, restricted cash, and customer funds, end of the period $ 4,602,449 $ 2,183,290 $ 6,785,739 _______________ (i) As reported in the Company's 2021 Form 10-Q filed with the SEC on November 4, 2021. (ii) Financial statement lines impacted in operating activities were customer funds and customers payable. (iii) Financial statement line impacted in financing activities was the addition of a new line called change in customer funds, restricted from use in the Company's operations. Concentration of Credit Risk For the three and nine months ended September 30, 2022 and September 30, 2021, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had two third-party payment processors that represented approximately 52% and 30% of settlements receivable as of both September 30, 2022 and December 31, 2021. All other third-party payment processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable debt securities, settlements receivable, customer funds, consumer receivables, loans held for sale, and loans held for investment. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable debt securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one two Sales and Marketing Expenses Advertising costs are expensed as incurred and in cluded in sales and marketing expenses on the condensed consolidated statements of operations. Total advertising costs were $91.6 million and $405.6 million for the three and nine months ended September 30, 2022, respectively, compared to $123.1 million and $296.4 million for the three and nine months ended September 30, 2021, respectively. In ad dition, services, incentives, and other costs to acquire customers that are not directly related to a revenue generating transaction are recorded as sales and marketing expenses, as the Company considers these to be marketing costs to encourage the usage of Cash App. These expenses include, but are not limited to, Cash App peer-to-peer pro cessing costs and related transaction losses, card issuance costs, customer referral bonuses, and promotional giveaways. The Company recorded $212.3 million a nd $620.3 million for the three and nine months ended September 30, 2022, respectively, compared to $183.2 million and $555.9 million for the three and nine months ended September 30, 2021, respectively, for such expenses. Significant Accounting Policies In addition to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, our significant interim accounting policies include the impact of foreign currency, and the accounting policies adopted based upon the acquisition of Afterpay. Foreign Currency The functional currency for most subsidiaries outside of the United States is the local currency. For purposes of the Company's consolidated financial statements, the assets and liabilities of these subsidiaries, including goodwill and acquired intangible assets, are translated into U.S. dollars using the exchange rates at the balance sheet dates. Gains and losses resulting from these translations are reported as a component of accumulated other comprehensive income (loss) on the Company's condensed consolidated statements of comprehensive income. Revenue, expenses, and gains or losses are translated into U.S. dollars using average exchange rates for each period. Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as a component of other expense (income), net on the condensed consolidated statements of operations. Afterpay Revenue Through Afterpay's buy now pay later ("BNPL") platform, the Company enables consumers to pay for purchases by splitting their purchase price into three to four installments over six to eight weeks. The Company generally pays the seller the full order value upfront, less a merchant fee, which consists of fixed and variable rates as contracted with the sellers. The Company also incurs other costs such as fees paid to third-party partners and processing fees to complete the consumer purchase transaction. The Company generally assumes non-repayment risk from the consumers. The Company initially recognizes a consumer receivable equal to net amounts paid to the seller plus any costs incurred to originate the consumer receivable. The Company recognizes the merchant fee less costs incurred to originate the consumer receivables as revenue using the effective interest method and is included within subscription and services-based revenue on the condensed consolidated statement of operations. The effective interest rate is determined based on estimated future cash receipts over the expected life of the consumer receivable, having consideration for the historical repayment pattern of the consumer receivables on a portfolio basis. The Company does not charge interest or fees to the consumers, other than late fees which are used by the Company as an incentive to encourage consumers to pay their outstanding balances as and when they fall due . Late fees are recognized and included within subscription and services-based revenue on the condensed consolidated statement of operations when chargeable to consumers and collectibility is reasonably assured based on, among other factors, consumer behavior and historical recovery experience. Late fees recorded from acquisition to September 30, 2022 were immaterial. Consumer Receivables The Company classifies consumer receivables as held for investment as the Company has the intent and ability to hold these investments for the foreseeable future or until maturity or payoff. These consumer receivables are reported at amortized cost, which includes the cost to originate the consumer receivables, adjusted for unearned merchant fees, origination costs, charge-offs, and the allowance for credit losses. Refer to Note 6, Consumer Receivables, net for more information. Allowance for Credit Losses Related to Consumer Receivables The Company calculates an allowance for credit losses on the consumer receivables portfolio in accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The guidance requires an entity to assess impairment of its financial instruments based on the entity's current estimates of expected credit losses over the contractual term of its loans held for investment portfolio as of each balance sheet date. Allowance for credit losses related to consumer receivables represents management’s best estimate of the expected credit losses in the outstanding portfolio of consumer receivables, as of the balance sheet date. The Company determines the allowance for credit losses using both quantitative and qualitative methods that analyze portfolio performance, uses judgment regarding the quantitative components of the reserve, and considers all available information relevant to assessing collectibility. This includes but is not limited to historical loss and recovery experience, recent and historical trends in delinquencies, past-due receivables and charge-offs, consumer behavior and repayment speed, underwriting and collection management changes, changes in the legal and regulatory environment, changes in risk and underwriting standards, current and historical macroeconomic conditions such as changes in unemployment and GDP, and various other factors that may affect the consumers’ ability to make future payments. When available information confirms that specific consumer receivables or portions thereof are uncollectible, identified amounts are charged off against the allowance for credit losses. Consumer receivables are charged off when management considers amounts to be uncollectible, which is generally determined by the number of days past due and is typically no later than 180 days past due. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In July 2021, the FASB issued ASU No. 2021-05, Lease (Topic 842): Lessors—Certain Leases with Variable Lease Payments ("ASU 2021-05"), which amends the lease classification requirements for lessors with certain leases containing variable payments. In accordance with ASU 2021-05, a lessor should classify and account for a lease with variable lease payments that do not depend on an index or a rate as an operating lease if both of the following criteria are met: 1) the lease would have been classified as a sales-type lease or a direct financing lease; and 2) the lessor would have otherwise recognized a day-one loss. The amendments in ASU 2021-05 are effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted this guidance effective January 1, 2022, and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2021-04”), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another Topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The amendments are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance effective January 1, 2022, and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. In March 2022, the SEC staff released Staff Accounting Bulletin No. 121 ("SAB 121"), which expressed the views of the SEC staff regarding the accounting for obligations to safeguard crypto-assets an entity holds for users of its crypto platform. This guidance requires entities that hold crypto-assets on behalf of platform users to recognize a liability to reflect the entity’s obligation to safeguard the crypto-assets held for its platform users. The liability should be measured at initial recognition and each reporting date at the fair value of the crypto-assets that the entity is responsible for holding for its platform users. The entity should also recognize an asset at the same time that it recognizes the safeguarding liability, measured at initial recognition and each reporting date at the fair value of the crypto-assets held for its platform users, subject to adjustments to reflect any actual or potential safeguarding loss events. The entity should also describe the asset and the corresponding liability in the footnotes to the financial statements and consider including information regarding who (e.g., the company, its agent, or another third party) holds the cryptographic key information, maintains the internal recordkeeping of those assets, and is obligated to secure the assets and protect them from loss or theft. This guidance is effective from the first interim period after June 15, 2022 and should be applied retrospectively. The Company adopted this guidance effective June 30, 2022 . Refer to Note 14, Bitcoin Held for Other Parties for more details. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method ("ASU 2022-01") related to the portfolio layer method of hedge accounting. The amendments allow nonprepayable financial assets to be included in a closed portfolio hedge using the portfolio layer method. ASU 2022-01 also allows for multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company's financial statements. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) related to troubled debt restructuring and vintage disclosures for financing receivables. The amendments eliminate recognition and measurement guidance for troubled debt restructurings for creditors and requires entities to evaluate if the modification represents a new loan or a continuation of the existing loan. ASU 2022-02 also enhances disclosure requirements for certain loan refinancing and restructurings made to borrowers experiencing financial difficulty and requires disclosure of current period write-offs by year of origination for financing receivables. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption permitted. The Company does not expect the adoption to have a material impact on the Company’s financial statements. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03") related to equity securities. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. An entity is prohibited from recognizing a contractual sale restriction as a separate unit of account. ASU 2022-03 also requires specific disclosures related to equity securities that are subject to contractual restrictions, including the fair value of such equity securities, the nature and remaining duration of the corresponding restrictions, and any circumstances that could cause a lapse in the restrictions. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company's financial statements. In September 2022, the FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), which requires buyers that use supplier finance programs in connection with the purchase of goods and services to make certain annual disclosures regarding the programs’ key terms and information about the obligations at the end of a reporting period, including a rollforward of those obligations. Only the amount outstanding at the end of the period must be disclosed in interim periods. The amendments do not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The amendments in ASU 2022-04 are effective retrospectively for fiscal years beginning after December 15, 2022, including interim periods in those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company’s financial statements. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The following table presents the Company's net revenue disaggregated by revenue source (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenue from contracts with customers: Transaction-based revenue $ 1,517,890 $ 1,297,040 $ 4,226,566 $ 3,484,245 Subscription and services-based revenue 902,708 636,841 2,427,193 1,793,308 Hardware revenue 43,388 37,255 128,765 109,769 Bitcoin revenue 1,762,752 1,815,662 5,279,430 8,051,026 Revenue from other sources: Subscription and services-based revenue (i) 288,803 57,929 818,731 144,321 Total net revenue $ 4,515,541 $ 3,844,727 $ 12,880,685 $ 13,582,669 (i) Subscription and services-based revenue from other sources relates to revenue generated from the Company's Square Loans and, for 2022 amounts, also includes revenue generated from consumer receivables originated through the BNPL platform, following the acquisition of Afterpay. |
INVESTMENTS IN DEBT SECURITIES
INVESTMENTS IN DEBT SECURITIES | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS IN DEBT SECURITIES | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 78,790 $ 5 $ (2,175) $ 76,620 Corporate bonds 365,001 13 (8,113) 356,901 Commercial paper 39,373 — — 39,373 Municipal securities 8,238 — (175) 8,063 Certificates of deposit 7,795 — — 7,795 U.S. government securities 558,474 16 (8,557) 549,933 Foreign government securities 14,492 — (204) 14,288 Total $ 1,072,163 $ 34 $ (19,224) $ 1,052,973 Long-term debt securities: U.S. agency securities $ 72,106 $ — $ (4,328) $ 67,778 Corporate bonds 320,808 — (13,226) 307,582 Municipal securities 12,772 — (719) 12,053 U.S. government securities 429,208 68 (17,630) 411,646 Foreign government securities 4,014 — (193) 3,821 Total $ 838,908 $ 68 $ (36,096) $ 802,880 The Company's short-term and long-term investments as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 73,986 $ 150 $ (8) $ 74,128 Corporate bonds 293,460 128 (269) 293,319 Commercial paper 36,088 — — 36,088 Municipal securities 5,543 5 — 5,548 Certificates of deposit 9,200 — — 9,200 U.S. government securities 430,992 106 (255) 430,843 Foreign government securities 20,256 19 (118) 20,157 Total $ 869,525 $ 408 $ (650) $ 869,283 Long-term debt securities: U.S. agency securities $ 154,454 $ 26 $ (1,160) $ 153,320 Corporate bonds 667,699 80 (4,572) 663,207 Municipal securities 22,541 2 (126) 22,417 U.S. government securities 678,553 3 (4,080) 674,476 Foreign government securities 13,084 — (74) 13,010 Total $ 1,536,331 $ 111 $ (10,012) $ 1,526,430 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2022 and December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in thousands): September 30, 2022 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 41,455 $ (1,197) $ 33,935 $ (978) $ 75,390 $ (2,175) Corporate bonds 174,089 (3,617) 175,397 (4,496) 349,486 (8,113) Municipal securities 5,043 (146) 3,020 (29) 8,063 (175) U.S. government securities 362,415 (5,218) 167,695 (3,339) 530,110 (8,557) Foreign government securities 7,924 (27) 6,364 (177) 14,288 (204) Total $ 590,926 $ (10,205) $ 386,411 $ (9,019) $ 977,337 $ (19,224) Long-term debt securities: U.S. agency securities $ 6,077 $ (361) $ 61,700 $ (3,967) $ 67,777 $ (4,328) Corporate bonds 136,848 (4,155) 170,735 (9,071) 307,583 (13,226) Municipal securities 10,853 (719) — — 10,853 (719) U.S. government securities 242,369 (11,430) 94,409 (6,200) 336,778 (17,630) Foreign government securities 861 (40) 2,960 (153) 3,821 (193) Total $ 397,008 $ (16,705) $ 329,804 $ (19,391) $ 726,812 $ (36,096) December 31, 2021 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 26,749 $ (8) $ — $ — $ 26,749 $ (8) Corporate bonds 241,792 (269) 311 — 242,103 (269) U.S. government securities 347,380 (255) — — 347,380 (255) Foreign government securities 12,734 (118) — — 12,734 (118) Total $ 628,655 $ (650) $ 311 $ — $ 628,966 $ (650) Long-term debt securities: U.S. agency securities $ 151,472 $ (1,160) $ — $ — $ 151,472 $ (1,160) Corporate bonds 627,467 (4,572) — — 627,467 (4,572) Municipal securities 18,616 (126) — — 18,616 (126) U.S. government securities 639,473 (4,080) — — 639,473 (4,080) Foreign government securities 13,010 (74) — — 13,010 (74) Total $ 1,450,038 $ (10,012) $ — $ — $ 1,450,038 $ (10,012) The Company does not intend to sell nor anticipate that it will be required to sell these securities before recovery of the amortized cost basis. Unrealized losses on available-for-sale debt securities were determined not to be related to credit related losses, therefore, an allowance for credit losses is not required. The contractual maturities of the Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,072,163 $ 1,052,973 Due in one to five years 838,908 802,880 Total $ 1,911,071 $ 1,855,853 The following table presents the assets underlying customer funds (in thousands): September 30, 2022 December 31, 2021 Cash $ 2,292,814 $ 242,243 Cash equivalents: Money market funds 439,093 2,126,579 Reverse repurchase agreement (i) 251,751 72,119 Short-term debt securities: U.S. agency securities — 29,994 U.S. government securities — 360,060 Total customer funds $ 2,983,658 $ 2,830,995 (i) The Company has accounted for the reverse repurchase agreement with a third-party as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement. The Company classified the amounts due from the counterparty as cash equivalents due to the short-term nature. The Company's investments within customer funds as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 30,002 $ — $ (8) $ 29,994 U.S. government securities 360,251 — (191) 360,060 Total $ 390,253 $ — $ (199) $ 390,054 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position were as follows (in thousands): Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 29,994 $ (8) $ — $ — $ 29,994 $ (8) U.S. government securities 360,060 (191) — — 360,060 (191) Total $ 390,054 $ (199) $ — $ — $ 390,054 $ (199) The Company does not have any available-for-sale debt securities for which the Company has recorded credit related losses. |
CUSTOMER FUNDS
CUSTOMER FUNDS | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
CUSTOMER FUNDS | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 78,790 $ 5 $ (2,175) $ 76,620 Corporate bonds 365,001 13 (8,113) 356,901 Commercial paper 39,373 — — 39,373 Municipal securities 8,238 — (175) 8,063 Certificates of deposit 7,795 — — 7,795 U.S. government securities 558,474 16 (8,557) 549,933 Foreign government securities 14,492 — (204) 14,288 Total $ 1,072,163 $ 34 $ (19,224) $ 1,052,973 Long-term debt securities: U.S. agency securities $ 72,106 $ — $ (4,328) $ 67,778 Corporate bonds 320,808 — (13,226) 307,582 Municipal securities 12,772 — (719) 12,053 U.S. government securities 429,208 68 (17,630) 411,646 Foreign government securities 4,014 — (193) 3,821 Total $ 838,908 $ 68 $ (36,096) $ 802,880 The Company's short-term and long-term investments as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 73,986 $ 150 $ (8) $ 74,128 Corporate bonds 293,460 128 (269) 293,319 Commercial paper 36,088 — — 36,088 Municipal securities 5,543 5 — 5,548 Certificates of deposit 9,200 — — 9,200 U.S. government securities 430,992 106 (255) 430,843 Foreign government securities 20,256 19 (118) 20,157 Total $ 869,525 $ 408 $ (650) $ 869,283 Long-term debt securities: U.S. agency securities $ 154,454 $ 26 $ (1,160) $ 153,320 Corporate bonds 667,699 80 (4,572) 663,207 Municipal securities 22,541 2 (126) 22,417 U.S. government securities 678,553 3 (4,080) 674,476 Foreign government securities 13,084 — (74) 13,010 Total $ 1,536,331 $ 111 $ (10,012) $ 1,526,430 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2022 and December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in thousands): September 30, 2022 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 41,455 $ (1,197) $ 33,935 $ (978) $ 75,390 $ (2,175) Corporate bonds 174,089 (3,617) 175,397 (4,496) 349,486 (8,113) Municipal securities 5,043 (146) 3,020 (29) 8,063 (175) U.S. government securities 362,415 (5,218) 167,695 (3,339) 530,110 (8,557) Foreign government securities 7,924 (27) 6,364 (177) 14,288 (204) Total $ 590,926 $ (10,205) $ 386,411 $ (9,019) $ 977,337 $ (19,224) Long-term debt securities: U.S. agency securities $ 6,077 $ (361) $ 61,700 $ (3,967) $ 67,777 $ (4,328) Corporate bonds 136,848 (4,155) 170,735 (9,071) 307,583 (13,226) Municipal securities 10,853 (719) — — 10,853 (719) U.S. government securities 242,369 (11,430) 94,409 (6,200) 336,778 (17,630) Foreign government securities 861 (40) 2,960 (153) 3,821 (193) Total $ 397,008 $ (16,705) $ 329,804 $ (19,391) $ 726,812 $ (36,096) December 31, 2021 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 26,749 $ (8) $ — $ — $ 26,749 $ (8) Corporate bonds 241,792 (269) 311 — 242,103 (269) U.S. government securities 347,380 (255) — — 347,380 (255) Foreign government securities 12,734 (118) — — 12,734 (118) Total $ 628,655 $ (650) $ 311 $ — $ 628,966 $ (650) Long-term debt securities: U.S. agency securities $ 151,472 $ (1,160) $ — $ — $ 151,472 $ (1,160) Corporate bonds 627,467 (4,572) — — 627,467 (4,572) Municipal securities 18,616 (126) — — 18,616 (126) U.S. government securities 639,473 (4,080) — — 639,473 (4,080) Foreign government securities 13,010 (74) — — 13,010 (74) Total $ 1,450,038 $ (10,012) $ — $ — $ 1,450,038 $ (10,012) The Company does not intend to sell nor anticipate that it will be required to sell these securities before recovery of the amortized cost basis. Unrealized losses on available-for-sale debt securities were determined not to be related to credit related losses, therefore, an allowance for credit losses is not required. The contractual maturities of the Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,072,163 $ 1,052,973 Due in one to five years 838,908 802,880 Total $ 1,911,071 $ 1,855,853 The following table presents the assets underlying customer funds (in thousands): September 30, 2022 December 31, 2021 Cash $ 2,292,814 $ 242,243 Cash equivalents: Money market funds 439,093 2,126,579 Reverse repurchase agreement (i) 251,751 72,119 Short-term debt securities: U.S. agency securities — 29,994 U.S. government securities — 360,060 Total customer funds $ 2,983,658 $ 2,830,995 (i) The Company has accounted for the reverse repurchase agreement with a third-party as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement. The Company classified the amounts due from the counterparty as cash equivalents due to the short-term nature. The Company's investments within customer funds as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 30,002 $ — $ (8) $ 29,994 U.S. government securities 360,251 — (191) 360,060 Total $ 390,253 $ — $ (199) $ 390,054 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position were as follows (in thousands): Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 29,994 $ (8) $ — $ — $ 29,994 $ (8) U.S. government securities 360,060 (191) — — 360,060 (191) Total $ 390,054 $ (199) $ — $ — $ 390,054 $ (199) The Company does not have any available-for-sale debt securities for which the Company has recorded credit related losses. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTSThe Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, and marketable equity investment at fair value. The Company classifies these investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company measures its safeguarding obligation liability related to bitcoin held for other parties at the fair value of the bitcoin that the Company holds for other parties and classifies the liability within Level 2 because the Company uses observable market prices of the underlying bitcoin as an input for the valuation. The Company also classifies its safeguarding asset related to bitcoin held for other parties within Level 2, unless the asset's carrying amount is adjusted to reflect any actual or potential safeguarding loss events, in which case it would be classified within Level 3. The Company was not aware of any actual or possible safeguarding loss events as of September 30, 2022 or December 31, 2021. The Company’s assets and liabilities that are measured at fair value on a recurring basis were classified as follows (in thousands): September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 1,218,293 $ — $ — $ 2,344,768 $ — $ — U.S. government securities 92,409 — — — — — U.S. agency securities — — — — 22,999 — Certificates of deposit — — — — 4,983 — Commercial paper — 139,420 — — — — Corporate bonds — 2,468 — — 790 — Municipal securities — 3,500 — — — — Customer funds: Money market funds 439,093 — — 2,126,579 — — Reverse repurchase agreement 251,751 — — 72,119 — — U.S. government securities — — — 360,060 — — U.S. agency securities — — — — 29,994 — Short-term debt securities: U.S. government securities 549,933 — — 430,843 — Corporate bonds — 356,901 — — 293,319 — U.S. agency securities — 76,620 — — 74,128 — Certificates of deposit — 7,795 — — 9,200 — Commercial paper — 39,373 — — 36,088 — Municipal securities — 8,063 — — 5,548 — Foreign government securities — 14,288 — — 20,157 — Long-term debt securities: U.S. government securities 411,646 — — 674,476 — — Corporate bonds — 307,582 — — 663,207 — U.S. agency securities — 67,778 — — 153,320 — Municipal securities — 12,053 — — 22,417 — Foreign government securities — 3,821 — — 13,010 — Other: Investment in marketable equity security 12,760 — — — — — Safeguarding asset related to bitcoin held for other parties — 527,669 — — 1,100,596 — Safeguarding obligation liability related to bitcoin held for other parties — (527,669) — — (1,100,596) — Total assets (liabilities) measured at fair value $ 2,975,885 $ 1,039,662 $ — $ 6,008,845 $ 1,349,160 $ — The carrying amounts of certain financial instruments, including settlements receivable, consumer receivables, loans held for investment, accounts payable, customers payable, accrued expenses, and settlements payable, approximate their fair values due to their short-term nature. The carrying amounts of the Company's warehouse funding facilities approximate their fair values. The Company estimates the fair value of its convertible notes and senior notes based on their last actively traded prices or significant other market observable inputs (Level 2). The estimated fair value and carrying value of the convertible notes and senior notes were as follows (in thousands): September 30, 2022 December 31, 2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2031 Senior Notes $ 987,818 $ 759,542 $ 986,774 $ 1,018,113 2026 Senior Notes 989,710 853,318 987,626 994,579 2027 Convertible Notes 568,200 411,735 567,208 614,286 2026 Convertible Notes 568,888 447,220 567,621 595,548 2025 Convertible Notes 992,629 910,558 990,361 1,477,302 2023 Convertible Notes 460,170 477,541 459,618 958,927 2022 Convertible Notes — — 455 3,192 Total $ 4,567,415 $ 3,859,914 $ 4,559,663 $ 5,661,947 The estimated fair value and carrying value of loans held for sale and loans held for investment were as follows (in thousands): September 30, 2022 December 31, 2021 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 462,980 $ 494,934 $ 517,940 $ 574,982 Loans held for investment 130,509 137,085 91,447 95,746 Total $ 593,489 $ 632,019 $ 609,387 $ 670,728 As of September 30, 2022 and December 31, 2021, $32.4 million and $364.8 million of the carrying value of loans held for sale was attributable to loans under the PPP, respectively. The PPP was intended to provide relief to eligible businesses impacted by COVID-19, and to incentivize businesses to keep their workers on the payroll. These loans are guaranteed by the U.S. government and are eligible for forgiveness if the borrowers meet certain criteria. As the loans under the PPP qualify for forgiveness if certain criteria are met or are guaranteed by the U.S. government through the Small Business Administration ("SBA"), the related credit losses as of September 30, 2022 were immaterial. If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three and nine months ended September 30, 2022 and 2021, the Company did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. |
CONSUMER RECEIVABLES, NET
CONSUMER RECEIVABLES, NET | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
CONSUMER RECEIVABLES, NET | CONSUMER RECEIVABLES, NET Consumer receivables represent amounts due from consumers for outstanding installment payments on orders processed on the Company's BNPL platform. Further discussed in Note 1, Description of Business and Summary of Significant Accounting Policies , consumer receivables are classified as held for investment. These receivables are interest free and are generally due within 14 to 56 days. The Company evaluates the consumer receivables as a single homogeneous portfolio as it is comprised of a single product type, point-of-sale unsecured installment loans. The Company closely monitors credit quality for consumer receivables to manage and evaluate its related exposure to credit risk. The criteria the Company monitors when assessing the credit quality and risk of its consumer receivables portfolio is primarily based on internal risk assessments, as they provide insight into customer risk profiles and are useful as indicators of potential future credit losses. Consumer receivables are internally rated as "Pass" rated or "Classified." Pass rated consumer receivables generally consist of consumer receivables that are current or up to 60 days past due. Classified consumer receivables generally comprise of consumer receivables that are 60 days or greater past due and have a higher risk of default. Internal risk ratings are reviewed and, generally, updated at least once a year. As of September 30, 2022, the amortized cost of Pass rated consumer receivables was $1.3 billion and the amount of Classified consumer receivables was less than $0.1 billion. The following table presents an aging analysis of the amortized cost of consumer receivables by delinquency status (in thousands): September 30, 2022 Non-delinquent loans $ 1,152,509 1 - 60 days past due 159,759 61 - 90 days past due 21,385 90+ days past due 60,445 Total amortized cost $ 1,394,098 The amount listed as 1 - 60 days past due in the above table includes $103.3 million of cash in transit, which reflects ongoing repayments from consumers that have been sent from consumers’ bank accounts but have not yet been received at the Company’s bank account as of the date of the financial statements. This cash in transit as of September 30, 2022 represents 7.4% of the total amortized cost of consumer receivables. For consumer receivables, an allowance for credit losses is determined based on the probability of a default event occurring over the life of the receivables. When a consumer has not paid by the due date, it is an indication that credit risk has increased. As a result, the allowance for credit losses for that receivable is measured at an amount equal to the lifetime allowance for credit losses for increased credit risk. Lifetime allowance for credit losses is the expected credit losses that result from all possible default events over the expected life of the receivables. The allowance for credit losses on consumer receivables is a valuation account that is deducted from the carrying value of the consumer receivables. Consumer receivables are charged off when they are over 180 days past due and the Company has no reasonable expectation of recovery. When consumer receivables are charged off, the Company recognizes the charge against the allowance for credit losses. While the Company expects collections at that point to be unlikely, the Company may recover amounts from the respective consumers. Any subsequent recoveries following charge-off are credited to transaction, loan, and consumer receivable losses on the condensed consolidated statements of operations in the period they were recovered. The amount of recoveries for the three and nine months ended September 30, 2022 were immaterial. The following table summarizes activity in the allowance for credit losses subsequent to the acquisition of Afterpay (in thousands): Three Months Ended September 30, 2022 From Acquisition on Allowance for credit losses, beginning of the period (i) $ 121,579 $ 115,552 Provision for credit losses 53,021 146,014 Charge-offs and other adjustments (28,516) (116,624) Foreign exchange effect (4,113) (2,971) Allowance for credit losses, end of the period $ 141,971 $ 141,971 (i) Consumer receivables acquired from Afterpay that reflect a more-than-insignificant deterioration of credit from origination are considered purchased credit deteriorated ("PCD") receivables. For PCD consumer receivables, the initial estimate of expected credit losses is recognized in the allowance for credit losses on the date of acquisition using the same methodology as other consumer receivables. In April 2021, the Company began originating loans in the U.S. through its wholly-owned subsidiary bank, Square Financial Services. The Company sells the majority of the loans to institutional investors with a portion retained on its balance sheet. Loans retained by the Company are classified as held for investment as the Company has both the intent and ability to hold them for the foreseeable future, until maturity, or until payoff. The Company’s intent and ability in the future may change based on changes in business strategies, the economic environment, and market conditions. As of September 30, 2022, the Company held $130.5 million as loans held for investment, net of allowance, included in other current assets on the condensed consolidated balance sheet. Refer to Note 12, Other Consolidated Balance Sheet Components (Current) for more details. Loans held for investment are recorded at amortized cost, less an allowance for potential uncollectible amounts. Amortized cost basis represents principal amounts outstanding, net of unearned income, unamortized deferred fees and costs on originated loans, premiums or discounts on purchased loans, and charge-offs. The allowance for loan losses, and amount of charge-offs and recoveries recorded as of September 30, 2022 were all immaterial. The Company considers loans that are greater than 60 days past due to be delinquent, and loans 90 days or more past due to be nonperforming. Loans that are 120 days or more past due are generally considered to be uncollectible and are charged off. When a loan is identified as nonperforming, recognition of income is discontinued. Loans are restored to performing status after total overdue unpaid amounts are repaid and the Company has reasonable assurance that performance under the terms of the loan will continue. As of September 30, 2022, the amount of loans that were identified as nonperforming loans was immaterial. The Company closely monitors economic conditions and loan performance trends to assess and manage its exposure to credit risk. The criteria the Company monitors when assessing the credit quality and risk of its loan portfolio is primarily based on internal risk ratings, as they provide insight into borrower risk profiles and are useful as indicators of potential future credit losses. Loans are internally rated as "Pass" rated or "Classified." Pass rated loans generally consist of loans that are current or up to 60 days past due. Classified loans generally comprise of loans that are 60 days or greater past due and have a higher risk of default. Internal risk ratings are reviewed and, generally, updated at least once a year. As of September 30, 2022, the amortized cost of Pass rated loans was $137.0 million and the amount of Classified loans was immaterial. |
LOANS HELD FOR INVESTMENT
LOANS HELD FOR INVESTMENT | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
LOANS HELD FOR INVESTMENT | CONSUMER RECEIVABLES, NET Consumer receivables represent amounts due from consumers for outstanding installment payments on orders processed on the Company's BNPL platform. Further discussed in Note 1, Description of Business and Summary of Significant Accounting Policies , consumer receivables are classified as held for investment. These receivables are interest free and are generally due within 14 to 56 days. The Company evaluates the consumer receivables as a single homogeneous portfolio as it is comprised of a single product type, point-of-sale unsecured installment loans. The Company closely monitors credit quality for consumer receivables to manage and evaluate its related exposure to credit risk. The criteria the Company monitors when assessing the credit quality and risk of its consumer receivables portfolio is primarily based on internal risk assessments, as they provide insight into customer risk profiles and are useful as indicators of potential future credit losses. Consumer receivables are internally rated as "Pass" rated or "Classified." Pass rated consumer receivables generally consist of consumer receivables that are current or up to 60 days past due. Classified consumer receivables generally comprise of consumer receivables that are 60 days or greater past due and have a higher risk of default. Internal risk ratings are reviewed and, generally, updated at least once a year. As of September 30, 2022, the amortized cost of Pass rated consumer receivables was $1.3 billion and the amount of Classified consumer receivables was less than $0.1 billion. The following table presents an aging analysis of the amortized cost of consumer receivables by delinquency status (in thousands): September 30, 2022 Non-delinquent loans $ 1,152,509 1 - 60 days past due 159,759 61 - 90 days past due 21,385 90+ days past due 60,445 Total amortized cost $ 1,394,098 The amount listed as 1 - 60 days past due in the above table includes $103.3 million of cash in transit, which reflects ongoing repayments from consumers that have been sent from consumers’ bank accounts but have not yet been received at the Company’s bank account as of the date of the financial statements. This cash in transit as of September 30, 2022 represents 7.4% of the total amortized cost of consumer receivables. For consumer receivables, an allowance for credit losses is determined based on the probability of a default event occurring over the life of the receivables. When a consumer has not paid by the due date, it is an indication that credit risk has increased. As a result, the allowance for credit losses for that receivable is measured at an amount equal to the lifetime allowance for credit losses for increased credit risk. Lifetime allowance for credit losses is the expected credit losses that result from all possible default events over the expected life of the receivables. The allowance for credit losses on consumer receivables is a valuation account that is deducted from the carrying value of the consumer receivables. Consumer receivables are charged off when they are over 180 days past due and the Company has no reasonable expectation of recovery. When consumer receivables are charged off, the Company recognizes the charge against the allowance for credit losses. While the Company expects collections at that point to be unlikely, the Company may recover amounts from the respective consumers. Any subsequent recoveries following charge-off are credited to transaction, loan, and consumer receivable losses on the condensed consolidated statements of operations in the period they were recovered. The amount of recoveries for the three and nine months ended September 30, 2022 were immaterial. The following table summarizes activity in the allowance for credit losses subsequent to the acquisition of Afterpay (in thousands): Three Months Ended September 30, 2022 From Acquisition on Allowance for credit losses, beginning of the period (i) $ 121,579 $ 115,552 Provision for credit losses 53,021 146,014 Charge-offs and other adjustments (28,516) (116,624) Foreign exchange effect (4,113) (2,971) Allowance for credit losses, end of the period $ 141,971 $ 141,971 (i) Consumer receivables acquired from Afterpay that reflect a more-than-insignificant deterioration of credit from origination are considered purchased credit deteriorated ("PCD") receivables. For PCD consumer receivables, the initial estimate of expected credit losses is recognized in the allowance for credit losses on the date of acquisition using the same methodology as other consumer receivables. In April 2021, the Company began originating loans in the U.S. through its wholly-owned subsidiary bank, Square Financial Services. The Company sells the majority of the loans to institutional investors with a portion retained on its balance sheet. Loans retained by the Company are classified as held for investment as the Company has both the intent and ability to hold them for the foreseeable future, until maturity, or until payoff. The Company’s intent and ability in the future may change based on changes in business strategies, the economic environment, and market conditions. As of September 30, 2022, the Company held $130.5 million as loans held for investment, net of allowance, included in other current assets on the condensed consolidated balance sheet. Refer to Note 12, Other Consolidated Balance Sheet Components (Current) for more details. Loans held for investment are recorded at amortized cost, less an allowance for potential uncollectible amounts. Amortized cost basis represents principal amounts outstanding, net of unearned income, unamortized deferred fees and costs on originated loans, premiums or discounts on purchased loans, and charge-offs. The allowance for loan losses, and amount of charge-offs and recoveries recorded as of September 30, 2022 were all immaterial. The Company considers loans that are greater than 60 days past due to be delinquent, and loans 90 days or more past due to be nonperforming. Loans that are 120 days or more past due are generally considered to be uncollectible and are charged off. When a loan is identified as nonperforming, recognition of income is discontinued. Loans are restored to performing status after total overdue unpaid amounts are repaid and the Company has reasonable assurance that performance under the terms of the loan will continue. As of September 30, 2022, the amount of loans that were identified as nonperforming loans was immaterial. The Company closely monitors economic conditions and loan performance trends to assess and manage its exposure to credit risk. The criteria the Company monitors when assessing the credit quality and risk of its loan portfolio is primarily based on internal risk ratings, as they provide insight into borrower risk profiles and are useful as indicators of potential future credit losses. Loans are internally rated as "Pass" rated or "Classified." Pass rated loans generally consist of loans that are current or up to 60 days past due. Classified loans generally comprise of loans that are 60 days or greater past due and have a higher risk of default. Internal risk ratings are reviewed and, generally, updated at least once a year. As of September 30, 2022, the amortized cost of Pass rated loans was $137.0 million and the amount of Classified loans was immaterial. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET The following table details property and equipment, less accumulated depreciation and amortization (in thousands): September 30, 2022 December 31, 2021 Leasehold improvements $ 227,158 $ 208,228 Computer equipment 210,524 174,004 Capitalized software 182,835 116,827 Office furniture and equipment 45,350 42,393 Total 665,867 541,452 Less: Accumulated depreciation and amortization (349,489) (259,312) Property and equipment, net $ 316,378 $ 282,140 Depreciation and amortization expense on property and equipment was $32.9 million and $94.3 million for the three and nine months ended September 30, 2022, respectively, and $27.0 million and $68.4 million for the three and nine months ended September 30, 2021, respectively. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Afterpay On January 31, 2022 (February 1, 2022 Australian Eastern Daylight Time), the Company completed the acquisition of Afterpay, a global BNPL platform. In connection with the acquisition, the Company issued 113,617,352 shares of the Company’s Class A common stock. The shares issued included a deemed vested component of outstanding employee awards, based on the ratio of time served in relation to the vesting term of each award, with the unvested portion being replaced with Block’s unvested replacement awards, with the same terms. The aggregate fair value of the shares issued was $13.8 billion based on the closing price of the Company’s Class A common stock on the acquisition date, of which $66.3 million was attributed to acceleration of various share-based arrangements and was accounted for as an expense immediately post-acquisition, included as a component of general and administrative expenses in the consolidated statement of operations. As of the completion of the acquisition, certain convertible notes with an outstanding principal amount of AU $1.5 billion (U.S. $1.1 billion based on the closing exchange rate on the acquisition date) remained outstanding, and were redeemed on March 4, 2022. The acquisition meets the criteria to be accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”). This method requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date and that the difference between the fair value of the consideration paid for the acquired entity and the fair value of the net assets acquired be recorded as goodwill, which is not amortized but is tested at least annually for impairment. In the first quarter of 2022, the Company prepared an initial determination of the fair value of the assets acquired and liabilities assumed as of the acquisition date using preliminary information. Subsequently, the Company recognized measurement period adjustments to the a ssets and liabilities assumed resulting from tax provision adjustments related to Afterpay’s fiscal year ended June 30, 2021 corporate income tax return filings, which impacted the historical tax attributes of certain Afterpay entities. The Company also adjusted the value of the deferred consideration liability assumed through the acquisition. The net effect of these adjustments on the preliminary purchase price allocation resulted in a decrease in deferred tax liabilities assumed of $23.6 million, an increase in current liabilities assumed of $10.3 million, and a net decrease in goodwill of $13.3 million. There was no impact to the condensed consolidated statements of operations as a result of these adjustments. The Company is still in the process of completing the determination of the fair value of certain assumed contingent consideration from Afterpay, the allocation of goodwill and certain intangible assets acquired to various operating units, and the evaluation of contingencies and tax effects related to the acquisition. Accordingly, the preliminary values reflected in the table below are subject to change. Refer to Note 12, Other Consolidated Balance Sheet Components (Current) for further details on the deferred consideration assumed from Afterpay. The table below summarizes the consideration paid for Afterpay and the assessment of the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data): Consideration: Stock (113,617,352 shares of Class A common stock, excluding value accounted as post-combination expense of $66,337) $ 13,827,929 Cash paid to settle tax withholding in connection with replacement awards 8,693 Total $ 13,836,622 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash, cash equivalents, and restricted cash acquired) $ 653,709 Consumer receivables 1,245,508 Intangible customer assets 1,378,000 Intangible technology assets 239,000 Intangible trade name 408,000 Other non-current assets 74,232 Long-term debt - current (i) (1,058,065) Current liabilities (404,770) Warehouse funding facilities (ii) (107,996) Deferred tax liabilities (211,377) Other non-current liabilities (55,374) Total identifiable net assets acquired 2,160,867 Goodwill 11,675,755 Total $ 13,836,622 (i) Long-term debt - current is comprised of the aforementioned Afterpay convertible notes, which were redeemed in cash at face value on March 4, 2022. (ii) Refer to Note 15, Indebtedness for further details. Goodwill from the acquisition was primarily attributable to the value of expected synergies created by incorporating Afterpay's BNPL platform, its business, and operations into the Company's Cash App and Square ecosystems and the value of the assembled workforce. The goodwill has no amortizable basis for income tax purposes. The acquisition resulted in the recognition of $131.0 million of deferred tax assets in Australia; however, the realization of such deferred tax assets depends primarily on the Company's ability, post-acquisition, to generate taxable income in future periods of which there is not sufficient positive evidence of such income as of September 30, 2022. Accordingly, a valuation allowance of $131.0 million was recorded against the acquired Australian deferred tax assets. Additionally, the other non-current liabilities include an estimate of $34.0 million in unrecognized tax benefits as of the date of acquisition. Pro Forma Financial Information The following table summarizes the unaudited pro forma consolidated financial information of the Company as if the Afterpay acquisition had occurred on January 1, 2021. Pro forma adjustments have been made to reflect, among other things, the incremental intangible asset amortization to be incurred based on the preliminary values of each identifiable intangible asset, stock-based compensation expense related to replacement equity awards, and the tax effects of such adjustments for the respective periods. The unaudited pro forma financial results are as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net revenue $ 4,515,541 $ 4,044,781 $ 12,945,438 $ 14,174,515 Net loss $ (15,774) $ (31,225) $ (333,947) $ (112,046) The unaudited pro forma financial information is not intended to present or be indicative of what the results of operations or financial position would have been had the events actually occurred on the dates indicated, nor is it meant to be indicative of future results of operations or financial position for any future period or as of any future date. The unaudited pro forma financial information does not give effect to the potential impact of current financial conditions, or any anticipated revenue enhancements, cost savings, or operating synergies that may result from the acquisition. Pro forma net loss for the nine months ended September 30, 2022 excludes $42.4 million of transaction costs directly attributable to the acquisition, as well as $66.3 million of incremental stock-based compensation expense incurred by Block, that were included in the determination of the net loss during the nine months ended September 30, 2022. Pro forma net loss for the nine months ended September 30, 2021 includes $117.3 million of transaction costs directly attributable to the acquisition incurred by both Afterpay and Block, and $66.3 million of incremental stock-based compensation expense. Pro forma net loss for the three months ended September 30, 2022 had no adjustments. Pro forma net loss for the three months ended September 30, 2021 excludes $26.9 million of transaction costs directly attributable to the acquisition incurred by both Afterpay and Block. Other Acquisitions |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets acquired. The change in carrying value of goodwill in the period was as follows (in thousands): Carrying value of goodwill, beginning of the year $ 519,276 Acquisitions 11,718,209 Foreign currency translation adjustments (679,501) Carrying value of goodwill, end of the period $ 11,557,984 The Company performs an annual goodwill impairment test on December 31 of each year and more frequently if events and circumstances indicate that the asset might be impaired. As defined further in Note 21, Segment and Geographical Information, the Company has two reportable segments, Square and Cash App. Goodwill arising from the acquisition of Afterpay has been equally allocated to Square and Cash App as management has concluded that the BNPL platform will contribute equally to each of these segments. The change in carrying value of goodwill allocated to the reportable segments in the period was as follows (in thousands): Cash App Square Corporate and Other Total Carrying value of goodwill, beginning of the year $ 128,334 $ 193,057 $ 197,885 $ 519,276 Acquisitions 5,860,305 5,857,904 — 11,718,209 Foreign currency translation adjustments (340,431) (339,070) — (679,501) Carrying value of goodwill, end of the period $ 5,648,208 $ 5,711,891 $ 197,885 $ 11,557,984 |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS The following tables present the detail of acquired intangible assets as of the periods presented (in thousands): Balance at September 30, 2022 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 395,057 $ (116,148) $ 278,909 Customer assets 15 years 1,434,803 (84,786) 1,350,017 Trade name 9 years 440,509 (47,151) 393,358 Other 9 years 13,701 (5,109) 8,592 Total $ 2,284,070 $ (253,194) $ 2,030,876 Balance at December 31, 2021 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 164,977 $ (65,619) $ 99,358 Customer assets 15 years 128,316 (19,244) 109,072 Trade name 9 years 53,051 (14,169) 38,882 Other 9 years 13,743 (4,006) 9,737 Total $ 360,087 $ (103,038) $ 257,049 All intangible assets are amortized over their estimated useful lives. The changes to the carrying value of intangible assets were as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Acquired intangible assets, net, beginning of the period $ 2,148,078 $ 262,196 $ 257,049 $ 137,612 Acquisitions — 18,100 2,028,490 159,100 Amortization expense (55,867) (11,140) (155,288) (27,258) Foreign currency translation adjustments (61,335) (464) (99,375) (762) Acquired intangible assets, net, end of the period $ 2,030,876 $ 268,692 $ 2,030,876 $ 268,692 The estimated future amortization expense of intangible assets in future periods as of September 30, 2022 was as follows (in thousands): Remainder of 2022 $ 54,684 2023 218,629 2024 215,168 2025 208,340 2026 194,274 Thereafter 1,139,781 Total $ 2,030,876 |
OTHER CONSOLIDATED BALANCE SHEE
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): September 30, 2022 December 31, 2021 Inventory, net $ 102,962 $ 77,058 Restricted cash 246,570 18,778 Processing costs receivable 285,006 228,914 Prepaid expenses 118,756 63,341 Accounts receivable, net 128,386 89,702 Loans held for investment, net of allowance for loan losses (i) 130,509 91,447 Other 163,684 118,189 Total $ 1,175,873 $ 687,429 (i) Refer to Note 7, Loans Held for Investment for further details . Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands): September 30, 2022 December 31, 2021 Accrued expenses $ 372,038 $ 254,900 Accounts payable 116,119 82,173 Customer deposits 118,754 59,844 Pagantis deferred consideration (i) 49,836 — Accrued transaction losses (ii) 61,012 55,167 Accrued royalties 51,441 53,616 Deferred revenue, current 47,197 48,462 Other 152,098 84,692 Total $ 968,495 $ 638,854 (i) On March 9, 2021, prior to acquisition by the Company, Afterpay completed the acquisition of Pagantis SAU and PMT Technology SLA (collectively, "Pagantis"). Pursuant to the acquisition agreement, Afterpay issued a convertible note to the sellers for deferred and contingent consideration. Under the terms of the note, upon a change in control of Afterpay, Afterpay had the option to redeem the convertible note for cash consideration, which Afterpay exercised. The settlement amount consists of two components: a fixed amount based on the principal amount of the note adjusted for the impact of the acquisition of Afterpay, and an additional amount that is contingent on the underlying equity value of Pagantis exceeding certain agreed upon thresholds. Under the terms of the note, absent a bilateral agreement on value between the Company and the note holder, the Company and note holder were each required to use an independent valuation expert to establish the underlying value of the Pagantis business as of the time of the change in control of Afterpay. Because the difference between the two valuations was more than a specified threshold, a third valuation expert has been jointly selected by the first two experts, with support from the Company and the note holder. The third expert is required to determine a value that falls within the range of the values established by the first two experts. The third expert is expected to deliver their valuation in the fourth quarter of 2022. Absent any manifest error, the third expert's valuation will be final, and settlement of the note will occur on that basis, having regard to the formula for calculation of the settlement value as per the note terms. As of September 30, 2022, the Company determined that based on the estimated underlying value of Pagantis, the contingent consideration had no value and accordingly, has accrued the fixed amount payable, adjusted for the period-end foreign exchange spot rate . The ultimate settlement value may differ materially from the accrued amounts. (ii) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers, primarily due to seller insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Accrued transaction losses, beginning of the period $ 61,835 $ 48,480 $ 55,167 $ 70,557 Provision for transaction losses 19,724 17,364 68,743 38,406 Charge-offs to accrued transaction losses (20,547) (18,107) (62,898) (61,226) Accrued transaction losses, end of the period $ 61,012 $ 47,737 $ 61,012 $ 47,737 In addition to amounts reflected in the table above, the Company recognized additional provision for transaction losses that was realized and written-off within the same period. The Company recorded $100.9 million and $312.6 million for the three and nine months ended September 30, 2022, respectively, compared to $89.8 million and $252.2 million for the three and nine months ended September 30, 2021, respectively, for such losses. Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands): September 30, 2022 December 31, 2021 Investment in non-marketable equity securities (i) $ 162,607 $ 81,919 Investment in bitcoin, net (ii) 111,294 149,000 Restricted cash 72,479 71,702 Other 92,154 67,914 Total $ 438,534 $ 370,535 (i) Investment in non-marketable equity securities represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded within other expense (income), net o n the condensed consolidated statements of operations. During the nine months ended September 30, 2022, the Company recorded an unrealized gain of $59.8 million , arising from the revaluation of a non-marketable investment, resulting in a cumulative unrealized gain of $78.8 million as of September 30, 2022. Unrealized losses were immaterial as of September 30, 2022. (ii) The Company invested an aggregate $220.0 million in bitcoin in 2020 and 2021, with no additional investments made during the nine months ended September 30, 2022. Investment in bitcoin is accounted for as an indefinite-lived intangible asset, and does not include any bitcoin held for other parties, which is further described in Note 14, Bitcoin Held for Other Parties . Investment in bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period. Impairment losses cannot be recovered for any subsequent increase in fair value until the sale of the asset. The Company recorded an impairment charge on its investment in bitcoin o f $1.6 million and $37.6 million i |
OTHER CONSOLIDATED BALANCE SH_2
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): September 30, 2022 December 31, 2021 Inventory, net $ 102,962 $ 77,058 Restricted cash 246,570 18,778 Processing costs receivable 285,006 228,914 Prepaid expenses 118,756 63,341 Accounts receivable, net 128,386 89,702 Loans held for investment, net of allowance for loan losses (i) 130,509 91,447 Other 163,684 118,189 Total $ 1,175,873 $ 687,429 (i) Refer to Note 7, Loans Held for Investment for further details . Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands): September 30, 2022 December 31, 2021 Accrued expenses $ 372,038 $ 254,900 Accounts payable 116,119 82,173 Customer deposits 118,754 59,844 Pagantis deferred consideration (i) 49,836 — Accrued transaction losses (ii) 61,012 55,167 Accrued royalties 51,441 53,616 Deferred revenue, current 47,197 48,462 Other 152,098 84,692 Total $ 968,495 $ 638,854 (i) On March 9, 2021, prior to acquisition by the Company, Afterpay completed the acquisition of Pagantis SAU and PMT Technology SLA (collectively, "Pagantis"). Pursuant to the acquisition agreement, Afterpay issued a convertible note to the sellers for deferred and contingent consideration. Under the terms of the note, upon a change in control of Afterpay, Afterpay had the option to redeem the convertible note for cash consideration, which Afterpay exercised. The settlement amount consists of two components: a fixed amount based on the principal amount of the note adjusted for the impact of the acquisition of Afterpay, and an additional amount that is contingent on the underlying equity value of Pagantis exceeding certain agreed upon thresholds. Under the terms of the note, absent a bilateral agreement on value between the Company and the note holder, the Company and note holder were each required to use an independent valuation expert to establish the underlying value of the Pagantis business as of the time of the change in control of Afterpay. Because the difference between the two valuations was more than a specified threshold, a third valuation expert has been jointly selected by the first two experts, with support from the Company and the note holder. The third expert is required to determine a value that falls within the range of the values established by the first two experts. The third expert is expected to deliver their valuation in the fourth quarter of 2022. Absent any manifest error, the third expert's valuation will be final, and settlement of the note will occur on that basis, having regard to the formula for calculation of the settlement value as per the note terms. As of September 30, 2022, the Company determined that based on the estimated underlying value of Pagantis, the contingent consideration had no value and accordingly, has accrued the fixed amount payable, adjusted for the period-end foreign exchange spot rate . The ultimate settlement value may differ materially from the accrued amounts. (ii) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers, primarily due to seller insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Accrued transaction losses, beginning of the period $ 61,835 $ 48,480 $ 55,167 $ 70,557 Provision for transaction losses 19,724 17,364 68,743 38,406 Charge-offs to accrued transaction losses (20,547) (18,107) (62,898) (61,226) Accrued transaction losses, end of the period $ 61,012 $ 47,737 $ 61,012 $ 47,737 In addition to amounts reflected in the table above, the Company recognized additional provision for transaction losses that was realized and written-off within the same period. The Company recorded $100.9 million and $312.6 million for the three and nine months ended September 30, 2022, respectively, compared to $89.8 million and $252.2 million for the three and nine months ended September 30, 2021, respectively, for such losses. Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands): September 30, 2022 December 31, 2021 Investment in non-marketable equity securities (i) $ 162,607 $ 81,919 Investment in bitcoin, net (ii) 111,294 149,000 Restricted cash 72,479 71,702 Other 92,154 67,914 Total $ 438,534 $ 370,535 (i) Investment in non-marketable equity securities represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded within other expense (income), net o n the condensed consolidated statements of operations. During the nine months ended September 30, 2022, the Company recorded an unrealized gain of $59.8 million , arising from the revaluation of a non-marketable investment, resulting in a cumulative unrealized gain of $78.8 million as of September 30, 2022. Unrealized losses were immaterial as of September 30, 2022. (ii) The Company invested an aggregate $220.0 million in bitcoin in 2020 and 2021, with no additional investments made during the nine months ended September 30, 2022. Investment in bitcoin is accounted for as an indefinite-lived intangible asset, and does not include any bitcoin held for other parties, which is further described in Note 14, Bitcoin Held for Other Parties . Investment in bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period. Impairment losses cannot be recovered for any subsequent increase in fair value until the sale of the asset. The Company recorded an impairment charge on its investment in bitcoin o f $1.6 million and $37.6 million i |
BITCOIN HELD FOR OTHER PARTIES
BITCOIN HELD FOR OTHER PARTIES | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
BITCOIN HELD FOR OTHER PARTIES | BITCOIN HELD FOR OTHER PARTIES The Company allows its Cash App customers to store their bitcoin in the Company’s digital wallets free of charge. The Company also holds an immaterial amount of bitcoin from select trading partners to facilitate bitcoin transactions for customers on Cash App. Other than bitcoin, the Company does not hold or store any other types of crypto-assets for customers or trading partners. The Company holds the cryptographic key information and maintains the internal recordkeeping of the bitcoin held for other parties. The Company's contractual arrangements state that its customers and trading partners retain legal ownership of the bitcoin; have the right to sell, pledge, or transfer the bitcoin; and also benefit from the rewards and bear the risks associated with the ownership, including as a result of any bitcoin price fluctuations. The customer also bears the risk of loss as a result of fraud or theft, unless the loss was caused by the Company’s gross negligence or the Company’s willful misconduct. The Company occasionally engages third-party custodians to store and safeguard bitcoin on the Company's behalf. As of September 30, 2022, an immaterial amount of the bitcoin was held by third-party custodians on the Company's behalf. Upon the adoption of SAB 121, the Company recorded a bitcoin safeguarding obligation liability and a corresponding bitcoin safeguarding asset based on the fair value of the bitcoin held for other parties at each reporting date. The Company was not aware of any actual or possible safeguarding loss events as of September 30, 2022 or December 31, 2021, and accordingly, the bitcoin safeguarding obligation liability and the associated bitcoin safeguarding asset were recorded at the same value. The balance sheet as of December 31, 2021 has been revised to reflect the adoption of SAB 121. The adoption of SAB 121 had no impact on previously reported consolidated statements of operations, statements of cash flows, or statements of stockholders' equity. The following table summarizes the Company’s bitcoin held for other parties (in thousands, except number of bitcoin): September 30, 2022 December 31, 2021 Approximate number of bitcoin held for customers 25,976 23,360 Approximate number of bitcoin held for trading partners 1,188 458 Total approximate number of bitcoin held for other parties 27,164 23,818 Safeguarding obligation liability related to bitcoin held for customers $ 504,588 $ 1,079,412 Safeguarding obligation liability related to bitcoin held for trading partners 23,081 21,184 Safeguarding obligation liability related to bitcoin held for other parties $ 527,669 $ 1,100,596 Safeguarding asset related to bitcoin held for other parties $ 527,669 $ 1,100,596 |
INDEBTEDNESS
INDEBTEDNESS | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS Revolving Credit Facility In May 2020, the Company entered into a revolving credit agreement with certain lenders, which provided a $500.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in May 2023. On May 28, 2020, the Company amended the credit agreement for the 2020 Credit Facility (the "Credit Agreement") to permit the Company’s wholly-owned subsidiary, Square Capital, LLC (“Square Capital”), to incur indebtedness in an aggregate principal amount of up to $500.0 million pursuant to the Paycheck Protection Program Liquidity Facility (“PPPLF”) authorized under the Federal Reserve Act of 1913. In connection with its convertible debt offerings in November 2020, the Company entered into a second amendment to the Credit Agreement on November 9, 2020 to permit convertible debt in an aggregate principal amount not to exceed $3.6 billion. On January 28, 2021, the Company entered into a third amendment to the Credit Agreement to increase the amount of indebtedness that Square Capital is permitted to incur pursuant to the PPPLF from an aggregate principal amount of up to $500.0 million to an aggregate principal amount of up to $1.0 billion. On May 25, 2021, the Company entered into a fourth amendment to the Credit Agreement to, among other things, extend the maturity date of the loans advanced to May 1, 2024. On January 28, 2022, the Company entered into a fifth amendment to the Credit Agreement to permit certain existing obligations of Afterpay and its subsidiaries to remain outstanding as of and after the completion of the Afterpay acquisition. On February 23, 2022, the Company entered into a sixth amendment to the Credit Agreement to, among other things, provide for a new tranche of unsecured revolving loan commitments in an aggregate principal amount of up to $100.0 million (the "Tranche B Loans). The Credit Agreement also contains a financial covenant that requires the Company to maintain a quarterly minimum liquidity amount (consisting of the sum of Unrestricted Cash and Cash Equivalents plus Marketable Securities, each as defined in the Credit Agreement) of at least $250.0 million, tested on a quarterly basis. The Company is obligated to pay customary fees for a credit facility of this size and type including a commitment fee of 0.15% per annum on the undrawn portion available under the 2020 Credit Facility. To date, no funds have been drawn and no letters of credit have been issued under the 2020 Credit Facility. As of September 30, 2022, $600.0 million remained available for draw. The Company incurred immaterial unused commitment fees during the three and nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the Company was in compliance with all financial covenants associated with the 2020 Credit Facility. Loans under the 2020 Credit Facility, excluding the Tranche B Loans, bear interest at the Company's option of (i) a base rate based on the highest of the prime rate, the federal funds rate plus 0.50%, and the adjusted LIBOR rate plus 1.00%, in each case, plus a margin ranging from 0.25% to 0.75% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.25% to 1.75%. The Credit Agreement includes provisions allowing the Company to replace or update LIBOR with a replacement rate. The margin is determined based on the Company’s total leverage ratio, as defined in the Credit Agreement. The Tranche B Loans bear interest at the Company's option of (i) an annual rate based on the forward-looking term rate based on the Secured Overnight Financing Rate ("Term SOFR") or (ii) a base rate. Tranche B Loans based on Term SOFR shall bear interest at a rate equal to Term SOFR plus a margin of between 1.25% and 1.75%, depending on the Company's total net leverage ratio. Tranche B Loans based on the base rate shall bear interest at a rate based on the highest of the prime rate, the federal funds rate plus 0.50%, and Term SOFR with a tenor of one-month plus 1.00%, in each case, plus a margin ranging from 0.25% to 0.75%, depending on the Company's total net leverage ratio. The Credit Agreement also contains customary affirmative and negative covenants typical for a financing of this type that, among other things, restricts the Company and certain of its subsidiaries’ ability to incur additional indebtedness, create liens, merge or consolidate or make certain dispositions, pay dividends and make distributions, enter into restrictive agreements, enter into agreements with affiliates, and make certain investments and acquisitions. Warehouse Funding Facilities Following the acquisition of Afterpay, the Company assumed Afterpay's existing warehouse funding facilities. The Company has financing arrangements with financial institutions in Australia, New Zealand, the United States, and the United Kingdom (collectively, the “Warehouse Facilities”). The Warehouse Facilities have been arranged utilizing wholly-owned and consolidated entities formed for the sole purpose of financing the origination of consumer receivables to partly fund the Company's BNPL platform. Borrowings under the Warehouse Facilities are secured against the respective consumer receivables. These Warehouse Facilities have maturity dates ranging from December 2023 to December 2024 . As of September 30, 2022, the aggregate commitment amount of the Warehouse Facilities, using the respective exchange rates at period-end, was $1.7 billion on a revolving basis, of which $0.5 billion was drawn and $1.2 billion remained available. All facilities contain portfolio parameters based on performance of the underlying consumer receivables, which each respective region has satisfied as of September 30, 2022. None of the Warehouse Facilities contain corporate financial covenants. All Warehouse Facilities are on a variable rate basis which aligns closely to the weighted average life of the consumer receivables they finance. Borrowings under these facilities bear interest at (i) a base rate aligned to either the local risk free rate, such as Term SOFR and the Sterling Overnight Index Average ("SONIA") or similar, and (ii) a margin which is set for the term of the availability period. In addition, each facility requires payment of immaterial commitment fees. The table below summarizes the amounts drawn on these facilities by year of maturity (in thousands): September 30, 2022 2023 $ 120,000 2024 359,422 Total funding debt, net of deferred debt issuance costs $ 479,422 Paycheck Protection Program Liquidity Facility On June 2, 2020, Square Capital was approved to borrow under the PPPLF with the Federal Reserve Bank of San Francisco (“First PPPLF Agreement”), at an annual interest rate of 0.35%. The PPPLF extends credit to eligible financial institutions that have originated or purchased PPP loans. Advances under the PPPLF are non-recourse and are secured by a pledge of PPP loans held by Square Capital. The maturity date of any PPPLF loan will be the maturity date of the PPP loans pledged to secure such PPPLF loan. The maturity date of any PPPLF loan will be accelerated on and to the extent of (i) the date of any loan forgiveness reimbursement by the SBA for any PPP loan securing such PPPLF loan; or (ii) the date of purchase by the SBA from Square Capital of any PPP loan securing such PPPLF loan to realize on the SBA’s guarantee of such PPP loan. The maturity date of all PPPLF loans shall be accelerated upon the occurrence of certain events of default by Square Capital, including but not limited to the failure to comply with a requirement of the PPPLF agreement or any representation, warranty, or covenant of Square Capital under the PPPLF agreement being inaccurate on or as of the date it is deemed to be made or on any date on which an PPPLF loan remains outstanding. The Company can also at its option prepay the advances in full or in part without penalty. Square Capital also shall prepay PPPLF loans so that the amount of any PPPLF loans outstanding does not exceed the outstanding amount of PPP loans pledged to secure such PPPLF loans. On January 29, 2021, Square Capital entered into a second PPPLF agreement with the Federal Reserve Bank of San Francisco (“Second PPPLF Agreement”) to secure additional credit collateralized by loans from the subsequent rounds of the PPP program in an aggregate principal amount of up to $1.0 billion under both PPPLF agreements. As of September 30, 2022, $31.1 million of PPPLF advances were outstanding. These advances are generally collateralized by the same value of PPP loans. Any differences between the amounts are generally due to the timing of PPP loan repayment or forgiveness, and repayment of PPPLF advances. Senior Unsecured Notes due in 2026 and 2031 On May 20, 2021, the Company issued an aggregate principal amount of $2.0 billion senior unsecured notes comprised of $1.0 billion of senior unsecured notes due 2026 ("2026 Senior Notes") and $1.0 billion senior unsecured notes due 2031 ("2031 Senior Notes" and, together with the 2026 Senior Notes, the “Senior Notes”). The 2026 Senior Notes mature on June 1, 2026, unless earlier redeemed or repurchased, and bear interest at a rate of 2.75% payable semi-annually on June 1 and December 1 of each year. The 2031 Senior Notes mature on June 1, 2031, unless earlier redeemed or repurchased, and bear interest at a rate of 3.50% payable semi-annually on June 1 and December 1 of each year. The Senior Notes are subject to optional redemption provisions. At any time prior to May 1, 2026, in the case of the 2026 Senior Notes, and March 1, 2031, in the case of the 2031 Senior Notes, the Company may redeem the applicable series in whole or part at a price equal to 100% of the principal amount of the notes to be redeemed plus an applicable premium and accrued and unpaid interest, if any, to but excluding the redemption date. The applicable premium for any note is the greater of: (i) 1.0% of the principal amount of such note, and (ii) the excess, if any, of (a) the present value at the redemption date of all scheduled payments of interest plus principal on such note (excluding accrued but unpaid interest, if any, to, but excluding, the redemption date) computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points, over (b) the principal amount of such note. At any time on or after May 1, 2026, in the case of the 2026 Senior Notes, and March 1, 2031, in the case of the 2031 Senior Notes, the Company may redeem the notes of the applicable series in whole or part at a price of 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest, if any, to but excluding the redemption date. If the Company experiences a change of control triggering event (as defined in the applicable indenture governing the applicable Senior Notes), the Company must offer to repurchase each series of Senior Notes at a repurchase price equal to 101% of the principal amount of the applicable notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. In the event of default, the trustee or holders of at least 25% in aggregate principal amount of the applicable series of outstanding Senior Notes under the applicable indenture may declare all of the notes of the applicable series to be due and immediately payable. If the event of default is the result of specified events of bankruptcy, insolvency or reorganization, all of the notes of the applicable series will become due without any declaration or action by the trustee or holders. If there is a default in the payment of interest, the Company shall pay the defaulted interest plus, to the extent lawful, interest payable on the defaulted interest at the rate provided in the Senior Notes. Debt issuance costs related to the 2026 Senior Notes and 2031 Senior Notes were comprised of discounts and commissions payable to the initial purchasers of $22.5 million and third-party offering costs of $5.7 million. Issuance costs are amortized to interest expense using the effective interest method at an effective interest rate of 3.06% and 3.69% for each of the respective terms of the 2026 Senior Notes and 2031 Senior Notes, respectively. Convertible Notes due in 2026 and 2027 On November 13, 2020, the Company issued an aggregate principal amount of $1.15 billion of convertible senior notes comprised of $575.0 million of convertible senior notes due 2026 ("2026 Convertible Notes") and $575.0 million of convertible senior notes due 2027 ("2027 Convertible Notes"). The 2026 Convertible Notes mature on May 1, 2026, unless earlier converted or repurchased, and bear a zero rate of interest. The 2027 Convertible Notes mature on November 1, 2027, unless earlier converted or repurchased, and bear interest at a rate of 0.25% payable semi-annually on May 1 and November 1 of each year. Both the 2026 Convertible Notes and 2027 Convertible Notes are convertible at an initial conversion rate of 3.3430 shares of the Company's Class A common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $299.13 per share of Class A common stock. Holders may convert their relevant series of notes at any time prior to the close of business on the business day immediately preceding February 1, 2026 and August 1, 2027 for the 2026 Convertible Notes and 2027 Convertible Notes, respectively, only under the following circumstances: (i) during any calendar quarter, commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price (as defined in the indenture governing the 2026 Convertible Notes and 2027 Convertible Notes) per $1,000 principal amount of 2026 Convertible Notes and 2027 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (iii) if the Company calls any or all of the 2026 Convertible Notes and 2027 Convertible Notes for redemption, such relevant series of notes called for redemption may be converted at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2026 Convertible Notes and 2027 Convertible Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their relevant series of notes in connection with such an event in certain circumstances. On or after February 1, 2026 in the case of the 2026 Convertible Notes, and on or after August 1, 2027 in the case of the 2027 Convertible Notes, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder of the relevant series of notes may convert all or any portion of its 2026 Convertible Notes or 2027 Convertible Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The circumstances required to allow the holders to convert their 2026 Convertible Notes and 2027 Convertible Notes were not met during the nine months ended September 30, 2022. On or after November 5, 2023 for the 2026 Convertible Notes, and on or after November 5, 2024 for the 2027 Convertible Notes, the Company may redeem all or a portion of each series of convertible notes for cash at its option, if the last reported sale price of the Company's Class A common stock has been at least 130% of the conversion price for the relevant series of notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes and 2027 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In accounting for the issuance of the 2026 Convertible Notes and 2027 Convertible Notes, prior to the adoption of ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"), the Company separated the relevant series of convertible notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $198.0 million and was determined by deducting the fair value of the liability component from the par value of the 2026 Convertible Notes and the 2027 Convertible Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") was amortized to interest expense at an effective interest rate of 3.35% and 3.66% for the 2026 Convertible Notes and 2027 Convertible Notes, respectively. Upon adoption of ASU 2020-06 on January 1, 2021, the Company reversed the separation of the debt and equity components and accounted for the 2026 Convertible Notes and 2027 Convertible Notes wholly as debt. The Company also reversed the amortization of the debt discount, with a cumulative adjustment to retained earnings on the adoption date. Debt issuance costs related to the 2026 Convertible Notes and 2027 Convertible Notes were comprised of discounts and commissions payable to the initial purchasers of $17.5 million and third-party offering costs of $1.0 million. Prior to the adoption of ASU 2020-06, the Company allocated the total amount incurred to the liability and equity components of the 2026 Convertible Notes and 2027 Convertible Notes based on their relative values. Issuance costs attributable to the liability component were $15.4 million and were amortized to interest expense using the effective interest method. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Upon adoption of ASU 2020-06 on January 1, 2021, the Company reversed the allocation of the issuance costs to the equity component and accounted for the entire amount as debt issuance cost that will be amortized as interest expense at an effective interest rate of 0.49% and 0.30% for each of the respective terms of the 2026 Convertible Notes and 2027 Convertible Notes, respectively, with a cumulative adjustment to retained earnings on the adoption date. Upon adoption of ASU 2020-06, the difference between the estimated fair value and the carrying value upon conversion is accounted for as a reduction to the related debt issuance costs, with the remainder recognized as additional paid in capital to reflect the par value of the shares issued. As of September 30, 2022, no principal had converted on either the 2026 Convertible Notes or 2027 Convertible Notes. As of September 30, 2022, the if-converted value of the 2026 Convertible Notes and 2027 Convertible Notes did not exceed the outstanding principal amount. Convertible Notes due in 2025 On March 5, 2020, the Company issued an aggregate principal amount of $1.0 billion of convertible senior notes ("2025 Convertible Notes"). The 2025 Convertible Notes mature on March 1, 2025, unless earlier converted or repurchased, and bear interest at a rate of 0.1250% payable semi-annually on March 1 and September 1 of each year. The 2025 Convertible Notes are convertible at an initial conversion rate of 8.2641 shares of the Company's Class A common stock per $1,000 principal amount of 2025 Convertible Notes, which is equivalent to an initial conversion price of approximately $121.01 per share of Class A common stock. Holders may convert their 2025 Convertible Notes at any time prior to the close of business on the business day immediately preceding December 1, 2024 only under the following circumstances: (i) during any calendar quarter, commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price (as defined in the indenture governing the 2025 Convertible Notes) per $1,000 principal amount of 2025 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; (iii) if the Company calls any or all of the 2025 Convertible Notes for redemption, such 2025 Convertible Notes called for redemption may be converted at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2025 Convertible Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their 2025 Convertible Notes in connection with such an event in certain circumstances. On or after December 1, 2024, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2025 Convertible Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The Company may redeem for cash all or any part of the 2025 Convertible Notes, at its option, on or after March 5, 2023, if the last reported sale price of the Company's Class A common stock has been at least 130% of the conversion price for the 2025 Convertible Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The circumstances to allow the holders to convert their 2025 Convertible Notes were met in the first quarter of 2021 and continued to be met through March 31, 2022. The circumstances were not met in the second and third quarters of 2022. As of September 30, 2022, certain holders of the 2025 Convertible Notes had converted an immaterial aggregate principal amount of their 2025 Convertible Notes. The Company has settled the conversions through the issuance of an immaterial amount of shares of the Company's Class A common stock. In accounting for the issuance of the 2025 Convertible Notes, prior to the adoption of ASU 2020-06, the Company separated the 2025 Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $154.6 million and was determined by deducting the fair value of the liability component from the par value of the 2025 Convertible Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. The debt discount was amortized to interest expense over the term of the 2025 Convertible Notes at an effective interest rate of 3.81% over the contractual terms of the 2025 Convertible Notes. Upon adoption of ASU 2020-06 on January 1, 2021, the Company reversed the separation of the debt and equity components and accounted for the 2025 Convertible Notes wholly as debt. The Company also reversed the amortization of the debt discount, with a cumulative adjustment to retained earnings on the adoption date. Debt issuance costs related to the 2025 Convertible Notes were comprised of discounts and commissions payable to the initial purchasers of $14.3 million and third-party offering costs of $0.9 million. Prior to the adoption of ASU 2020-06, the Company allocated the total amount incurred to the liability and equity components of the 2025 Convertible Notes based on their relative values. Issuance costs attributable to the liability component were $12.8 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Upon adoption of ASU 2020-06 on January 1, 2021, the Company reversed the allocation of the issuance costs to the equity component and accounted for the entire amount as debt issuance cost that will be amortized as interest expense over the remaining term at an effective interest rate of 0.43% for the 2025 Convertible Notes with a cumulative adjustment to retained earnings on the adoption date. Upon adoption of ASU 2020-06, the difference between the estimated fair value and the carrying value upon conversion is accounted for as a reduction to the related debt issuance costs, with the remainder recognized as additional paid in capital to reflect the par value of the shares issued. As of September 30, 2022, the if-converted value of the 2025 Convertible Notes did not exceed the outstanding principal amount. Convertible Notes due in 2023 On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes ("2023 Convertible Notes"). The 2023 Convertible Notes mature on May 15, 2023, unless earlier converted or repurchased, and bear interest at a rate of 0.50% payable semi-annually on May 15 and November 15 of each year. The 2023 Convertible Notes are convertible at an initial conversion rate of 12.8456 shares of the Company's Class A common stock per $1,000 principal amount of 2023 Convertible Notes, which is equivalent to an initial conversion price of approximately $77.85 per share of Class A common stock. Holders may convert their 2023 Convertible Notes at any time prior to the close of business on the business day immediately preceding February 15, 2023 only under the following circumstances: (i) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price (as defined in the indenture governing the 2023 Convertible Notes) per $1,000 principal amount of 2023 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2023 Convertible Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after February 15, 2023, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2023 Convertible Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. The circumstances to allow the holders to convert their 2023 Convertible Notes were met in the fourth quarter of 2020 and continued to be met through the first half of 2022. The circumstances were not met in the third quarter of 2022. As of September 30, 2022, certain holders of the 2023 Convertible Notes had converted an aggregate principal amount of $401.9 million of their 2023 Convertible Notes. The Company has settled the conversions through the issuance of 5.2 million shares of the Company's Class A common stock. In accounting for the issuance of the 2023 Convertible Notes, prior to the adoption of ASU 2020-06, the Company separated the 2023 Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $155.3 million and was determined by deducting the fair value of the liability component from the par value of the 2023 Convertible Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. The debt discount was amortized to interest expense over the term of the 2023 Convertible Notes at an effective interest rate of 4.69% over the contractual terms of the 2023 Convertible Notes. Upon adoption of ASU 2020-06 on January 1, 2021, the Company reversed the separation of the debt and equity components and accounted for the 2023 Convertible Notes wholly as debt. The Company also reversed the amortization of the debt discount, with a cumulative adjustment to retained earnings on the adoption date. Debt issuance costs related to the 2023 Convertible Notes comprised of discounts and commissions payable to the initial purchasers of $6.0 million and third-party offering costs of $0.8 million. Prior to the adoption of ASU 2020-06, the Company allocated the total amount incurred to the liability and equity components of the 2023 Convertible Notes based on their relative values. Issuance costs attributable to the liability component were $5.6 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Upon adoption of ASU 2020-06 on January 1, 2021, the Company reversed the allocation of the issuance costs to the equity component and accounted for the entire amount as debt issuance cost that will be amortized as interest expense over the remaining term at an effective interest rate of 0.66% for the 2023 Convertible Notes with a cumulative adjustment to retai |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax benefit of $17.3 million and $17.7 million for the three and nine months ended September 30, 2022, respectively, compared to an income tax expense of $0.5 million and an income tax benefit of $8.0 million for the three and nine months ended September 30, 2021, respectively. The difference between income before income tax at the U.S. federal statutory rate and the income tax benefit recorded for the three and nine months ended September 30, 2022 is primarily due to a change in the valuation allowance in the U.S. and certain foreign jurisdictions. The difference between the income tax benefit for the three and nine months ended September 30, 2022 and the income tax expense for the three months ended September 30, 2021 and the income tax benefit for the nine months ended September 30, 2021 primarily relates to a current year loss of an entity with sufficient deferred tax liabilities available to realize it in future periods, a decrease in excess share-based compensation deductions, and a change in the valuation allowance in certain jurisdictions. The Company is subject to income taxes in the U.S. and certain foreign tax jurisdictions. The tax provision for the three and nine months ended September 30, 2022 and September 30, 2021 is calculated on a jurisdictional basis. The Company estimated the worldwide income tax provision using the estimated annual effective income tax rate expected to be applicable for the full year. The Company’s effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which the Company operates, changes in valuation allowances against deferred tax assets, the recognition and de-recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. As of September 30, 2022, the Company retained a full valuation allowance on its net deferred tax assets in certain jurisdictions. The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods. The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Preferred Stock As of September 30, 2022, the Company is authorized to issue 100,000,000 shares of preferred stock, each with a par value of 0.0000001 per share. No shares of preferred stock were outstanding as of September 30, 2022. Common Stock The Company has two classes of authorized common stock outstanding: Class A common stock and Class B common stock. Class A common stock and Class B common stock are referred to as "common stock" throughout these Notes to the Condensed Consolidated Financial Statements, unless otherwise noted. Holders of shares of Class A common stock are entitled to one vote per share, while holders of shares of Class B common stock are entitled to ten votes per share. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of its Class A common stock and generally convert into shares of its Class A common stock upon transfer. The holders of Class A common stock and Class B common stock have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares. As of September 30, 2022, the Company was authorized to issue 1,000,000,000 shares of Class A common stock and 500,000,000 shares of Class B common stock, each with a par value of 0.0000001 per share. As of September 30, 2022, there were 535,879,345 shares of Class A common stock and 60,657,578 shares of Class B common stock outstanding. Following the Company's initial public offering in 2015, all new stock options and stock-based awards are granted in Class A common stock. Warrants In conjunction with the 2022 Convertible Notes offering, the Company sold the 2022 Warrants whereby the counterparties have the option to purchase a total of approximately 19.2 million shares of the Company’s Class A common stock at a price of $31.18 per share. The 2022 Warrants expired evenly over a 60 trading day period starting on June 1, 2022 and ending on August 25, 2022. During the three and nine months ended September 30, 2022, warrants were exercised for 7.9 million and 10.9 million shares, respectively. In conjunction with the 2023 Convertible Notes offering, the Company sold the 2023 Warrants whereby the counterparties have the option to purchase a total of approximately 11.1 million shares of the Company’s Class A common stock at a price of $109.26 per share. The 2023 Warrants expire evenly over a 60 trading day period starting on August 15, 2023. None of the warrants were exercised as of September 30, 2022. In conjunction with the 2025 Convertible Notes offering, the Company sold the 2025 Warrants whereby the counterparties have the option to purchase a total of approximately 8.3 million shares of the Company’s Class A common stock at a price of $161.34 per share. The 2025 Warrants expire evenly over a 60 trading day period starting on June 1, 2025. None of the warrants were exercised as of September 30, 2022. In conjunction with the 2026 Convertible Notes offering, the Company sold the 2026 Warrants whereby the counterparties have the option to purchase a total of approximately 1.9 million shares of the Company’s Class A common stock at a price of $368.16 per share. The 2026 Warrants expire evenly over a 60 trading day period starting on August 1, 2026. None of the warrants were exercised as of September 30, 2022. In conjunction with the 2027 Convertible Notes offering, the Company sold the 2027 Warrants whereby the counterparties have the option to purchase a total of approximately 1.9 million shares of the Company’s Class A common stock at a price of $414.18 per share. The 2027 Warrants expire evenly over a 60 trading day period starting on February 1, 2028. None of the warrants were exercised as of September 30, 2022. Conversion of Convertible Notes and Exercise of Convertible Note Hedges In connection with the conversion of the 2022 Convertible Notes, the Company issued an aggregate 16.5 million shares of Class A common stock as of the maturity date on March 1, 2022, of which an immaterial number of shares were issued in 202 2. The Company also exercised all of the 2022 Convertible Note Hedges and received 15.0 million shares of Class A common stock from the 2022 Note Hedge Counterparties to offset the shares issued, which is inclusive of 0.2 million shares that were received in 2022. In connection with the conversion of the 2023 Convertible Notes, the Company has issued an aggregate 5.2 million shares of Class A common stock as of September 30, 2022, of which an immaterial number of shares were issued in the nine months ended September 30, 2022. The Company also exercised a pro-rata portion of the 2023 Convertible Note Hedges and received 3.0 million shares of Class A common stock from the 2023 Note Hedge Counterparties to offset the shares issued as of September 30, 2022, which is inclusive of 1.0 million shares that were received in the nine months ended September 30, 2022. Stock Plans The Company maintains two share-based employee compensation plans: the 2009 Stock Plan ("2009 Plan") and the 2015 Equity Incentive Plan ("2015 Plan"). The 2015 Plan serves as the successor to the 2009 Plan. The 2015 Plan became effective as of November 17, 2015. Outstanding awards under the 2009 Plan continue to be subject to the terms and conditions of the 2009 Plan. Since November 17, 2015, no additional awards have been nor will be granted in the future under the 2009 Plan. Under the 2015 Plan, shares of the Company's Class A common stock are reserved for the issuance of incentive and nonstatutory stock options ("ISOs" and "NSOs", respectively), restricted stock awards ("RSAs"), restricted stock units ("RSUs"), performance shares, and stock bonuses to qualified employees, directors, and consultants. The awards must be granted at a price per share not less than the fair market value at the date of grant. Initially, 30,000,000 shares were reserved under the 2015 Plan and any shares subject to options or other similar awards granted under the 2009 Plan that expire, are forfeited, are repurchased by the Company, or otherwise terminate unexercised, will become available under the 2015 Plan. The number of shares available for issuance under the 2015 Plan has been and will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 40,000,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the administrator of the Plan. The administrator consists of the board of directors who then delegates the responsibilities to the compensation committee. As of September 30, 2022, the total number of shares subject to stock options, RSAs, and RSUs outstanding under the 2015 Plan was 26,214,639, and 124,801,371 shares were available for future issuance. As of September 30, 2022, the total number of shares subject to stock options, RSAs, and RSUs outstanding under the 2009 Plan was 4,400,536. A summary of stock option activity for the nine months ended September 30, 2022 is as follows (in thousands, except share and per share data): Number of Stock Options Weighted Weighted Aggregate Outstanding, beginning of the year 8,916,100 $ 26.09 3.89 $ 1,226,105 Granted 796,719 94.61 Exercised (2,173,106) 7.96 Forfeited (85,258) 103.84 Expired (12,124) $ 194.03 Outstanding, end of the period 7,442,331 $ 37.56 4.02 $ 253,390 Exercisable, end of the period 6,222,745 $ 24.65 3.22 $ 250,015 Restricted Stock Activity Activity related to RSAs and RSUs during the nine months ended September 30, 2022 is set forth below: Number of Weighted Unvested, beginning of the year 13,221,953 $ 137.86 Granted 18,062,856 98.19 Vested (5,753,971) 115.57 Forfeited (2,357,994) 124.96 Unvested, end of the period 23,172,844 $ 113.78 Share-Based Compensation The fair value of stock options and employee stock purchase plan rights are estimated on the date of grant using the Black-Scholes-Merton option valuation model. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue $ 104 $ 99 $ 352 $ 310 Product development 184,569 121,209 508,781 314,265 Sales and marketing 28,744 16,023 75,133 40,680 General and administrative 49,316 27,680 210,528 74,744 Total $ 262,733 $ 165,011 $ 794,794 $ 429,999 The Company recorded $16.0 million and $41.9 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three and nine months ended September 30, 2022, respectively, compared to $7.6 million and 24.4 million during three and nine months ended September 30, 2021, respectively, which are included in the table above. The total share-based compensation expense for the nine months ended September 30, 2022 also includes $66.3 million rel ated to the acceleration of various share-based arrangements associated with the acquisition of Afterpay. The Company capitalized $5.6 million and $13.2 million of share-based compensation expense related to capitalized software costs during the three and nine months ended September 30, 2022, respectively, compared to $3.6 million and $11.0 million during the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, there was $2.6 billion of total unrecognized compensation cost related to outstanding stock options and restricted stock awards that are expected to be recognized over a weighted-average period of 2.93 years. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHAREBasic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock. In periods when the Company reported a net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Numerator: Net income (loss) $ (18,744) $ (2,876) $ (435,384) $ 239,810 Less: Net loss attributable to noncontrolling interests (4,033) (2,960) (8,460) (3,303) Net income (loss) attributable to common stockholders $ (14,711) $ 84 $ (426,924) $ 243,113 Denominator: Basic shares: Weighted-average shares used to compute basic net income (loss) per share 592,672 460,654 572,234 457,039 Diluted shares: Stock options, restricted stock, and employee stock purchase plan — 17,180 — 18,991 Convertible notes — — — 18,727 Common stock warrants — 26,286 — 25,447 Weighted-average shares used to compute diluted net income (loss) per share 592,672 504,120 572,234 520,204 Net income (loss) per share attributable to common stockholders: Basic $ (0.02) $ 0.00 $ (0.75) $ 0.53 Diluted $ (0.02) $ 0.00 $ (0.75) $ 0.48 The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Stock options, restricted stock, and employee stock purchase plan 35,272 7,652 30,338 7,161 Convertible notes 18,025 20,884 18,030 3,845 Common stock warrants 27,929 16,075 37,241 16,914 Total anti-dilutive securities 81,226 44,611 85,609 27,920 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn July 2019, the Company entered into an operating lease agreement to lease certain office space located in St. Louis, Missouri, from an affiliate of one of the Company’s co-founders and current member of its board of directors, Mr. Jim McKelvey. The lease commencement date varies by floor beginning in May 2020. The term of the agreement is 15.5 years with total future minimum lease payments over the term of approximately $42.7 million. As of September 30, 2022, the Company had recorded right-of-use assets of $20.1 million and associated lease liabilities of $32.7 million related to this lease arrangement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation and Regulatory Matters The Company is currently subject to, and may in the future be involved in, various litigation matters, legal claims, investigations, and regulatory proceedings. The Company received Civil Investigative Demands (“CIDs”) from the Consumer Financial Protection Bureau (“CFPB”), as well as from Attorneys General from multiple states, seeking the production of information related to, among other things, Cash App’s handling of customer complaints and disputes. The Company is cooperating with the CFPB and the state Attorneys General in connection with these CIDs. The Company has accrued a liability for an estimated amount in connection with these CIDs in accordance with ASC 450-20, Contingencies: Loss Contingencies. The accrued amount was not material as of September 30, 2022. Given the status of these matters, it is not possible to reliably determine the range of potential liability in excess of the accrued amounts that could result from these investigations. The Company regularly assesses the likelihood of adverse outcomes resulting from litigation and regulatory proceedings and adjusts the financial statements based on such assessments. The eventual outcome of these matters may differ materially from the estimates the Company has currently accrued in the financial statements. On December 16, 2021, H&R Block, Inc. and HRB Innovations, Inc. (collectively, “HRB”) filed a complaint for trademark infringement against the Company in the United States District Court for the Western District of Missouri. HRB alleges that the Company’s rebranding to Block, Inc. and use of a green square logo in connection with the Company’s Cash App Taxes product infringe HRB’s trademarks and are likely to cause consumer confusion. HRB demands that the Company stop using the Block name and associated branding, and further demands that the Company stop using the green square Cash App logo. A preliminary injunction granted by the trial court on April 28, 2022 preventing the Company from using its Block, Inc. name in connection with Cash App Taxes was stayed by the appellate court on June 8, 2022 for the duration of the Company's appeal of the preliminary injunction. The Company continues to believe this lawsuit is without merit and intends to vigorously defend itself in this matter. In addition, the Company is subject to various legal matters, investigations, claims, and disputes arising in the ordinary course of business. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability with respect to these matters. Although occasional adverse decisions or settlements may occur, the Company does not believe that the final disposition of any of these other matters will have a material adverse effect on its results of operations, financial position, or liquidity. The Company cannot give any assurance regarding the ultimate outcome of these matters, and their resolution could be material to the Company's operating results for any particular period. Other Contingencies The Company is under examination, or may be subject to examination, by several tax authorities. These examinations may lead to proposed adjustments to the Company's taxes or net operating losses with respect to years under examination, as well as subsequent periods. The Company regularly assesses the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of the Company's provision for direct and indirect taxes. The Company continues to monitor the progress of ongoing discussions with tax authorities and the effect, if any, on the Company's provision for direct and indirect taxes. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with the Company’s expectations, the Company could be required to adjust the Company's provision for direct and indirect taxes in the period such resolution occurs. |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION The Company reports its segments to reflect the manner in which the Company's chief operating decision maker ("CODM") reviews and assesses performance. Accordingly, the Company has two reportable segments, Square and Cash App. The results of Afterpay have been equally allocated to the Cash App and Square segments as management has concluded that Afterpay's BNPL platform will contribute equally to both the Cash App and Square platforms. Further, Afterpay does not have a segment manager who reports to the CODM. Rather, the operations of Afterpay are managed by the segment managers of Cash App and Square, who are responsible for allocating resources and evaluating the performance of Afterpay. Products and services that are not assigned to a specific reportable segment, including but not limited to TIDAL, TBD, and Spiral, are aggregated and presented within a general corporate and other category. Square and Cash App are defined as follows: • Cash App includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments. Cash App also includes Cash App Card which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM. • Square includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App. The primary financial measures used by the CODM to evaluate performance and allocate resources are revenue and gross profit. The CODM does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not included. The following tables present information on the reportable segments revenue and segment gross profit (in thousands): Three Months Ended Nine Months Ended Cash App Square Corporate and Other (i) Total Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 118,459 $ 1,399,431 $ — $ 1,517,890 $ 343,768 $ 3,882,798 $ 4,226,566 Subscription and services-based revenue 803,673 331,703 56,135 1,191,511 2,146,163 932,188 167,573 3,245,924 Hardware revenue — 43,388 — 43,388 — 128,765 128,765 Bitcoin revenue 1,762,752 — — 1,762,752 5,279,430 5,279,430 Segment revenue (ii) $ 2,684,884 $ 1,774,522 $ 56,135 $ 4,515,541 $ 7,769,361 $ 4,943,751 $ 167,573 $ 12,880,685 Segment gross profit (iii) $ 774,470 $ 782,968 $ 9,651 $ 1,567,089 $ 2,103,023 $ 2,199,628 $ 29,046 $ 4,331,697 Three Months Ended Nine Months Ended Cash App Square Corporate and Other (i) Total Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 103,192 $ 1,193,848 $ — $ 1,297,040 $ 306,101 $ 3,178,144 $ — $ 3,484,245 Subscription and services-based revenue 474,779 162,341 57,650 694,770 1,406,313 434,673 96,643 1,937,629 Hardware revenue — 37,255 — 37,255 — 109,769 — 109,769 Bitcoin revenue 1,815,662 — — 1,815,662 8,051,026 — — 8,051,026 Segment revenue $ 2,393,633 $ 1,393,444 $ 57,650 $ 3,844,727 $ 9,763,440 $ 3,722,586 $ 96,643 $ 13,582,669 Segment gross profit $ 511,717 $ 606,225 $ 15,273 $ 1,133,215 $ 1,553,255 $ 1,659,378 $ 25,147 $ 3,237,780 (i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment. (ii) The revenue for both Cash App and Square for the three and nine months ended September 30, 2022 includes $105.0 million and $273.9 million each, respectively, from Afterpay post-acquisition results following the closing of the acquisition. (iii) The gross profit for both Cash App and Square for the three and nine months ended September 30, 2022 includes $74.9 million and $195.8 million each, respectively, from Afterpay post-acquisition results following the closing of the acquisition. The following table provides a reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Total segment gross profit $ 1,567,089 $ 1,133,215 $ 4,331,697 $ 3,237,780 Less: Product development 548,037 360,729 1,531,088 992,498 Less: Sales and marketing 485,838 409,073 1,518,227 1,132,411 Less: General and administrative 395,437 267,348 1,235,306 683,969 Less: Transaction, loan, and consumer receivable losses 147,586 62,306 395,433 130,874 Less: Bitcoin impairment losses 1,619 6,000 37,580 71,126 Less: Amortization of customer and other intangible assets 37,361 4,763 103,414 11,176 Less: Interest expense, net 6,042 13,409 34,756 20,126 Less: Other expense (income), net (18,798) 12,011 (71,036) (36,249) Income (loss) before applicable income taxes $ (36,033) $ (2,424) $ (453,071) $ 231,849 Revenue by geography is based on the addresses of the sellers or customers. The following table details revenue by geographic area (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 United States $ 4,195,291 $ 3,679,609 $ 12,007,976 $ 13,179,547 International 320,250 165,118 872,709 403,122 Total $ 4,515,541 $ 3,844,727 $ 12,880,685 $ 13,582,669 No individual country from the international markets contributed more than 10% of total revenue for the three and nine months ended September 30, 2022 and 2021. Long-Lived Assets The following table details long-lived assets by geography (in thousands): September 30, 2022 December 31, 2021 United States $ 8,105,759 $ 1,426,103 Australia 4,523,768 26,680 Other international 1,701,230 55,088 Total $ 14,330,757 $ 1,507,871 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The supplemental disclosures of cash flow information consist of the following (in thousands): Nine Months Ended 2022 2021 Supplemental cash flow data: Cash paid for interest $ 42,836 $ 4,770 Cash paid for income taxes 18,629 9,071 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 37,939 40,712 Purchases of property and equipment in accounts payable and accrued expenses 11,835 21,746 Deferred purchase consideration related to business combinations 14,377 54,132 Fair value of common stock issued related to business combinations (13,827,929) (28,735) Fair value of common stock issued to settle the conversion of convertible notes (2,551) (742,174) Fair value of common stock shares received to settle convertible note hedges 133,144 1,623,095 Fair value of common stock issued in connection with the exercise of common stock warrants (806,446) — Bitcoin lent to third-party borrowers 5,934 (5,994) |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2021 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive income, and cash flows for the interim periods. The condensed consolidated financial statements include the financial statements of Block and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest, which is reported as a component of stockholders' equity on the condensed consolidated balance sheets. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on current and past experience, to the extent that historical experience is predictive of future performance and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis. |
Concentration of Credit Risk | Concentration of Credit Risk For the three and nine months ended September 30, 2022 and September 30, 2021, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had two third-party payment processors that represented approximately 52% and 30% of settlements receivable as of both September 30, 2022 and December 31, 2021. All other third-party payment processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable debt securities, settlements receivable, customer funds, consumer receivables, loans held for sale, and loans held for investment. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable debt securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one two |
Sales and Marketing Expenses | Sales and Marketing Expenses Advertising costs are expensed as incurred and in cluded in sales and marketing expenses on the condensed consolidated statements of operations. Total advertising costs were $91.6 million and $405.6 million for the three and nine months ended September 30, 2022, respectively, compared to $123.1 million and $296.4 million for the three and nine months ended September 30, 2021, respectively. In ad dition, services, incentives, and other costs to acquire customers that are not directly related to a revenue generating transaction are recorded as sales and marketing expenses, as the Company considers these to be marketing costs to |
Foreign Currency | Foreign Currency The functional currency for most subsidiaries outside of the United States is the local currency. For purposes of the Company's consolidated financial statements, the assets and liabilities of these subsidiaries, including goodwill and acquired intangible assets, are translated into U.S. dollars using the exchange rates at the balance sheet dates. Gains and losses resulting from these translations are reported as a component of accumulated other comprehensive income (loss) on the Company's condensed consolidated statements of comprehensive income. Revenue, expenses, and gains or losses are translated into U.S. dollars using average exchange rates for each period. Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as a component of other expense (income), net on the condensed consolidated statements of operations. |
Afterpay Revenue | Afterpay Revenue Through Afterpay's buy now pay later ("BNPL") platform, the Company enables consumers to pay for purchases by splitting their purchase price into three to four installments over six to eight weeks. The Company generally pays the seller the full order value upfront, less a merchant fee, which consists of fixed and variable rates as contracted with the sellers. The Company also incurs other costs such as fees paid to third-party partners and processing fees to complete the consumer purchase transaction. The Company generally assumes non-repayment risk from the consumers. The Company initially recognizes a consumer receivable equal to net amounts paid to the seller plus any costs incurred to originate the consumer receivable. The Company recognizes the merchant fee less costs incurred to originate the consumer receivables as revenue using the effective interest method and is included within subscription and services-based revenue on the condensed consolidated statement of operations. The effective interest rate is determined based on estimated future cash receipts over the expected life of the consumer receivable, having consideration for the historical repayment pattern of the consumer receivables on a portfolio basis. The Company does not charge interest or fees to the consumers, other than late fees which are used by the Company as an incentive to encourage consumers to pay their outstanding balances as and when they fall due . Late fees are recognized and included within subscription and services-based revenue on the condensed consolidated statement of operations when chargeable to consumers and collectibility is reasonably assured based on, among other factors, consumer behavior and historical recovery experience. Late fees recorded from acquisition to September 30, 2022 were immaterial. |
Consumer Receivables | Consumer ReceivablesThe Company classifies consumer receivables as held for investment as the Company has the intent and ability to hold these investments for the foreseeable future or until maturity or payoff. These consumer receivables are reported at amortized cost, which includes the cost to originate the consumer receivables, adjusted for unearned merchant fees, origination costs, charge-offs, and the allowance for credit losses. |
Allowance for Credit Losses Related to Consumer Receivables | Allowance for Credit Losses Related to Consumer Receivables The Company calculates an allowance for credit losses on the consumer receivables portfolio in accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The guidance requires an entity to assess impairment of its financial instruments based on the entity's current estimates of expected credit losses over the contractual term of its loans held for investment portfolio as of each balance sheet date. |
Recently Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In July 2021, the FASB issued ASU No. 2021-05, Lease (Topic 842): Lessors—Certain Leases with Variable Lease Payments ("ASU 2021-05"), which amends the lease classification requirements for lessors with certain leases containing variable payments. In accordance with ASU 2021-05, a lessor should classify and account for a lease with variable lease payments that do not depend on an index or a rate as an operating lease if both of the following criteria are met: 1) the lease would have been classified as a sales-type lease or a direct financing lease; and 2) the lessor would have otherwise recognized a day-one loss. The amendments in ASU 2021-05 are effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted this guidance effective January 1, 2022, and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2021-04”), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another Topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The amendments are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance effective January 1, 2022, and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. In March 2022, the SEC staff released Staff Accounting Bulletin No. 121 ("SAB 121"), which expressed the views of the SEC staff regarding the accounting for obligations to safeguard crypto-assets an entity holds for users of its crypto platform. This guidance requires entities that hold crypto-assets on behalf of platform users to recognize a liability to reflect the entity’s obligation to safeguard the crypto-assets held for its platform users. The liability should be measured at initial recognition and each reporting date at the fair value of the crypto-assets that the entity is responsible for holding for its platform users. The entity should also recognize an asset at the same time that it recognizes the safeguarding liability, measured at initial recognition and each reporting date at the fair value of the crypto-assets held for its platform users, subject to adjustments to reflect any actual or potential safeguarding loss events. The entity should also describe the asset and the corresponding liability in the footnotes to the financial statements and consider including information regarding who (e.g., the company, its agent, or another third party) holds the cryptographic key information, maintains the internal recordkeeping of those assets, and is obligated to secure the assets and protect them from loss or theft. This guidance is effective from the first interim period after June 15, 2022 and should be applied retrospectively. The Company adopted this guidance effective June 30, 2022 . Refer to Note 14, Bitcoin Held for Other Parties for more details. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method ("ASU 2022-01") related to the portfolio layer method of hedge accounting. The amendments allow nonprepayable financial assets to be included in a closed portfolio hedge using the portfolio layer method. ASU 2022-01 also allows for multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company's financial statements. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) related to troubled debt restructuring and vintage disclosures for financing receivables. The amendments eliminate recognition and measurement guidance for troubled debt restructurings for creditors and requires entities to evaluate if the modification represents a new loan or a continuation of the existing loan. ASU 2022-02 also enhances disclosure requirements for certain loan refinancing and restructurings made to borrowers experiencing financial difficulty and requires disclosure of current period write-offs by year of origination for financing receivables. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption permitted. The Company does not expect the adoption to have a material impact on the Company’s financial statements. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03") related to equity securities. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. An entity is prohibited from recognizing a contractual sale restriction as a separate unit of account. ASU 2022-03 also requires specific disclosures related to equity securities that are subject to contractual restrictions, including the fair value of such equity securities, the nature and remaining duration of the corresponding restrictions, and any circumstances that could cause a lapse in the restrictions. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company's financial statements. In September 2022, the FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), which requires buyers that use supplier finance programs in connection with the purchase of goods and services to make certain annual disclosures regarding the programs’ key terms and information about the obligations at the end of a reporting period, including a rollforward of those obligations. Only the amount outstanding at the end of the period must be disclosed in interim periods. The amendments do not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The amendments in ASU 2022-04 are effective retrospectively for fiscal years beginning after December 15, 2022, including interim periods in those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company’s financial statements. |
Fair Value of Financial Instruments | FAIR VALUE MEASUREMENTSThe Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, and marketable equity investment at fair value. The Company classifies these investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company measures its safeguarding obligation liability related to bitcoin held for other parties at the fair value of the bitcoin that the Company holds for other parties and classifies the liability within Level 2 because the Company uses observable market prices of the underlying bitcoin as an input for the valuation. The Company also classifies its safeguarding asset related to bitcoin held for other parties within Level 2, unless the asset's carrying amount is adjusted to reflect any actual or potential safeguarding loss events, in which case it would be classified within Level 3. The Company was not aware of any actual or possible safeguarding loss events as of |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Prior Period Adjustments | The following table presents the effects of the changes on the presentation of these cash flows to the previously reported condensed consolidated statement of cash flows (in thousands): Nine Months Ended September 30, 2021 As Previously Reported (i) Adjustments As Adjusted Net cash provided by (used in): Operating activities (ii) $ 672,776 $ (19,300) $ 653,476 Investing activities (1,256,619) — (1,256,619) Financing activities (iii) 1,998,740 611,282 2,610,022 Effect of foreign exchange rate on cash and cash equivalents (14,311) — (14,311) Net increase in cash, cash equivalents, restricted cash, and customer funds 1,400,586 591,982 1,992,568 Cash, cash equivalents, restricted cash, and customer funds, beginning of the period 3,201,863 1,591,308 4,793,171 Cash, cash equivalents, restricted cash, and customer funds, end of the period $ 4,602,449 $ 2,183,290 $ 6,785,739 _______________ (i) As reported in the Company's 2021 Form 10-Q filed with the SEC on November 4, 2021. (ii) Financial statement lines impacted in operating activities were customer funds and customers payable. (iii) Financial statement line impacted in financing activities was the addition of a new line called change in customer funds, restricted from use in the Company's operations. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company's net revenue disaggregated by revenue source (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenue from contracts with customers: Transaction-based revenue $ 1,517,890 $ 1,297,040 $ 4,226,566 $ 3,484,245 Subscription and services-based revenue 902,708 636,841 2,427,193 1,793,308 Hardware revenue 43,388 37,255 128,765 109,769 Bitcoin revenue 1,762,752 1,815,662 5,279,430 8,051,026 Revenue from other sources: Subscription and services-based revenue (i) 288,803 57,929 818,731 144,321 Total net revenue $ 4,515,541 $ 3,844,727 $ 12,880,685 $ 13,582,669 (i) Subscription and services-based revenue from other sources relates to revenue generated from the Company's Square Loans and, for 2022 amounts, also includes revenue generated from consumer receivables originated through the BNPL platform, following the acquisition of Afterpay. |
INVESTMENTS IN DEBT SECURITIES
INVESTMENTS IN DEBT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments | The Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 78,790 $ 5 $ (2,175) $ 76,620 Corporate bonds 365,001 13 (8,113) 356,901 Commercial paper 39,373 — — 39,373 Municipal securities 8,238 — (175) 8,063 Certificates of deposit 7,795 — — 7,795 U.S. government securities 558,474 16 (8,557) 549,933 Foreign government securities 14,492 — (204) 14,288 Total $ 1,072,163 $ 34 $ (19,224) $ 1,052,973 Long-term debt securities: U.S. agency securities $ 72,106 $ — $ (4,328) $ 67,778 Corporate bonds 320,808 — (13,226) 307,582 Municipal securities 12,772 — (719) 12,053 U.S. government securities 429,208 68 (17,630) 411,646 Foreign government securities 4,014 — (193) 3,821 Total $ 838,908 $ 68 $ (36,096) $ 802,880 The Company's short-term and long-term investments as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 73,986 $ 150 $ (8) $ 74,128 Corporate bonds 293,460 128 (269) 293,319 Commercial paper 36,088 — — 36,088 Municipal securities 5,543 5 — 5,548 Certificates of deposit 9,200 — — 9,200 U.S. government securities 430,992 106 (255) 430,843 Foreign government securities 20,256 19 (118) 20,157 Total $ 869,525 $ 408 $ (650) $ 869,283 Long-term debt securities: U.S. agency securities $ 154,454 $ 26 $ (1,160) $ 153,320 Corporate bonds 667,699 80 (4,572) 663,207 Municipal securities 22,541 2 (126) 22,417 U.S. government securities 678,553 3 (4,080) 674,476 Foreign government securities 13,084 — (74) 13,010 Total $ 1,536,331 $ 111 $ (10,012) $ 1,526,430 The Company's investments within customer funds as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 30,002 $ — $ (8) $ 29,994 U.S. government securities 360,251 — (191) 360,060 Total $ 390,253 $ — $ (199) $ 390,054 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2022 and December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in thousands): September 30, 2022 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 41,455 $ (1,197) $ 33,935 $ (978) $ 75,390 $ (2,175) Corporate bonds 174,089 (3,617) 175,397 (4,496) 349,486 (8,113) Municipal securities 5,043 (146) 3,020 (29) 8,063 (175) U.S. government securities 362,415 (5,218) 167,695 (3,339) 530,110 (8,557) Foreign government securities 7,924 (27) 6,364 (177) 14,288 (204) Total $ 590,926 $ (10,205) $ 386,411 $ (9,019) $ 977,337 $ (19,224) Long-term debt securities: U.S. agency securities $ 6,077 $ (361) $ 61,700 $ (3,967) $ 67,777 $ (4,328) Corporate bonds 136,848 (4,155) 170,735 (9,071) 307,583 (13,226) Municipal securities 10,853 (719) — — 10,853 (719) U.S. government securities 242,369 (11,430) 94,409 (6,200) 336,778 (17,630) Foreign government securities 861 (40) 2,960 (153) 3,821 (193) Total $ 397,008 $ (16,705) $ 329,804 $ (19,391) $ 726,812 $ (36,096) December 31, 2021 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 26,749 $ (8) $ — $ — $ 26,749 $ (8) Corporate bonds 241,792 (269) 311 — 242,103 (269) U.S. government securities 347,380 (255) — — 347,380 (255) Foreign government securities 12,734 (118) — — 12,734 (118) Total $ 628,655 $ (650) $ 311 $ — $ 628,966 $ (650) Long-term debt securities: U.S. agency securities $ 151,472 $ (1,160) $ — $ — $ 151,472 $ (1,160) Corporate bonds 627,467 (4,572) — — 627,467 (4,572) Municipal securities 18,616 (126) — — 18,616 (126) U.S. government securities 639,473 (4,080) — — 639,473 (4,080) Foreign government securities 13,010 (74) — — 13,010 (74) Total $ 1,450,038 $ (10,012) $ — $ — $ 1,450,038 $ (10,012) The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position were as follows (in thousands): Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 29,994 $ (8) $ — $ — $ 29,994 $ (8) U.S. government securities 360,060 (191) — — 360,060 (191) Total $ 390,054 $ (199) $ — $ — $ 390,054 $ (199) |
Contractual Maturities of Short-Term and Long-Term Investments | The contractual maturities of the Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,072,163 $ 1,052,973 Due in one to five years 838,908 802,880 Total $ 1,911,071 $ 1,855,853 |
CUSTOMER FUNDS (Tables)
CUSTOMER FUNDS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Assets Underlying Customer Funds | The following table presents the assets underlying customer funds (in thousands): September 30, 2022 December 31, 2021 Cash $ 2,292,814 $ 242,243 Cash equivalents: Money market funds 439,093 2,126,579 Reverse repurchase agreement (i) 251,751 72,119 Short-term debt securities: U.S. agency securities — 29,994 U.S. government securities — 360,060 Total customer funds $ 2,983,658 $ 2,830,995 (i) The Company has accounted for the reverse repurchase agreement with a third-party as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement. The Company classified the amounts due from the counterparty as cash equivalents due to the short-term nature. |
Investments within Customer Funds | The Company's short-term and long-term investments as of September 30, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 78,790 $ 5 $ (2,175) $ 76,620 Corporate bonds 365,001 13 (8,113) 356,901 Commercial paper 39,373 — — 39,373 Municipal securities 8,238 — (175) 8,063 Certificates of deposit 7,795 — — 7,795 U.S. government securities 558,474 16 (8,557) 549,933 Foreign government securities 14,492 — (204) 14,288 Total $ 1,072,163 $ 34 $ (19,224) $ 1,052,973 Long-term debt securities: U.S. agency securities $ 72,106 $ — $ (4,328) $ 67,778 Corporate bonds 320,808 — (13,226) 307,582 Municipal securities 12,772 — (719) 12,053 U.S. government securities 429,208 68 (17,630) 411,646 Foreign government securities 4,014 — (193) 3,821 Total $ 838,908 $ 68 $ (36,096) $ 802,880 The Company's short-term and long-term investments as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 73,986 $ 150 $ (8) $ 74,128 Corporate bonds 293,460 128 (269) 293,319 Commercial paper 36,088 — — 36,088 Municipal securities 5,543 5 — 5,548 Certificates of deposit 9,200 — — 9,200 U.S. government securities 430,992 106 (255) 430,843 Foreign government securities 20,256 19 (118) 20,157 Total $ 869,525 $ 408 $ (650) $ 869,283 Long-term debt securities: U.S. agency securities $ 154,454 $ 26 $ (1,160) $ 153,320 Corporate bonds 667,699 80 (4,572) 663,207 Municipal securities 22,541 2 (126) 22,417 U.S. government securities 678,553 3 (4,080) 674,476 Foreign government securities 13,084 — (74) 13,010 Total $ 1,536,331 $ 111 $ (10,012) $ 1,526,430 The Company's investments within customer funds as of December 31, 2021 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 30,002 $ — $ (8) $ 29,994 U.S. government securities 360,251 — (191) 360,060 Total $ 390,253 $ — $ (199) $ 390,054 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2022 and December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in thousands): September 30, 2022 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 41,455 $ (1,197) $ 33,935 $ (978) $ 75,390 $ (2,175) Corporate bonds 174,089 (3,617) 175,397 (4,496) 349,486 (8,113) Municipal securities 5,043 (146) 3,020 (29) 8,063 (175) U.S. government securities 362,415 (5,218) 167,695 (3,339) 530,110 (8,557) Foreign government securities 7,924 (27) 6,364 (177) 14,288 (204) Total $ 590,926 $ (10,205) $ 386,411 $ (9,019) $ 977,337 $ (19,224) Long-term debt securities: U.S. agency securities $ 6,077 $ (361) $ 61,700 $ (3,967) $ 67,777 $ (4,328) Corporate bonds 136,848 (4,155) 170,735 (9,071) 307,583 (13,226) Municipal securities 10,853 (719) — — 10,853 (719) U.S. government securities 242,369 (11,430) 94,409 (6,200) 336,778 (17,630) Foreign government securities 861 (40) 2,960 (153) 3,821 (193) Total $ 397,008 $ (16,705) $ 329,804 $ (19,391) $ 726,812 $ (36,096) December 31, 2021 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 26,749 $ (8) $ — $ — $ 26,749 $ (8) Corporate bonds 241,792 (269) 311 — 242,103 (269) U.S. government securities 347,380 (255) — — 347,380 (255) Foreign government securities 12,734 (118) — — 12,734 (118) Total $ 628,655 $ (650) $ 311 $ — $ 628,966 $ (650) Long-term debt securities: U.S. agency securities $ 151,472 $ (1,160) $ — $ — $ 151,472 $ (1,160) Corporate bonds 627,467 (4,572) — — 627,467 (4,572) Municipal securities 18,616 (126) — — 18,616 (126) U.S. government securities 639,473 (4,080) — — 639,473 (4,080) Foreign government securities 13,010 (74) — — 13,010 (74) Total $ 1,450,038 $ (10,012) $ — $ — $ 1,450,038 $ (10,012) The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position were as follows (in thousands): Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 29,994 $ (8) $ — $ — $ 29,994 $ (8) U.S. government securities 360,060 (191) — — 360,060 (191) Total $ 390,054 $ (199) $ — $ — $ 390,054 $ (199) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The Company’s assets and liabilities that are measured at fair value on a recurring basis were classified as follows (in thousands): September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 1,218,293 $ — $ — $ 2,344,768 $ — $ — U.S. government securities 92,409 — — — — — U.S. agency securities — — — — 22,999 — Certificates of deposit — — — — 4,983 — Commercial paper — 139,420 — — — — Corporate bonds — 2,468 — — 790 — Municipal securities — 3,500 — — — — Customer funds: Money market funds 439,093 — — 2,126,579 — — Reverse repurchase agreement 251,751 — — 72,119 — — U.S. government securities — — — 360,060 — — U.S. agency securities — — — — 29,994 — Short-term debt securities: U.S. government securities 549,933 — — 430,843 — Corporate bonds — 356,901 — — 293,319 — U.S. agency securities — 76,620 — — 74,128 — Certificates of deposit — 7,795 — — 9,200 — Commercial paper — 39,373 — — 36,088 — Municipal securities — 8,063 — — 5,548 — Foreign government securities — 14,288 — — 20,157 — Long-term debt securities: U.S. government securities 411,646 — — 674,476 — — Corporate bonds — 307,582 — — 663,207 — U.S. agency securities — 67,778 — — 153,320 — Municipal securities — 12,053 — — 22,417 — Foreign government securities — 3,821 — — 13,010 — Other: Investment in marketable equity security 12,760 — — — — — Safeguarding asset related to bitcoin held for other parties — 527,669 — — 1,100,596 — Safeguarding obligation liability related to bitcoin held for other parties — (527,669) — — (1,100,596) — Total assets (liabilities) measured at fair value $ 2,975,885 $ 1,039,662 $ — $ 6,008,845 $ 1,349,160 $ — September 30, 2022 December 31, 2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2031 Senior Notes $ 987,818 $ 759,542 $ 986,774 $ 1,018,113 2026 Senior Notes 989,710 853,318 987,626 994,579 2027 Convertible Notes 568,200 411,735 567,208 614,286 2026 Convertible Notes 568,888 447,220 567,621 595,548 2025 Convertible Notes 992,629 910,558 990,361 1,477,302 2023 Convertible Notes 460,170 477,541 459,618 958,927 2022 Convertible Notes — — 455 3,192 Total $ 4,567,415 $ 3,859,914 $ 4,559,663 $ 5,661,947 The estimated fair value and carrying value of loans held for sale and loans held for investment were as follows (in thousands): September 30, 2022 December 31, 2021 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 462,980 $ 494,934 $ 517,940 $ 574,982 Loans held for investment 130,509 137,085 91,447 95,746 Total $ 593,489 $ 632,019 $ 609,387 $ 670,728 |
CONSUMER RECEIVABLES, NET (Tabl
CONSUMER RECEIVABLES, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Aging Analysis of Consumer Receivables held for Investment | The following table presents an aging analysis of the amortized cost of consumer receivables by delinquency status (in thousands): September 30, 2022 Non-delinquent loans $ 1,152,509 1 - 60 days past due 159,759 61 - 90 days past due 21,385 90+ days past due 60,445 Total amortized cost $ 1,394,098 |
Activity in Allowance for Credit Losses | The following table summarizes activity in the allowance for credit losses subsequent to the acquisition of Afterpay (in thousands): Three Months Ended September 30, 2022 From Acquisition on Allowance for credit losses, beginning of the period (i) $ 121,579 $ 115,552 Provision for credit losses 53,021 146,014 Charge-offs and other adjustments (28,516) (116,624) Foreign exchange effect (4,113) (2,971) Allowance for credit losses, end of the period $ 141,971 $ 141,971 (i) Consumer receivables acquired from Afterpay that reflect a more-than-insignificant deterioration of credit from origination are considered purchased credit deteriorated ("PCD") receivables. For PCD consumer receivables, the initial estimate of expected credit losses is recognized in the allowance for credit losses on the date of acquisition using the same methodology as other consumer receivables. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | The following table details property and equipment, less accumulated depreciation and amortization (in thousands): September 30, 2022 December 31, 2021 Leasehold improvements $ 227,158 $ 208,228 Computer equipment 210,524 174,004 Capitalized software 182,835 116,827 Office furniture and equipment 45,350 42,393 Total 665,867 541,452 Less: Accumulated depreciation and amortization (349,489) (259,312) Property and equipment, net $ 316,378 $ 282,140 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Assets Acquired and Liabilities Assumed | The table below summarizes the consideration paid for Afterpay and the assessment of the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data): Consideration: Stock (113,617,352 shares of Class A common stock, excluding value accounted as post-combination expense of $66,337) $ 13,827,929 Cash paid to settle tax withholding in connection with replacement awards 8,693 Total $ 13,836,622 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash, cash equivalents, and restricted cash acquired) $ 653,709 Consumer receivables 1,245,508 Intangible customer assets 1,378,000 Intangible technology assets 239,000 Intangible trade name 408,000 Other non-current assets 74,232 Long-term debt - current (i) (1,058,065) Current liabilities (404,770) Warehouse funding facilities (ii) (107,996) Deferred tax liabilities (211,377) Other non-current liabilities (55,374) Total identifiable net assets acquired 2,160,867 Goodwill 11,675,755 Total $ 13,836,622 (i) Long-term debt - current is comprised of the aforementioned Afterpay convertible notes, which were redeemed in cash at face value on March 4, 2022. (ii) Refer to Note 15, Indebtedness for further details. |
Pro Forma Financial Information | The unaudited pro forma financial results are as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net revenue $ 4,515,541 $ 4,044,781 $ 12,945,438 $ 14,174,515 Net loss $ (15,774) $ (31,225) $ (333,947) $ (112,046) |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in Carrying Value of Goodwill | The change in carrying value of goodwill in the period was as follows (in thousands): Carrying value of goodwill, beginning of the year $ 519,276 Acquisitions 11,718,209 Foreign currency translation adjustments (679,501) Carrying value of goodwill, end of the period $ 11,557,984 The change in carrying value of goodwill allocated to the reportable segments in the period was as follows (in thousands): Cash App Square Corporate and Other Total Carrying value of goodwill, beginning of the year $ 128,334 $ 193,057 $ 197,885 $ 519,276 Acquisitions 5,860,305 5,857,904 — 11,718,209 Foreign currency translation adjustments (340,431) (339,070) — (679,501) Carrying value of goodwill, end of the period $ 5,648,208 $ 5,711,891 $ 197,885 $ 11,557,984 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite Lived Intangible Assets | The following tables present the detail of acquired intangible assets as of the periods presented (in thousands): Balance at September 30, 2022 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 395,057 $ (116,148) $ 278,909 Customer assets 15 years 1,434,803 (84,786) 1,350,017 Trade name 9 years 440,509 (47,151) 393,358 Other 9 years 13,701 (5,109) 8,592 Total $ 2,284,070 $ (253,194) $ 2,030,876 Balance at December 31, 2021 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 164,977 $ (65,619) $ 99,358 Customer assets 15 years 128,316 (19,244) 109,072 Trade name 9 years 53,051 (14,169) 38,882 Other 9 years 13,743 (4,006) 9,737 Total $ 360,087 $ (103,038) $ 257,049 The changes to the carrying value of intangible assets were as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Acquired intangible assets, net, beginning of the period $ 2,148,078 $ 262,196 $ 257,049 $ 137,612 Acquisitions — 18,100 2,028,490 159,100 Amortization expense (55,867) (11,140) (155,288) (27,258) Foreign currency translation adjustments (61,335) (464) (99,375) (762) Acquired intangible assets, net, end of the period $ 2,030,876 $ 268,692 $ 2,030,876 $ 268,692 |
Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets in future periods as of September 30, 2022 was as follows (in thousands): Remainder of 2022 $ 54,684 2023 218,629 2024 215,168 2025 208,340 2026 194,274 Thereafter 1,139,781 Total $ 2,030,876 |
OTHER CONSOLIDATED BALANCE SH_3
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Current Assets | The following table presents the detail of other current assets (in thousands): September 30, 2022 December 31, 2021 Inventory, net $ 102,962 $ 77,058 Restricted cash 246,570 18,778 Processing costs receivable 285,006 228,914 Prepaid expenses 118,756 63,341 Accounts receivable, net 128,386 89,702 Loans held for investment, net of allowance for loan losses (i) 130,509 91,447 Other 163,684 118,189 Total $ 1,175,873 $ 687,429 (i) Refer to Note 7, Loans Held for Investment for further details . |
Accrued Expenses and Other Current Liabilities | The following table presents the detail of accrued expenses and other current liabilities (in thousands): September 30, 2022 December 31, 2021 Accrued expenses $ 372,038 $ 254,900 Accounts payable 116,119 82,173 Customer deposits 118,754 59,844 Pagantis deferred consideration (i) 49,836 — Accrued transaction losses (ii) 61,012 55,167 Accrued royalties 51,441 53,616 Deferred revenue, current 47,197 48,462 Other 152,098 84,692 Total $ 968,495 $ 638,854 (i) On March 9, 2021, prior to acquisition by the Company, Afterpay completed the acquisition of Pagantis SAU and PMT Technology SLA (collectively, "Pagantis"). Pursuant to the acquisition agreement, Afterpay issued a convertible note to the sellers for deferred and contingent consideration. Under the terms of the note, upon a change in control of Afterpay, Afterpay had the option to redeem the convertible note for cash consideration, which Afterpay exercised. The settlement amount consists of two components: a fixed amount based on the principal amount of the note adjusted for the impact of the acquisition of Afterpay, and an additional amount that is contingent on the underlying equity value of Pagantis exceeding certain agreed upon thresholds. Under the terms of the note, absent a bilateral agreement on value between the Company and the note holder, the Company and note holder were each required to use an independent valuation expert to establish the underlying value of the Pagantis business as of the time of the change in control of Afterpay. Because the difference between the two valuations was more than a specified threshold, a third valuation expert has been jointly selected by the first two experts, with support from the Company and the note holder. The third expert is required to determine a value that falls within the range of the values established by the first two experts. The third expert is expected to deliver their valuation in the fourth quarter of 2022. Absent any manifest error, the third expert's valuation will be final, and settlement of the note will occur on that basis, having regard to the formula for calculation of the settlement value as per the note terms. As of September 30, 2022, the Company determined that based on the estimated underlying value of Pagantis, the contingent consideration had no value and accordingly, has accrued the fixed amount payable, adjusted for the period-end foreign exchange spot rate . The ultimate settlement value may differ materially from the accrued amounts. (ii) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers, primarily due to seller insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Accrued transaction losses, beginning of the period $ 61,835 $ 48,480 $ 55,167 $ 70,557 Provision for transaction losses 19,724 17,364 68,743 38,406 Charge-offs to accrued transaction losses (20,547) (18,107) (62,898) (61,226) Accrued transaction losses, end of the period $ 61,012 $ 47,737 $ 61,012 $ 47,737 In addition to amounts reflected in the table above, the Company recognized additional provision for transaction losses that was realized and written-off within the same period. The Company recorded $100.9 million and $312.6 million for the three and nine months ended September 30, 2022, respectively, compared to $89.8 million and $252.2 million for the three and nine months ended September 30, 2021, respectively, for such losses. |
Reserve for Transaction Losses | The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Accrued transaction losses, beginning of the period $ 61,835 $ 48,480 $ 55,167 $ 70,557 Provision for transaction losses 19,724 17,364 68,743 38,406 Charge-offs to accrued transaction losses (20,547) (18,107) (62,898) (61,226) Accrued transaction losses, end of the period $ 61,012 $ 47,737 $ 61,012 $ 47,737 |
OTHER CONSOLIDATED BALANCE SH_4
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Non-Current Assets | The following table presents the detail of other non-current assets (in thousands): September 30, 2022 December 31, 2021 Investment in non-marketable equity securities (i) $ 162,607 $ 81,919 Investment in bitcoin, net (ii) 111,294 149,000 Restricted cash 72,479 71,702 Other 92,154 67,914 Total $ 438,534 $ 370,535 (i) Investment in non-marketable equity securities represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded within other expense (income), net o n the condensed consolidated statements of operations. During the nine months ended September 30, 2022, the Company recorded an unrealized gain of $59.8 million , arising from the revaluation of a non-marketable investment, resulting in a cumulative unrealized gain of $78.8 million as of September 30, 2022. Unrealized losses were immaterial as of September 30, 2022. (ii) The Company invested an aggregate $220.0 million in bitcoin in 2020 and 2021, with no additional investments made during the nine months ended September 30, 2022. Investment in bitcoin is accounted for as an indefinite-lived intangible asset, and does not include any bitcoin held for other parties, which is further described in Note 14, Bitcoin Held for Other Parties . Investment in bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period. Impairment losses cannot be recovered for any subsequent increase in fair value until the sale of the asset. The Company recorded an impairment charge on its investment in bitcoin o f $1.6 million and $37.6 million i |
BITCOIN HELD FOR OTHER PARTIES
BITCOIN HELD FOR OTHER PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Bitcoin Held on Behalf of Others | The following table summarizes the Company’s bitcoin held for other parties (in thousands, except number of bitcoin): September 30, 2022 December 31, 2021 Approximate number of bitcoin held for customers 25,976 23,360 Approximate number of bitcoin held for trading partners 1,188 458 Total approximate number of bitcoin held for other parties 27,164 23,818 Safeguarding obligation liability related to bitcoin held for customers $ 504,588 $ 1,079,412 Safeguarding obligation liability related to bitcoin held for trading partners 23,081 21,184 Safeguarding obligation liability related to bitcoin held for other parties $ 527,669 $ 1,100,596 Safeguarding asset related to bitcoin held for other parties $ 527,669 $ 1,100,596 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Amounts Drawn on Facilities by Year of Maturity | The table below summarizes the amounts drawn on these facilities by year of maturity (in thousands): September 30, 2022 2023 $ 120,000 2024 359,422 Total funding debt, net of deferred debt issuance costs $ 479,422 |
Net Carrying Amount of Convertible Notes | The net carrying amount of the Notes as of September 30, 2022 were as follows (in thousands): Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value 2031 Senior Notes $ 1,000,000 $ (12,182) $ 987,818 2026 Senior Notes 1,000,000 (10,290) 989,710 2027 Convertible Notes 575,000 (6,800) 568,200 2026 Convertible Notes 575,000 (6,112) 568,888 2025 Convertible Notes 1,000,000 (7,371) 992,629 2023 Convertible Notes (i) 460,630 (460) 460,170 Total $ 4,610,630 $ (43,215) $ 4,567,415 (i) Net carrying value disclosed as current portion of long-term debt within total current liabilities on the condensed consolidated balance sheet. The net carrying amount of the Notes as of December 31, 2021 were as follows (in thousands): Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value 2031 Senior Notes $ 1,000,000 $ (13,226) $ 986,774 2026 Senior Notes 1,000,000 (12,374) 987,626 2027 Convertible Notes 575,000 (7,792) 567,208 2026 Convertible Notes 575,000 (7,379) 567,621 2025 Convertible Notes 1,000,000 (9,639) 990,361 2023 Convertible Notes 460,630 (1,012) 459,618 2022 Convertible Notes (i) 455 — 455 Total $ 4,611,085 $ (51,422) $ 4,559,663 (i) Net carrying value disclosed as current portion of long-term debt within total current liabilities on the condensed consolidated balance sheet. |
Interest Expense on Convertible Notes | The Company recognized interest expense on the Notes as follows (in thousands, except for percentages): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Contractual interest expense 16,846 $ 17,047 50,012 $ 27,272 Amortization of debt issuance costs (i) 2,766 2,868 8,208 7,005 Total $ 19,612 $ 19,915 $ 58,220 $ 34,277 (i) Upon adoption of ASU 2020-06, the debt discount associated with the equity component on convertible debt outstanding was reversed which resulted in a decrease in the amount of non-cash interest expense to be recognized going forward. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the nine months ended September 30, 2022 is as follows (in thousands, except share and per share data): Number of Stock Options Weighted Weighted Aggregate Outstanding, beginning of the year 8,916,100 $ 26.09 3.89 $ 1,226,105 Granted 796,719 94.61 Exercised (2,173,106) 7.96 Forfeited (85,258) 103.84 Expired (12,124) $ 194.03 Outstanding, end of the period 7,442,331 $ 37.56 4.02 $ 253,390 Exercisable, end of the period 6,222,745 $ 24.65 3.22 $ 250,015 |
Restricted Stock Awards and Restricted Stock Units Activity | Activity related to RSAs and RSUs during the nine months ended September 30, 2022 is set forth below: Number of Weighted Unvested, beginning of the year 13,221,953 $ 137.86 Granted 18,062,856 98.19 Vested (5,753,971) 115.57 Forfeited (2,357,994) 124.96 Unvested, end of the period 23,172,844 $ 113.78 |
Summary of the Effect of Share-Based Compensation on the Condensed Consolidated Statements of Operations | The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue $ 104 $ 99 $ 352 $ 310 Product development 184,569 121,209 508,781 314,265 Sales and marketing 28,744 16,023 75,133 40,680 General and administrative 49,316 27,680 210,528 74,744 Total $ 262,733 $ 165,011 $ 794,794 $ 429,999 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income (Loss) Per Share | The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Numerator: Net income (loss) $ (18,744) $ (2,876) $ (435,384) $ 239,810 Less: Net loss attributable to noncontrolling interests (4,033) (2,960) (8,460) (3,303) Net income (loss) attributable to common stockholders $ (14,711) $ 84 $ (426,924) $ 243,113 Denominator: Basic shares: Weighted-average shares used to compute basic net income (loss) per share 592,672 460,654 572,234 457,039 Diluted shares: Stock options, restricted stock, and employee stock purchase plan — 17,180 — 18,991 Convertible notes — — — 18,727 Common stock warrants — 26,286 — 25,447 Weighted-average shares used to compute diluted net income (loss) per share 592,672 504,120 572,234 520,204 Net income (loss) per share attributable to common stockholders: Basic $ (0.02) $ 0.00 $ (0.75) $ 0.53 Diluted $ (0.02) $ 0.00 $ (0.75) $ 0.48 |
Antidilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Stock options, restricted stock, and employee stock purchase plan 35,272 7,652 30,338 7,161 Convertible notes 18,025 20,884 18,030 3,845 Common stock warrants 27,929 16,075 37,241 16,914 Total anti-dilutive securities 81,226 44,611 85,609 27,920 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | The following tables present information on the reportable segments revenue and segment gross profit (in thousands): Three Months Ended Nine Months Ended Cash App Square Corporate and Other (i) Total Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 118,459 $ 1,399,431 $ — $ 1,517,890 $ 343,768 $ 3,882,798 $ 4,226,566 Subscription and services-based revenue 803,673 331,703 56,135 1,191,511 2,146,163 932,188 167,573 3,245,924 Hardware revenue — 43,388 — 43,388 — 128,765 128,765 Bitcoin revenue 1,762,752 — — 1,762,752 5,279,430 5,279,430 Segment revenue (ii) $ 2,684,884 $ 1,774,522 $ 56,135 $ 4,515,541 $ 7,769,361 $ 4,943,751 $ 167,573 $ 12,880,685 Segment gross profit (iii) $ 774,470 $ 782,968 $ 9,651 $ 1,567,089 $ 2,103,023 $ 2,199,628 $ 29,046 $ 4,331,697 Three Months Ended Nine Months Ended Cash App Square Corporate and Other (i) Total Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 103,192 $ 1,193,848 $ — $ 1,297,040 $ 306,101 $ 3,178,144 $ — $ 3,484,245 Subscription and services-based revenue 474,779 162,341 57,650 694,770 1,406,313 434,673 96,643 1,937,629 Hardware revenue — 37,255 — 37,255 — 109,769 — 109,769 Bitcoin revenue 1,815,662 — — 1,815,662 8,051,026 — — 8,051,026 Segment revenue $ 2,393,633 $ 1,393,444 $ 57,650 $ 3,844,727 $ 9,763,440 $ 3,722,586 $ 96,643 $ 13,582,669 Segment gross profit $ 511,717 $ 606,225 $ 15,273 $ 1,133,215 $ 1,553,255 $ 1,659,378 $ 25,147 $ 3,237,780 (i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment. (ii) The revenue for both Cash App and Square for the three and nine months ended September 30, 2022 includes $105.0 million and $273.9 million each, respectively, from Afterpay post-acquisition results following the closing of the acquisition. (iii) The gross profit for both Cash App and Square for the three and nine months ended September 30, 2022 includes $74.9 million and $195.8 million each, respectively, from Afterpay post-acquisition results following the closing of the acquisition. |
Reconciliation of Total Segment Profit to Income before applicable Income Taxes | The following table provides a reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Total segment gross profit $ 1,567,089 $ 1,133,215 $ 4,331,697 $ 3,237,780 Less: Product development 548,037 360,729 1,531,088 992,498 Less: Sales and marketing 485,838 409,073 1,518,227 1,132,411 Less: General and administrative 395,437 267,348 1,235,306 683,969 Less: Transaction, loan, and consumer receivable losses 147,586 62,306 395,433 130,874 Less: Bitcoin impairment losses 1,619 6,000 37,580 71,126 Less: Amortization of customer and other intangible assets 37,361 4,763 103,414 11,176 Less: Interest expense, net 6,042 13,409 34,756 20,126 Less: Other expense (income), net (18,798) 12,011 (71,036) (36,249) Income (loss) before applicable income taxes $ (36,033) $ (2,424) $ (453,071) $ 231,849 |
Revenue by Geographic Area | Revenue by geography is based on the addresses of the sellers or customers. The following table details revenue by geographic area (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 United States $ 4,195,291 $ 3,679,609 $ 12,007,976 $ 13,179,547 International 320,250 165,118 872,709 403,122 Total $ 4,515,541 $ 3,844,727 $ 12,880,685 $ 13,582,669 |
Long-lived Assets by Geographic Area | The following table details long-lived assets by geography (in thousands): September 30, 2022 December 31, 2021 United States $ 8,105,759 $ 1,426,103 Australia 4,523,768 26,680 Other international 1,701,230 55,088 Total $ 14,330,757 $ 1,507,871 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures | The supplemental disclosures of cash flow information consist of the following (in thousands): Nine Months Ended 2022 2021 Supplemental cash flow data: Cash paid for interest $ 42,836 $ 4,770 Cash paid for income taxes 18,629 9,071 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 37,939 40,712 Purchases of property and equipment in accounts payable and accrued expenses 11,835 21,746 Deferred purchase consideration related to business combinations 14,377 54,132 Fair value of common stock issued related to business combinations (13,827,929) (28,735) Fair value of common stock issued to settle the conversion of convertible notes (2,551) (742,174) Fair value of common stock shares received to settle convertible note hedges 133,144 1,623,095 Fair value of common stock issued in connection with the exercise of common stock warrants (806,446) — Bitcoin lent to third-party borrowers 5,934 (5,994) |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) payment_installment customer | Sep. 30, 2021 USD ($) customer | Sep. 30, 2022 USD ($) segment customer third_party_processor payment_installment | Sep. 30, 2021 USD ($) customer | Dec. 31, 2021 | |
Concentration Risk [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Advertising costs | $ | $ 91.6 | $ 123.1 | $ 405.6 | $ 296.4 | |
Selling and marketing expenses not directly related to a revenue generating transaction | $ | $ 212.3 | $ 183.2 | $ 620.3 | $ 555.9 | |
Consumer Portfolio Segment | |||||
Concentration Risk [Line Items] | |||||
Threshold period past due to consider amounts to be uncollectible | 180 days | 180 days | |||
Minimum | |||||
Concentration Risk [Line Items] | |||||
Settlements receivable period | 1 day | ||||
Minimum | Afterpay Limited | Subscription and services-based revenue | |||||
Concentration Risk [Line Items] | |||||
Number of payment installments | payment_installment | 3 | 3 | |||
Payment period | 42 days | ||||
Maximum | |||||
Concentration Risk [Line Items] | |||||
Settlements receivable period | 2 days | ||||
Maximum | Afterpay Limited | Subscription and services-based revenue | |||||
Concentration Risk [Line Items] | |||||
Number of payment installments | payment_installment | 4 | 4 | |||
Payment period | 56 days | ||||
Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Number of customers accounting for greater than 10% of total net revenue | customer | 0 | 0 | 0 | 0 | |
Settlements Receivable | Credit Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Number of third party processors | third_party_processor | 2 | ||||
Settlements Receivable | Credit Concentration Risk | Third Party Processor One | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 52% | 52% | |||
Settlements Receivable | Credit Concentration Risk | Third Party Processor Two | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 30% | 30% |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Prior Period Adjustments on Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Operating activities | $ 130,534 | $ 653,476 |
Investing activities | 1,505,250 | (1,256,619) |
Financing activities | (881,408) | 2,610,022 |
Effect of foreign exchange rate on cash and cash equivalents | (94,972) | (14,311) |
Net increase in cash, cash equivalents, restricted cash, and customer funds | 659,404 | 1,992,568 |
Cash, cash equivalents, restricted cash, and customer funds, beginning of the period | 6,975,090 | 4,793,171 |
Cash, cash equivalents, restricted cash, and customer funds, end of the period | $ 7,634,494 | 6,785,739 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Operating activities | 672,776 | |
Investing activities | (1,256,619) | |
Financing activities | 1,998,740 | |
Effect of foreign exchange rate on cash and cash equivalents | (14,311) | |
Net increase in cash, cash equivalents, restricted cash, and customer funds | 1,400,586 | |
Cash, cash equivalents, restricted cash, and customer funds, beginning of the period | 3,201,863 | |
Cash, cash equivalents, restricted cash, and customer funds, end of the period | 4,602,449 | |
Adjustments | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Operating activities | (19,300) | |
Investing activities | 0 | |
Financing activities | 611,282 | |
Effect of foreign exchange rate on cash and cash equivalents | 0 | |
Net increase in cash, cash equivalents, restricted cash, and customer funds | 591,982 | |
Cash, cash equivalents, restricted cash, and customer funds, beginning of the period | 1,591,308 | |
Cash, cash equivalents, restricted cash, and customer funds, end of the period | $ 2,183,290 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 4,515,541 | $ 3,844,727 | $ 12,880,685 | $ 13,582,669 |
Transaction-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 1,517,890 | 1,297,040 | 4,226,566 | 3,484,245 |
Revenue | 1,517,890 | 1,297,040 | 4,226,566 | 3,484,245 |
Subscription and services-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 902,708 | 636,841 | 2,427,193 | 1,793,308 |
Revenues from other sources | 288,803 | 57,929 | 818,731 | 144,321 |
Revenue | 1,191,511 | 694,770 | 3,245,924 | 1,937,629 |
Hardware revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 43,388 | 37,255 | 128,765 | 109,769 |
Revenue | 43,388 | 37,255 | 128,765 | 109,769 |
Bitcoin revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 1,762,752 | 1,815,662 | 5,279,430 | 8,051,026 |
Revenue | $ 1,762,752 | $ 1,815,662 | $ 5,279,430 | $ 8,051,026 |
INVESTMENTS IN DEBT SECURITIE_2
INVESTMENTS IN DEBT SECURITIES - Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,911,071 | |
Fair Value | 1,855,853 | |
Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,072,163 | $ 869,525 |
Gross Unrealized Gains | 34 | 408 |
Gross Unrealized Losses | (19,224) | (650) |
Fair Value | 1,052,973 | 869,283 |
Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 838,908 | 1,536,331 |
Gross Unrealized Gains | 68 | 111 |
Gross Unrealized Losses | (36,096) | (10,012) |
Fair Value | 802,880 | 1,526,430 |
U.S. agency securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 78,790 | 73,986 |
Gross Unrealized Gains | 5 | 150 |
Gross Unrealized Losses | (2,175) | (8) |
Fair Value | 76,620 | 74,128 |
U.S. agency securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 72,106 | 154,454 |
Gross Unrealized Gains | 0 | 26 |
Gross Unrealized Losses | (4,328) | (1,160) |
Fair Value | 67,778 | 153,320 |
Corporate bonds | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 365,001 | 293,460 |
Gross Unrealized Gains | 13 | 128 |
Gross Unrealized Losses | (8,113) | (269) |
Fair Value | 356,901 | 293,319 |
Corporate bonds | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 320,808 | 667,699 |
Gross Unrealized Gains | 0 | 80 |
Gross Unrealized Losses | (13,226) | (4,572) |
Fair Value | 307,582 | 663,207 |
Commercial paper | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 39,373 | 36,088 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 39,373 | 36,088 |
Municipal securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,238 | 5,543 |
Gross Unrealized Gains | 0 | 5 |
Gross Unrealized Losses | (175) | 0 |
Fair Value | 8,063 | 5,548 |
Municipal securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 12,772 | 22,541 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | (719) | (126) |
Fair Value | 12,053 | 22,417 |
Certificates of deposit | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 7,795 | 9,200 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 7,795 | 9,200 |
U.S. government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 558,474 | 430,992 |
Gross Unrealized Gains | 16 | 106 |
Gross Unrealized Losses | (8,557) | (255) |
Fair Value | 549,933 | 430,843 |
U.S. government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 429,208 | 678,553 |
Gross Unrealized Gains | 68 | 3 |
Gross Unrealized Losses | (17,630) | (4,080) |
Fair Value | 411,646 | 674,476 |
Foreign government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 14,492 | 20,256 |
Gross Unrealized Gains | 0 | 19 |
Gross Unrealized Losses | (204) | (118) |
Fair Value | 14,288 | 20,157 |
Foreign government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,014 | 13,084 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (193) | (74) |
Fair Value | $ 3,821 | $ 13,010 |
INVESTMENTS IN DEBT SECURITIE_3
INVESTMENTS IN DEBT SECURITIES - Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | $ 590,926 | $ 628,655 |
Less than 12 Months, Gross Unrealized Losses | (10,205) | (650) |
Greater than 12 months, Fair Value | 386,411 | 311 |
Greater than 12 months, Gross Unrealized Losses | (9,019) | 0 |
Total, Fair Value | 977,337 | 628,966 |
Total, Gross Unrealized Losses | (19,224) | (650) |
Short-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 41,455 | 26,749 |
Less than 12 Months, Gross Unrealized Losses | (1,197) | (8) |
Greater than 12 months, Fair Value | 33,935 | 0 |
Greater than 12 months, Gross Unrealized Losses | (978) | 0 |
Total, Fair Value | 75,390 | 26,749 |
Total, Gross Unrealized Losses | (2,175) | (8) |
Short-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 174,089 | 241,792 |
Less than 12 Months, Gross Unrealized Losses | (3,617) | (269) |
Greater than 12 months, Fair Value | 175,397 | 311 |
Greater than 12 months, Gross Unrealized Losses | (4,496) | 0 |
Total, Fair Value | 349,486 | 242,103 |
Total, Gross Unrealized Losses | (8,113) | (269) |
Short-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 5,043 | |
Less than 12 Months, Gross Unrealized Losses | (146) | |
Greater than 12 months, Fair Value | 3,020 | |
Greater than 12 months, Gross Unrealized Losses | (29) | |
Total, Fair Value | 8,063 | |
Total, Gross Unrealized Losses | (175) | |
Short-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 362,415 | 347,380 |
Less than 12 Months, Gross Unrealized Losses | (5,218) | (255) |
Greater than 12 months, Fair Value | 167,695 | 0 |
Greater than 12 months, Gross Unrealized Losses | (3,339) | 0 |
Total, Fair Value | 530,110 | 347,380 |
Total, Gross Unrealized Losses | (8,557) | (255) |
Short-term debt securities | Foreign government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 7,924 | 12,734 |
Less than 12 Months, Gross Unrealized Losses | (27) | (118) |
Greater than 12 months, Fair Value | 6,364 | 0 |
Greater than 12 months, Gross Unrealized Losses | (177) | 0 |
Total, Fair Value | 14,288 | 12,734 |
Total, Gross Unrealized Losses | (204) | (118) |
Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 397,008 | 1,450,038 |
Less than 12 Months, Gross Unrealized Losses | (16,705) | (10,012) |
Greater than 12 months, Fair Value | 329,804 | 0 |
Greater than 12 months, Gross Unrealized Losses | (19,391) | 0 |
Total, Fair Value | 726,812 | 1,450,038 |
Total, Gross Unrealized Losses | (36,096) | (10,012) |
Long-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 6,077 | 151,472 |
Less than 12 Months, Gross Unrealized Losses | (361) | (1,160) |
Greater than 12 months, Fair Value | 61,700 | 0 |
Greater than 12 months, Gross Unrealized Losses | (3,967) | 0 |
Total, Fair Value | 67,777 | 151,472 |
Total, Gross Unrealized Losses | (4,328) | (1,160) |
Long-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 136,848 | 627,467 |
Less than 12 Months, Gross Unrealized Losses | (4,155) | (4,572) |
Greater than 12 months, Fair Value | 170,735 | 0 |
Greater than 12 months, Gross Unrealized Losses | (9,071) | 0 |
Total, Fair Value | 307,583 | 627,467 |
Total, Gross Unrealized Losses | (13,226) | (4,572) |
Long-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 10,853 | 18,616 |
Less than 12 Months, Gross Unrealized Losses | (719) | (126) |
Greater than 12 months, Fair Value | 0 | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 | 0 |
Total, Fair Value | 10,853 | 18,616 |
Total, Gross Unrealized Losses | (719) | (126) |
Long-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 242,369 | 639,473 |
Less than 12 Months, Gross Unrealized Losses | (11,430) | (4,080) |
Greater than 12 months, Fair Value | 94,409 | 0 |
Greater than 12 months, Gross Unrealized Losses | (6,200) | 0 |
Total, Fair Value | 336,778 | 639,473 |
Total, Gross Unrealized Losses | (17,630) | (4,080) |
Long-term debt securities | Foreign government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 861 | 13,010 |
Less than 12 Months, Gross Unrealized Losses | (40) | (74) |
Greater than 12 months, Fair Value | 2,960 | 0 |
Greater than 12 months, Gross Unrealized Losses | (153) | 0 |
Total, Fair Value | 3,821 | 13,010 |
Total, Gross Unrealized Losses | $ (193) | $ (74) |
INVESTMENTS IN DEBT SECURITIE_4
INVESTMENTS IN DEBT SECURITIES - Contractual Maturities of Short-Term and Long-Term Investments (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Amortized Cost | |
Due in one year or less | $ 1,072,163 |
Due in one to five years | 838,908 |
Amortized Cost | 1,911,071 |
Fair Value | |
Due in one year or less | 1,052,973 |
Due in one to five years | 802,880 |
Fair Value | $ 1,855,853 |
CUSTOMER FUNDS - Assets Underly
CUSTOMER FUNDS - Assets Underlying Customer Funds (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 2,983,658 | $ 2,830,995 |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 2,292,814 | 242,243 |
Cash Equivalents | Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 439,093 | 2,126,579 |
Cash Equivalents | Reverse repurchase agreement | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 251,751 | $ 72,119 |
CUSTOMER FUNDS - Investments wi
CUSTOMER FUNDS - Investments within Customer Funds (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,911,071 | |
Fair Value | $ 1,855,853 | |
Customer funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 390,253 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (199) | |
Fair Value | 390,054 | |
Customer funds | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 30,002 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (8) | |
Fair Value | 29,994 | |
Customer funds | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 360,251 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (191) | |
Fair Value | $ 360,060 |
CUSTOMER FUNDS - Debt Securitie
CUSTOMER FUNDS - Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value (Details) - Customer funds $ in Thousands | Dec. 31, 2021 USD ($) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Less than 12 Months, Fair Value | $ 390,054 |
Less than 12 Months, Gross Unrealized Losses | (199) |
Greater than 12 months, Fair Value | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 |
Total, Fair Value | 390,054 |
Total, Gross Unrealized Losses | (199) |
U.S. agency securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Less than 12 Months, Fair Value | 29,994 |
Less than 12 Months, Gross Unrealized Losses | (8) |
Greater than 12 months, Fair Value | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 |
Total, Fair Value | 29,994 |
Total, Gross Unrealized Losses | (8) |
U.S. government securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Less than 12 Months, Fair Value | 360,060 |
Less than 12 Months, Gross Unrealized Losses | (191) |
Greater than 12 months, Fair Value | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 |
Total, Fair Value | 360,060 |
Total, Gross Unrealized Losses | $ (191) |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | $ 2,983,658 | $ 2,830,995 |
Short-term debt securities | 1,052,973 | 869,283 |
Long-term debt securities | 802,880 | 1,526,430 |
Safeguarding asset related to bitcoin held for other parties | 527,669 | 1,100,596 |
Safeguarding obligation liability related to bitcoin held for other parties | (527,669) | (1,100,596) |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 0 | 360,060 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 0 | 29,994 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable equity security | 12,760 | 0 |
Safeguarding asset related to bitcoin held for other parties | 0 | 0 |
Safeguarding obligation liability related to bitcoin held for other parties | 0 | 0 |
Total assets (liabilities) measured at fair value | 2,975,885 | 6,008,845 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,218,293 | 2,344,768 |
Customer funds | 439,093 | 2,126,579 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 92,409 | 0 |
Customer funds | 0 | 360,060 |
Short-term debt securities | 549,933 | 430,843 |
Long-term debt securities | 411,646 | 674,476 |
Fair Value, Measurements, Recurring | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Reverse repurchase agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 251,751 | 72,119 |
Fair Value, Measurements, Recurring | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Foreign government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable equity security | 0 | 0 |
Safeguarding asset related to bitcoin held for other parties | 527,669 | 1,100,596 |
Safeguarding obligation liability related to bitcoin held for other parties | (527,669) | (1,100,596) |
Total assets (liabilities) measured at fair value | 1,039,662 | 1,349,160 |
Fair Value, Measurements, Recurring | Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,468 | 790 |
Short-term debt securities | 356,901 | 293,319 |
Long-term debt securities | 307,582 | 663,207 |
Fair Value, Measurements, Recurring | Level 2 | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 22,999 |
Customer funds | 0 | 29,994 |
Short-term debt securities | 76,620 | 74,128 |
Long-term debt securities | 67,778 | 153,320 |
Fair Value, Measurements, Recurring | Level 2 | Reverse repurchase agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 4,983 |
Short-term debt securities | 7,795 | 9,200 |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 139,420 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 39,373 | 36,088 |
Fair Value, Measurements, Recurring | Level 2 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,500 | 0 |
Short-term debt securities | 8,063 | 5,548 |
Long-term debt securities | 12,053 | 22,417 |
Fair Value, Measurements, Recurring | Level 2 | Foreign government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 14,288 | 20,157 |
Long-term debt securities | 3,821 | 13,010 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable equity security | 0 | 0 |
Safeguarding asset related to bitcoin held for other parties | 0 | 0 |
Safeguarding obligation liability related to bitcoin held for other parties | 0 | 0 |
Total assets (liabilities) measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Customer funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Reverse repurchase agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer funds | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Foreign government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Long-term debt securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value and Carrying Value of Convertible Senior Notes (Details) - Level 2 - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | $ 4,567,415 | $ 4,559,663 |
Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 3,859,914 | 5,661,947 |
2031 Senior Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 987,818 | 986,774 |
2031 Senior Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 759,542 | 1,018,113 |
2026 Senior Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 989,710 | 987,626 |
2026 Senior Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 853,318 | 994,579 |
2027 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 568,200 | 567,208 |
2027 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 411,735 | 614,286 |
2026 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 568,888 | 567,621 |
2026 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 447,220 | 595,548 |
2025 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 992,629 | 990,361 |
2025 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 910,558 | 1,477,302 |
2023 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 460,170 | 459,618 |
2023 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 477,541 | 958,927 |
2022 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 0 | 455 |
2022 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | $ 0 | $ 3,192 |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value and Carrying Value of Loans Held for Sale (Details) - Level 3 - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 462,980 | $ 517,940 |
Loans held for investment | 130,509 | 91,447 |
Total | 593,489 | 609,387 |
Fair Value (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 494,934 | 574,982 |
Loans held for investment | 137,085 | 95,746 |
Total | $ 632,019 | $ 670,728 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held for sale | $ 462,980 | $ 517,940 |
Paycheck Protection Program, CARES Act Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held for sale | $ 32,400 | $ 364,800 |
CONSUMER RECEIVABLES, NET - Nar
CONSUMER RECEIVABLES, NET - Narrative (Details) - Consumer Portfolio Segment $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Threshold period past due | 60 days |
Consumer receivables | $ 1,394,098 |
Cash in transit | $ 103,300 |
Percentage of cash in transit to total amortized cost of consumer receivables | 7.40% |
Threshold period past due to consider amounts to be uncollectible | 180 days |
Pass | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Consumer receivables | $ 1,300,000 |
Classified | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Consumer receivables | $ 100,000 |
Minimum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Payment period | 14 days |
Maximum | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Payment period | 56 days |
CONSUMER RECEIVABLES, NET - Agi
CONSUMER RECEIVABLES, NET - Aging Analysis (Details) - Consumer Portfolio Segment $ in Thousands | Sep. 30, 2022 USD ($) |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | $ 1,394,098 |
Non-delinquent loans | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | 1,152,509 |
1 - 60 days past due | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | 159,759 |
61 - 90 days past due | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | 21,385 |
90+ days past due | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | $ 60,445 |
CONSUMER RECEIVABLES, NET - Act
CONSUMER RECEIVABLES, NET - Activity in Allowance for Credit Losses (Details) - Consumer Portfolio Segment - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit losses, recorded from acquisition | $ 121,579 | $ 115,552 |
Provision for credit losses | 53,021 | 146,014 |
Charge-offs and other adjustments | (28,516) | (116,624) |
Foreign exchange effect | (4,113) | (2,971) |
Allowance for credit losses, end of the period | $ 141,971 | $ 141,971 |
LOANS HELD FOR INVESTMENT (Deta
LOANS HELD FOR INVESTMENT (Details) - Loan Portfolio Segment - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, net of allowance for loan losses | $ 130,509 | $ 91,447 |
Threshold period past due | 60 days | |
Nonperforming Financial Instruments | ||
Financing Receivable, Past Due [Line Items] | ||
Threshold period past due | 90 days | |
Unlikely to be Collected Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
Threshold period past due | 120 days | |
Pass | ||
Financing Receivable, Past Due [Line Items] | ||
Consumer receivables | $ 137,000 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 665,867 | $ 541,452 |
Less: Accumulated depreciation and amortization | (349,489) | (259,312) |
Property and equipment, net | 316,378 | 282,140 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 227,158 | 208,228 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 210,524 | 174,004 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 182,835 | 116,827 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 45,350 | $ 42,393 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense on property and equipment | $ 32.9 | $ 27 | $ 94.3 | $ 68.4 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) $ in Billions | 3 Months Ended | 9 Months Ended | |||||
Feb. 01, 2022 USD ($) | Jan. 31, 2022 USD ($) shares | Sep. 30, 2022 USD ($) business | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jan. 31, 2022 AUD ($) | |
Business Acquisition [Line Items] | |||||||
Number of businesses acquired | business | 0 | ||||||
Afterpay Limited | |||||||
Business Acquisition [Line Items] | |||||||
Equity consideration (in shares) | shares | 113,617,352 | ||||||
Equity consideration | $ 13,800,000,000 | ||||||
Acquisition cost expensed | $ 66,337,000 | $ 66,300,000 | $ 66,300,000 | ||||
Acquired debt from acquisition | 1,058,065,000 | $ 1.5 | |||||
Adjustment of deferred tax liabilities | 23,600,000 | ||||||
Current liabilities adjustment | 10,300,000 | ||||||
Goodwill adjustment | 13,300,000 | ||||||
Deferred tax assets | 131,000,000 | ||||||
Deferred tax assets, valuation allowance | 131,000,000 | ||||||
Unrecognized tax benefits | 34,000,000 | ||||||
Transaction costs | $ 26,900,000 | 42,400,000 | 117,300,000 | ||||
Fair value of consideration transferred | $ 13,836,622,000 | ||||||
Other Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of consideration transferred | 46,000,000 | ||||||
Goodwill amount expected to be tax deductible | $ 0 | 0 | 0 | 0 | |||
Intangible assets (excluding goodwill) amount expected to be tax deductible | $ 0 | $ 0 | $ 0 | $ 0 |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) $ in Thousands, $ in Billions | 9 Months Ended | |||||
Feb. 01, 2022 USD ($) | Jan. 31, 2022 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jan. 31, 2022 AUD ($) | Dec. 31, 2021 USD ($) | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Goodwill | $ 11,557,984 | $ 519,276 | ||||
Afterpay Limited | ||||||
Consideration: | ||||||
Stock (113,617,352 shares of Class A common stock, excluding value accounted as post-combination expense of $66,337) | $ 13,827,929 | |||||
Cash paid to settle tax withholding in connection with replacement awards | $ 8,693 | |||||
Equity consideration (in shares) | shares | 113,617,352 | |||||
Acquisition cost expensed | $ 66,337 | $ 66,300 | $ 66,300 | |||
Total | $ 13,836,622 | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Current assets (inclusive of cash, cash equivalents, and restricted cash acquired) | 653,709 | |||||
Consumer receivables | 1,245,508 | |||||
Other non-current assets | 74,232 | |||||
Long-term debt - current | (1,058,065) | $ (1.5) | ||||
Current liabilities | (404,770) | |||||
Warehouse funding facilities | (107,996) | |||||
Deferred tax liabilities | (211,377) | |||||
Other non-current liabilities | (55,374) | |||||
Total identifiable net assets acquired | 2,160,867 | |||||
Goodwill | 11,675,755 | |||||
Total | 13,836,622 | |||||
Afterpay Limited | Intangible customer assets | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Intangible assets | 1,378,000 | |||||
Afterpay Limited | Intangible technology assets | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Intangible assets | 239,000 | |||||
Afterpay Limited | Intangible trade name | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||
Intangible assets | $ 408,000 |
ACQUISITIONS - Pro Forma Financ
ACQUISITIONS - Pro Forma Financial Information (Details) - Afterpay Limited - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net revenue | $ 4,515,541 | $ 4,044,781 | $ 12,945,438 | $ 14,174,515 |
Net loss | $ (15,774) | $ (31,225) | $ (333,947) | $ (112,046) |
GOODWILL - Change in Carrying V
GOODWILL - Change in Carrying Value of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 519,276 |
Acquisitions | 11,718,209 |
Foreign currency translation adjustments | (679,501) |
Goodwill, ending balance | 11,557,984 |
Corporate and Other | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 197,885 |
Acquisitions | 0 |
Foreign currency translation adjustments | 0 |
Goodwill, ending balance | 197,885 |
Cash App | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 128,334 |
Acquisitions | 5,860,305 |
Foreign currency translation adjustments | (340,431) |
Goodwill, ending balance | 5,648,208 |
Square | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 193,057 |
Acquisitions | 5,857,904 |
Foreign currency translation adjustments | (339,070) |
Goodwill, ending balance | $ 5,711,891 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of reportable segments | 2 |
ACQUIRED INTANGIBLE ASSETS - Sc
ACQUIRED INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Cost | $ 2,284,070 | $ 360,087 | ||||
Accumulated Amortization | (253,194) | (103,038) | ||||
Net | $ 2,030,876 | $ 257,049 | $ 2,148,078 | $ 268,692 | $ 262,196 | $ 137,612 |
Technology assets | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Estimated Useful Life | 5 years | 5 years | ||||
Cost | $ 395,057 | $ 164,977 | ||||
Accumulated Amortization | (116,148) | (65,619) | ||||
Net | $ 278,909 | $ 99,358 | ||||
Customer assets | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Estimated Useful Life | 15 years | 15 years | ||||
Cost | $ 1,434,803 | $ 128,316 | ||||
Accumulated Amortization | (84,786) | (19,244) | ||||
Net | $ 1,350,017 | $ 109,072 | ||||
Trade name | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Estimated Useful Life | 9 years | 9 years | ||||
Cost | $ 440,509 | $ 53,051 | ||||
Accumulated Amortization | (47,151) | (14,169) | ||||
Net | $ 393,358 | $ 38,882 | ||||
Other | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Estimated Useful Life | 9 years | 9 years | ||||
Cost | $ 13,701 | $ 13,743 | ||||
Accumulated Amortization | (5,109) | (4,006) | ||||
Net | $ 8,592 | $ 9,737 |
ACQUIRED INTANGIBLE ASSETS - Ch
ACQUIRED INTANGIBLE ASSETS - Change in Carrying Value of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Acquired intangible assets, net, beginning of the period | $ 2,148,078 | $ 262,196 | $ 257,049 | $ 137,612 |
Acquisitions | 0 | 18,100 | 2,028,490 | 159,100 |
Amortization expense | (55,867) | (11,140) | (155,288) | (27,258) |
Foreign currency translation adjustments | (61,335) | (464) | (99,375) | (762) |
Acquired intangible assets, net, end of the period | $ 2,030,876 | $ 268,692 | $ 2,030,876 | $ 268,692 |
ACQUIRED INTANGIBLE ASSETS - Fu
ACQUIRED INTANGIBLE ASSETS - Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Remainder of 2022 | $ 54,684 | |||||
2023 | 218,629 | |||||
2024 | 215,168 | |||||
2025 | 208,340 | |||||
2026 | 194,274 | |||||
Thereafter | 1,139,781 | |||||
Net | $ 2,030,876 | $ 2,148,078 | $ 257,049 | $ 268,692 | $ 262,196 | $ 137,612 |
OTHER CONSOLIDATED BALANCE SH_5
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Inventory, net | $ 102,962 | $ 77,058 | |
Restricted cash | 246,570 | 18,778 | $ 14,420 |
Processing costs receivable | 285,006 | 228,914 | |
Prepaid expenses | 118,756 | 63,341 | |
Accounts receivable, net | 128,386 | 89,702 | |
Other | 163,684 | 118,189 | |
Total | 1,175,873 | 687,429 | |
Loan Portfolio Segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for investment, net of allowance for loan losses | $ 130,509 | $ 91,447 |
OTHER CONSOLIDATED BALANCE SH_6
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses and Other Current Liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Accrued expenses | $ 372,038,000 | $ 372,038,000 | $ 254,900,000 | ||
Accounts payable | 116,119,000 | 116,119,000 | 82,173,000 | ||
Customer deposits | 118,754,000 | 118,754,000 | 59,844,000 | ||
Pagantis deferred consideration | 49,836,000 | 49,836,000 | 0 | ||
Accrued transaction losses | 61,012,000 | 61,012,000 | 55,167,000 | ||
Accrued royalties | 51,441,000 | 51,441,000 | 53,616,000 | ||
Deferred revenue, current | 47,197,000 | 47,197,000 | 48,462,000 | ||
Other | 152,098,000 | 152,098,000 | 84,692,000 | ||
Total | 968,495,000 | 968,495,000 | $ 638,854,000 | ||
Contingent consideration | 0 | 0 | |||
Transaction Losses | |||||
Business Acquisition [Line Items] | |||||
Provisions for transaction losses realized and written-off within the same period | $ 100,900,000 | $ 89,800,000 | $ 312,600,000 | $ 252,200,000 |
OTHER CONSOLIDATED BALANCE SH_7
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Reserve for Transaction Losses (Details) - Transaction Losses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loss Contingency Accrual [Roll Forward] | ||||
Accrued transaction losses, beginning of the period | $ 61,835 | $ 48,480 | $ 55,167 | $ 70,557 |
Provision for transaction losses | 19,724 | 17,364 | 68,743 | 38,406 |
Charge-offs to accrued transaction losses | (20,547) | (18,107) | (62,898) | (61,226) |
Accrued transaction losses, end of the period | $ 61,012 | $ 47,737 | $ 61,012 | $ 47,737 |
OTHER CONSOLIDATED BALANCE SH_8
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 24 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Investment in non-marketable equity securities | $ 162,607 | $ 162,607 | $ 81,919 | ||
Investment in bitcoin | 111,294 | 111,294 | 149,000 | ||
Restricted cash | 72,479 | $ 73,420 | 72,479 | $ 73,420 | 71,702 |
Other | 92,154 | 92,154 | 67,914 | ||
Total | 438,534 | 438,534 | 370,535 | ||
Investment in non-marketable equity securities, unrealized gain | 59,800 | ||||
Investment in non-marketable equity securities, cumulative unrealized gain | 78,800 | 78,800 | |||
Bitcoin impairment losses | 1,619 | $ 6,000 | 37,580 | $ 71,126 | |
Bitcoin accumulated impairment losses | 108,700 | 108,700 | |||
Bitcoin | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible asset acquired | 0 | $ 220,000 | |||
Fair value of bitcoin investment | 156,000 | 156,000 | |||
Amount of fair value in excess of carrying value for bitcoin investment | $ 44,700 | $ 44,700 |
BITCOIN HELD FOR OTHER PARTIE_2
BITCOIN HELD FOR OTHER PARTIES (Details) $ in Thousands | Sep. 30, 2022 USD ($) bitcoin | Dec. 31, 2021 USD ($) bitcoin |
Platform Operator, Crypto-Asset [Line Items] | ||
Approximate number of bitcoin held for customers | bitcoin | 25,976 | 23,360 |
Approximate number of bitcoin held for trading partners | bitcoin | 1,188 | 458 |
Total approximate number of bitcoin held for other parties | bitcoin | 27,164 | 23,818 |
Safeguarding obligation liability related to bitcoin held for other parties | $ 527,669 | $ 1,100,596 |
Safeguarding asset related to bitcoin held for other parties | 527,669 | 1,100,596 |
Crypto-Asset, Held For Customers | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Safeguarding obligation liability related to bitcoin held for other parties | 504,588 | 1,079,412 |
Crypto-Asset, Held For Partners | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Safeguarding obligation liability related to bitcoin held for other parties | $ 23,081 | $ 21,184 |
INDEBTEDNESS - Facility Narrati
INDEBTEDNESS - Facility Narrative (Details) - USD ($) | 1 Months Ended | |||||||
Feb. 23, 2022 | May 31, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | Jan. 29, 2021 | Jan. 28, 2021 | Nov. 09, 2020 | May 28, 2020 | |
Debt Instrument [Line Items] | ||||||||
Paycheck protection program liquidity facility advances outstanding | $ 31,116,000 | $ 497,533,000 | ||||||
Line of Credit | Paycheck Protection Program Liquidity Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 1,000,000,000 | $ 1,000,000,000 | $ 500,000,000 | |||||
Paycheck protection program liquidity facility advances outstanding | 31,100,000 | |||||||
Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal outstanding | 4,610,630,000 | $ 4,611,085,000 | ||||||
Revolving Credit Facility | Line of Credit | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 500,000,000 | |||||||
Increase limit | $ 100,000,000 | |||||||
Debt covenant, minimum quarterly liquidity amount | $ 250,000,000 | |||||||
Unused commitment fee percentage | 0.15% | |||||||
Amounts drawn to date | 0 | |||||||
Letters of credit outstanding | 0 | |||||||
Remaining borrowing capacity | 600,000,000 | |||||||
Revolving Credit Facility | Line of Credit | Federal Funds Rate | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Revolving Credit Facility | Line of Credit | Federal Funds Rate | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Revolving Credit Facility | Line of Credit | Federal Funds Rate | Minimum | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional basis spread on variable rate | 0.25% | |||||||
Revolving Credit Facility | Line of Credit | Federal Funds Rate | Maximum | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional basis spread on variable rate | 0.75% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | Minimum | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.25% | |||||||
Additional basis spread on variable rate | 0.25% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | Maximum | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.75% | |||||||
Additional basis spread on variable rate | 0.75% | |||||||
Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1% | |||||||
Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.25% | |||||||
Additional basis spread on variable rate | 0.25% | |||||||
Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.75% | |||||||
Additional basis spread on variable rate | 0.75% | |||||||
Revolving Credit Facility | Line of Credit | Prime Rate | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Revolving Credit Facility | Line of Credit | Prime Rate | Minimum | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional basis spread on variable rate | 0.25% | |||||||
Revolving Credit Facility | Line of Credit | Prime Rate | Maximum | Senior Unsecured Revolving Credit Facility, Tranche B Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional basis spread on variable rate | 0.75% | |||||||
Revolving Credit Facility | Convertible Debt | Credit Agreement, Second Amendment | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 3,600,000,000 | |||||||
Line of Credit | Secured Debt | Warehouse Funding Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 1,700,000,000 | |||||||
Remaining borrowing capacity | 1,200,000,000 | |||||||
Principal outstanding | $ 500,000,000 |
INDEBTEDNESS - Amounts Drawn on
INDEBTEDNESS - Amounts Drawn on Facilities by Year of Maturity (Details) - Secured Debt - Warehouse Funding Facilities - Line of Credit $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 120,000 |
2024 | 359,422 |
Net Carrying Value | $ 479,422 |
INDEBTEDNESS - Senior Unsecured
INDEBTEDNESS - Senior Unsecured Notes Narrative (Details) - Senior Notes $ in Millions | May 20, 2021 USD ($) |
Senior Unsecured Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 2,000 |
Redemption price, percentage | 100% |
Redemption price, premium rate | 1% |
Debt repurchase, percentage | 101% |
Debt default, percentage of interest by trustee or holders (at least) | 25% |
Discounts and commissions payable | $ 22.5 |
Third party offering costs | $ 5.7 |
Senior Unsecured Notes | US Treasury (UST) Interest Rate | |
Debt Instrument [Line Items] | |
Redemption price, premium, basis spread on variable rate | 0.50% |
2026 Senior Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 1,000 |
Interest rate | 2.75% |
Effective interest rate | 3.06% |
2031 Senior Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 1,000 |
Interest rate | 3.50% |
Effective interest rate | 3.69% |
INDEBTEDNESS - Convertible Note
INDEBTEDNESS - Convertible Notes Narrative (Details) - Convertible Debt $ / shares in Units, shares in Millions | 9 Months Ended | 24 Months Ended | 67 Months Ended | |||||
Nov. 13, 2020 USD ($) day $ / shares | Mar. 05, 2020 USD ($) day $ / shares | May 25, 2018 USD ($) day $ / shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) shares | Jan. 01, 2021 | Mar. 06, 2017 USD ($) $ / shares | |
Debt Instrument [Line Items] | ||||||||
Conversion price (in USD per share) | $ / shares | $ 121.01 | $ 77.85 | $ 22.95 | |||||
2026 and 2027 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 1,150,000,000 | |||||||
Conversion rate | 0.003343 | |||||||
Conversion price (in USD per share) | $ / shares | $ 299.13 | |||||||
Redemption price, percentage | 100% | |||||||
Carrying amount of equity component | $ 198,000,000 | |||||||
Discounts and commissions payable | 17,500,000 | |||||||
Third party offering costs | 1,000,000 | |||||||
Issuance costs attributable to the liability component | $ 15,400,000 | |||||||
2026 and 2027 Notes | Debt Instrument, Conversion Term One | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | day | 20 | |||||||
Threshold consecutive trading days | day | 30 | |||||||
Threshold percentage of stock price trigger | 130% | |||||||
2026 and 2027 Notes | Debt Instrument Conversion Term Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | day | 5 | |||||||
Threshold consecutive trading days | day | 5 | |||||||
Threshold percentage of stock price trigger | 98% | |||||||
2026 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 575,000,000 | |||||||
Interest rate | 0% | |||||||
Conversion price (in USD per share) | $ / shares | $ 299.13 | |||||||
Effective interest rate | 3.35% | |||||||
2026 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate | 0.49% | |||||||
2027 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 575,000,000 | |||||||
Interest rate | 0.25% | |||||||
Conversion price (in USD per share) | $ / shares | $ 299.13 | |||||||
Effective interest rate | 3.66% | |||||||
2027 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate | 0.30% | |||||||
2025 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 1,000,000,000 | |||||||
Interest rate | 0.125% | |||||||
Conversion rate | 0.0082641 | |||||||
Conversion price (in USD per share) | $ / shares | $ 121.01 | |||||||
Redemption price, percentage | 100% | |||||||
Carrying amount of equity component | $ 154,600,000 | |||||||
Effective interest rate | 3.81% | |||||||
Discounts and commissions payable | $ 14,300,000 | |||||||
Third party offering costs | 900,000 | |||||||
Issuance costs attributable to the liability component | $ 12,800,000 | |||||||
2025 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate | 0.43% | |||||||
2025 Convertible Notes | Debt Instrument, Conversion Term One | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | day | 20 | |||||||
Threshold consecutive trading days | day | 30 | |||||||
Threshold percentage of stock price trigger | 130% | |||||||
2025 Convertible Notes | Debt Instrument Conversion Term Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | day | 5 | |||||||
Threshold consecutive trading days | day | 5 | |||||||
Threshold percentage of stock price trigger | 98% | |||||||
2023 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 862,500,000 | |||||||
Interest rate | 0.50% | |||||||
Conversion rate | 0.0128456 | |||||||
Conversion price (in USD per share) | $ / shares | $ 77.85 | |||||||
Carrying amount of equity component | $ 155,300,000 | |||||||
Effective interest rate | 4.69% | |||||||
Discounts and commissions payable | $ 6,000,000 | |||||||
Third party offering costs | 800,000 | |||||||
Issuance costs attributable to the liability component | $ 5,600,000 | |||||||
Notes converted | $ 401,900,000 | |||||||
Shares issued upon conversion (in shares) | shares | 5.2 | |||||||
2023 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate | 0.66% | |||||||
2023 Convertible Notes | Debt Instrument, Conversion Term One | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | day | 20 | |||||||
Threshold consecutive trading days | day | 30 | |||||||
Threshold percentage of stock price trigger | 130% | |||||||
2023 Convertible Notes | Debt Instrument Conversion Term Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | day | 5 | |||||||
Threshold consecutive trading days | day | 5 | |||||||
Threshold percentage of stock price trigger | 98% | |||||||
2022 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 440,000,000 | |||||||
Notes converted | $ 500,000 | $ 440,000,000 | ||||||
Shares issued upon conversion (in shares) | shares | 16.5 |
INDEBTEDNESS - Net Carrying Amo
INDEBTEDNESS - Net Carrying Amount of Convertible Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 4,610,630 | $ 4,611,085 |
Unamortized Debt Issuance Costs | (43,215) | (51,422) |
Net Carrying Value | 4,567,415 | 4,559,663 |
2031 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,000,000 | 1,000,000 |
Unamortized Debt Issuance Costs | (12,182) | (13,226) |
Net Carrying Value | 987,818 | 986,774 |
2026 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,000,000 | 1,000,000 |
Unamortized Debt Issuance Costs | (10,290) | (12,374) |
Net Carrying Value | 989,710 | 987,626 |
2027 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 575,000 | 575,000 |
Unamortized Debt Issuance Costs | (6,800) | (7,792) |
Net Carrying Value | 568,200 | 567,208 |
2026 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 575,000 | 575,000 |
Unamortized Debt Issuance Costs | (6,112) | (7,379) |
Net Carrying Value | 568,888 | 567,621 |
2025 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,000,000 | 1,000,000 |
Unamortized Debt Issuance Costs | (7,371) | (9,639) |
Net Carrying Value | 992,629 | 990,361 |
2023 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 460,630 | 460,630 |
Unamortized Debt Issuance Costs | (460) | (1,012) |
Net Carrying Value | $ 460,170 | 459,618 |
2022 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 455 | |
Unamortized Debt Issuance Costs | 0 | |
Net Carrying Value | $ 455 |
INDEBTEDNESS - Interest Expense
INDEBTEDNESS - Interest Expense on Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 16,846 | $ 17,047 | $ 50,012 | $ 27,272 |
Amortization of debt issuance costs | 2,766 | 2,868 | 8,208 | 7,005 |
Total | $ 19,612 | $ 19,915 | $ 58,220 | $ 34,277 |
INDEBTEDNESS - Convertible No_2
INDEBTEDNESS - Convertible Note Hedge and Warrant Transactions Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | 52 Months Ended | 67 Months Ended | ||||
Nov. 13, 2020 | Mar. 05, 2020 | May 25, 2018 | Mar. 06, 2017 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price of convertible debt (in USD per share) | $ 121.01 | $ 77.85 | $ 22.95 | ||||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | $ 161.34 | $ 109.26 | $ 31.18 | ||||
Convertible Debt | 2027 Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price of convertible debt (in USD per share) | $ 299.13 | ||||||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | 414.18 | ||||||
Convertible Debt | 2026 Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price of convertible debt (in USD per share) | 299.13 | ||||||
Conversion price of convertible debt after effect of warrants and note hedge (in USD per share) | $ 368.16 | ||||||
Common Stock Warrant, 2027 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 1,900 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 414.18 | ||||||
Proceeds from issuance of warrants | $ 68 | ||||||
Common Stock Warrant, 2026 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 1,900 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 368.16 | ||||||
Proceeds from issuance of warrants | $ 64.6 | ||||||
Common Stock Warrant, 2025 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 8,260 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 161.34 | ||||||
Proceeds from issuance of warrants | $ 99.5 | ||||||
Common Stock Warrant, 2023 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11,100 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 109.26 | ||||||
Proceeds from issuance of warrants | $ 112.1 | ||||||
Shares of common stock received due to exercise of note hedges (in shares) | 1,000 | 3,000 | |||||
Common Stock Warrant, 2022 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 19,200 | ||||||
Warrants, weighted average exercise price (in USD per share) | $ 31.18 | ||||||
Proceeds from issuance of warrants | $ 57.2 | ||||||
Shares of common stock received due to exercise of note hedges (in shares) | 200 | 15,000 | |||||
Options Held | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 1,900 | 8,300 | 11,100 | 19,200 | |||
Convertible note hedge, option to purchase common stock, price (in USD per share) | $ 299.13 | $ 121.01 | $ 77.85 | $ 22.95 | |||
Cost of convertible note hedge | $ 149.2 | $ 172.6 | $ 92.1 | ||||
Options Held | 2027 Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Cost of convertible note hedge | $ 104.3 | ||||||
Options Held | 2026 Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Cost of convertible note hedge | $ 84.6 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (17,289) | $ 452 | $ (17,687) | $ (7,961) |
STOCKHOLDERS' EQUITY - Preferre
STOCKHOLDERS' EQUITY - Preferred Stock, Common Stock, Warrants, Conversion of Convertible Notes and Exercise Convertible Note Hedges Narrative (Details) | 3 Months Ended | 9 Months Ended | 52 Months Ended | 67 Months Ended | |||||
Sep. 30, 2022 $ / shares shares | Sep. 30, 2022 vote $ / shares shares | Sep. 30, 2022 $ / shares shares | Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | Nov. 13, 2020 $ / shares shares | Mar. 05, 2020 $ / shares shares | May 25, 2018 $ / shares shares | Mar. 06, 2017 $ / shares shares | |
Class of Stock [Line Items] | |||||||||
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
Preferred stock, outstanding (in shares) | 0 | 0 | 0 | 0 | 0 | ||||
2023 Convertible Notes | Convertible Debt | |||||||||
Class of Stock [Line Items] | |||||||||
Shares issued upon conversion (in shares) | 5,200,000 | ||||||||
Common Stock Warrant, 2022 Notes | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 19,200,000 | ||||||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 31.18 | ||||||||
Warrants term | 60 days | 60 days | 60 days | 60 days | |||||
Number of warrants exercised during period (in shares) | 7,900,000 | 10,900,000 | |||||||
Shares of common stock received due to exercise of note hedges (in shares) | 200,000 | 15,000,000 | |||||||
Common Stock Warrant, 2023 Notes | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 11,100,000 | ||||||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 109.26 | ||||||||
Warrants term | 60 days | 60 days | 60 days | 60 days | |||||
Number of warrants exercised (in shares) | 0 | 0 | 0 | 0 | |||||
Shares of common stock received due to exercise of note hedges (in shares) | 1,000,000 | 3,000,000 | |||||||
Common Stock Warrant, 2025 Notes | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 8,260,000 | ||||||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 161.34 | ||||||||
Warrants term | 60 days | 60 days | 60 days | 60 days | |||||
Number of warrants exercised (in shares) | 0 | 0 | 0 | 0 | |||||
Common Stock Warrant, 2026 Notes | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 1,900,000 | ||||||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 368.16 | ||||||||
Warrants term | 60 days | 60 days | 60 days | 60 days | |||||
Number of warrants exercised (in shares) | 0 | 0 | 0 | 0 | |||||
Common Stock Warrant, 2027 Notes | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants to purchase aggregate shares of capital stock (in shares) | 1,900,000 | ||||||||
Warrants, weighted average exercise price (in USD per share) | $ / shares | $ 414.18 | ||||||||
Warrants term | 60 days | 60 days | 60 days | 60 days | |||||
Number of warrants exercised (in shares) | 0 | 0 | 0 | 0 | |||||
Class A | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, number of votes entitled for each share held (in votes) | vote | 1 | ||||||||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
Common stock, outstanding (in shares) | 535,879,345 | 535,879,345 | 535,879,345 | 535,879,345 | 403,237,209 | ||||
Class B | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, number of votes entitled for each share held (in votes) | vote | 10 | ||||||||
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
Common stock, outstanding (in shares) | 60,657,578 | 60,657,578 | 60,657,578 | 60,657,578 | 61,706,578 |
STOCKHOLDERS' EQUITY - Stock Pl
STOCKHOLDERS' EQUITY - Stock Plans and Share Based Compensation Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Feb. 01, 2022 USD ($) | Nov. 17, 2015 shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) plan shares | Sep. 30, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share based compensation plans | plan | 2 | |||||
Employee stock purchase plan, compensation expense | $ | $ 262,733 | $ 165,011 | $ 794,794 | $ 429,999 | ||
Capitalized share-based compensation expense | $ | 5,600 | 3,600 | 13,200 | 11,000 | ||
Unrecognized compensation cost | $ | 2,600,000 | $ 2,600,000 | ||||
Unrecognized compensation cost, period for recognition | 2 years 11 months 4 days | |||||
Afterpay Limited | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Acquisition cost expensed | $ | $ 66,337 | $ 66,300 | 66,300 | |||
Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Employee stock purchase plan, compensation expense | $ | $ 16,000 | $ 7,600 | $ 41,900 | $ 24,400 | ||
2009 Stock Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for future issuance (in shares) | 0 | |||||
2009 Stock Option Plan | Stock options, RSAs, and RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity instruments outstanding (in shares) | 4,400,536 | 4,400,536 | ||||
2015 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for future issuance (in shares) | 124,801,371 | 124,801,371 | ||||
Shares reserved for future issuance (in shares) | 30,000,000 | |||||
Shares reserved for future issuance, percentage of annual increase | 5% | |||||
2015 Equity Incentive Plan | Stock options, RSAs, and RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity instruments outstanding (in shares) | 26,214,639 | 26,214,639 | ||||
2015 Equity Incentive Plan | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance, amount of annual increase (in shares) | 40,000,000 |
STOCKHOLDERS' EQUITY - Stock Op
STOCKHOLDERS' EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of Stock Options | ||
Outstanding, beginning of the year (in shares) | 8,916,100 | |
Granted (in shares) | 796,719 | |
Exercised (in shares) | (2,173,106) | |
Forfeited (in shares) | (85,258) | |
Expired (in shares) | (12,124) | |
Outstanding, end of the period (in shares) | 7,442,331 | 8,916,100 |
Weighted Average Exercise Price | ||
Beginning balance (in USD per share) | $ 26.09 | |
Granted (in USD per share) | 94.61 | |
Exercised (in USD per share) | 7.96 | |
Forfeited (in USD per share) | 103.84 | |
Expired (in USD per share) | 194.03 | |
Ending balance (in USD per share) | $ 37.56 | $ 26.09 |
Additional Disclosures | ||
Exercisable, end of the period (in shares) | 6,222,745 | |
Exercisable, end of the period, weighted average exercise price (in USD per share) | $ 24.65 | |
Outstanding, weighted average remaining contractual term | 4 years 7 days | 3 years 10 months 20 days |
Exercisable, end of the period, weighted average remaining contractual term | 3 years 2 months 19 days | |
Outstanding, aggregate intrinsic value | $ 253,390 | $ 1,226,105 |
Exercisable, end of the period, aggregate intrinsic value | $ 250,015 |
STOCKHOLDERS' EQUITY - Restrict
STOCKHOLDERS' EQUITY - Restricted Stock Awards and Restricted Stock Units Activity (Details) - RSAs and RSUs | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Shares | |
Unvested, beginning of the year (in shares) | shares | 13,221,953 |
Granted (in shares) | shares | 18,062,856 |
Vested (in shares) | shares | (5,753,971) |
Forfeited (in shares) | shares | (2,357,994) |
Unvested, end of the period (in shares) | shares | 23,172,844 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of the period (in USD per share) | $ / shares | $ 137.86 |
Granted (in USD per share) | $ / shares | 98.19 |
Vested (in USD per share) | $ / shares | 115.57 |
Forfeited (in USD per share) | $ / shares | 124.96 |
Unvested, end of the period (in USD per share) | $ / shares | $ 113.78 |
STOCKHOLDERS' EQUITY - Effects
STOCKHOLDERS' EQUITY - Effects of Share-Based Compensation on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 262,733 | $ 165,011 | $ 794,794 | $ 429,999 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 104 | 99 | 352 | 310 |
Product development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 184,569 | 121,209 | 508,781 | 314,265 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 28,744 | 16,023 | 75,133 | 40,680 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 49,316 | $ 27,680 | $ 210,528 | $ 74,744 |
NET INCOME (LOSS) PER SHARE - C
NET INCOME (LOSS) PER SHARE - Calculation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||||||
Net income (loss) | $ (18,744) | $ (209,277) | $ (207,363) | $ (2,876) | $ 203,678 | $ 39,008 | $ (435,384) | $ 239,810 |
Less: Net loss attributable to noncontrolling interests | (4,033) | (2,960) | (8,460) | (3,303) | ||||
Net income (loss) attributable to common stockholders, basic | (14,711) | 84 | (426,924) | 243,113 | ||||
Net income (loss) attributable to common stockholders, diluted | $ (14,711) | $ 84 | $ (426,924) | $ 243,113 | ||||
Basic shares: | ||||||||
Weighted-average shares used to compute basic net income (loss) per share (in shares) | 592,672 | 460,654 | 572,234 | 457,039 | ||||
Diluted shares: | ||||||||
Stock options, restricted stock, and employee stock purchase plan (in shares) | 0 | 17,180 | 0 | 18,991 | ||||
Convertible notes (in shares) | 0 | 0 | 0 | 18,727 | ||||
Common stock warrants (in shares) | 0 | 26,286 | 0 | 25,447 | ||||
Weighted-average shares used to compute diluted net income (loss) per share (in shares) | 592,672 | 504,120 | 572,234 | 520,204 | ||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||||||
Basic (in USD per share) | $ (0.02) | $ 0 | $ (0.75) | $ 0.53 | ||||
Diluted (in USD per share) | $ (0.02) | $ 0 | $ (0.75) | $ 0.48 |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Antidilutive Securities Excluded from Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 81,226 | 44,611 | 85,609 | 27,920 |
Stock options, restricted stock, and employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 35,272 | 7,652 | 30,338 | 7,161 |
Convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 18,025 | 20,884 | 18,030 | 3,845 |
Common stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from calculation of diluted net income (loss) per share (in shares) | 27,929 | 16,075 | 37,241 | 16,914 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Jul. 31, 2019 |
Related Party Transaction [Line Items] | |||
Operating lease right-of-use assets | $ 425,519 | $ 449,406 | |
Affiliated Entity | Operating Lease Agreement | |||
Related Party Transaction [Line Items] | |||
Operating lease term | 15 years 6 months | ||
Total lease payments over term | $ 42,700 | ||
Operating lease right-of-use assets | 20,100 | ||
Operating lease liability | $ 32,700 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION - Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 4,515,541 | $ 3,844,727 | $ 12,880,685 | $ 13,582,669 |
Gross Profit | 1,567,089 | 1,133,215 | 4,331,697 | 3,237,780 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 56,135 | 57,650 | 167,573 | 96,643 |
Gross Profit | 9,651 | 15,273 | 29,046 | 25,147 |
Cash App and Square Segement | Operating Segments | Afterpay Limited | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 105,000 | 273,900 | ||
Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,684,884 | 2,393,633 | 7,769,361 | 9,763,440 |
Gross Profit | 774,470 | 511,717 | 2,103,023 | 1,553,255 |
Cash App | Operating Segments | Afterpay Limited | ||||
Segment Reporting Information [Line Items] | ||||
Gross Profit | 74,900 | 195,800 | ||
Square | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,774,522 | 1,393,444 | 4,943,751 | 3,722,586 |
Gross Profit | 782,968 | 606,225 | 2,199,628 | 1,659,378 |
Square | Operating Segments | Afterpay Limited | ||||
Segment Reporting Information [Line Items] | ||||
Gross Profit | 74,900 | 195,800 | ||
Transaction-based revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,517,890 | 1,297,040 | 4,226,566 | 3,484,245 |
Revenue | 1,517,890 | 1,297,040 | 4,226,566 | 3,484,245 |
Transaction-based revenue | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Transaction-based revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 118,459 | 103,192 | 343,768 | 306,101 |
Transaction-based revenue | Square | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,399,431 | 1,193,848 | 3,882,798 | 3,178,144 |
Subscription and services-based revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 902,708 | 636,841 | 2,427,193 | 1,793,308 |
Revenue | 1,191,511 | 694,770 | 3,245,924 | 1,937,629 |
Subscription and services-based revenue | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 56,135 | 57,650 | 167,573 | 96,643 |
Subscription and services-based revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 803,673 | 474,779 | 2,146,163 | 1,406,313 |
Subscription and services-based revenue | Square | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 331,703 | 162,341 | 932,188 | 434,673 |
Hardware revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 43,388 | 37,255 | 128,765 | 109,769 |
Revenue | 43,388 | 37,255 | 128,765 | 109,769 |
Hardware revenue | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Hardware revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Hardware revenue | Square | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 43,388 | 37,255 | 128,765 | 109,769 |
Bitcoin revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,762,752 | 1,815,662 | 5,279,430 | 8,051,026 |
Revenue | 1,762,752 | 1,815,662 | 5,279,430 | 8,051,026 |
Bitcoin revenue | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Bitcoin revenue | Cash App | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,762,752 | 1,815,662 | 5,279,430 | 8,051,026 |
Bitcoin revenue | Square | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 0 | $ 0 | $ 0 |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION - Reconciliation of Total Segment Profit to Income before applicable Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Total segment gross profit | $ 1,567,089 | $ 1,133,215 | $ 4,331,697 | $ 3,237,780 |
Less: Product development | 548,037 | 360,729 | 1,531,088 | 992,498 |
Less: Sales and marketing | 485,838 | 409,073 | 1,518,227 | 1,132,411 |
Less: General and administrative | 395,437 | 267,348 | 1,235,306 | 683,969 |
Less: Transaction, loan, and consumer receivable losses | 147,586 | 62,306 | 395,433 | 130,874 |
Less: Bitcoin impairment losses | 1,619 | 6,000 | 37,580 | 71,126 |
Less: Amortization of customer and other intangible assets | 37,361 | 4,763 | 103,414 | 11,176 |
Less: Interest expense, net | 6,042 | 13,409 | 34,756 | 20,126 |
Less: Other expense (income), net | (18,798) | 12,011 | (71,036) | (36,249) |
Income (loss) before income tax | $ (36,033) | $ (2,424) | $ (453,071) | $ 231,849 |
SEGMENT AND GEOGRAPHICAL INFO_6
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 4,515,541 | $ 3,844,727 | $ 12,880,685 | $ 13,582,669 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 4,195,291 | 3,679,609 | 12,007,976 | 13,179,547 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 320,250 | $ 165,118 | $ 872,709 | $ 403,122 |
SEGMENT AND GEOGRAPHICAL INFO_7
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 14,330,757 | $ 1,507,871 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 8,105,759 | 1,426,103 |
Australia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 4,523,768 | 26,680 |
Other international | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,701,230 | $ 55,088 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Data (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental cash flow data: | ||
Cash paid for interest | $ 42,836 | $ 4,770 |
Cash paid for income taxes | 18,629 | 9,071 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for operating lease obligations | 37,939 | 40,712 |
Purchases of property and equipment in accounts payable and accrued expenses | 11,835 | 21,746 |
Deferred purchase consideration related to business combinations | 14,377 | 54,132 |
Fair value of common stock issued related to business combinations | (13,827,929) | (28,735) |
Fair value of common stock issued to settle the conversion of convertible notes | (2,551) | (742,174) |
Fair value of common stock shares received to settle convertible note hedges | 133,144 | 1,623,095 |
Fair value of common stock issued in connection with the exercise of common stock warrants | (806,446) | 0 |
Bitcoin lent to third-party borrowers | $ 5,934 | $ (5,994) |
Uncategorized Items - sq-202209
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |