Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Class of Stock [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 35.5 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2022. | ||
Entity Central Index Key | 0001512673 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding | 541,390,152 | ||
Class B | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding | 60,635,933 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | San Francisco, California |
Auditor Firm ID | 42 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,544,202 | $ 4,443,669 |
Investments in short-term debt securities | 1,081,851 | 869,283 |
Settlements receivable | 2,416,324 | 1,171,612 |
Customer funds | 3,180,324 | 2,830,995 |
Loans held for sale | 474,036 | 517,940 |
Safeguarding asset related to bitcoin held for other parties | 428,243 | 1,100,596 |
Other current assets | 1,627,265 | 687,429 |
Total current assets | 15,623,405 | 11,621,524 |
Property and equipment, net | 329,302 | 282,140 |
Goodwill | 11,966,761 | 519,276 |
Acquired intangible assets, net | 2,014,034 | 257,049 |
Investments in long-term debt securities | 573,429 | 1,526,430 |
Operating lease right-of-use assets | 373,172 | 449,406 |
Other non-current assets | 484,237 | 370,535 |
Total assets | 31,364,340 | 15,026,360 |
Current liabilities: | ||
Customers payable | 5,548,656 | 3,979,624 |
Settlements payable | 462,505 | 254,611 |
Accrued expenses and other current liabilities | 1,056,676 | 702,881 |
Current portion of long-term debt (Note 15) | 460,356 | 455 |
Warehouse funding facilities, current | 461,240 | 0 |
Safeguarding obligation liability related to bitcoin held for other parties | 428,243 | 1,100,596 |
PPP Liquidity Facility advances | 16,840 | 497,533 |
Total current liabilities | 8,434,516 | 6,535,700 |
Warehouse funding facilities, non-current | 132,498 | 15,236 |
Warehouse funding facilities, non-current | 877,066 | 0 |
Long-term debt (Note 15) | 4,109,829 | 4,559,208 |
Operating lease liabilities, non-current | 357,419 | 395,017 |
Other non-current liabilities | 201,657 | 207,610 |
Total liabilities | 14,112,985 | 11,712,771 |
Commitments and contingencies (Note 20) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at December 31, 2022 and December 31, 2021. None issued and outstanding at December 31, 2022 and December 31, 2021. | 0 | 0 |
Additional paid-in capital | 18,314,681 | 3,317,255 |
Accumulated other comprehensive loss | (523,090) | (16,435) |
Accumulated deficit | (568,712) | (27,965) |
Total stockholders’ equity attributable to common stockholders | 17,222,879 | 3,272,855 |
Noncontrolling interests | 28,476 | 40,734 |
Total stockholders’ equity | 17,251,355 | 3,313,589 |
Total liabilities and stockholders’ equity | 31,364,340 | 15,026,360 |
Consumer Portfolio Segment | ||
Current assets: | ||
Consumer receivables, net | 1,871,160 | 0 |
Class A | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Class B | ||
Stockholders’ equity: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 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) | 539,408,009 | 403,237,209 |
Common stock, outstanding (in shares) | 539,408,009 | 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) | 60,651,533 | 61,706,578 |
Common stock, outstanding (in shares) | 60,651,533 | 61,706,578 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Revenue | $ 17,531,587 | $ 17,661,203 | $ 9,497,578 |
Cost of Revenue [Abstract] | |||
Amortization of acquired technology assets | 70,194 | 22,645 | 11,174 |
Total cost of revenue | 11,539,695 | 13,241,380 | 6,764,169 |
Gross profit | 5,991,892 | 4,419,823 | 2,733,409 |
Operating expenses: | |||
Product development | 2,135,612 | 1,383,841 | 881,826 |
Sales and marketing | 2,057,951 | 1,617,189 | 1,109,670 |
General and administrative | 1,686,849 | 982,817 | 579,203 |
Transaction, loan, and consumer receivable losses | 550,683 | 187,991 | 177,670 |
Bitcoin impairment losses | 46,571 | 71,126 | 0 |
Amortization of customer and other acquired intangible assets | 138,758 | 15,747 | 3,855 |
Total operating expenses | 6,616,424 | 4,258,711 | 2,752,224 |
Operating income (loss) | (624,532) | 161,112 | (18,815) |
Interest expense, net | 36,228 | 33,124 | 56,943 |
Other income, net | (95,443) | (29,474) | (291,725) |
Income (loss) before income tax | (565,317) | 157,462 | 215,967 |
Provision (benefit) for income taxes | (12,312) | (1,364) | 2,862 |
Net income (loss) | (553,005) | 158,826 | 213,105 |
Less: Net loss attributable to noncontrolling interests | (12,258) | (7,458) | 0 |
Net income (loss) attributable to common stockholders | $ (540,747) | $ 166,284 | $ 213,105 |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in USD per share) | $ (0.93) | $ 0.36 | $ 0.48 |
Diluted (in USD per share) | $ (0.93) | $ 0.33 | $ 0.44 |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | |||
Basic (in shares) | 578,949 | 458,432 | 443,126 |
Diluted (in shares) | 578,949 | 501,779 | 482,167 |
Transaction-based revenue | |||
Revenue: | |||
Revenue | $ 5,701,540 | $ 4,793,146 | $ 3,294,978 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 3,364,028 | 2,719,502 | 1,911,848 |
Subscription and services-based revenue | |||
Revenue: | |||
Revenue | 4,552,773 | 2,709,731 | 1,539,403 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 861,745 | 483,056 | 222,712 |
Hardware revenue | |||
Revenue: | |||
Revenue | 164,418 | 145,679 | 91,654 |
Cost of Revenue [Abstract] | |||
Cost of revenue | 286,995 | 221,185 | 143,901 |
Bitcoin revenue | |||
Revenue: | |||
Revenue | 7,112,856 | 10,012,647 | 4,571,543 |
Cost of Revenue [Abstract] | |||
Cost of revenue | $ 6,956,733 | $ 9,794,992 | $ 4,474,534 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (553,005) | $ 158,826 | $ 213,105 |
Net foreign currency translation adjustments | (471,166) | (24,667) | 20,439 |
Net unrealized gain (loss) on marketable debt securities | (35,489) | (15,096) | 1,260 |
Total comprehensive income (loss) | $ (1,059,660) | $ 119,063 | $ 234,804 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 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, 2019 | 432,796,720 | ||||||||
Beginning balance at Dec. 31, 2019 | $ 1,715,050 | $ 0 | $ 2,223,749 | $ 1,629 | $ (510,328) | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 213,105 | 213,105 | |||||||
Shares issued in connection with employee stock plans (in shares) | 19,013,638 | ||||||||
Shares issued in connection with employee stock plans | 161,984 | 161,984 | |||||||
Issuance of common stock in connection with business combination (shares) | 607,974 | ||||||||
Issuance of common stock in connection with business combination | 35,319 | 35,319 | |||||||
Change in other comprehensive income (loss) | 21,699 | 21,699 | |||||||
Share-based compensation | 411,673 | 411,673 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (2,852,127) | ||||||||
Tax withholding related to vesting of restricted stock units | (314,019) | (314,019) | |||||||
Conversion feature of convertible notes, net of allocated costs | 347,059 | 347,059 | |||||||
Purchase of bond hedges in conjunction with issuance of convertible notes | (338,145) | (338,145) | |||||||
Sale of warrants in conjunction with issuance of convertible notes | 232,095 | 232,095 | |||||||
Issuance of common stock in conjunction with the conversion of convertible of notes (in shares) | 8,853,484 | ||||||||
Issuance of common stock in conjunction with the conversion of convertible notes | 195,749 | 195,749 | |||||||
Exercise of bond hedges in conjunction with the conversion of convertible notes (in shares) | (2,234,913) | ||||||||
Ending balance (in shares) at Dec. 31, 2020 | 456,184,776 | ||||||||
Ending balance at Dec. 31, 2020 | $ 2,681,569 | $ (399,733) | $ 0 | 2,955,464 | $ (502,707) | 23,328 | (297,223) | $ 102,974 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 | ||||||||
Net income (loss) | $ 158,826 | 166,284 | (7,458) | ||||||
Shares issued in connection with employee stock plans (in shares) | 11,975,907 | ||||||||
Shares issued in connection with employee stock plans | 126,829 | 126,829 | |||||||
Issuance of common stock in connection with business combination (shares) | 118,443 | ||||||||
Issuance of common stock in connection with business combination | 28,735 | 28,735 | |||||||
Change in other comprehensive income (loss) | (39,763) | (39,763) | |||||||
Share-based compensation | 623,067 | 623,067 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (1,403,146) | ||||||||
Tax withholding related to vesting of restricted stock units | (323,012) | (323,012) | |||||||
Issuance of common stock in conjunction with the conversion of convertible of notes (in shares) | 5,514,727 | ||||||||
Issuance of common stock in conjunction with the conversion of convertible notes | 408,879 | 408,879 | |||||||
Exercise of bond hedges in conjunction with the conversion of convertible notes (in shares) | (7,446,920) | ||||||||
Noncontrolling interests in connection with business combination | 48,192 | 48,192 | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 464,943,787 | ||||||||
Ending 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) | (553,005) | (540,747) | (12,258) | ||||||
Shares issued in connection with employee stock plans (in shares) | 11,824,138 | ||||||||
Shares issued in connection with employee stock plans | 81,768 | 81,768 | |||||||
Issuance of common stock in connection with business combination (shares) | 113,617,352 | ||||||||
Issuance of common stock in connection with business combination | 13,827,929 | 13,827,929 | |||||||
Change in other comprehensive income (loss) | (506,655) | (506,655) | |||||||
Share-based compensation | 1,092,010 | 1,092,010 | |||||||
Tax withholding related to vesting of restricted stock units (in shares) | (37,629) | ||||||||
Tax withholding related to vesting of restricted stock units | (4,735) | (4,735) | |||||||
Issuance of common stock in conjunction with the conversion of convertible of notes (in shares) | 20,055 | ||||||||
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) | (1,188,734) | ||||||||
Issuance of common stock in connection with the exercise of common stock warrants (in shares) | 10,880,573 | ||||||||
Ending balance (in shares) at Dec. 31, 2022 | 600,059,542 | ||||||||
Ending balance at Dec. 31, 2022 | $ 17,251,355 | $ 0 | $ 18,314,681 | $ (523,090) | $ (568,712) | $ 28,476 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (553,005) | $ 158,826 | $ 213,105 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 340,523 | 134,757 | 84,212 |
Amortization of discounts and premiums and other non-cash adjustments | (592,489) | 31,104 | 76,129 |
Loss on extinguishment of long-term debt | 0 | 0 | 6,651 |
Non-cash lease expense | 129,811 | 83,137 | 70,253 |
Share-based compensation | 1,071,278 | 608,040 | 397,800 |
Gains on revaluation of equity investments | (73,457) | (35,492) | (295,297) |
Transaction, loan, and consumer receivable losses | 550,683 | 187,991 | 177,670 |
Bitcoin impairment losses | 46,571 | 71,126 | 0 |
Change in deferred income taxes | (69,593) | (10,435) | (8,016) |
Changes in operating assets and liabilities: | |||
Settlements receivable | (1,499,057) | (346,217) | (547,484) |
Purchases and originations of loans | (6,114,847) | (3,227,172) | (1,837,137) |
Proceeds from payments and forgiveness of loans | 6,040,369 | 3,067,344 | 1,505,406 |
Customers payable | 1,060,861 | 171,555 | 371,598 |
Settlements payable | 207,894 | 15,249 | 143,528 |
Other assets and liabilities | (369,639) | (61,983) | (185,308) |
Net cash provided by operating activities | 175,903 | 847,830 | 173,110 |
Cash flows from investing activities: | |||
Purchases of marketable debt securities | (755,697) | (2,714,560) | (1,322,362) |
Proceeds from maturities of marketable debt securities | 999,569 | 831,019 | 607,134 |
Proceeds from sale of marketable debt securities | 449,723 | 617,097 | 585,427 |
Purchases of marketable debt securities from customer funds | 0 | (488,851) | (642,252) |
Proceeds from maturities of marketable debt securities from customer funds | 73,000 | 505,501 | 382,887 |
Proceeds from sale of marketable debt securities from customer funds | 316,576 | 35,071 | 51,430 |
Payments for originations of consumer receivables | (18,361,871) | 0 | 0 |
Proceeds from principal repayments and sales of consumer receivables | 18,192,470 | 0 | 0 |
Purchases of property and equipment | (170,815) | (134,320) | (138,402) |
Purchases of bitcoin investments | 0 | (170,000) | (50,000) |
Purchases of other investments | (56,712) | (48,510) | (1,277) |
Proceeds from sale of equity investments | 0 | 420,644 | 0 |
Business combinations, net of cash acquired | 539,453 | ||
Business combinations, net of cash acquired | (163,970) | (79,221) | |
Net cash provided by (used in) investing activities | 1,225,696 | (1,310,879) | (606,636) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible notes, net | 0 | 0 | 2,116,544 |
Purchases of senior note hedges | 0 | 0 | (338,145) |
Proceeds from issuance of warrants | 0 | 0 | 232,095 |
Proceeds from issuance of senior notes, net | 0 | 1,971,828 | 0 |
Payments to redeem convertible notes | (1,071,788) | 0 | 0 |
Proceeds from PPP Liquidity Facility advances | 0 | 681,539 | 464,094 |
Repayments of PPP Liquidity Facility advances | (480,694) | (648,100) | 0 |
Proceeds from warehouse facilities borrowings | 1,620,805 | 0 | 0 |
Repayments of warehouse facilities borrowings | (391,463) | 0 | 0 |
Proceeds from the exercise of stock options and purchases under the employee stock purchase plan | 81,768 | 126,719 | 161,985 |
Payments for tax withholding related to vesting of restricted stock units | (4,735) | (323,011) | (314,019) |
Net increase in interest-bearing deposits | 82,049 | 59,844 | 0 |
Other financing activities | (87,692) | (9,948) | (7,359) |
Change in customer funds, restricted from use in the Company's operations | 349,330 | 793,163 | 1,361,540 |
Net cash flows from financing available for Company operations | 97,580 | 2,652,034 | 3,676,735 |
Effect of foreign exchange rate on cash and cash equivalents | (38,363) | (7,066) | 12,995 |
Net increase in cash, cash equivalents, restricted cash, and customer funds | 1,460,816 | 2,181,919 | 3,256,204 |
Cash, cash equivalents, restricted cash, and customer funds, beginning of the period | 6,975,090 | 4,793,171 | 1,536,967 |
Cash, cash equivalents, restricted cash, and customer funds, end of the period | 8,435,906 | 6,975,090 | 4,793,171 |
Reconciliation of cash, cash equivalents, restricted cash, and customer funds: | |||
Cash and cash equivalents | 4,544,202 | 4,443,669 | 3,158,058 |
Short-term restricted cash | 639,780 | 18,778 | 30,279 |
Long-term restricted cash | 71,600 | 71,702 | 13,526 |
Customer funds cash and cash equivalents | 3,180,324 | 2,440,941 | 1,591,308 |
Total | $ 8,435,906 | $ 6,975,090 | $ 4,793,171 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 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 facilitate 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 consumers 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. Refer to 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 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"). The 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 consolidated balance sheets. Use of Estimates The preparation of the Company’s 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 consolidated financial statements include, but are not limited to, those related to valuation of goodwill and acquired intangible assets, accrued transaction losses, valuation of loans held for sale and investment, 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 reporting units, assessing contingencies including 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 and investment, 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. Prior period amounts 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) as a result of these reclassifications. Concentration of Credit Risk For the years ended December 31, 2022, 2021, and 2020, the Company had no customer that accounted for greater than 10% of total net revenue. As of December 31, 2022, the Compa ny had two third-party payment processors that represented approximately 54% and 31% of settlements receivable. As of December 31, 2021, these two parties represented approximately 52% and 30% of settlements receivable. In both years, all other third-party 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 Significant Accounting Policies Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Transaction-based Revenue The Company charges its sellers a transaction fee for managed payments solutions that is generally calculated as a percentage of the total transaction amount processed. The Company selectively offers custom pricing for certain large sellers. The Company collects the transaction amount from the seller's customer's bank, net of acquiring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the sellers. The Company acts as the merchant of record for its sellers and works directly with payment card networks and banks so that its sellers do not need to manage the complex systems, rules, and requirements of the payments industry. The Company satisfies its performance obligations and therefore recognizes the transaction fees as revenue upon authorization of a transaction by the seller's customer's bank. Revenue is recognized net of refunds, which arise from reversals of transactions initiated by sellers. The transaction fees collected from sellers are recognized as revenue on a gross basis as the Company is the principal in the delivery of the managed payments solutions to the sellers. The Company has concluded it is the principal because as the merchant of record, it controls the services before delivery to the seller, it is primarily responsible for the delivery of the services to its sellers, and it has discretion in setting prices charged to sellers. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the merchant of record, Square is liable for the costs of processing the transactions for its sellers, and records such costs within cost of revenue. The Company also charges certain Cash App customers making peer-to-peer transactions using business accounts, or funding transactions with a credit card, a transaction fee that is generally calculated as a percentage of the total transaction amount processed. The Company collects the transaction amount from the customer's Cash App account, net of incurring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the customers. Subscription and Services-based Revenue Subscription and services-based revenue is primarily comprised of revenue the Company generates from Cash App including Instant Deposit and Cash App Card, Square Loans, Afterpay's buy now, pay later ("BNPL") platform, website hosting and domain name registration services, TIDAL, and various other software as a service ("SaaS") products. Instant Deposit is a functionality within the Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. The Cash App Card offers Cash App customers the ability to use their stored funds via a Visa prepaid card that is linked to the balance the customer stores in Cash App. The Company charges the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM. The Company also earns interchange fees when a Cash App Card is used to make a purchase. These transaction and interchange fees are treated as revenue when charged. Square Loans (formerly Square Capital) facilitates loans to qualified Square sellers through the Company's subsidiary, Square Financial Services ("SFS"), which is an industrial loan corporation. The loans are either repaid through withholding a percentage of the collections of the seller's receivables processed by the Company or a specified monthly amount. The Company generally utilizes a pre-qualification process that includes an analysis of the aggregated data of the seller’s business which includes, but is not limited to, the seller’s historical processing volumes, transaction count, chargebacks, growth, and length of time as a Square customer. Generally, the loans have no stated coupon rate but the seller is charged a one-time origination fee based upon their risk rating, which is derived primarily from processing activity. For some of the loans, it is the Company’s intent to sell all of its rights, title, and interest of these loans to third-party investors for an upfront fee when the loans are sold. The Company records the amounts advanced to the customers or the net amounts paid to purchase the loans as cost of the loans. Subsequently, the Company records a gain on sale of the loans to the third-party investors as revenue upon transfer of title. The Company is retained by the third-party investors to service the loans and earns a servicing fee for facilitating the repayment of these receivables through its managed payments solutions. The Company records servicing revenue as servicing is delivered. For the loans which are not immediately sold to third-party investors or for which the Company has the intent and ability to hold through maturity, interest and fees earned are recognized as revenue using the effective interest method. Cash App Borrow, the Company’s first credit product for consumers, allows customers to access short-term loans for a small fee. The loans are repaid at the end of the loan term and customers may elect to prepay all or a part of the outstanding balance. If the outstanding balance is not paid when due, late fees in the form of interest may be charged. The short-term loans are facilitated through a partnership with an industrial bank. The loans are originated by the bank partner, from whom the Company purchases the loans obtaining all rights, title, and interest. Net amounts paid to the bank are recorded as the cost of the loans purchased, and amounts collected in excess of the carrying value are recognized as revenue over the life of the loans. The loan fee and late fees are recorded within subscription and services-based revenue on the consolidated statement of operations. Through the BNPL platform, consumers can pay for their purchases over time by splitting their purchase price into generally three or four installments, typically due in two-week increments, without paying fees (if payments are made on time). The Company generally pays the seller the full order value upfront, less taxes, if applicable, and 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. This revenue is included within subscription and services-based revenue on the 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. For the majority of the Company's BNPL products, consumers are not charged interest or fees, other than late fees which may be charged in certain regions by the Company as an incentive to encourage consumers to pay their outstanding balances as and when they fall due. As of October 2022, the Company also offers the ability for consumers to pay for larger transaction sizes over a six TIDAL primarily generates revenue from subscriptions to its customers, and such subscriptions allow access to the song library, video library, and improved sound quality. Customers can subscribe to services directly from the TIDAL website or through the Apple store. With both offerings, the Company charges customers a monthly fee for those subscription services, which is recognized ratably as revenue as the service is provided. SaaS represents software products and solutions that provide customers with access to various technologies for a fee which is recognized as revenue ratably as the service is provided. The Company's contracts with customers are generally for a term of one month and renew automatically each month. The Company invoices its customers monthly. The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month. Hardware Revenue Hardware revenue includes revenue from sales of magstripe readers, contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals. Third-party peripherals include cash drawers, receipt printers, scales, and barcode scanners, all of which can be integrated with Square Stand, Square Register, or Square Terminal to provide a comprehensive point-of-sale solution. The Company generates revenue through the sale of hardware through e-commerce and through its retail distribution channels. The Company satisfies its performance obligation upon delivery of hardware to its customers which include end user customers, distributors, and retailers. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing. Distributors and retailers have payment terms that range from 30 to 90 days after delivery. Bitcoin Revenue The Company offers its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company satisfies its performance obligation and records revenue when bitcoin is transferred to the customer's account. The Company purchases bitcoin from private broker dealers or from Cash App customers and applies a marginal fee before selling it to its customers. The amounts received from customers are recorded as revenue on a gross basis and the associated bitcoin cost as cost of revenues, as the Company is the principal in the bitcoin sale transaction. The Company has concluded it is the principal because it controls the bitcoin before delivery to the customers, it is primarily responsible for the delivery of the bitcoin to the customers, it is exposed to risks arising from fluctuations of the market price of bitcoin before delivery to customers, and has discretion in setting prices charged to customers. Cost of Revenue Transaction-based Costs Transaction-based costs consist primarily of interchange and assessment fees, processing fees and bank settlement fees paid to third-party payment processors and financial institutions. Subscription and Services-based Costs Subscriptions and services-based costs consist primarily of processing and partnership fees related to Cash App including Instant Deposit, Cash App Card, as well as costs associated with the Company's BNPL platform, and TIDAL. Hardware Costs Hardware costs consist of all product costs associated with contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals. Product costs include third-party manufacturing-related overhead and personnel-related costs, certain royalties, packaging, and fulfillment costs. Bitcoin Costs Bitcoin costs consist of the total amount the Company pays to purchase bitcoin that is sold to customers. These costs fluctuate in line with bitcoin revenue. Other Costs Generally, other costs such as personnel-related costs, rent, and occupancy charges are not allocated to cost of revenues and are reflected in operating expenses and are not material. Sales and Marketing Expenses Advertising costs are expensed as incurred and included in sales and marketing expenses on the consolidated statements of operations. Total advertising costs for the years ended December 31, 2022, 2021, and 2020 were $544.2 million, $435.8 million, a nd $224.7 million, respectively. The Company also records services, incentives, and other costs to customers that are not directly related to a revenue generating transaction 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 processing costs and related transaction losses, card issuance costs, customer referral bonuses, and promotional giveaways. These costs are expensed as incurred. The Company recorded $840.0 million, $778.3 million, and $635.3 million, for the years ended December 31, 2022, 2021, and 2020, respectively, for such expenses. Share-based Compensation Share-based compensation expense relates to stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), and purchases under the Company’s 2015 Employee Stock Purchase Plan ("ESPP") which is measured based on the grant-date fair value. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The fair value of stock options and ESPP shares granted to employees is estimated on the date of grant using the Black-Scholes-Merton option valuation model. This share-based compensation expense valuation model requires the Company to make assumptions and judgments regarding the variables used in the calculation. These variables include the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s stock, expected risk-free interest rate, and expected dividends. The Company uses the simplified calculation of expected term, defined as an average of the vesting term and the contractual term to maturity. Expected volatility is based on a weighted-average of the historical volatilities of the Company's common stock. The expected risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Generally, share-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. Interest Income and Expense Interest income consists of interest income from the Company's investment in marketable debt securities and interest expense relating to the Company's long-term debt. Interest income and interest expense were both immaterial for the years ended December 31, 2022, 2021, and 2020. 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 consolidated statements of comprehensive income (loss). 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 income, net on the consolidated statements of operations. Income and Other Taxes The Company reports income taxes under the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company considers historical information, tax planning strategies, the expected timing of the reversal of existing temporary differences, and may rely on financial projections to support its position on the recoverability of deferred tax assets. The Company’s judgment regarding future profitability contains significant assumptions and estimates of future operations. If such assumptions were to differ significantly from actual future results of operations, it may have a material impact on the Company’s ability to realize its deferred tax assets. At the end of each period, the Company assesses the ability to realize the deferred tax assets. If it is more likely than not that the Company will not realize the deferred tax assets, then the Company establishes a valuation allowance for all or a portion of the deferred tax assets. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision (benefit) for income tax expense on the consolidated statements of operations. Cash and Cash Equivalents, Restricted Cash, and Customer Funds Cash and Cash Equivalents The Company considers all highly liquid investments, including money market funds, with an original maturity of three months or less when purchased to be cash equivalents. Restricted Cash The Company records restricted cash amounts as a current asset on the consolidated balance sheets if the restriction expires in less than 12 months, or as a non-current asset if the restriction is 12 months or longer. If there is no minimum time frame during which the cash must remain restricted, the nature of the transactions related to the restriction determine the classification. The Company's short-term restricted cash was $639.8 million and $18.8 million as of December 31, 2022 and 2021, respectively. The balance as of December 31, 2022 was primarily comprised of cash held by the wholly-owned consolidated entities used in the warehouse funding facility arrangements. This restricted cash will be used to pay the borrowings under the warehouse funding facilities or will be distributed to the Company. The Company's total restricted cash also includes pledged cash deposits in accounts at the financial institutions that process the Company's sellers' payment transactions and collateral pursuant to various agreements with banks relating to the Company's products. The Company uses restricted cash to secure letters of credit with the related financial institutions to provide collateral for cash flow timing differences in the processing of payments. The Company's long-term restricted cash of $71.6 million and $71.7 million as of December 31, 2022 and December 31, 2021, respectively, is primarily related to cash held as collateral as required by the FDIC for Square Financial Services. The Company has recorded these amounts as non-current assets on the consolidated balance sheets as the requirement by the FDIC specifies a time frame of 12 months or longer during which the cash must remain restricted. Customer Funds Customer funds represent customers' stored balances that customers would later use to send money or make payments, or customers cash in transit. Under the terms of service associated with these funds, the Company is restricted from using the funds in the Company's operations. Interest income from customer funds is recorded as a component of subscription and services-based revenue on the consolidated statements of operations, and was immaterial for the year ended December 31, 2022. The Company may invest a portion of these stored balances in short-term marketable debt securities. Refer to Note 4, Customer Funds for more details. Investments in Marketable Debt Securities The Company's short-term and long-term investments include marketable debt securities such as government and agency securities, corporate bonds, commercial paper, and municipal securities. The Company determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable debt securities as available-for-sale and carries these investments at fair value, reporting the unrealized gains and losses, net of taxes, as a component of stockholders’ equity. The U.S. government and U.S. agency securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. The corporate bonds are issued by highly rated entities. The foreign government securities are issued by highly rated international entities. The Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time, sufficient for the recovery of their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense (income), net on the consolidated statements of operations. Investments in Equity Securities The Company holds marketable and non-marketable equity investments. Marketable equity investments are measured using quoted prices in active markets with changes recorded in other expense (income), net on the consolidated statements of operations. Non-marketable equity investments, which have no readily determinable fair values, are measured using the measurement alternative, which is defined as cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded in other income, net on the consolidated statements of operations. Non-marketable equity investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires judgment due to the absence of market prices and inherent lack of liquidity. The carrying value for these investments is not adjusted if there are no observable transactions for identical or similar investments of the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. The Company will adjust for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issue. Valuations of non-marketable equity investments are inherently complex due to the lack of readily available market data. In addition, the determination of whether an orderly transaction is for an identical or similar investment requires significant management judgment, including understanding the differences in the rights and obligations of the investments and the extent to which those differences would affect the fair values of those investments. The Company assesses the impairment of its non-marketable equity investments on a quarterly basis. The impairment analysis encompasses an assessment of the severity and duration of the impairment and a qualitative and quantitative analysis of other key factors including the investee’s financial metrics, market acceptance of the investee’s product or technology, other competitive products or technology in the market, general market conditions, and the rate at which the investee is using its cash. If the investment is considered to be impaired, the Company will record an impairment in other income, net on the consolidated statements of operations and establish a new carrying value for the investment. Fair Value Measurements The Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value accounting establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 that are observable for |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The following table presents the Company's net revenue disaggregated by revenue source (in thousands): Year Ended December 31, 2022 2021 2020 Revenue from contracts with customers: Transaction-based revenue $ 5,701,540 $ 4,793,146 $ 3,294,978 Subscription and services-based revenue 3,385,784 2,445,811 1,447,188 Hardware revenue 164,418 145,679 91,654 Bitcoin revenue 7,112,856 10,012,647 4,571,543 Revenue from other sources: Subscription and services-based revenue (i) 1,166,989 263,920 92,215 Total net revenue $ 17,531,587 $ 17,661,203 $ 9,497,578 (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 | 12 Months Ended |
Dec. 31, 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 December 31, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 96,545 $ 16 $ (2,120) $ 94,441 Corporate bonds 368,110 2 (7,475) 360,637 Commercial paper 31,503 — — 31,503 Municipal securities 9,884 — (191) 9,693 Certificates of deposit 6,400 — — 6,400 U.S. government securities 580,568 6 (8,937) 571,637 Foreign government securities 7,795 — (255) 7,540 Total $ 1,100,805 $ 24 $ (18,978) $ 1,081,851 Long-term debt securities: U.S. agency securities $ 74,097 $ — $ (3,782) $ 70,315 Corporate bonds 245,891 6 (9,171) 236,726 Municipal securities 10,415 3 (664) 9,754 U.S. government securities 268,902 — (13,210) 255,692 Foreign government securities 1,000 — (58) 942 Total $ 600,305 $ 9 $ (26,885) $ 573,429 The Company's short-term and long-term investments as of December 31, 2021 are 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 December 31, 2022 and 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): December 31, 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 $ 8,572 $ (24) $ 84,628 $ (2,096) $ 93,200 $ (2,120) Corporate bonds 34,795 (423) 320,748 (7,052) 355,543 (7,475) Municipal securities 587 (13) 5,811 (178) 6,398 (191) U.S. government securities 146,974 (839) 394,880 (8,098) 541,854 (8,937) Foreign government securities — — 7,540 (255) 7,540 (255) Total $ 190,928 $ (1,299) $ 813,607 $ (17,679) $ 1,004,535 $ (18,978) Long-term debt securities: U.S. agency securities $ 11,501 $ (20) $ 58,814 $ (3,762) $ 70,315 $ (3,782) Corporate bonds 33,862 (262) 201,791 (8,909) 235,653 (9,171) Municipal securities 467 (33) 8,784 (631) 9,251 (664) U.S. government securities 54,405 (590) 201,288 (12,620) 255,693 (13,210) Foreign government securities — — 942 (58) 942 (58) Total $ 100,235 $ (905) $ 471,619 $ (25,980) $ 571,854 $ (26,885) 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 December 31, 2022 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,100,805 $ 1,081,851 Due in one to five years 600,305 573,429 Total $ 1,701,110 $ 1,655,280 The following table presents the assets underlying customer funds (in thousands): December 31, December 31, Cash $ 1,748,983 $ 242,243 Cash equivalents: Money market funds 851,296 2,126,579 Reverse repurchase agreement (i) 580,045 72,119 Short-term debt securities: U.S. agency securities — 29,994 U.S. government securities — 360,060 Total $ 3,180,324 $ 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 classifies the amounts due from the counterparty as cash equivalents due to their short term nature. The Company does not have any available-for-sale debt securities for which the Company has recorded credit related losses. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company did not hold any investments within customer funds as of December 31, 2022. 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 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 were in a continuous loss position, were as follows (in thousands): 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 $ 29,994 $ (7) $ — $ — $ 29,994 $ (7) U.S. government securities $ 360,060 $ (191) $ — $ — $ 360,060 $ (191) Total $ 390,054 $ (198) $ — $ — $ 390,054 $ (198) |
CUSTOMER FUNDS
CUSTOMER FUNDS | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
CUSTOMER FUNDS | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of December 31, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 96,545 $ 16 $ (2,120) $ 94,441 Corporate bonds 368,110 2 (7,475) 360,637 Commercial paper 31,503 — — 31,503 Municipal securities 9,884 — (191) 9,693 Certificates of deposit 6,400 — — 6,400 U.S. government securities 580,568 6 (8,937) 571,637 Foreign government securities 7,795 — (255) 7,540 Total $ 1,100,805 $ 24 $ (18,978) $ 1,081,851 Long-term debt securities: U.S. agency securities $ 74,097 $ — $ (3,782) $ 70,315 Corporate bonds 245,891 6 (9,171) 236,726 Municipal securities 10,415 3 (664) 9,754 U.S. government securities 268,902 — (13,210) 255,692 Foreign government securities 1,000 — (58) 942 Total $ 600,305 $ 9 $ (26,885) $ 573,429 The Company's short-term and long-term investments as of December 31, 2021 are 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 December 31, 2022 and 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): December 31, 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 $ 8,572 $ (24) $ 84,628 $ (2,096) $ 93,200 $ (2,120) Corporate bonds 34,795 (423) 320,748 (7,052) 355,543 (7,475) Municipal securities 587 (13) 5,811 (178) 6,398 (191) U.S. government securities 146,974 (839) 394,880 (8,098) 541,854 (8,937) Foreign government securities — — 7,540 (255) 7,540 (255) Total $ 190,928 $ (1,299) $ 813,607 $ (17,679) $ 1,004,535 $ (18,978) Long-term debt securities: U.S. agency securities $ 11,501 $ (20) $ 58,814 $ (3,762) $ 70,315 $ (3,782) Corporate bonds 33,862 (262) 201,791 (8,909) 235,653 (9,171) Municipal securities 467 (33) 8,784 (631) 9,251 (664) U.S. government securities 54,405 (590) 201,288 (12,620) 255,693 (13,210) Foreign government securities — — 942 (58) 942 (58) Total $ 100,235 $ (905) $ 471,619 $ (25,980) $ 571,854 $ (26,885) 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 December 31, 2022 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,100,805 $ 1,081,851 Due in one to five years 600,305 573,429 Total $ 1,701,110 $ 1,655,280 The following table presents the assets underlying customer funds (in thousands): December 31, December 31, Cash $ 1,748,983 $ 242,243 Cash equivalents: Money market funds 851,296 2,126,579 Reverse repurchase agreement (i) 580,045 72,119 Short-term debt securities: U.S. agency securities — 29,994 U.S. government securities — 360,060 Total $ 3,180,324 $ 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 classifies the amounts due from the counterparty as cash equivalents due to their short term nature. The Company does not have any available-for-sale debt securities for which the Company has recorded credit related losses. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company did not hold any investments within customer funds as of December 31, 2022. 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 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 were in a continuous loss position, were as follows (in thousands): 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 $ 29,994 $ (7) $ — $ — $ 29,994 $ (7) U.S. government securities $ 360,060 $ (191) $ — $ — $ 360,060 $ (191) Total $ 390,054 $ (198) $ — $ — $ 390,054 $ (198) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 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 December 31, 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): December 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 1,230,924 $ — $ — $ 2,344,768 $ — $ — U.S. agency securities — 7,923 — — 22,999 — Certificates of deposit — — — — 4,983 — Commercial paper — 25,080 — — — — Corporate bonds — — — — 790 — Customer funds: Money market funds 851,296 — — 2,126,579 — — Reverse repurchase agreement 580,045 — — 72,119 — — U.S. agency securities — — — — 29,994 — U.S. government securities — — — 360,060 — — Short-term debt securities: U.S. agency securities — 94,441 — — 74,128 — Corporate bonds — 360,637 — — 293,319 — Commercial paper — 31,503 — — 36,088 — Municipal securities — 9,693 — — 5,548 — Certificates of deposit — 6,400 — — 9,200 — U.S. government securities 571,637 — — 430,843 — Foreign government securities — 7,540 — — 20,157 — Long-term debt securities: U.S. agency securities — 70,315 — — 153,320 — Corporate bonds — 236,726 — — 663,207 — Municipal securities — 9,754 — — 22,417 — U.S. government securities 255,692 — — 674,476 — — Foreign government securities — 942 — — 13,010 — Other: Investment in marketable equity security 11,092 — — — — — Safeguarding asset related to bitcoin held for other parties — 428,243 — — 1,100,596 — Safeguarding obligation liability related to bitcoin held for other parties — (428,243) — — (1,100,596) — Total assets (liabilities) measured at fair value $ 3,500,686 $ 860,954 $ — $ 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 and senior notes based on their last actively traded prices (Level 1) or market observable inputs (Level 2). The estimated fair value and carrying value of the convertible and senior notes were as follows (in thousands): December 31, 2022 December 31, 2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2031 Senior Notes $ 988,171 $ 782,857 $ 986,774 $ 1,018,113 2026 Senior Notes 990,414 885,876 987,626 994,579 2027 Convertible Notes 568,535 433,082 567,208 614,286 2026 Convertible Notes 569,315 464,066 567,621 595,548 2025 Convertible Notes 993,394 943,188 990,361 1,477,302 2023 Convertible Notes 460,356 480,925 459,618 958,927 2022 Convertible Notes — 455 3,192 Total $ 4,570,185 $ 3,989,994 $ 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): December 31, 2022 December 31, 2021 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 474,036 $ 491,807 $ 517,940 $ 574,982 Loans held for investment 123,959 126,122 91,447 95,746 Total $ 597,995 $ 617,929 $ 609,387 $ 670,728 As of December 31, 2022 and 2021, $19.9 million and $364.8 million of the carrying value of loans held for sale were attributable to loans under the Paycheck Protection Program ("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 December 31, 2022 were immaterial. For the years ended December 31, 2022, 2021, and 2020, the Company recorded incremental charges for the excess of amortized cost over the fair value of the loans of $27.5 million, $6.4 million, and $26.0 million, respectively. To determine the fair value of the loans held for sale, the Company utilizes discounted cash flow valuation modeling, taking into account the probability of default and estimated timing and amounts of periodic repayments. In estimating the expected timing and amounts of the future periodic repayments for the loans outstanding, the Company considered other relevant market data in developing such estimates and assumptions. As of December 31, 2022, there were no material changes to the Company's estimates of fair value, and the Company will continue to evaluate facts and circumstances that could impact its estimates and affect its results of operations in future periods. 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 years ended December 31, 2022, 2021, and 2020, 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 | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
CONSUMER RECEIVABLES, NET | LOANS HELD FOR INVESTMENT 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 December 31, 2022, the Company held $124.0 million as loans held for investment, net of allowance, included in other current assets on the consolidated balance sheets. 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 recorded as of December 31, 2022 were immaterial. Recoveries recorded as of December 31, 2022 were 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 written 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 December 31, 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 December 31, 2022, the amortized cost of Pass rated loans was $128.8 million and the amount of Classified loans was immaterial. |
LOANS HELD FOR INVESTMENT
LOANS HELD FOR INVESTMENT | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
LOANS HELD FOR INVESTMENT | LOANS HELD FOR INVESTMENT 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 December 31, 2022, the Company held $124.0 million as loans held for investment, net of allowance, included in other current assets on the consolidated balance sheets. 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 recorded as of December 31, 2022 were immaterial. Recoveries recorded as of December 31, 2022 were 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 written 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 December 31, 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 December 31, 2022, the amortized cost of Pass rated loans was $128.8 million and the amount of Classified loans was immaterial. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 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): December 31, December 31, Leasehold improvements $ 228,634 $ 208,228 Computer equipment 224,959 174,004 Capitalized software 197,420 116,827 Office furniture and equipment 45,836 42,393 Total 696,849 541,452 Less: Accumulated depreciation and amortization (367,547) (259,312) Property and equipment, net $ 329,302 $ 282,140 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 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. This included the recognition of $131.0 million of deferred tax assets and a corresponding valuation allowance of $131.0 million in Australia. Subsequently in 2022, the Company recognized measurement period adjustments to the assets acquired and liabilities assumed, including adjustments to the value of the deferred and contingent consideration liability assumed through the acquisition. The Company also refined its analysis of the value of the tax basis of certain acquired intangible assets of the Afterpay entities in Australia, and completed its determination of the allocation of goodwill and certain intangible assets acquired to various operating units. This resulted in a reduction to the preliminary estimate of the deferred tax asset and a reversal of the valuation allowance of $131.0 million. The Company also completed its evaluation of unrecognized tax benefits and tax contingencies, resulting in an increase in the assumed liabilities. The net effect of the adjustments recorded in the year ended December 31, 2022 resulted in an increase in current and other non-current liabilities assumed of $52.8 million, a decrease in deferred tax liabilities assumed of $44.3 million, a decrease in intangible assets acquired of $22.0 million, and a net increase in goodwill of $30.5 million. There was no impact to the consolidated statements of operations as a result of these adjustments. As of December 31, 2022, the Company's purchase price allocation is complete and the measurement period is closed. 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 consideration $ 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 names 386,000 Other non-current assets 74,232 Long-term debt - current (i) (1,058,065) Current liabilities (439,358) Warehouse funding facilities (ii) (107,996) Deferred tax liabilities (190,689) Other non-current liabilities (63,213) Total identifiable net assets acquired 2,117,128 Goodwill 11,719,494 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. 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 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): Year Ended December 31, 2022 2021 Net revenue $ 17,601,817 $ 18,494,077 Net loss $ (356,568) $ (183,616) 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 year ended December 31, 2022 excludes $42.4 million of transaction costs incurred by Block 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 Company's net loss for the year ended December 31, 2022. Pro forma net loss for the year ended December 31, 2021 includes an adjustment of $45.9 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. TIDAL On April 30, 2021, the Company acquired an 86.8% ownership interest in TIDAL, a global music and entertainment platform that brings fans and artists together through unique music, content, and experiences. The acquisition extends the Company's purpose of economic empowerment to musicians. The Company has the option, but not the obligation, to acquire any portion of the remaining noncontrolling interest any time after a three-year period has elapsed from the execution of the merger agreement at a price based on the fair value of TIDAL shares. The purchase consideration was comprised of $223.1 million in cash and 41,138 shares of the Company’s Class A common stock with an aggregate fair value of $10.1 million based on the closing price of the Company’s Class A common stock on the acquisition date. Third-party acquisition related costs were immaterial. The results of TIDAL’s operations have been included in the consolidated financial statements since the closing date. The acquisition was accounted for as a business combination. 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. The table below summarizes the consideration paid for TIDAL and the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). Consideration: Cash $ 176,663 Deferred consideration 46,475 Stock (41,138 shares of Class A common stock) 10,071 Total consideration $ 233,209 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash acquired of $12,358) $ 29,621 Intangible customer assets 69,000 Intangible technology assets 29,000 Intangible trade name 35,000 Intangible other assets 8,000 Other non-current assets 33,443 Accrued expenses and other current liabilities (67,789) Other non-current liabilities (52,759) Total identifiable net assets acquired 83,516 Noncontrolling interests (48,192) Goodwill 197,885 Total $ 233,209 Goodwill from the acquisition was primarily attributable to the value of expected synergies created by incorporating TIDAL product and operations into the Company's technology platform and the value of the assembled workforce. An estimated amount of approximately $70.7 million of the goodwill generated from the TIDAL acquisition and approximately $126.7 million of the acquired intangible assets are expected to be deductible for US tax purposes based on the preliminary values. Additionally, the acquisition would have resulted in the recognition of US deferred tax assets; 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 evidence of such income as of December 31, 2022. Accordingly, a valuation allowance was recorded against the net acquired deferred tax asset in accounting for the acquisition. Deferred consideration in the aggregate amount of $46.5 million primarily relates to pre-acquisition contingencies, and includes a portion of purchase consideration withheld, for a period of up to four years, as security for TIDAL's indemnification obligations related to general representations and warranties, in addition to certain potential exposures. The Company recognized certain liabilities for acquired pre-existing potential exposures, and an indemnification receivable in the amount of $22.8 million has been recorded related to such exposures in accordance with the terms of the indemnification agreement. The amounts have been determined in accordance with ASC 740, Income Taxes , and ASC 450, Contingencies . In addition to the deferred consideration, an additional amount of $32.2 million in purchase consideration has been withheld related to defined post-acquisition activities. Because these amounts relate to post-acquisition activities, in accordance with ASC 805, Business Combinations , such amounts will be recognized as expenses in future periods, as incurred. The noncontrolling interest was recorded based on the fair value on the date of acquisition. The acquisition of TIDAL did not have a material impact on the Company's consolidated financial statements. Accordingly, pro forma financial information has not been presented. Other Acquisitions During the years ended December 31, 2022, 2021, and 2020, the Company completed certain acquisitions for a total consideration of $46.0 million, $20.5 million, and $126.7 million, respectively, which resulted in the recognition of additional intangible assets and goodwill. These acquisitions were not material and therefore pro forma financial information has not been presented. None of the goodwill generated from the acquisitions or the acquired intangible assets are expected to be deductible for tax purposes. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 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 the carrying value of goodwill was as follows (in thousands): Balance at December 31, 2020 $ 316,701 Acquisitions 203,079 Other adjustments (504) Balance at December 31, 2021 519,276 Acquisitions 11,761,866 Foreign currency translation adjustments (314,381) Balance at December 31, 2022 $ 11,966,761 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 the carrying value of goodwill allocated to the reportable segments was as follows (in thousands): Cash App Square Corporate and Other Total Balance at December 31, 2020 $ 128,838 $ 187,863 $ — $ 316,701 Acquisitions — 5,194 197,885 203,079 Other adjustments (504) — — (504) Balance at December 31, 2021 128,334 193,057 197,885 519,276 Acquisitions 5,882,133 5,879,733 — 11,761,866 Foreign currency translation adjustments (157,537) (156,844) — (314,381) Balance at December 31, 2022 $ 5,852,930 $ 5,915,946 $ 197,885 $ 11,966,761 |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS The following table details acquired intangible assets (in thousands): Balance at December 31, 2022 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 398,665 $ (133,116) $ 265,549 Customer assets 15 years 1,474,163 (110,316) 1,363,847 Trade names 9 years 434,766 (58,352) 376,414 Other 9 years 13,701 (5,477) 8,224 Total $ 2,321,295 $ (307,261) $ 2,014,034 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 names 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 change in the carrying value of intangible assets was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Acquired intangible assets, net, beginning of the period $ 257,049 $ 137,612 $ 69,079 Acquisitions 2,006,490 159,100 85,960 Amortization expense (208,952) (40,522) (19,239) Foreign currency translation and other adjustments (40,553) 859 1,812 Acquired intangible assets, net, end of the period $ 2,014,034 $ 257,049 $ 137,612 The estimated future amortization expense of intangible assets as of December 31, 2022 is as follows (in thousands): 2023 $ 221,883 2024 218,422 2025 211,595 2026 197,528 2027 149,443 Thereafter 1,015,163 Total $ 2,014,034 |
OTHER CONSOLIDATED BALANCE SHEE
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | 12 Months Ended |
Dec. 31, 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 details other current assets (in thousands): December 31, December 31, Inventory, net $ 97,703 $ 77,058 Restricted cash 639,780 18,778 Processing costs receivable 298,568 228,914 Prepaid expenses 141,262 63,341 Accounts receivable, net 140,508 89,702 Loans held for investment, net of allowance for loan losses (i) 123,959 91,447 Other 185,485 118,189 Total $ 1,627,265 $ 687,429 (i) Refer to Note 7, Loans Held for Investment for further details . Accrued Expenses and Other Current Liabilities The following table details accrued expenses and other current liabilities (in thousands): December 31, December 31, Accrued expenses $ 382,571 $ 254,900 Accounts payable 95,846 82,173 Customer deposits 141,893 59,844 Accrued transaction losses (i) 64,539 55,167 Accrued royalties 63,684 53,616 Operating lease liabilities, current 66,854 64,027 Other 241,289 133,154 Total $ 1,056,676 $ 702,881 (i) 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 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): Year Ended December 31, 2022 2021 Accrued transaction losses, beginning of the period $ 55,167 $ 70,557 Provision for transaction losses 100,735 63,436 Charge-offs to accrued transaction losses (91,363) (78,826) Accrued transaction losses, end of the period $ 64,539 $ 55,167 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 $411.7 million and $338.6 million for the years ended December 31, 2022 and 2021, respectively, for such losses. Other Non-Current Assets The following table details other non-current assets (in thousands): December 31, December 31, Investment in non-marketable equity securities (i) $ 208,880 $ 81,919 Investment in bitcoin, net (ii) 102,303 149,000 Restricted cash 71,600 71,702 Other 101,454 67,914 Total $ 484,237 $ 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 on the consolidated statements of operations. During the year ended December 31, 2022, the Company recorded unrealized gains of $96.1 million arising from the revaluation of certain non-marketable investments, resulting in cumulative unrealized gains of $115.2 million as of December 31, 2022. Unrealized losses were immaterial as of December 31, 2022. (ii) As of December 31, 2022, the Company has purchased a cumulative $220.0 million in bitcoin for investment purposes. 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 impairment losses of $46.6 million in the year ended December 31, 2022, due to the observed market price of bitcoin decreasing below the carrying value during the period. As of December 31, 2022, the cumulative impairment losses to date were $117.7 million and the fair value of the investment in bitcoin was $132.7 million based on observable market prices, which was $30.4 million in excess of the Company's carrying value of $102.3 million after impairment charges. |
OTHER CONSOLIDATED BALANCE SH_2
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | 12 Months Ended |
Dec. 31, 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 details other current assets (in thousands): December 31, December 31, Inventory, net $ 97,703 $ 77,058 Restricted cash 639,780 18,778 Processing costs receivable 298,568 228,914 Prepaid expenses 141,262 63,341 Accounts receivable, net 140,508 89,702 Loans held for investment, net of allowance for loan losses (i) 123,959 91,447 Other 185,485 118,189 Total $ 1,627,265 $ 687,429 (i) Refer to Note 7, Loans Held for Investment for further details . Accrued Expenses and Other Current Liabilities The following table details accrued expenses and other current liabilities (in thousands): December 31, December 31, Accrued expenses $ 382,571 $ 254,900 Accounts payable 95,846 82,173 Customer deposits 141,893 59,844 Accrued transaction losses (i) 64,539 55,167 Accrued royalties 63,684 53,616 Operating lease liabilities, current 66,854 64,027 Other 241,289 133,154 Total $ 1,056,676 $ 702,881 (i) 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 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): Year Ended December 31, 2022 2021 Accrued transaction losses, beginning of the period $ 55,167 $ 70,557 Provision for transaction losses 100,735 63,436 Charge-offs to accrued transaction losses (91,363) (78,826) Accrued transaction losses, end of the period $ 64,539 $ 55,167 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 $411.7 million and $338.6 million for the years ended December 31, 2022 and 2021, respectively, for such losses. Other Non-Current Assets The following table details other non-current assets (in thousands): December 31, December 31, Investment in non-marketable equity securities (i) $ 208,880 $ 81,919 Investment in bitcoin, net (ii) 102,303 149,000 Restricted cash 71,600 71,702 Other 101,454 67,914 Total $ 484,237 $ 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 on the consolidated statements of operations. During the year ended December 31, 2022, the Company recorded unrealized gains of $96.1 million arising from the revaluation of certain non-marketable investments, resulting in cumulative unrealized gains of $115.2 million as of December 31, 2022. Unrealized losses were immaterial as of December 31, 2022. (ii) As of December 31, 2022, the Company has purchased a cumulative $220.0 million in bitcoin for investment purposes. 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 impairment losses of $46.6 million in the year ended December 31, 2022, due to the observed market price of bitcoin decreasing below the carrying value during the period. As of December 31, 2022, the cumulative impairment losses to date were $117.7 million and the fair value of the investment in bitcoin was $132.7 million based on observable market prices, which was $30.4 million in excess of the Company's carrying value of $102.3 million after impairment charges. |
BITCOIN HELD FOR OTHER PARTIES
BITCOIN HELD FOR OTHER PARTIES | 12 Months Ended |
Dec. 31, 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 does not use any of the bitcoin custodied for customers or trading partners as collateral for any of the Company’s loans or other financing arrangements; nor does it lend or pledge bitcoin held for others to any third parties. The Company occasionally engages third-party custodians to store and safeguard bitcoin on the Company's behalf. As of December 31, 2022, no bitcoin custodied for customers was held by third-party custodians. As of the adoption of SAB 121, the Company records 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 December 31, 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): December 31, December 31, Approximate number of bitcoin held for customers 25,850 23,360 Approximate number of bitcoin held for trading partners 62 458 Total approximate number of bitcoin held for other parties 25,912 23,818 Safeguarding obligation liability related to bitcoin held for customers $ 427,221 $ 1,079,412 Safeguarding obligation liability related to bitcoin held for trading partners $ 1,022 21,184 Safeguarding obligation liability related to bitcoin held for other parties $ 428,243 $ 1,100,596 Safeguarding asset related to bitcoin held for other parties $ 428,243 $ 1,100,596 |
INDEBTEDNESS
INDEBTEDNESS | 12 Months Ended |
Dec. 31, 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 2024. 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 December 31, 2022, $600.0 million remained available for draw. The Company incurred immaterial unused commitment fees during the years ended December 31, 2022, 2021, and 2020. As of December 31, 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 December 31, 2022, the aggregate commitment amount of the Warehouse Facilities, using the respective exchange rates at perio d-end, was $1.7 billion on a revolving basis, of which $1.3 billion was drawn and $0.4 billion remained available. All facilities contain portfolio parameters based on performance of the underlying consumer receivables, which each respective region has satisfied as of December 31, 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): December 31, 2023 (i) 461,240 2024 877,066 Total funding debt, net of deferred debt issuance costs $ 1,338,306 (i) Disclosed as warehouse funding facilities, current portion within total current liabilities on the consolidated balance sheet. 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 December 31, 2022, $16.8 million of PPPLF advances were outstanding and 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 year ended December 31, 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 No. 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 0.30% and 0.49% 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 December 31, 2022, no principal had converted on either the 2026 Convertible Notes or 2027 Convertible Notes. As of December 31, 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, third, and fourth quarters of 2022. As of December 31, 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 December 31, 2022, there has been an immaterial aggregate principal amount converted on the 2025 Convertible Notes. As of December 31, 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: (1) 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; (2) 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 (3) 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 deliver shares of its Class A common stock. 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 and fourth quarters of 2022. As of December 31, 2022, certain holders of the 2023 Convertible Notes had converted an aggregate principal amount of $401.9 million of their 2023 Convertible Notes, all of which was converted during the year ended December 31, 2022. 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 b |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The domestic and foreign components of income (loss) before income taxes were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ (347,968) $ 417,356 $ 369,016 Foreign (217,349) (259,894) (153,049) Income (loss) before income taxes $ (565,317) $ 157,462 $ 215,967 The components of the provision for income taxes were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ 14,352 $ 201 $ — State 17,504 3,186 4,016 Foreign 25,425 5,684 6,862 Total current provision for income taxes 57,281 9,071 10,878 Deferred: Federal (59,909) (1,463) (970) State (7,677) (524) (231) Foreign (2,007) (8,448) (6,815) Total deferred provision for income taxes (69,593) (10,435) (8,016) Total provision (benefit) for income taxes $ (12,312) $ (1,364) $ 2,862 The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate: December 31, 2022 2021 2020 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit (1.1) 0.6 0.3 Foreign rate differential (2.0) 10.4 4.0 Other non-deductible expenses (1.4) 4.5 2.7 Credits 27.0 (83.9) (34.6) Other items 0.6 1.6 2.2 Change in valuation allowance (46.7) 290.4 153.9 Share-based compensation 7.5 (275.0) (155.4) Change in uncertain tax positions (1.5) 5.0 2.3 Loss inclusions of US foreign subsidiaries 2.1 0.9 — Non-deductible executive compensation (0.3) 5.9 3.6 Non-deductible acquisition related costs (3.0) 5.9 1.3 Intercompany transactions — 3.8 — Cancellation of debt income — 8.0 — Total 2.2 % (0.9) % 1.3 % The tax effects of temporary differences and related deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Capitalized costs & research and development capitalization $ 474,766 $ 12,409 Accrued expenses 129,695 62,707 Net operating loss carryforwards 1,172,880 1,276,561 Tax credit carryforwards 501,185 378,682 Share-based compensation 72,128 50,431 Deferred interest — 34,475 Other 6,199 7,740 Operating lease liability 109,176 111,099 Cryptocurrency investment 30,273 17,600 Deferred consideration 11,665 11,266 Convertible notes 52,915 70,316 Safeguarding liability related to bitcoin held for other parties 110,150 272,287 Total deferred tax assets 2,671,032 2,305,573 Valuation allowance (2,100,383) (1,887,111) Total deferred tax assets, net of valuation allowance 570,649 418,462 Deferred tax liabilities: Property, equipment and intangible assets (451,349) (31,775) Indefinite-lived intangibles (1,309) (867) Unrealized gain on investments (29,554) (4,712) Operating lease right-of-use asset (96,894) (108,747) Safeguarding asset related to bitcoin held for other parties (110,150) (272,287) Total deferred tax liabilities (689,256) (418,388) Net deferred tax assets (liabilities) $ (118,607) $ 74 Realization of deferred tax assets is dependent upon the generation of future taxable income, the timing and amount of which are uncertain. The Company's deferred tax assets and liabilities are primarily related to U.S. operations. As of December 31, 2022, the Company has two separate U.S. federal corporate income tax filing groups: Block Inc. & Subsidiaries and Afterpay US, Inc. In 2022, the Block Inc. & Subsidiaries group generated a current tax provision resulting from the requirement to capitalize research and development expenses under Internal Revenue Code ("IRC") Section 174 starting in 2022 and a decline in stock-based compensation deductions. Block Inc. & Subsidiaries has significant deferred tax assets in the form of net operating loss carryovers, tax credit carryovers, capitalized costs resulting from the IRC Section 174 capitalization requirement, and other tax deductible temporary differences. Due to the history of tax losses generated by Block Inc. & Subsidiaries, the Company believes it is not more likely than not that the deferred tax assets as of December 31, 2022 will be realized. Accordingly, the Company retained a full valuation allowance on the deferred tax assets in Block Inc. & Subsidiaries. In 2022, Afterpay US Inc. generated a tax loss. Afterpay US Inc. has significant deferred tax liabilities in relation to acquired intangible assets, which can be used as a source of future income to realize its deferred tax assets as of December 31, 2022. Accordingly, the Company has not recognized a valuation allowance in Afterpay U.S. Inc. The Company also has a history of tax losses in certain foreign jurisdictions, which it believes are not more likely than not to be realized as of December 31, 2022. Accordingly, the Company retained a full valuation allowance on its deferred tax assets in these jurisdictions. 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. The valuation allowance increased by approximately $213.3 million and $649.1 million during the years ended December 31, 2022, and 2021, respectively. As of December 31, 2022, the Company had $2.8 billion of federal, $4.2 billion of state, and $1.3 billion of foreign net operating loss carryforwards. In 2022, $1.7 billion of federal net operating losses from tax years 2009 through 2018 are estimated to be utilized. The remaining carryforward amount from tax years 2018 through 2020 have no expiration date. The state and foreign net operating loss carryforwards will begin to expire in 2023. As of December 31, 2022, the Company had $402.3 million of federal, $250.9 million of state, and $19.5 million of foreign research credit carryforwards. In 2022, $30.6 million of federal research credits from tax years 2009 through 2017 are estimated to be utilized. The remaining federal research credit carryforward for tax years 2017-2021 will begin to expire in 2037. The state and foreign credit carryforwards have no expiration date. Utilization of the net operating loss carryforwards and credits may be subject to annual limitations due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before they are able to be utilized. The Company does not expect any previous ownership changes, as defined under Section 382 and 383 of the Internal Revenue Code, to result in an ultimate limitation that will materially reduce the total amount of net operating loss carryforwards and credits that can be utilized. As of December 31, 2022, the Company had unrecognized tax benefits of $506.5 million, of which $73.5 million would impact the annual effective tax rate if recognized and the remainder of which would result in a corresponding adjustment to the valuation allowance. The change in the balance of unrecognized tax benefit was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Unrecognized tax benefit, beginning of the period $ 448,392 $ 295,182 $ 217,574 Gross increases and decreases related to prior period tax positions 5,431 6,552 (2,615) Gross increases and decreases related to current period tax positions 30,988 124,238 77,235 Reductions related to lapse of statute of limitations (2,950) — (49) Gross increases related to acquisitions 24,651 22,420 3,037 Unrecognized tax benefit, end of the period $ 506,512 $ 448,392 $ 295,182 The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. The Company had total accrued interest and penalties of $9.1 million, $7.8 million, and $1.4 million related to uncertain tax positions for the years ended December 31, 2022, 2021, and 2020, respectively. It is reasonably possible that over the next 12-month period the Company may experience a decrease in its unrecognized tax benefits as a result of tax examinations or lapses of statute of limitations. The estimated decrease in unrecognized tax benefits may range up to $14.8 million. The Company is subject to taxation in the United States and various state and foreign jurisdictions. The Company is currently under examination in California for tax years 2013, 2014, and 2016 and in Texas for tax years 2015-2019. The Company’s various tax years starting with 2009 to 2021 remain open in various taxing jurisdictions. As of December 31, 2022, the Company has not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences resulting from earnings for certain non-U.S. subsidiaries, which are permanently reinvested outside the U.S. Cumulative undistributed earnings for these non-U.S. subsidiaries as of December 31, 2022 are $110.0 million. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDER'S EQUITY | STOCKHOLDERS' EQUITY Convertible Preferred Stock As of December 31, 2022, the Company is authorized to issue 100,000,000 shares of preferred stock, with a $0.0000001 par value. No shares of preferred stock are outstanding as of December 31, 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 Consolidated Financial Statements, unless otherwise noted. Holders of the Company's Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by the Company's board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of December 31, 2022, the Company did not declare any dividends. 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 December 31, 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 December 31, 2022, there were 539,408,009 shares of Class A common stock and 60,651,533 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. Additionally, holders of Class B common stock are able to convert such shares into 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 year ended December 31, 2022, all 2022 Warrants were exercised on a net share settlement basis for 10.9 million shares. 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 December 31, 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 December 31, 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 December 31, 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 December 31, 2022. Conversion of Convertible Notes and Exercise of Convertible Note Hedges In connection with the conversion of certain 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 the year ended December 31, 2022. The Company also exercised all of the 2022 Convertible Note Hedges and received 15.0 million shares of Class A common stock from the counterparties to offset the shares issued, which is inclusive of 0.2 million shares that were received in the year ended December 31, 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 December 31, 2022, of which an immaterial number of shares were issued in the year ended December 31, 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 December 31, 2022, which is inclusive of 1.0 million shares that were received in the year ended December 31, 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. As of December 31, 2022, the total number of shares subject to stock options, RSAs, and RSUs outstanding under the 2009 Plan was 3,730,601 shares. 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 December 31, 2022, the total number of shares subject to stock options, RSAs, and RSUs outstanding under the 2015 Plan was 31,308,210 shares, and 117,238,742 shares were available for future issuance. A summary of stock option activity for the year ended December 31, 2022 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Outstanding, beginning of the period 8,916,100 $ 26.09 3.89 $ 1,226,105 Granted 796,719 94.61 Exercised (2,867,609) 8.22 Forfeited (93,371) 105.85 Expired (13,056) 190.75 Outstanding, end of the period 6,738,783 $ 40.37 4.02 $ 224,484 Exercisable, end of the period 5,701,097 $ 28.32 3.30 $ 221,311 Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding, in-the-money options. Aggregate intrinsic value for stock options exercised for the years ended December 31, 2022, 2021, and 2020 was $0.2 billion, $1.1 billion, and $1.2 billion, respectively. The total weighted-average grant-date fair value of options granted was $73.31, $131.57, and $27.04 per share for the years ended December 31, 2022, 2021, and 2020, respectively. Restricted Stock Activity The Company issues RSAs and RSUs under the 2015 Plan, which typically vest over a term of four years. Activity related to RSAs and RSUs during the year ended December 31, 2022 is set forth below: Number of Weighted Unvested, beginning of the period 13,221,953 $ 137.86 Granted 26,437,317 85.17 Vested (8,198,514) 111.33 Forfeited (3,160,728) 123.83 Unvested, end of the period 28,300,028 $ 97.89 The total fair value of shares vested was $724.2 million, $1.6 billion, and $817.5 million in the years ended December 31, 2022, 2021, and 2020, respectively. Employee Stock Purchase Plan On November 17, 2015, the Company’s 2015 Employee Stock Purchase Plan ("ESPP") became effective. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 25%, subject to any plan limitations. The ESPP provides for 12-month offering periods. The offering periods are scheduled to start on the first trading day on or after May 15 and November 15 of each year. Each offering period includes two purchase periods, which begin on the first trading day on or after November 15 and May 15, and ending on the last trading day on or before May 15 and November 15, respectively. Employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or the last trading day of the purchase period. The number of shares available for sale under the ESPP will be increased annually on the first day of each fiscal year, equal to the least of (i) 8,400,000 shares, (ii) 1% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (iii) such other amount as determined by the administrator. As of December 31, 2022, 7,153,108 shares had been purchased under the ESPP and 25,703,532 shares were available for future issuance under the ESPP. Share-Based Compensation The fair values of stock options granted were estimated using the following weighted-average assumptions: Year Ended December 31, 2022 2021 2020 Dividend yield — % — % — % Risk-free interest rate 3.08 % 1.08 % 0.41 % Expected volatility 59.2 % 54.91 % 48.29 % Expected term (years) 6.02 6.02 6.02 The following table summarizes the effects of share-based compensation on the consolidated statements of operations (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 494 $ 410 $ 368 Product development 701,715 446,596 289,553 Sales and marketing 105,231 57,070 36,627 General and administrative 261,849 103,966 70,952 Total $ 1,069,289 $ 608,042 $ 397,500 The Company recorded tax benefits related to stock-based compensation expense of $218.9 million, $10.5 million and $7.8 million, during the years ended December 31, 2022, 2021, and 2020, respectively. The Company recorded $61.4 million, $34.9 million, and $18.2 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the years ended December 31, 2022, 2021 and 2020, respectively. The total share-based compensation expense for the year ended December 31, 2022 also includes a $66.3 million one-time charge related to the acceleration of various share-based arrangements associated with the acquisition of Afterpay. The Company capitalized $20.7 million, $15.1 million, and $13.9 million of share-based compensation expense related to capitalized software during the years ended December 31, 2022, 2021, and 2020, respectively. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME (LOSS) PER SHARE Basic 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 per share (in thousands, except per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net income (loss) $ (553,005) $ 158,826 $ 213,105 Less: Net loss attributable to noncontrolling interests (12,258) (7,458) — Net income (loss) attributable to common stockholders $ (540,747) $ 166,284 $ 213,105 Denominator: Basic shares: Weighted-average shares used to compute basic net income (loss) per share 578,949 458,432 443,126 Diluted shares: Stock options, restricted stock, and employee stock purchase plan — 17,849 23,628 Convertible notes — 408 — Common stock warrants — 25,090 15,413 Weighted-average shares used to compute diluted net income (loss) per share 578,949 501,779 482,167 Net income (loss) per share attributable to common stockholders: Basic $ (0.93) $ 0.36 $ 0.48 Diluted $ (0.93) $ 0.33 $ 0.44 The following potential common shares were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive for the periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Stock options, restricted stock, and employee stock purchase plan 32,185 7,680 12,509 Convertible notes 18,029 23,947 25,073 Common stock warrants 33,699 17,271 22,140 Total anti-dilutive securities 83,913 48,898 59,722 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn July 2019, the Company entered into a lease agreement for office space 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, for a term of 15.5 years with options to extend the lease term for two five-year terms. The lease possession date varied by floor, beginning in May 2020. As of December 31, 2022, the Company had recorded right-of-use assets of $19.9 million and associated lease liabilities of $32.2 million related to this lease arrangement.Under the lease agreement, the Company also has an option to terminate the lease for up to 50% of the leased space any time between January 1, 2024 and December 31, 2026, as well as an option to terminate the lease for the entire property on January 1, 2034. Termination penalties specified in the lease agreement will apply if the Company exercises any of the options to terminate the lease. On January 2, 2023, the Company notified the lessor of its intention to exercise the early termination option with respect to approximately 48% of the leased space, effective December 31, 2023. As a result, the Company will pay a termination penalty of approximately $5.2 million to exercise the option. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating and Finance Leases The Company’s operating leases are primarily comprised of office facilities. The Company's leases have remaining lease terms of one year to 14 years, some of which include options to extend up to five year terms, or include options to terminate the leases with advanced notice. None of the options to extend the leases have been included in the measurement of the right-of-use asset or the associated lease liability. There were no finance lease obligations as of December 31, 2022. The components of lease costs for the year ended December 31, 2022 were as follows (in thousands): Year Ended December 31, 2022 2021 Fixed operating lease costs $ 93,365 $ 83,136 Variable operating lease costs 27,065 15,568 Short-term lease costs 4,332 1,953 Sublease income (15,965) (12,210) Total lease costs $ 108,797 $ 88,447 Other information related to operating leases was as follows: Year Ended December 31, 2022 2021 Weighted-average remaining lease term 7.7 years 8.3 years Weighted-average discount rate 3.55 % 3.55 % Cash flows related to leases were as follows (in thousands): Year Ended December 31, 2022 2021 Cash flows from operating activities: Payments for operating lease liabilities $ (92,730) $ (77,201) Supplemental cash flow data: Right-of-use assets obtained in exchange for operating lease obligations $ 39,324 $ 63,290 Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of December 31, 2022 are as follows (in thousands): 2023 $ 81,160 2024 68,669 2025 61,301 2026 52,460 2027 49,056 Thereafter 186,827 Total $ 499,473 Less: Amount representing interest 65,639 Less: Leases executed but not yet commenced 8,024 Less: Lease incentives and transfer to held for sale 1,352 Total $ 424,458 The Company recognized total rental expenses for operating leases of $93.6 million, $80.3 million, and $75.2 million during the years ended December 31, 2022, 2021, and 2020, respectively. Purchase Commitments During the year ended December 31, 2022, we entered into non-cancelable purchase obligations related to cloud computing infrastructure. The commitment amounts in the table below are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, and the approximate timing of the actions under the contracts. As of December 31, 2022, the future minimum payments under the purchase commitments were as follows (in thousands): Payments Due By Period 2023 $ 182,500 2024 244,700 2025 273,600 2026 263,300 2027 315,100 Total $ 1,279,200 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 December 31, 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. On January 24, 2023, the Eighth Circuit reversed and vacated the injunction granted by the trial court. On February 21, 2023, HRB filed a petition for rehearing en banc, which is now under consideration by the Eighth Circuit. 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 | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHICAL INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATIONThe 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 financial results of the Company's BNPL platform have been allocated equally to the Cash App and Square segments as management has concluded that the 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): Year Ended December 31, 2022 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 466,171 $ 5,235,369 $ — $ 5,701,540 Subscription and services-based revenue 3,047,084 1,300,043 205,646 4,552,773 Hardware revenue — 164,418 — 164,418 Bitcoin revenue 7,112,856 — — 7,112,856 Segment revenue (ii) 10,626,111 6,699,830 205,646 17,531,587 Segment gross profit (iii, iv) $ 2,950,967 $ 3,000,978 $ 39,947 $ 5,991,892 Year Ended December 31, 2021 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 409,844 $ 4,383,302 $ — $ 4,793,146 Subscription and services-based revenue 1,893,008 664,367 152,356 2,709,731 Hardware revenue — 145,679 — 145,679 Bitcoin revenue 10,012,647 — — 10,012,647 Segment revenue 12,315,499 5,193,348 152,356 17,661,203 Segment gross profit (iv) $ 2,070,847 $ 2,316,671 $ 32,305 $ 4,419,823 Year Ended December 31, 2020 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 233,747 $ 3,061,231 $ — $ 3,294,978 Subscription and services-based revenue 1,163,096 376,307 — 1,539,403 Hardware revenue — 91,654 — 91,654 Bitcoin revenue 4,571,543 — — 4,571,543 Segment revenue 5,968,386 3,529,192 — 9,497,578 Segment gross profit (iv) $ 1,225,578 $ 1,507,831 $ — $ 2,733,409 (i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment, and intersegment eliminations. (ii) The revenue for both Cash App and Square for the year ended December 31, 2022 included $405.7 million each, from Afterpay post-acquisition results following the closing of the acquisition. (iii) The gross profit for both Cash App and Square for the year ended December 31, 2022 included $294.1 million each, from Afterpay post-acquisition results following the closing of the acquisition. (iv) Segment gross profit for Cash App for the years ended December 31, 2022, 2021, and 2020 included $32.1 million, $10.5 million, and $5.4 million of amortization of acquired technology assets expense, respectively. Segment gross profit for Square for the years ended December 31, 2022, 2021, and 2020 included $32.2 million, $8.3 million, and $5.8 million of amortization of acquired technology assets expense, respectively. Amortization of acquired technology assets expense included in Corporate and Other was immaterial for the years ended December 31, 2022, 2021, and 2020. The following table provides a reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes (in thousands): Year Ended December 31, 2022 2021 2020 Total segment gross profit $ 5,991,892 $ 4,419,823 $ 2,733,409 Less: Product development 2,135,612 1,383,841 881,826 Less: Sales and marketing 2,057,951 1,617,189 1,109,670 Less: General and administrative 1,686,849 982,817 579,203 Less: Transaction, loan, and consumer receivable losses 550,683 187,991 177,670 Less: Bitcoin impairment losses 46,571 71,126 — Less: Amortization of customer and other intangible assets 138,758 15,747 3,855 Less: Interest expense, net 36,228 33,124 56,943 Less: Other income (loss), net (95,443) (29,474) (291,725) Income (loss) before applicable income taxes $ (565,317) $ 157,462 $ 215,967 Revenue Revenue by geography is based on the addresses of the sellers or customers. The following table details revenue by geographic area (in thousands): Year Ended December 31, 2022 2021 2020 United States $ 16,314,769 $ 17,077,532 $ 9,186,440 International 1,216,818 583,671 311,138 Total $ 17,531,587 $ 17,661,203 $ 9,497,578 No individual country from the international markets contributed more than 10% of total revenue for the years ended December 31, 2022, 2021, and 2020. Long-Lived Assets The following table details long-lived assets by geographic area (in thousands): December 31, 2022 2021 United States $ 8,023,535 $ 1,426,103 Australia 4,801,434 26,680 International 1,858,300 55,088 Total $ 14,683,269 $ 1,507,871 Assets by reportable segment were not included, as this information is not reviewed by the CODM to make operating decisions or allocate resources, and is reviewed on a consolidated basis. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 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): Year Ended December 31, 2022 2021 2020 Supplemental Cash Flow Data: Cash paid for interest $ 84,876 $ 40,446 $ 3,857 Cash paid for income taxes 39,045 10,041 6,001 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 39,324 63,290 342,662 Purchases of property and equipment in accounts payable and accrued expenses 5,212 15,071 (3,975) Deferred purchase consideration related to business combinations 14,377 50,079 8,974 Fair value of common stock issued related to business combinations (13,827,929) (28,735) (35,318) Fair value of common stock issued to settle the conversion of convertible notes (2,523) (1,258,562) (1,398,829) Fair value of shares received to settle convertible note hedges 133,144 1,800,933 369,015 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 (6,084) — |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying 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"). The 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 consolidated balance sheets. |
Use of Estimates | Use of Estimates The preparation of the Company’s 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 consolidated financial statements include, but are not limited to, those related to valuation of goodwill and acquired intangible assets, accrued transaction losses, valuation of loans held for sale and investment, 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 reporting units, assessing contingencies including 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 and investment, 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. |
Concentration of Credit Risk | Concentration of Credit Risk For the years ended December 31, 2022, 2021, and 2020, the Company had no customer that accounted for greater than 10% of total net revenue. As of December 31, 2022, the Compa ny had two third-party payment processors that represented approximately 54% and 31% of settlements receivable. As of December 31, 2021, these two parties represented approximately 52% and 30% of settlements receivable. In both years, all other third-party 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 |
Revenue Recognition and Cost of Revenue | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Transaction-based Revenue The Company charges its sellers a transaction fee for managed payments solutions that is generally calculated as a percentage of the total transaction amount processed. The Company selectively offers custom pricing for certain large sellers. The Company collects the transaction amount from the seller's customer's bank, net of acquiring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the sellers. The Company acts as the merchant of record for its sellers and works directly with payment card networks and banks so that its sellers do not need to manage the complex systems, rules, and requirements of the payments industry. The Company satisfies its performance obligations and therefore recognizes the transaction fees as revenue upon authorization of a transaction by the seller's customer's bank. Revenue is recognized net of refunds, which arise from reversals of transactions initiated by sellers. The transaction fees collected from sellers are recognized as revenue on a gross basis as the Company is the principal in the delivery of the managed payments solutions to the sellers. The Company has concluded it is the principal because as the merchant of record, it controls the services before delivery to the seller, it is primarily responsible for the delivery of the services to its sellers, and it has discretion in setting prices charged to sellers. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the merchant of record, Square is liable for the costs of processing the transactions for its sellers, and records such costs within cost of revenue. The Company also charges certain Cash App customers making peer-to-peer transactions using business accounts, or funding transactions with a credit card, a transaction fee that is generally calculated as a percentage of the total transaction amount processed. The Company collects the transaction amount from the customer's Cash App account, net of incurring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the customers. Subscription and Services-based Revenue Subscription and services-based revenue is primarily comprised of revenue the Company generates from Cash App including Instant Deposit and Cash App Card, Square Loans, Afterpay's buy now, pay later ("BNPL") platform, website hosting and domain name registration services, TIDAL, and various other software as a service ("SaaS") products. Instant Deposit is a functionality within the Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. The Cash App Card offers Cash App customers the ability to use their stored funds via a Visa prepaid card that is linked to the balance the customer stores in Cash App. The Company charges the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM. The Company also earns interchange fees when a Cash App Card is used to make a purchase. These transaction and interchange fees are treated as revenue when charged. Square Loans (formerly Square Capital) facilitates loans to qualified Square sellers through the Company's subsidiary, Square Financial Services ("SFS"), which is an industrial loan corporation. The loans are either repaid through withholding a percentage of the collections of the seller's receivables processed by the Company or a specified monthly amount. The Company generally utilizes a pre-qualification process that includes an analysis of the aggregated data of the seller’s business which includes, but is not limited to, the seller’s historical processing volumes, transaction count, chargebacks, growth, and length of time as a Square customer. Generally, the loans have no stated coupon rate but the seller is charged a one-time origination fee based upon their risk rating, which is derived primarily from processing activity. For some of the loans, it is the Company’s intent to sell all of its rights, title, and interest of these loans to third-party investors for an upfront fee when the loans are sold. The Company records the amounts advanced to the customers or the net amounts paid to purchase the loans as cost of the loans. Subsequently, the Company records a gain on sale of the loans to the third-party investors as revenue upon transfer of title. The Company is retained by the third-party investors to service the loans and earns a servicing fee for facilitating the repayment of these receivables through its managed payments solutions. The Company records servicing revenue as servicing is delivered. For the loans which are not immediately sold to third-party investors or for which the Company has the intent and ability to hold through maturity, interest and fees earned are recognized as revenue using the effective interest method. Cash App Borrow, the Company’s first credit product for consumers, allows customers to access short-term loans for a small fee. The loans are repaid at the end of the loan term and customers may elect to prepay all or a part of the outstanding balance. If the outstanding balance is not paid when due, late fees in the form of interest may be charged. The short-term loans are facilitated through a partnership with an industrial bank. The loans are originated by the bank partner, from whom the Company purchases the loans obtaining all rights, title, and interest. Net amounts paid to the bank are recorded as the cost of the loans purchased, and amounts collected in excess of the carrying value are recognized as revenue over the life of the loans. The loan fee and late fees are recorded within subscription and services-based revenue on the consolidated statement of operations. Through the BNPL platform, consumers can pay for their purchases over time by splitting their purchase price into generally three or four installments, typically due in two-week increments, without paying fees (if payments are made on time). The Company generally pays the seller the full order value upfront, less taxes, if applicable, and 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. This revenue is included within subscription and services-based revenue on the 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. For the majority of the Company's BNPL products, consumers are not charged interest or fees, other than late fees which may be charged in certain regions by the Company as an incentive to encourage consumers to pay their outstanding balances as and when they fall due. As of October 2022, the Company also offers the ability for consumers to pay for larger transaction sizes over a six TIDAL primarily generates revenue from subscriptions to its customers, and such subscriptions allow access to the song library, video library, and improved sound quality. Customers can subscribe to services directly from the TIDAL website or through the Apple store. With both offerings, the Company charges customers a monthly fee for those subscription services, which is recognized ratably as revenue as the service is provided. SaaS represents software products and solutions that provide customers with access to various technologies for a fee which is recognized as revenue ratably as the service is provided. The Company's contracts with customers are generally for a term of one month and renew automatically each month. The Company invoices its customers monthly. The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month. Hardware Revenue Hardware revenue includes revenue from sales of magstripe readers, contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals. Third-party peripherals include cash drawers, receipt printers, scales, and barcode scanners, all of which can be integrated with Square Stand, Square Register, or Square Terminal to provide a comprehensive point-of-sale solution. The Company generates revenue through the sale of hardware through e-commerce and through its retail distribution channels. The Company satisfies its performance obligation upon delivery of hardware to its customers which include end user customers, distributors, and retailers. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing. Distributors and retailers have payment terms that range from 30 to 90 days after delivery. Bitcoin Revenue The Company offers its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company satisfies its performance obligation and records revenue when bitcoin is transferred to the customer's account. The Company purchases bitcoin from private broker dealers or from Cash App customers and applies a marginal fee before selling it to its customers. The amounts received from customers are recorded as revenue on a gross basis and the associated bitcoin cost as cost of revenues, as the Company is the principal in the bitcoin sale transaction. The Company has concluded it is the principal because it controls the bitcoin before delivery to the customers, it is primarily responsible for the delivery of the bitcoin to the customers, it is exposed to risks arising from fluctuations of the market price of bitcoin before delivery to customers, and has discretion in setting prices charged to customers. Cost of Revenue Transaction-based Costs Transaction-based costs consist primarily of interchange and assessment fees, processing fees and bank settlement fees paid to third-party payment processors and financial institutions. Subscription and Services-based Costs Subscriptions and services-based costs consist primarily of processing and partnership fees related to Cash App including Instant Deposit, Cash App Card, as well as costs associated with the Company's BNPL platform, and TIDAL. Hardware Costs Hardware costs consist of all product costs associated with contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals. Product costs include third-party manufacturing-related overhead and personnel-related costs, certain royalties, packaging, and fulfillment costs. Bitcoin Costs Bitcoin costs consist of the total amount the Company pays to purchase bitcoin that is sold to customers. These costs fluctuate in line with bitcoin revenue. Other Costs Generally, other costs such as personnel-related costs, rent, and occupancy charges are not allocated to cost of revenues and are reflected in operating expenses and are not material. |
Sales and Marketing Expenses | Sales and Marketing Expenses Advertising costs are expensed as incurred and included in sales and marketing expenses on the consolidated statements of operations. Total advertising costs for the years ended December 31, 2022, 2021, and 2020 were $544.2 million, $435.8 million, a nd $224.7 million, respectively. The Company also records |
Share-based Compensation | Share-based CompensationShare-based compensation expense relates to stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), and purchases under the Company’s 2015 Employee Stock Purchase Plan ("ESPP") which is measured based on the grant-date fair value. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The fair value of stock options and ESPP shares granted to employees is estimated on the date of grant using the Black-Scholes-Merton option valuation model. This share-based compensation expense valuation model requires the Company to make assumptions and judgments regarding the variables used in the calculation. These variables include the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s stock, expected risk-free interest rate, and expected dividends. The Company uses the simplified calculation of expected term, defined as an average of the vesting term and the contractual term to maturity. Expected volatility is based on a weighted-average of the historical volatilities of the Company's common stock. The expected risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Generally, share-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. |
Interest Income and Interest Expense | Interest Income and ExpenseInterest income consists of interest income from the Company's investment in marketable debt securities and interest expense relating to the Company's long-term debt. |
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 consolidated statements of comprehensive income (loss). 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 income, net on the consolidated statements of operations. |
Income and Other Taxes | Income and Other Taxes The Company reports income taxes under the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company considers historical information, tax planning strategies, the expected timing of the reversal of existing temporary differences, and may rely on financial projections to support its position on the recoverability of deferred tax assets. The Company’s judgment regarding future profitability contains significant assumptions and estimates of future operations. If such assumptions were to differ significantly from actual future results of operations, it may have a material impact on the Company’s ability to realize its deferred tax assets. At the end of each period, the Company assesses the ability to realize the deferred tax assets. If it is more likely than not that the Company will not realize the deferred tax assets, then the Company establishes a valuation allowance for all or a portion of the deferred tax assets. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision (benefit) for income tax expense on the consolidated statements of operations. |
Cash and Cash Equivalents, Restricted Cash and Customer Funds | Cash and Cash Equivalents, Restricted Cash, and Customer Funds Cash and Cash Equivalents The Company considers all highly liquid investments, including money market funds, with an original maturity of three months or less when purchased to be cash equivalents. Restricted Cash The Company records restricted cash amounts as a current asset on the consolidated balance sheets if the restriction expires in less than 12 months, or as a non-current asset if the restriction is 12 months or longer. If there is no minimum time frame during which the cash must remain restricted, the nature of the transactions related to the restriction determine the classification. The Company's short-term restricted cash was $639.8 million and $18.8 million as of December 31, 2022 and 2021, respectively. The balance as of December 31, 2022 was primarily comprised of cash held by the wholly-owned consolidated entities used in the warehouse funding facility arrangements. This restricted cash will be used to pay the borrowings under the warehouse funding facilities or will be distributed to the Company. The Company's total restricted cash also includes pledged cash deposits in accounts at the financial institutions that process the Company's sellers' payment transactions and collateral pursuant to various agreements with banks relating to the Company's products. The Company uses restricted cash to secure letters of credit with the related financial institutions to provide collateral for cash flow timing differences in the processing of payments. The Company's long-term restricted cash of $71.6 million and $71.7 million as of December 31, 2022 and December 31, 2021, respectively, is primarily related to cash held as collateral as required by the FDIC for Square Financial Services. The Company has recorded these amounts as non-current assets on the consolidated balance sheets as the requirement by the FDIC specifies a time frame of 12 months or longer during which the cash must remain restricted. Customer Funds |
Investments in Marketable Debt Securities | Investments in Marketable Debt Securities The Company's short-term and long-term investments include marketable debt securities such as government and agency securities, corporate bonds, commercial paper, and municipal securities. The Company determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable debt securities as available-for-sale and carries these investments at fair value, reporting the unrealized gains and losses, net of taxes, as a component of stockholders’ equity. The U.S. government and U.S. agency securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. The corporate bonds are issued by highly rated entities. The foreign government securities are issued by highly rated international entities. The Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time, sufficient for the recovery of their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense (income), net on the consolidated statements of operations. Investments in Equity Securities The Company holds marketable and non-marketable equity investments. Marketable equity investments are measured using quoted prices in active markets with changes recorded in other expense (income), net on the consolidated statements of operations. Non-marketable equity investments, which have no readily determinable fair values, are measured using the measurement alternative, which is defined as cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded in other income, net on the consolidated statements of operations. Non-marketable equity investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires judgment due to the absence of market prices and inherent lack of liquidity. The carrying value for these investments is not adjusted if there are no observable transactions for identical or similar investments of the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. The Company will adjust for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issue. Valuations of non-marketable equity investments are inherently complex due to the lack of readily available market data. In addition, the determination of whether an orderly transaction is for an identical or similar investment requires significant management judgment, including understanding the differences in the rights and obligations of the investments and the extent to which those differences would affect the fair values of those investments. |
Fair Value Measurements | Fair Value Measurements The Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value accounting establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
Customer Loans | Customer Loans The Company classifies customer loans as loans held for sale when the Company has the intent to sell all of its rights, title, and interest in these loans to third-party investors, and there is an available market for such loans. The Company classifies customer loans as loans held for investment when the Company has both the intent and ability to hold for the foreseeable future, or until maturity or payoff. |
Loans Held for Sale | Loans Held for SaleLoans held for sale are recorded at the lower of amortized cost or fair value determined on an individual loan basis. To determine the fair value the Company utilizes discounted cash flow valuation modeling, taking into account the probability of default and estimated timing and amounts of periodic repayments. In estimating the expected timing and amounts of the future periodic repayments for the loans outstanding, the Company considered other relevant market data. The Company recognizes a charge within transaction, loan, and consumer receivable losses on the consolidated statement of operations whenever the amortized cost of a loan exceeds its fair value, with such charges being reversed for subsequent increases in fair value, but only to the extent that such reversals do not result in the amortized cost of a loan exceeding its fair value. A loan that is initially designated as held for sale may be reclassified to held for investment if and when the Company's intent for that loan changes. |
Loans Held for Investment/Consumer Receivables | Loans Held for Investment 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 Company’s intent and ability to designate loans as held for investment in the future may change based on changes in business strategies, the economic environment, and market conditions. The Company calculates an allowance for losses on the loans held for investment portfolio in accordance with ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The Company assesses impairment of its financial instruments based on current estimates of expected credit losses over the contractual term of its loans held for investment portfolio as of each balance sheet date. The Company determines the allowance for loan losses using both quantitative and qualitative methods and considers all available information relevant to assessing collectability. This includes, but is not limited to, historical loss and recovery experience, recent and historical trends in delinquencies, past-due loans and charge-offs, borrower 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 sellers’ ability to make future payments. Consumer Receivables 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 classifies consumer receivables as held for investment when the Company has the intent and ability to hold these investments for the foreseeable future or until maturity or payoff. The Company classifies consumer receivables as held for sale when the Company has the intent to sell all of its rights, title, and interest in these receivables to third-party investors, and there is an available market for such receivables. 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. |
Settlements Receivable | Settlements Receivable Settlements receivable represents amounts due from third-party payment processors for customer transactions. Settlements receivable are typically received within one two |
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. 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 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. |
Inventory | InventoryInventory consists of contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal, and third-party peripherals, as well as component parts that are used to manufacture these products. Inventory is stated at the lower of cost (generally on a first-in, first-out basis) or net realizable value. Inventory that is obsolete or in excess of forecasted usage is written down to its net realizable value based on the estimated selling prices in the ordinary course of business. The Company's inventory is held at third-party warehouses and contract manufacturer premises. |
Investments in Bitcoin | Investment in Bitcoin Bitcoin is a cryptocurrency that is considered to be an indefinite-lived intangible asset because bitcoin lacks physical form and there is no limit to its useful life. Accordingly, the Company's investment in bitcoin is not subject to amortization but is tested for impairment on a daily basis. The Company has concluded that because bitcoin is traded in an active market where there are observable prices, a decline in the quoted price below cost is generally viewed as an impairment indicator. If the fair value of bitcoin decreases below the carrying value during the assessed period, an impairment charge is recognized at that time. After an impairment loss is recognized, the adjusted carrying value becomes the new accounting basis of the Company's investment in bitcoin. Impairment losses cannot be reversed for any subsequent increase in fair value until the sale of the asset. The Company's investment in bitcoin does not include any bitcoin held for other parties. |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost less accumulated depreciation, which is computed on a straight-line basis over the asset’s estimated useful life. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Three years Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term |
Capitalized Software | Capitalized Software The Company capitalizes certain costs incurred in developing internal-use software when capitalization requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. Capitalized costs are included in property and equipment, net, and amortized on a straight-lined basis over the estimated useful life of the software and included in product development costs on the consolidated statements of operations. |
Leases | Leases The Company leases office space and equipment under non-cancellable finance and operating leases with various expiration dates. The Company determines whether an arrangement is a lease for accounting purposes at contract inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized at the present value of the future lease payments, generally for the base noncancellable lease term, at the lease commencement date for each lease. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate because the interest rate implicit in most of the Company's leases is not readily determinable. The Company's incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Operating lease ROU assets also include any prepaid lease payments and lease incentives. The Company's lease agreements generally contain lease and non-lease components. The Company applies the practical expedient to account for the lease and non-lease components as a single lease component for all leases, where applicable. Non-lease components primarily include payments for maintenance and utilities. The Company includes the fixed non-lease components in the determination of the ROU assets and operating lease liabilities. Variable lease payments that are not based on a rate or index are not included in the calculation of the ROU asset and lease liability, and they are recognized as lease expense in the period in which the obligation for those payments is incurred. Variable lease payments predominantly relate to variable operating expenses, taxes, parking, and electricity. The Company records the amortization of the ROU asset and the accretion of lease liability as a component of rent expense in the consolidated statements of operations. The Company evaluates ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of an ROU asset may not be recoverable. When a decision has been made to exit a lease prior to the contractual term or to sublease that space, the Company evaluates the asset for impairment and recognizes the associated impact to the ROU asset and related expense, if applicable. The evaluation is performed at the asset group level initially and when appropriate, at the lowest level of identifiable cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU assets are estimated over the ROU assets’ useful lives. If the evaluation indicates that the carrying amount of the ROU assets may not be recoverable, any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation techniques. When lease agreements provide allowances for leasehold improvements, the Company assesses whether it is the owner of the leasehold improvements for accounting purposes. When the Company concludes that it is the owner, it capitalizes the leasehold improvement assets and recognizes the related depreciation expense on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. Additionally, the Company recognizes the amounts of allowances to be received from the lessor as a reduction of the lease liability and the associated ROU asset. When the Company concludes that it is not the owner, the payments that the Company makes towards the leasehold improvements are accounted as a component of the lease payments. |
Business Combinations | Business Combinations The purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of total consideration over the fair values of the assets acquired and the liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded on the consolidated statements of operations. |
Long-lived Assets, including Goodwill and Acquired Intangible Assets | Long-Lived Assets, including Goodwill and Acquired Intangible Assets The Company evaluates the recoverability of property and equipment and finite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated. If the carrying amount of the long–lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third–party independent appraisals, as considered necessary. For the periods presented, the Company recorded no impairment charges. The Company performs a goodwill impairment test annually on December 31 and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value. The Company first assesses qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. For the periods presented, the Company recorded no impairment charges. Acquired intangible assets consist of acquired technology and customer relationships associated with various acquisitions. Acquired technology is amortized over its estimated useful life on a straight-line basis and included as a component of cost of revenue on the consolidated statements of operations. Acquired customer relationships and other intangible assets are amortized on a straight-line basis over their estimated useful lives, and included as a component of operating expenses on the consolidated statements of operations. The Company evaluates the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining period of amortization. |
Customers Payable | Customers PayableCustomers payable represents the transaction amounts, less revenue earned by the Company, owed to sellers or Cash App customers. The payable amount consists of amounts owed to customers due to timing differences as the Company typically settles within one |
Accrued Transaction Losses | Accrued Transaction LossesThe 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 insolvency, disputes between a seller and their customer, or due to fraudulent transactions. Accrued transaction losses also include estimated losses on Cash App activity related to peer-to-peer payments sent from a credit card, Cash for Business, and Cash App Card. 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 Company also considers other relevant market data in developing such estimates and assumptions. Additions to the reserve are reflected in current operating results, while realized losses are offset against the reserve. These amounts are classified within transaction, loan, and consumer receivable losses on the consolidated statements of operations, except for the amounts associated with the peer-to-peer service offered to Cash App customers for free that are classified within sales and marketing expenses. |
Segments | Segments The Company reports its segments to reflect the manner in which the Company's chief operating decision maker ("CODM") reviews and assesses performance. The Company has two reportable segments, Square (formerly Seller) 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. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In July 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-05, Leases (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 is 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. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Estimated Useful Lives of Property and Equipment | The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Three years Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term The following table details property and equipment, less accumulated depreciation and amortization (in thousands): December 31, December 31, Leasehold improvements $ 228,634 $ 208,228 Computer equipment 224,959 174,004 Capitalized software 197,420 116,827 Office furniture and equipment 45,836 42,393 Total 696,849 541,452 Less: Accumulated depreciation and amortization (367,547) (259,312) Property and equipment, net $ 329,302 $ 282,140 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 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): Year Ended December 31, 2022 2021 2020 Revenue from contracts with customers: Transaction-based revenue $ 5,701,540 $ 4,793,146 $ 3,294,978 Subscription and services-based revenue 3,385,784 2,445,811 1,447,188 Hardware revenue 164,418 145,679 91,654 Bitcoin revenue 7,112,856 10,012,647 4,571,543 Revenue from other sources: Subscription and services-based revenue (i) 1,166,989 263,920 92,215 Total net revenue $ 17,531,587 $ 17,661,203 $ 9,497,578 (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) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term and Long-term Investments | The Company's short-term and long-term investments as of December 31, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 96,545 $ 16 $ (2,120) $ 94,441 Corporate bonds 368,110 2 (7,475) 360,637 Commercial paper 31,503 — — 31,503 Municipal securities 9,884 — (191) 9,693 Certificates of deposit 6,400 — — 6,400 U.S. government securities 580,568 6 (8,937) 571,637 Foreign government securities 7,795 — (255) 7,540 Total $ 1,100,805 $ 24 $ (18,978) $ 1,081,851 Long-term debt securities: U.S. agency securities $ 74,097 $ — $ (3,782) $ 70,315 Corporate bonds 245,891 6 (9,171) 236,726 Municipal securities 10,415 3 (664) 9,754 U.S. government securities 268,902 — (13,210) 255,692 Foreign government securities 1,000 — (58) 942 Total $ 600,305 $ 9 $ (26,885) $ 573,429 The Company's short-term and long-term investments as of December 31, 2021 are 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 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 December 31, 2022 and 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): December 31, 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 $ 8,572 $ (24) $ 84,628 $ (2,096) $ 93,200 $ (2,120) Corporate bonds 34,795 (423) 320,748 (7,052) 355,543 (7,475) Municipal securities 587 (13) 5,811 (178) 6,398 (191) U.S. government securities 146,974 (839) 394,880 (8,098) 541,854 (8,937) Foreign government securities — — 7,540 (255) 7,540 (255) Total $ 190,928 $ (1,299) $ 813,607 $ (17,679) $ 1,004,535 $ (18,978) Long-term debt securities: U.S. agency securities $ 11,501 $ (20) $ 58,814 $ (3,762) $ 70,315 $ (3,782) Corporate bonds 33,862 (262) 201,791 (8,909) 235,653 (9,171) Municipal securities 467 (33) 8,784 (631) 9,251 (664) U.S. government securities 54,405 (590) 201,288 (12,620) 255,693 (13,210) Foreign government securities — — 942 (58) 942 (58) Total $ 100,235 $ (905) $ 471,619 $ (25,980) $ 571,854 $ (26,885) 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 were in a continuous loss position, were as follows (in thousands): 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 $ 29,994 $ (7) $ — $ — $ 29,994 $ (7) U.S. government securities $ 360,060 $ (191) $ — $ — $ 360,060 $ (191) Total $ 390,054 $ (198) $ — $ — $ 390,054 $ (198) |
Contractual Maturities of Short-Term and Long-Term Investments | The contractual maturities of the Company's short-term and long-term investments as of December 31, 2022 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,100,805 $ 1,081,851 Due in one to five years 600,305 573,429 Total $ 1,701,110 $ 1,655,280 |
CUSTOMER FUNDS (Tables)
CUSTOMER FUNDS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Assets Underlying Customer Funds | The following table presents the assets underlying customer funds (in thousands): December 31, December 31, Cash $ 1,748,983 $ 242,243 Cash equivalents: Money market funds 851,296 2,126,579 Reverse repurchase agreement (i) 580,045 72,119 Short-term debt securities: U.S. agency securities — 29,994 U.S. government securities — 360,060 Total $ 3,180,324 $ 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 classifies the amounts due from the counterparty as cash equivalents due to their short term nature. |
Investments within Customer Funds | The Company's short-term and long-term investments as of December 31, 2022 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 96,545 $ 16 $ (2,120) $ 94,441 Corporate bonds 368,110 2 (7,475) 360,637 Commercial paper 31,503 — — 31,503 Municipal securities 9,884 — (191) 9,693 Certificates of deposit 6,400 — — 6,400 U.S. government securities 580,568 6 (8,937) 571,637 Foreign government securities 7,795 — (255) 7,540 Total $ 1,100,805 $ 24 $ (18,978) $ 1,081,851 Long-term debt securities: U.S. agency securities $ 74,097 $ — $ (3,782) $ 70,315 Corporate bonds 245,891 6 (9,171) 236,726 Municipal securities 10,415 3 (664) 9,754 U.S. government securities 268,902 — (13,210) 255,692 Foreign government securities 1,000 — (58) 942 Total $ 600,305 $ 9 $ (26,885) $ 573,429 The Company's short-term and long-term investments as of December 31, 2021 are 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 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 December 31, 2022 and 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): December 31, 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 $ 8,572 $ (24) $ 84,628 $ (2,096) $ 93,200 $ (2,120) Corporate bonds 34,795 (423) 320,748 (7,052) 355,543 (7,475) Municipal securities 587 (13) 5,811 (178) 6,398 (191) U.S. government securities 146,974 (839) 394,880 (8,098) 541,854 (8,937) Foreign government securities — — 7,540 (255) 7,540 (255) Total $ 190,928 $ (1,299) $ 813,607 $ (17,679) $ 1,004,535 $ (18,978) Long-term debt securities: U.S. agency securities $ 11,501 $ (20) $ 58,814 $ (3,762) $ 70,315 $ (3,782) Corporate bonds 33,862 (262) 201,791 (8,909) 235,653 (9,171) Municipal securities 467 (33) 8,784 (631) 9,251 (664) U.S. government securities 54,405 (590) 201,288 (12,620) 255,693 (13,210) Foreign government securities — — 942 (58) 942 (58) Total $ 100,235 $ (905) $ 471,619 $ (25,980) $ 571,854 $ (26,885) 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 were in a continuous loss position, were as follows (in thousands): 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 $ 29,994 $ (7) $ — $ — $ 29,994 $ (7) U.S. government securities $ 360,060 $ (191) $ — $ — $ 360,060 $ (191) Total $ 390,054 $ (198) $ — $ — $ 390,054 $ (198) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s assets and liabilities that are measured at fair value on a recurring basis were classified as follows (in thousands): December 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 1,230,924 $ — $ — $ 2,344,768 $ — $ — U.S. agency securities — 7,923 — — 22,999 — Certificates of deposit — — — — 4,983 — Commercial paper — 25,080 — — — — Corporate bonds — — — — 790 — Customer funds: Money market funds 851,296 — — 2,126,579 — — Reverse repurchase agreement 580,045 — — 72,119 — — U.S. agency securities — — — — 29,994 — U.S. government securities — — — 360,060 — — Short-term debt securities: U.S. agency securities — 94,441 — — 74,128 — Corporate bonds — 360,637 — — 293,319 — Commercial paper — 31,503 — — 36,088 — Municipal securities — 9,693 — — 5,548 — Certificates of deposit — 6,400 — — 9,200 — U.S. government securities 571,637 — — 430,843 — Foreign government securities — 7,540 — — 20,157 — Long-term debt securities: U.S. agency securities — 70,315 — — 153,320 — Corporate bonds — 236,726 — — 663,207 — Municipal securities — 9,754 — — 22,417 — U.S. government securities 255,692 — — 674,476 — — Foreign government securities — 942 — — 13,010 — Other: Investment in marketable equity security 11,092 — — — — — Safeguarding asset related to bitcoin held for other parties — 428,243 — — 1,100,596 — Safeguarding obligation liability related to bitcoin held for other parties — (428,243) — — (1,100,596) — Total assets (liabilities) measured at fair value $ 3,500,686 $ 860,954 $ — $ 6,008,845 $ 1,349,160 $ — December 31, 2022 December 31, 2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2031 Senior Notes $ 988,171 $ 782,857 $ 986,774 $ 1,018,113 2026 Senior Notes 990,414 885,876 987,626 994,579 2027 Convertible Notes 568,535 433,082 567,208 614,286 2026 Convertible Notes 569,315 464,066 567,621 595,548 2025 Convertible Notes 993,394 943,188 990,361 1,477,302 2023 Convertible Notes 460,356 480,925 459,618 958,927 2022 Convertible Notes — 455 3,192 Total $ 4,570,185 $ 3,989,994 $ 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): December 31, 2022 December 31, 2021 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 474,036 $ 491,807 $ 517,940 $ 574,982 Loans held for investment 123,959 126,122 91,447 95,746 Total $ 597,995 $ 617,929 $ 609,387 $ 670,728 |
CONSUMER RECEIVABLES, NET (Tabl
CONSUMER RECEIVABLES, NET (Tables) | 12 Months Ended |
Dec. 31, 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): December 31, 2022 Non-delinquent loans $ 1,643,874 1 - 60 days past due 295,830 61 - 90 days past due 20,612 90+ days past due 62,134 Total amortized cost $ 2,022,450 |
Change in Allowance for Credit Losses | The following table summarizes activity in the allowance for credit losses subsequent to the acquisition of Afterpay (in thousands): From Acquisition on Allowance for credit losses, beginning of the period (i) $ 115,552 Provision for credit losses 203,670 Charge-offs and other adjustments (168,664) Foreign exchange effect 732 Allowance for credit losses, end of the period $ 151,290 (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) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Capitalized software 18 months Computer and data center equipment Three years Furniture and fixtures Seven years Leasehold improvements Lesser of ten years or remaining lease term The following table details property and equipment, less accumulated depreciation and amortization (in thousands): December 31, December 31, Leasehold improvements $ 228,634 $ 208,228 Computer equipment 224,959 174,004 Capitalized software 197,420 116,827 Office furniture and equipment 45,836 42,393 Total 696,849 541,452 Less: Accumulated depreciation and amortization (367,547) (259,312) Property and equipment, net $ 329,302 $ 282,140 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions | 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 consideration $ 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 names 386,000 Other non-current assets 74,232 Long-term debt - current (i) (1,058,065) Current liabilities (439,358) Warehouse funding facilities (ii) (107,996) Deferred tax liabilities (190,689) Other non-current liabilities (63,213) Total identifiable net assets acquired 2,117,128 Goodwill 11,719,494 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. The table below summarizes the consideration paid for TIDAL and the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). Consideration: Cash $ 176,663 Deferred consideration 46,475 Stock (41,138 shares of Class A common stock) 10,071 Total consideration $ 233,209 Recognized amounts of identifiable assets acquired and liabilities assumed: Current assets (inclusive of cash acquired of $12,358) $ 29,621 Intangible customer assets 69,000 Intangible technology assets 29,000 Intangible trade name 35,000 Intangible other assets 8,000 Other non-current assets 33,443 Accrued expenses and other current liabilities (67,789) Other non-current liabilities (52,759) Total identifiable net assets acquired 83,516 Noncontrolling interests (48,192) Goodwill 197,885 Total $ 233,209 |
Pro Forma Financial Information | The unaudited pro forma financial results are as follows (in thousands): Year Ended December 31, 2022 2021 Net revenue $ 17,601,817 $ 18,494,077 Net loss $ (356,568) $ (183,616) |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Change in Carrying Value of Goodwill | The change in the carrying value of goodwill was as follows (in thousands): Balance at December 31, 2020 $ 316,701 Acquisitions 203,079 Other adjustments (504) Balance at December 31, 2021 519,276 Acquisitions 11,761,866 Foreign currency translation adjustments (314,381) Balance at December 31, 2022 $ 11,966,761 The change in the carrying value of goodwill allocated to the reportable segments was as follows (in thousands): Cash App Square Corporate and Other Total Balance at December 31, 2020 $ 128,838 $ 187,863 $ — $ 316,701 Acquisitions — 5,194 197,885 203,079 Other adjustments (504) — — (504) Balance at December 31, 2021 128,334 193,057 197,885 519,276 Acquisitions 5,882,133 5,879,733 — 11,761,866 Foreign currency translation adjustments (157,537) (156,844) — (314,381) Balance at December 31, 2022 $ 5,852,930 $ 5,915,946 $ 197,885 $ 11,966,761 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite Lived Intangible Assets | The following table details acquired intangible assets (in thousands): Balance at December 31, 2022 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 398,665 $ (133,116) $ 265,549 Customer assets 15 years 1,474,163 (110,316) 1,363,847 Trade names 9 years 434,766 (58,352) 376,414 Other 9 years 13,701 (5,477) 8,224 Total $ 2,321,295 $ (307,261) $ 2,014,034 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 names 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 change in the carrying value of intangible assets was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Acquired intangible assets, net, beginning of the period $ 257,049 $ 137,612 $ 69,079 Acquisitions 2,006,490 159,100 85,960 Amortization expense (208,952) (40,522) (19,239) Foreign currency translation and other adjustments (40,553) 859 1,812 Acquired intangible assets, net, end of the period $ 2,014,034 $ 257,049 $ 137,612 |
Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets as of December 31, 2022 is as follows (in thousands): 2023 $ 221,883 2024 218,422 2025 211,595 2026 197,528 2027 149,443 Thereafter 1,015,163 Total $ 2,014,034 |
OTHER CONSOLIDATED BALANCE SH_3
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Current Assets | The following table details other current assets (in thousands): December 31, December 31, Inventory, net $ 97,703 $ 77,058 Restricted cash 639,780 18,778 Processing costs receivable 298,568 228,914 Prepaid expenses 141,262 63,341 Accounts receivable, net 140,508 89,702 Loans held for investment, net of allowance for loan losses (i) 123,959 91,447 Other 185,485 118,189 Total $ 1,627,265 $ 687,429 (i) Refer to Note 7, Loans Held for Investment for further details . |
Accrued Expenses and Other Current Liabilities | The following table details accrued expenses and other current liabilities (in thousands): December 31, December 31, Accrued expenses $ 382,571 $ 254,900 Accounts payable 95,846 82,173 Customer deposits 141,893 59,844 Accrued transaction losses (i) 64,539 55,167 Accrued royalties 63,684 53,616 Operating lease liabilities, current 66,854 64,027 Other 241,289 133,154 Total $ 1,056,676 $ 702,881 (i) 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 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): Year Ended December 31, 2022 2021 Accrued transaction losses, beginning of the period $ 55,167 $ 70,557 Provision for transaction losses 100,735 63,436 Charge-offs to accrued transaction losses (91,363) (78,826) Accrued transaction losses, end of the period $ 64,539 $ 55,167 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 $411.7 million and $338.6 million for the years ended December 31, 2022 and 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): Year Ended December 31, 2022 2021 Accrued transaction losses, beginning of the period $ 55,167 $ 70,557 Provision for transaction losses 100,735 63,436 Charge-offs to accrued transaction losses (91,363) (78,826) Accrued transaction losses, end of the period $ 64,539 $ 55,167 |
OTHER CONSOLIDATED BALANCE SH_4
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Non-Current Assets | The following table details other non-current assets (in thousands): December 31, December 31, Investment in non-marketable equity securities (i) $ 208,880 $ 81,919 Investment in bitcoin, net (ii) 102,303 149,000 Restricted cash 71,600 71,702 Other 101,454 67,914 Total $ 484,237 $ 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 on the consolidated statements of operations. During the year ended December 31, 2022, the Company recorded unrealized gains of $96.1 million arising from the revaluation of certain non-marketable investments, resulting in cumulative unrealized gains of $115.2 million as of December 31, 2022. Unrealized losses were immaterial as of December 31, 2022. (ii) As of December 31, 2022, the Company has purchased a cumulative $220.0 million in bitcoin for investment purposes. 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 impairment losses of $46.6 million in the year ended December 31, 2022, due to the observed market price of bitcoin decreasing below the carrying value during the period. As of December 31, 2022, the cumulative impairment losses to date were $117.7 million and the fair value of the investment in bitcoin was $132.7 million based on observable market prices, which was $30.4 million in excess of the Company's carrying value of $102.3 million after impairment charges. |
BITCOIN HELD FOR OTHER PARTIES
BITCOIN HELD FOR OTHER PARTIES (Tables) | 12 Months Ended |
Dec. 31, 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): December 31, December 31, Approximate number of bitcoin held for customers 25,850 23,360 Approximate number of bitcoin held for trading partners 62 458 Total approximate number of bitcoin held for other parties 25,912 23,818 Safeguarding obligation liability related to bitcoin held for customers $ 427,221 $ 1,079,412 Safeguarding obligation liability related to bitcoin held for trading partners $ 1,022 21,184 Safeguarding obligation liability related to bitcoin held for other parties $ 428,243 $ 1,100,596 Safeguarding asset related to bitcoin held for other parties $ 428,243 $ 1,100,596 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 12 Months Ended |
Dec. 31, 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): December 31, 2023 (i) 461,240 2024 877,066 Total funding debt, net of deferred debt issuance costs $ 1,338,306 (i) Disclosed as warehouse funding facilities, current portion within total current liabilities on the consolidated balance sheet. |
Net Carrying Amount of Convertible Notes | The following table summarizes the Company's Notes as of December 31, 2022 (in thousands): Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value 2031 Senior Notes $ 1,000,000 $ (11,829) $ 988,171 2026 Senior Notes 1,000,000 (9,586) 990,414 2027 Convertible Notes 575,000 (6,465) 568,535 2026 Convertible Notes 575,000 (5,685) 569,315 2025 Convertible Notes 1,000,000 (6,606) 993,394 2023 Convertible Notes (i) 460,630 (274) 460,356 Total $ 4,610,630 $ (40,445) $ 4,570,185 (i) Net carrying value disclosed as current portion of long-term debt within total current liabilities on the consolidated balance sheet. The following table summarizes the Company's Notes as of December 31, 2021 (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 455 — 455 Total $ 4,611,085 $ (51,422) $ 4,559,663 |
Interest Expense on Convertible Notes | The following table summarizes the interest expense of the Notes (in thousands): Year Ended December 31, 2022 2021 2020 Contractual interest expense $ 66,910 $ 44,141 $ 6,078 Amortization of debt discount and issuance costs (i) 10,979 9,823 67,979 Total $ 77,889 $ 53,964 $ 74,057 (i) Upon adoption of ASU 2020-06 on January 1, 2021, 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. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Domestic and Foreign Components of Income (Loss) Before Income Taxes | The domestic and foreign components of income (loss) before income taxes were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ (347,968) $ 417,356 $ 369,016 Foreign (217,349) (259,894) (153,049) Income (loss) before income taxes $ (565,317) $ 157,462 $ 215,967 |
Components of Provision for Income Taxes | The components of the provision for income taxes were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ 14,352 $ 201 $ — State 17,504 3,186 4,016 Foreign 25,425 5,684 6,862 Total current provision for income taxes 57,281 9,071 10,878 Deferred: Federal (59,909) (1,463) (970) State (7,677) (524) (231) Foreign (2,007) (8,448) (6,815) Total deferred provision for income taxes (69,593) (10,435) (8,016) Total provision (benefit) for income taxes $ (12,312) $ (1,364) $ 2,862 |
Reconciliation of Statutory Federal Income Tax Rate to Company's Effective Tax Rate | The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate: December 31, 2022 2021 2020 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit (1.1) 0.6 0.3 Foreign rate differential (2.0) 10.4 4.0 Other non-deductible expenses (1.4) 4.5 2.7 Credits 27.0 (83.9) (34.6) Other items 0.6 1.6 2.2 Change in valuation allowance (46.7) 290.4 153.9 Share-based compensation 7.5 (275.0) (155.4) Change in uncertain tax positions (1.5) 5.0 2.3 Loss inclusions of US foreign subsidiaries 2.1 0.9 — Non-deductible executive compensation (0.3) 5.9 3.6 Non-deductible acquisition related costs (3.0) 5.9 1.3 Intercompany transactions — 3.8 — Cancellation of debt income — 8.0 — Total 2.2 % (0.9) % 1.3 % |
Tax Effects of Temporary Differences and Related Deferred Tax Assets and Liabilities | The tax effects of temporary differences and related deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Capitalized costs & research and development capitalization $ 474,766 $ 12,409 Accrued expenses 129,695 62,707 Net operating loss carryforwards 1,172,880 1,276,561 Tax credit carryforwards 501,185 378,682 Share-based compensation 72,128 50,431 Deferred interest — 34,475 Other 6,199 7,740 Operating lease liability 109,176 111,099 Cryptocurrency investment 30,273 17,600 Deferred consideration 11,665 11,266 Convertible notes 52,915 70,316 Safeguarding liability related to bitcoin held for other parties 110,150 272,287 Total deferred tax assets 2,671,032 2,305,573 Valuation allowance (2,100,383) (1,887,111) Total deferred tax assets, net of valuation allowance 570,649 418,462 Deferred tax liabilities: Property, equipment and intangible assets (451,349) (31,775) Indefinite-lived intangibles (1,309) (867) Unrealized gain on investments (29,554) (4,712) Operating lease right-of-use asset (96,894) (108,747) Safeguarding asset related to bitcoin held for other parties (110,150) (272,287) Total deferred tax liabilities (689,256) (418,388) Net deferred tax assets (liabilities) $ (118,607) $ 74 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefit | unrecognized tax benefit was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Unrecognized tax benefit, beginning of the period $ 448,392 $ 295,182 $ 217,574 Gross increases and decreases related to prior period tax positions 5,431 6,552 (2,615) Gross increases and decreases related to current period tax positions 30,988 124,238 77,235 Reductions related to lapse of statute of limitations (2,950) — (49) Gross increases related to acquisitions 24,651 22,420 3,037 Unrecognized tax benefit, end of the period $ 506,512 $ 448,392 $ 295,182 |
STOCKHOLDER'S EQUITY (Tables)
STOCKHOLDER'S EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the year ended December 31, 2022 is as follows (in thousands, except share and per share data): Number of Stock Options Outstanding Weighted Weighted Aggregate Outstanding, beginning of the period 8,916,100 $ 26.09 3.89 $ 1,226,105 Granted 796,719 94.61 Exercised (2,867,609) 8.22 Forfeited (93,371) 105.85 Expired (13,056) 190.75 Outstanding, end of the period 6,738,783 $ 40.37 4.02 $ 224,484 Exercisable, end of the period 5,701,097 $ 28.32 3.30 $ 221,311 |
Restricted Stock Awards and Restricted Stock Units Activity | Activity related to RSAs and RSUs during the year ended December 31, 2022 is set forth below: Number of Weighted Unvested, beginning of the period 13,221,953 $ 137.86 Granted 26,437,317 85.17 Vested (8,198,514) 111.33 Forfeited (3,160,728) 123.83 Unvested, end of the period 28,300,028 $ 97.89 |
Fair Value Assumptions for Options | The fair values of stock options granted were estimated using the following weighted-average assumptions: Year Ended December 31, 2022 2021 2020 Dividend yield — % — % — % Risk-free interest rate 3.08 % 1.08 % 0.41 % Expected volatility 59.2 % 54.91 % 48.29 % Expected term (years) 6.02 6.02 6.02 |
Summary of the Effect of Share-Based Compensation on the Consolidated Statements of Operations | The following table summarizes the effects of share-based compensation on the consolidated statements of operations (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 494 $ 410 $ 368 Product development 701,715 446,596 289,553 Sales and marketing 105,231 57,070 36,627 General and administrative 261,849 103,966 70,952 Total $ 1,069,289 $ 608,042 $ 397,500 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Share | The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net income (loss) $ (553,005) $ 158,826 $ 213,105 Less: Net loss attributable to noncontrolling interests (12,258) (7,458) — Net income (loss) attributable to common stockholders $ (540,747) $ 166,284 $ 213,105 Denominator: Basic shares: Weighted-average shares used to compute basic net income (loss) per share 578,949 458,432 443,126 Diluted shares: Stock options, restricted stock, and employee stock purchase plan — 17,849 23,628 Convertible notes — 408 — Common stock warrants — 25,090 15,413 Weighted-average shares used to compute diluted net income (loss) per share 578,949 501,779 482,167 Net income (loss) per share attributable to common stockholders: Basic $ (0.93) $ 0.36 $ 0.48 Diluted $ (0.93) $ 0.33 $ 0.44 |
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 per share because their effect would have been anti-dilutive for the periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Stock options, restricted stock, and employee stock purchase plan 32,185 7,680 12,509 Convertible notes 18,029 23,947 25,073 Common stock warrants 33,699 17,271 22,140 Total anti-dilutive securities 83,913 48,898 59,722 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Expense Components and Other Information Related to Leases | The components of lease costs for the year ended December 31, 2022 were as follows (in thousands): Year Ended December 31, 2022 2021 Fixed operating lease costs $ 93,365 $ 83,136 Variable operating lease costs 27,065 15,568 Short-term lease costs 4,332 1,953 Sublease income (15,965) (12,210) Total lease costs $ 108,797 $ 88,447 Other information related to operating leases was as follows: Year Ended December 31, 2022 2021 Weighted-average remaining lease term 7.7 years 8.3 years Weighted-average discount rate 3.55 % 3.55 % Cash flows related to leases were as follows (in thousands): Year Ended December 31, 2022 2021 Cash flows from operating activities: Payments for operating lease liabilities $ (92,730) $ (77,201) Supplemental cash flow data: Right-of-use assets obtained in exchange for operating lease obligations $ 39,324 $ 63,290 |
Future Minimum Lease Payments under Non-Cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of December 31, 2022 are as follows (in thousands): 2023 $ 81,160 2024 68,669 2025 61,301 2026 52,460 2027 49,056 Thereafter 186,827 Total $ 499,473 Less: Amount representing interest 65,639 Less: Leases executed but not yet commenced 8,024 Less: Lease incentives and transfer to held for sale 1,352 Total $ 424,458 |
Future Minimum Payments under the Purchase Commitments | As of December 31, 2022, the future minimum payments under the purchase commitments were as follows (in thousands): Payments Due By Period 2023 $ 182,500 2024 244,700 2025 273,600 2026 263,300 2027 315,100 Total $ 1,279,200 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 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): Year Ended December 31, 2022 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 466,171 $ 5,235,369 $ — $ 5,701,540 Subscription and services-based revenue 3,047,084 1,300,043 205,646 4,552,773 Hardware revenue — 164,418 — 164,418 Bitcoin revenue 7,112,856 — — 7,112,856 Segment revenue (ii) 10,626,111 6,699,830 205,646 17,531,587 Segment gross profit (iii, iv) $ 2,950,967 $ 3,000,978 $ 39,947 $ 5,991,892 Year Ended December 31, 2021 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 409,844 $ 4,383,302 $ — $ 4,793,146 Subscription and services-based revenue 1,893,008 664,367 152,356 2,709,731 Hardware revenue — 145,679 — 145,679 Bitcoin revenue 10,012,647 — — 10,012,647 Segment revenue 12,315,499 5,193,348 152,356 17,661,203 Segment gross profit (iv) $ 2,070,847 $ 2,316,671 $ 32,305 $ 4,419,823 Year Ended December 31, 2020 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 233,747 $ 3,061,231 $ — $ 3,294,978 Subscription and services-based revenue 1,163,096 376,307 — 1,539,403 Hardware revenue — 91,654 — 91,654 Bitcoin revenue 4,571,543 — — 4,571,543 Segment revenue 5,968,386 3,529,192 — 9,497,578 Segment gross profit (iv) $ 1,225,578 $ 1,507,831 $ — $ 2,733,409 (i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment, and intersegment eliminations. (ii) The revenue for both Cash App and Square for the year ended December 31, 2022 included $405.7 million each, from Afterpay post-acquisition results following the closing of the acquisition. (iii) The gross profit for both Cash App and Square for the year ended December 31, 2022 included $294.1 million each, from Afterpay post-acquisition results following the closing of the acquisition. (iv) Segment gross profit for Cash App for the years ended December 31, 2022, 2021, and 2020 included $32.1 million, $10.5 million, and $5.4 million of amortization of acquired technology assets expense, respectively. Segment gross profit for Square for the years ended December 31, 2022, 2021, and 2020 included $32.2 million, $8.3 million, and $5.8 million of amortization of acquired technology assets expense, respectively. Amortization of acquired technology assets expense included in Corporate and Other was immaterial for the years ended December 31, 2022, 2021, and 2020. |
Reconciliation of Revenue from Segments to Consolidated | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table provides a reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes (in thousands): Year Ended December 31, 2022 2021 2020 Total segment gross profit $ 5,991,892 $ 4,419,823 $ 2,733,409 Less: Product development 2,135,612 1,383,841 881,826 Less: Sales and marketing 2,057,951 1,617,189 1,109,670 Less: General and administrative 1,686,849 982,817 579,203 Less: Transaction, loan, and consumer receivable losses 550,683 187,991 177,670 Less: Bitcoin impairment losses 46,571 71,126 — Less: Amortization of customer and other intangible assets 138,758 15,747 3,855 Less: Interest expense, net 36,228 33,124 56,943 Less: Other income (loss), net (95,443) (29,474) (291,725) Income (loss) before applicable income taxes $ (565,317) $ 157,462 $ 215,967 |
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): Year Ended December 31, 2022 2021 2020 United States $ 16,314,769 $ 17,077,532 $ 9,186,440 International 1,216,818 583,671 311,138 Total $ 17,531,587 $ 17,661,203 $ 9,497,578 |
Long-Lived Assets by Geographic Area | The following table details long-lived assets by geographic area (in thousands): December 31, 2022 2021 United States $ 8,023,535 $ 1,426,103 Australia 4,801,434 26,680 International 1,858,300 55,088 Total $ 14,683,269 $ 1,507,871 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures | The supplemental disclosures of cash flow information consist of the following (in thousands): Year Ended December 31, 2022 2021 2020 Supplemental Cash Flow Data: Cash paid for interest $ 84,876 $ 40,446 $ 3,857 Cash paid for income taxes 39,045 10,041 6,001 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 39,324 63,290 342,662 Purchases of property and equipment in accounts payable and accrued expenses 5,212 15,071 (3,975) Deferred purchase consideration related to business combinations 14,377 50,079 8,974 Fair value of common stock issued related to business combinations (13,827,929) (28,735) (35,318) Fair value of common stock issued to settle the conversion of convertible notes (2,523) (1,258,562) (1,398,829) Fair value of shares received to settle convertible note hedges 133,144 1,800,933 369,015 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 (6,084) — |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Dec. 31, 2022 USD ($) segment payment_installment customer third_party_processor | Dec. 31, 2021 USD ($) third_party_processor customer | Dec. 31, 2020 USD ($) customer | |
Concentration Risk [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Advertising costs | $ 544,200,000 | $ 435,800,000 | $ 224,700,000 | |
Selling and marketing expenses not directly related to a revenue generating transaction | 840,000,000 | 778,300,000 | 635,300,000 | |
Short-term restricted cash | 639,780,000 | 18,778,000 | 30,279,000 | |
Long-term restricted cash | 71,600,000 | 71,702,000 | 13,526,000 | |
Reclassification from loans held for sale to loans held for investment | 357,400,000 | |||
Net gains on sales of loans | $ 164,300,000 | 95,500,000 | 0 | |
Measurement period for business combinations | 1 year | |||
Intangible assets impairment | $ 0 | 0 | 0 | |
Goodwill, impairment charges | $ 0 | $ 0 | $ 0 | |
Settlement period for customers payable | 1 day | |||
Consumer Portfolio Segment | ||||
Concentration Risk [Line Items] | ||||
Threshold period past due to consider amounts to be uncollectible | 180 days | |||
Customer Concentration Risk | Net Revenue | ||||
Concentration Risk [Line Items] | ||||
Number of customers | customer | 0 | 0 | 0 | |
Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Number of third party processors | third_party_processor | 2 | 2 | ||
Third Party Processor One | Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 54% | 52% | ||
Third Party Processor Two | Credit Concentration Risk | Settlements Receivable | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 31% | 30% | ||
Minimum | ||||
Concentration Risk [Line Items] | ||||
Settlements receivable period | 1 day | |||
Loans held for sale selling period | 1 day | |||
Maximum | ||||
Concentration Risk [Line Items] | ||||
Settlements receivable period | 2 days | |||
Loans held for sale selling period | 2 days | |||
Subscription and services-based revenue | ||||
Concentration Risk [Line Items] | ||||
Contract with customer, term | 1 month | |||
Subscription and services-based revenue | Afterpay Limited | ||||
Concentration Risk [Line Items] | ||||
Increment payment period | 14 days | |||
Subscription and services-based revenue | Minimum | Afterpay Limited | ||||
Concentration Risk [Line Items] | ||||
Number of payment installments | payment_installment | 3 | |||
Payment period | 6 months | |||
Subscription and services-based revenue | Maximum | Afterpay Limited | ||||
Concentration Risk [Line Items] | ||||
Number of payment installments | payment_installment | 4 | |||
Payment period | 12 months | |||
Hardware revenue | Minimum | ||||
Concentration Risk [Line Items] | ||||
Payment period | 30 days | |||
Hardware revenue | Maximum | ||||
Concentration Risk [Line Items] | ||||
Payment period | 90 days |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Capitalized software | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 18 months |
Computer and data center equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 7 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 10 years |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 17,531,587 | $ 17,661,203 | $ 9,497,578 |
Transaction-based revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 5,701,540 | 4,793,146 | 3,294,978 |
Revenue | 5,701,540 | 4,793,146 | 3,294,978 |
Subscription and services-based revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 3,385,784 | 2,445,811 | 1,447,188 |
Revenue from other sources | 1,166,989 | 263,920 | 92,215 |
Revenue | 4,552,773 | 2,709,731 | 1,539,403 |
Hardware revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 164,418 | 145,679 | 91,654 |
Revenue | 164,418 | 145,679 | 91,654 |
Bitcoin revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 7,112,856 | 10,012,647 | 4,571,543 |
Revenue | $ 7,112,856 | $ 10,012,647 | $ 4,571,543 |
INVESTMENTS IN DEBT SECURITIE_2
INVESTMENTS IN DEBT SECURITIES - Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,701,110 | |
Fair Value | 1,655,280 | |
Short-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,100,805 | $ 869,525 |
Gross Unrealized Gains | 24 | 408 |
Gross Unrealized Losses | (18,978) | (650) |
Fair Value | 1,081,851 | 869,283 |
Short-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 96,545 | 73,986 |
Gross Unrealized Gains | 16 | 150 |
Gross Unrealized Losses | (2,120) | (8) |
Fair Value | 94,441 | 74,128 |
Short-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 368,110 | 293,460 |
Gross Unrealized Gains | 2 | 128 |
Gross Unrealized Losses | (7,475) | (269) |
Fair Value | 360,637 | 293,319 |
Short-term debt securities | Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 31,503 | 36,088 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 31,503 | 36,088 |
Short-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,884 | 5,543 |
Gross Unrealized Gains | 0 | 5 |
Gross Unrealized Losses | (191) | 0 |
Fair Value | 9,693 | 5,548 |
Short-term debt securities | Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,400 | 9,200 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 6,400 | 9,200 |
Short-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 580,568 | 430,992 |
Gross Unrealized Gains | 6 | 106 |
Gross Unrealized Losses | (8,937) | (255) |
Fair Value | 571,637 | 430,843 |
Short-term debt securities | Foreign government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 7,795 | 20,256 |
Gross Unrealized Gains | 0 | 19 |
Gross Unrealized Losses | (255) | (118) |
Fair Value | 7,540 | 20,157 |
Long-term debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 600,305 | 1,536,331 |
Gross Unrealized Gains | 9 | 111 |
Gross Unrealized Losses | (26,885) | (10,012) |
Fair Value | 573,429 | 1,526,430 |
Long-term debt securities | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 74,097 | 154,454 |
Gross Unrealized Gains | 0 | 26 |
Gross Unrealized Losses | (3,782) | (1,160) |
Fair Value | 70,315 | 153,320 |
Long-term debt securities | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 245,891 | 667,699 |
Gross Unrealized Gains | 6 | 80 |
Gross Unrealized Losses | (9,171) | (4,572) |
Fair Value | 236,726 | 663,207 |
Long-term debt securities | Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,415 | 22,541 |
Gross Unrealized Gains | 3 | 2 |
Gross Unrealized Losses | (664) | (126) |
Fair Value | 9,754 | 22,417 |
Long-term debt securities | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 268,902 | 678,553 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (13,210) | (4,080) |
Fair Value | 255,692 | 674,476 |
Long-term debt securities | Foreign government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,000 | 13,084 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (58) | (74) |
Fair Value | $ 942 | $ 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 | Dec. 31, 2022 | Dec. 31, 2021 |
Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | $ 190,928 | $ 628,655 |
Less than 12 Months, Gross Unrealized Losses | (1,299) | (650) |
Greater than 12 months, Fair Value | 813,607 | 311 |
Greater than 12 months, Gross Unrealized Losses | (17,679) | 0 |
Total, Fair Value | 1,004,535 | 628,966 |
Total, Gross Unrealized Losses | (18,978) | (650) |
Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 100,235 | 1,450,038 |
Less than 12 Months, Gross Unrealized Losses | (905) | (10,012) |
Greater than 12 months, Fair Value | 471,619 | 0 |
Greater than 12 months, Gross Unrealized Losses | (25,980) | 0 |
Total, Fair Value | 571,854 | 1,450,038 |
Total, Gross Unrealized Losses | (26,885) | (10,012) |
U.S. agency securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 8,572 | 26,749 |
Less than 12 Months, Gross Unrealized Losses | (24) | (8) |
Greater than 12 months, Fair Value | 84,628 | 0 |
Greater than 12 months, Gross Unrealized Losses | (2,096) | 0 |
Total, Fair Value | 93,200 | 26,749 |
Total, Gross Unrealized Losses | (2,120) | (8) |
U.S. agency securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 11,501 | 151,472 |
Less than 12 Months, Gross Unrealized Losses | (20) | (1,160) |
Greater than 12 months, Fair Value | 58,814 | 0 |
Greater than 12 months, Gross Unrealized Losses | (3,762) | 0 |
Total, Fair Value | 70,315 | 151,472 |
Total, Gross Unrealized Losses | (3,782) | (1,160) |
Corporate bonds | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 34,795 | 241,792 |
Less than 12 Months, Gross Unrealized Losses | (423) | (269) |
Greater than 12 months, Fair Value | 320,748 | 311 |
Greater than 12 months, Gross Unrealized Losses | (7,052) | 0 |
Total, Fair Value | 355,543 | 242,103 |
Total, Gross Unrealized Losses | (7,475) | (269) |
Corporate bonds | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 33,862 | 627,467 |
Less than 12 Months, Gross Unrealized Losses | (262) | (4,572) |
Greater than 12 months, Fair Value | 201,791 | 0 |
Greater than 12 months, Gross Unrealized Losses | (8,909) | 0 |
Total, Fair Value | 235,653 | 627,467 |
Total, Gross Unrealized Losses | (9,171) | (4,572) |
Municipal securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 587 | |
Less than 12 Months, Gross Unrealized Losses | (13) | |
Greater than 12 months, Fair Value | 5,811 | |
Greater than 12 months, Gross Unrealized Losses | (178) | |
Total, Fair Value | 6,398 | |
Total, Gross Unrealized Losses | (191) | |
Municipal securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 467 | 18,616 |
Less than 12 Months, Gross Unrealized Losses | (33) | (126) |
Greater than 12 months, Fair Value | 8,784 | 0 |
Greater than 12 months, Gross Unrealized Losses | (631) | 0 |
Total, Fair Value | 9,251 | 18,616 |
Total, Gross Unrealized Losses | (664) | (126) |
U.S. government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 146,974 | 347,380 |
Less than 12 Months, Gross Unrealized Losses | (839) | (255) |
Greater than 12 months, Fair Value | 394,880 | 0 |
Greater than 12 months, Gross Unrealized Losses | (8,098) | 0 |
Total, Fair Value | 541,854 | 347,380 |
Total, Gross Unrealized Losses | (8,937) | (255) |
U.S. government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 54,405 | 639,473 |
Less than 12 Months, Gross Unrealized Losses | (590) | (4,080) |
Greater than 12 months, Fair Value | 201,288 | 0 |
Greater than 12 months, Gross Unrealized Losses | (12,620) | 0 |
Total, Fair Value | 255,693 | 639,473 |
Total, Gross Unrealized Losses | (13,210) | (4,080) |
Foreign government securities | Short-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 0 | 12,734 |
Less than 12 Months, Gross Unrealized Losses | 0 | (118) |
Greater than 12 months, Fair Value | 7,540 | 0 |
Greater than 12 months, Gross Unrealized Losses | (255) | 0 |
Total, Fair Value | 7,540 | 12,734 |
Total, Gross Unrealized Losses | (255) | (118) |
Foreign government securities | Long-term debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 Months, Fair Value | 0 | 13,010 |
Less than 12 Months, Gross Unrealized Losses | 0 | (74) |
Greater than 12 months, Fair Value | 942 | 0 |
Greater than 12 months, Gross Unrealized Losses | (58) | 0 |
Total, Fair Value | 942 | 13,010 |
Total, Gross Unrealized Losses | $ (58) | $ (74) |
INVESTMENTS IN DEBT SECURITIE_4
INVESTMENTS IN DEBT SECURITIES - Contractual Maturities of Short-Term and Long-Term Investments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Amortized Cost | |
Due in one year or less | $ 1,100,805 |
Due in one to five years | 600,305 |
Amortized Cost | 1,701,110 |
Fair Value | |
Due in one year or less | 1,081,851 |
Due in one to five years | 573,429 |
Fair Value | $ 1,655,280 |
CUSTOMER FUNDS - Assets Underly
CUSTOMER FUNDS - Assets Underlying Customer Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 3,180,324 | $ 2,830,995 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 0 | 29,994 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 0 | 360,060 |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 1,748,983 | 242,243 |
Cash Equivalents | Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 851,296 | 2,126,579 |
Cash Equivalents | Reverse repurchase agreement | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 580,045 | $ 72,119 |
CUSTOMER FUNDS - Investments wi
CUSTOMER FUNDS - Investments within Customer Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,701,110 | |
Fair Value | $ 1,655,280 | |
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 [Line Items] | |
Less than 12 Months, Fair Value | $ 390,054 |
Less than 12 Months, Gross Unrealized Losses | (198) |
Greater than 12 months, Fair Value | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 |
Total, Fair Value | 390,054 |
Total, Gross Unrealized Losses | (198) |
U.S. agency securities | |
Debt Securities, Available-for-sale [Line Items] | |
Less than 12 Months, Fair Value | 29,994 |
Less than 12 Months, Gross Unrealized Losses | (7) |
Greater than 12 months, Fair Value | 0 |
Greater than 12 months, Gross Unrealized Losses | 0 |
Total, Fair Value | 29,994 |
Total, Gross Unrealized Losses | (7) |
U.S. government securities | |
Debt Securities, Available-for-sale [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 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | $ 3,180,324 | $ 2,830,995 |
Short-term debt securities | 1,081,851 | 869,283 |
Long-term debt securities | 573,429 | 1,526,430 |
Safeguarding asset related to bitcoin held for other parties | 428,243 | 1,100,596 |
Safeguarding obligation liability related to bitcoin held for other parties | (428,243) | (1,100,596) |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable equity security | 11,092 | 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 | 3,500,686 | 6,008,845 |
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 | 428,243 | 1,100,596 |
Safeguarding obligation liability related to bitcoin held for other parties | (428,243) | (1,100,596) |
Total assets (liabilities) measured at fair value | 860,954 | 1,349,160 |
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 |
Money market funds | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 1,230,924 | 2,344,768 |
Customer Funds | 851,296 | 2,126,579 |
Money market funds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Customer Funds | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Customer Funds | 0 | 0 |
Reverse repurchase agreement | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 580,045 | 72,119 |
Reverse repurchase agreement | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 0 |
Reverse repurchase agreement | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 0 |
U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 29,994 |
U.S. agency securities | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
U.S. agency securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 7,923 | 22,999 |
Customer Funds | 0 | 29,994 |
Short-term debt securities | 94,441 | 74,128 |
Long-term debt securities | 70,315 | 153,320 |
U.S. agency securities | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
Certificates of deposit | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Certificates of deposit | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 4,983 |
Short-term debt securities | 6,400 | 9,200 |
Certificates of deposit | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Short-term debt securities | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 25,080 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Corporate bonds | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
Corporate bonds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 790 |
Short-term debt securities | 360,637 | 293,319 |
Long-term debt securities | 236,726 | 663,207 |
Corporate bonds | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 360,060 |
U.S. government securities | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 360,060 |
Short-term debt securities | 571,637 | 430,843 |
Long-term debt securities | 255,692 | 674,476 |
U.S. government securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 0 |
Short-term debt securities | 0 | |
Long-term debt securities | 0 | 0 |
U.S. government securities | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer Funds | 0 | 0 |
Short-term debt securities | 0 | 0 |
Long-term debt securities | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 31,503 | 36,088 |
Commercial paper | Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 0 | 0 |
Municipal securities | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
Municipal securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 9,693 | 5,548 |
Long-term debt securities | 9,754 | 22,417 |
Municipal securities | Fair Value, Measurements, Recurring | Level 3 | ||
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 |
Foreign government securities | Fair Value, Measurements, Recurring | Level 1 | ||
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 |
Foreign government securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term debt securities | 7,540 | 20,157 |
Long-term debt securities | 942 | 13,010 |
Foreign government securities | Fair Value, Measurements, Recurring | Level 3 | ||
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) - Fair Value, Measurements, Recurring - Level 2 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | $ 4,570,185 | $ 4,559,663 |
Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 3,989,994 | 5,661,947 |
2031 Senior Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 988,171 | 986,774 |
2031 Senior Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 782,857 | 1,018,113 |
2026 Senior Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 990,414 | 987,626 |
2026 Senior Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument | 885,876 | 994,579 |
2027 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 568,535 | 567,208 |
2027 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 433,082 | 614,286 |
2026 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 569,315 | 567,621 |
2026 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 464,066 | 595,548 |
2025 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 993,394 | 990,361 |
2025 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 943,188 | 1,477,302 |
2023 Convertible Notes | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 460,356 | 459,618 |
2023 Convertible Notes | Fair Value (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 480,925 | 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 | $ 3,192 |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value and Carrying Value of Loans Held for Sale (Details) - Fair Value, Measurements, Recurring - Level 3 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 474,036 | $ 517,940 |
Loans held for investment | 123,959 | 91,447 |
Total | 597,995 | 609,387 |
Fair Value (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 491,807 | 574,982 |
Loans held for investment | 126,122 | 95,746 |
Total | $ 617,929 | $ 670,728 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for sale | $ 474,036 | $ 517,940 | |
Paycheck Protection Program, CARES Act Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans held for sale | 19,900 | 364,800 | |
Loans Receivable Held-For-Sale | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loss included in earnings from excess amortized cost over fair value of loans charge | $ 27,500 | $ 6,400 | $ 26,000 |
CONSUMER RECEIVABLES, NET - Nar
CONSUMER RECEIVABLES, NET - Narrative (Details) - Consumer Portfolio Segment $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Loans held for investment, threshold period past due | 60 days |
Consumer receivables | $ 2,022,450 |
Cash in transit | $ 224,900 |
Percentage of cash in transit to total amortized cost of consumer receivables | 11.10% |
Threshold period past due to consider amounts to be uncollectible | 180 days |
Pass | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Consumer receivables | $ 1,900,000 |
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 | Dec. 31, 2022 USD ($) |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | $ 2,022,450 |
Non-delinquent loans | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | 1,643,874 |
1 - 60 days past due | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | 295,830 |
61 - 90 days past due | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | 20,612 |
90+ days past due | |
Financing Receivable, Past Due [Line Items] | |
Consumer receivables | $ 62,134 |
CONSUMER RECEIVABLES, NET - Act
CONSUMER RECEIVABLES, NET - Activity in Allowance for Credit Losses (Details) - Consumer Portfolio Segment $ in Thousands | 11 Months Ended |
Dec. 31, 2022 USD ($) | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Allowance for credit losses, beginning of the period | $ 115,552 |
Provision for credit losses | 203,670 |
Charge-offs and other adjustments | (168,664) |
Foreign exchange effect | 732 |
Allowance for credit losses, end of the period | $ 151,290 |
LOANS HELD FOR INVESTMENT (Deta
LOANS HELD FOR INVESTMENT (Details) - Loan Portfolio Segment - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Consumer receivables, net | $ 123,959 | $ 91,447 |
Loans held for investment, threshold period past due | 60 days | |
Nonperforming Financial Instruments | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, threshold period past due | 90 days | |
Unlikely to be Collected Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, threshold period past due | 120 days | |
Pass | ||
Financing Receivable, Past Due [Line Items] | ||
Consumer receivables | $ 128,800 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 696,849 | $ 541,452 |
Less: Accumulated depreciation and amortization | (367,547) | (259,312) |
Property and equipment, net | 329,302 | 282,140 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 228,634 | 208,228 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 224,959 | 174,004 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 197,420 | 116,827 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 45,836 | $ 42,393 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense on property and equipment | $ 131.5 | $ 94.2 | $ 65 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) $ in Billions | 3 Months Ended | 12 Months Ended | ||||||
Feb. 01, 2022 USD ($) | Jan. 31, 2022 USD ($) shares | Apr. 30, 2021 USD ($) shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 31, 2022 AUD ($) | |
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 | ||||||
Deferred tax assets | $ 131,000,000 | |||||||
Deferred tax assets, valuation allowance | 131,000,000 | |||||||
Reversal of deferred tax asset valuation allowance | $ 131,000,000 | |||||||
Increase adjustments to current liabilities assumed | 52,800,000 | |||||||
Increase adjustments to non-current liabilities assumed | 52,800,000 | |||||||
Adjustment of deferred tax liabilities | 44,300,000 | |||||||
Decrease adjustment in intangibles | 22,000,000 | |||||||
Increase adjustment in goodwill | 30,500,000 | |||||||
Transaction costs | 42,400,000 | 45,900,000 | ||||||
Consideration transferred | $ 13,836,622,000 | |||||||
TIDAL | ||||||||
Business Acquisition [Line Items] | ||||||||
Equity consideration (in shares) | shares | 41,138 | |||||||
Equity consideration | $ 10,071,000 | |||||||
Percent acquired of outstanding shares | 86.80% | |||||||
Option period to acquire remaining noncontrolling interest | 3 years | |||||||
Consideration paid and deferred | $ 223,100,000 | |||||||
Goodwill amount expected to be tax deductible | 70,700,000 | |||||||
Intangible assets (excluding goodwill) amount expected to be tax deductible | 126,700,000 | |||||||
Deferred consideration | $ 46,475,000 | |||||||
Deferred consideration, withheld period | 4 years | |||||||
Cash withheld as security for indemnification obligations | $ 22,800,000 | |||||||
Purchase consideration has been withheld related to defined post-acquisition activities which will be expensed in future periods | 32,200,000 | |||||||
Consideration transferred | $ 233,209,000 | |||||||
Other Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill amount expected to be tax deductible | 0 | 0 | $ 0 | |||||
Intangible assets (excluding goodwill) amount expected to be tax deductible | 0 | 0 | 0 | |||||
Consideration transferred | $ 46,000,000 | $ 20,500,000 | $ 126,700,000 |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) $ in Thousands, $ in Billions | 12 Months Ended | ||||||
Feb. 01, 2022 USD ($) | Jan. 31, 2022 USD ($) shares | Apr. 30, 2021 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 31, 2022 AUD ($) | Dec. 31, 2020 USD ($) | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Goodwill | $ 11,966,761 | $ 519,276 | $ 316,701 | ||||
TIDAL | |||||||
Consideration: | |||||||
Cash | $ 176,663 | ||||||
Deferred consideration | 46,475 | ||||||
Stock (41,138 shares of Class A common stock) | $ 10,071 | ||||||
Equity consideration (in shares) | shares | 41,138 | ||||||
Total consideration | $ 233,209 | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Current assets (inclusive of cash acquired of $12,358) | 29,621 | ||||||
Cash acquired | 12,358 | ||||||
Other non-current assets | 33,443 | ||||||
Accrued expenses and other current liabilities | 67,789 | ||||||
Other non-current liabilities | (52,759) | ||||||
Total identifiable net assets acquired | 83,516 | ||||||
Noncontrolling interests | (48,192) | ||||||
Goodwill | 197,885 | ||||||
Total | 233,209 | ||||||
TIDAL | Customer assets | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Intangible assets | 69,000 | ||||||
TIDAL | Acquired technology | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Intangible assets | 29,000 | ||||||
TIDAL | Intangible trade name | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Intangible assets | 35,000 | ||||||
TIDAL | Other | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Intangible assets | $ 8,000 | ||||||
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 | 8,693 | ||||||
Stock (41,138 shares of Class A common stock) | $ 13,800,000 | ||||||
Equity consideration (in shares) | shares | 113,617,352 | ||||||
Acquisition cost expensed | $ 66,337 | $ 66,300 | $ 66,300 | ||||
Total consideration | $ 13,836,622 | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Current assets (inclusive of cash acquired of $12,358) | 653,709 | ||||||
Consumer receivables | 1,245,508 | ||||||
Other non-current assets | 74,232 | ||||||
Long-term debt - current | (1,058,065) | $ (1.5) | |||||
Current liabilities | (439,358) | ||||||
Warehouse funding facilities | (107,996) | ||||||
Deferred tax liabilities | (190,689) | ||||||
Other non-current liabilities | (63,213) | ||||||
Total identifiable net assets acquired | 2,117,128 | ||||||
Goodwill | 11,719,494 | ||||||
Total | 13,836,622 | ||||||
Afterpay Limited | Customer assets | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||
Intangible assets | 1,378,000 | ||||||
Afterpay Limited | Acquired technology | |||||||
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 | $ 386,000 |
ACQUISITIONS - Pro Forma Financ
ACQUISITIONS - Pro Forma Financial Information (Details) - Afterpay Limited - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Net revenue | $ 17,601,817 | $ 18,494,077 |
Net loss | $ (356,568) | $ (183,616) |
GOODWILL - Schedule of Change i
GOODWILL - Schedule of Change in Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 519,276 | $ 316,701 |
Acquisitions | 11,761,866 | 203,079 |
Other adjustments | (504) | |
Foreign currency translation adjustments | (314,381) | |
Ending balance | 11,966,761 | 519,276 |
Corporate and Other | ||
Goodwill [Roll Forward] | ||
Beginning balance | 197,885 | 0 |
Acquisitions | 0 | 197,885 |
Other adjustments | 0 | |
Foreign currency translation adjustments | 0 | |
Ending balance | 197,885 | 197,885 |
Cash App | ||
Goodwill [Roll Forward] | ||
Beginning balance | 128,334 | 128,838 |
Acquisitions | 5,882,133 | 0 |
Other adjustments | (504) | |
Foreign currency translation adjustments | (157,537) | |
Ending balance | 5,852,930 | 128,334 |
Square | ||
Goodwill [Roll Forward] | ||
Beginning balance | 193,057 | 187,863 |
Acquisitions | 5,879,733 | 5,194 |
Other adjustments | 0 | |
Foreign currency translation adjustments | (156,844) | |
Ending balance | $ 5,915,946 | $ 193,057 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Goodwill, impairment charges | $ | $ 0 | $ 0 | $ 0 |
ACQUIRED INTANGIBLE ASSETS - Sc
ACQUIRED INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 2,321,295 | $ 360,087 | ||
Accumulated Amortization | (307,261) | (103,038) | ||
Net | $ 2,014,034 | $ 257,049 | $ 137,612 | $ 69,079 |
Technology assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 5 years | 5 years | ||
Cost | $ 398,665 | $ 164,977 | ||
Accumulated Amortization | (133,116) | (65,619) | ||
Net | $ 265,549 | $ 99,358 | ||
Customer assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 15 years | 15 years | ||
Cost | $ 1,474,163 | $ 128,316 | ||
Accumulated Amortization | (110,316) | (19,244) | ||
Net | $ 1,363,847 | $ 109,072 | ||
Trade names | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 9 years | 9 years | ||
Cost | $ 434,766 | $ 53,051 | ||
Accumulated Amortization | (58,352) | (14,169) | ||
Net | $ 376,414 | $ 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 | (5,477) | (4,006) | ||
Net | $ 8,224 | $ 9,737 |
ACQUIRED INTANGIBLE ASSETS - Ch
ACQUIRED INTANGIBLE ASSETS - Change in Carrying Value of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ 257,049 | $ 137,612 | $ 69,079 |
Acquisitions | 2,006,490 | 159,100 | 85,960 |
Amortization expense | (208,952) | (40,522) | (19,239) |
Foreign currency translation and other adjustments | (40,553) | 859 | 1,812 |
Ending balance | $ 2,014,034 | $ 257,049 | $ 137,612 |
ACQUIRED INTANGIBLE ASSETS - Fu
ACQUIRED INTANGIBLE ASSETS - Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
2023 | $ 221,883 | |||
2024 | 218,422 | |||
2025 | 211,595 | |||
2026 | 197,528 | |||
2027 | 149,443 | |||
Thereafter | 1,015,163 | |||
Net | $ 2,014,034 | $ 257,049 | $ 137,612 | $ 69,079 |
OTHER CONSOLIDATED BALANCE SH_5
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Inventory, net | $ 97,703 | $ 77,058 | |
Restricted cash | 639,780 | 18,778 | $ 30,279 |
Processing costs receivable | 298,568 | 228,914 | |
Prepaid expenses | 141,262 | 63,341 | |
Accounts receivable, net | 140,508 | 89,702 | |
Other | 185,485 | 118,189 | |
Total | 1,627,265 | 687,429 | |
Loan Portfolio Segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Consumer receivables, net | $ 123,959 | $ 91,447 |
OTHER CONSOLIDATED BALANCE SH_6
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued expenses | $ 382,571 | $ 254,900 |
Accounts payable | 95,846 | 82,173 |
Customer deposits | 141,893 | 59,844 |
Accrued transaction losses | 64,539 | 55,167 |
Accrued royalties | 63,684 | 53,616 |
Operating lease liabilities, current | $ 66,854 | $ 64,027 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total | Total |
Other | $ 241,289 | $ 133,154 |
Total | $ 1,056,676 | $ 702,881 |
OTHER CONSOLIDATED BALANCE SH_7
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Reserve for Transaction Losses (Details) - Transaction Losses - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingency Accrual [Roll Forward] | ||
Accrued transaction losses, beginning of the period | $ 55,167 | $ 70,557 |
Provision for transaction losses | 100,735 | 63,436 |
Charge-offs to accrued transaction losses | (91,363) | (78,826) |
Accrued transaction losses, end of the period | $ 64,539 | $ 55,167 |
OTHER CONSOLIDATED BALANCE SH_8
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Transaction Losses | ||
Loss Contingencies [Line Items] | ||
Provisions for transaction losses realized and written-off within the same period | $ 411.7 | $ 338.6 |
OTHER CONSOLIDATED BALANCE SH_9
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment in non-marketable equity securities | $ 208,880 | $ 81,919 | $ 81,919 | |
Investment in bitcoin, net | 102,303 | 149,000 | 149,000 | |
Restricted cash | 71,600 | 71,702 | $ 13,526 | 71,702 |
Other | 101,454 | 67,914 | 67,914 | |
Total | 484,237 | 370,535 | 370,535 | |
Investment in non-marketable equity securities, unrealized gain | 96,100 | |||
Investment in non-marketable equity securities, cumulative unrealized gain | 115,200 | |||
Bitcoin impairment losses | 46,571 | $ 71,126 | $ 0 | |
Bitcoin accumulated impairment losses | 117,700 | |||
Bitcoin | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived intangible asset acquired | $ 220,000 | |||
Fair value of bitcoin investment | 132,700 | |||
Amount of fair value in excess of carrying value for bitcoin investment | $ 30,400 |
BITCOIN HELD FOR OTHER PARTIE_2
BITCOIN HELD FOR OTHER PARTIES (Details) $ in Thousands | Dec. 31, 2022 USD ($) bitcoin | Dec. 31, 2021 USD ($) bitcoin |
Platform Operator, Crypto-Asset [Line Items] | ||
Approximate number of bitcoin held for customers | bitcoin | 25,850 | 23,360 |
Approximate number of bitcoin held for trading partners | bitcoin | 62 | 458 |
Total approximate number of bitcoin held for other parties | bitcoin | 25,912 | 23,818 |
Safeguarding obligation liability related to bitcoin held for other parties | $ 428,243 | $ 1,100,596 |
Safeguarding asset related to bitcoin held for other parties | 428,243 | 1,100,596 |
Crypto-Asset, Held For Customers | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Safeguarding obligation liability related to bitcoin held for other parties | 427,221 | 1,079,412 |
Crypto-Asset, Held For Partners | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Safeguarding obligation liability related to bitcoin held for other parties | $ 1,022 | $ 21,184 |
INDEBTEDNESS - Facility Narrati
INDEBTEDNESS - Facility Narrative (Details) - USD ($) | 1 Months Ended | |||||||
Feb. 23, 2022 | May 31, 2020 | Dec. 31, 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 | $ 16,840,000 | $ 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 | 16,800,000 | |||||||
Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal outstanding | 4,610,630,000 | $ 4,611,085,000 | ||||||
Revolving Secured 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, percent | 0.15% | |||||||
Amounts drawn to date | 0 | |||||||
Letters of credit outstanding | 0 | |||||||
Remaining borrowing capacity | 600,000,000 | |||||||
Revolving Secured Credit Facility | Line of Credit | Federal Funds Rate | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Revolving Secured 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 Secured 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 Secured 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 Secured Credit Facility | Line of Credit | LIBOR | 2020 Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1% | |||||||
Revolving Secured 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 Secured 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 Secured 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 Secured 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 Secured 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 Secured 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 Secured 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 Secured 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 Secured 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 | 400,000,000 | |||||||
Principal outstanding | $ 1,300,000,000 |
INDEBTEDNESS - Amounts Drawn on
INDEBTEDNESS - Amounts Drawn on Facilities by Year of Maturity (Details) - Secured Debt - Warehouse Funding Facilities - Line of Credit $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 461,240 |
2024 | 877,066 |
Total funding debt, net of deferred debt issuance costs | $ 1,338,306 |
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 | 12 Months Ended | 43 Months Ended | 70 Months Ended | |||||
Nov. 13, 2020 USD ($) day $ / shares | Mar. 05, 2020 USD ($) day $ / shares | May 25, 2018 USD ($) day $ / shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 shares | Dec. 31, 2022 USD ($) | Jan. 01, 2021 | Mar. 06, 2017 USD ($) $ / shares | |
Debt Instrument [Line Items] | ||||||||
Conversion price of convertible debt (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 of convertible debt (in USD per share) | $ / shares | $ 299.13 | |||||||
Redemption price, percentage | 100% | |||||||
Debt Instrument, Convertible, 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 of convertible debt (in USD per share) | $ / shares | $ 299.13 | |||||||
Effective interest rate of the liability component | 3.35% | |||||||
2026 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate of the liability component | 0.30% | |||||||
2027 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 575,000,000 | |||||||
Interest rate | 0.25% | |||||||
Conversion price of convertible debt (in USD per share) | $ / shares | $ 299.13 | |||||||
Effective interest rate of the liability component | 3.66% | |||||||
2027 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate of the liability component | 0.49% | |||||||
2025 Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 1,000,000,000 | |||||||
Interest rate | 0.125% | |||||||
Conversion rate | 0.0082641 | |||||||
Conversion price of convertible debt (in USD per share) | $ / shares | $ 121.01 | |||||||
Redemption price, percentage | 100% | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 154,600,000 | |||||||
Effective interest rate of the liability component | 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 of the liability component | 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 of convertible debt (in USD per share) | $ / shares | $ 77.85 | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 155,300,000 | |||||||
Effective interest rate of the liability component | 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 | |||||||
Converted principal amount | $ 401,900,000 | |||||||
Shares issued in connection with conversion (in shares) | shares | 5.2 | |||||||
2023 Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate of the liability component | 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 | |||||||
Converted principal amount | $ 500,000 | $ 440,000,000 | ||||||
Shares issued in connection with conversion (in shares) | shares | 16.5 |
INDEBTEDNESS - Net Carrying Amo
INDEBTEDNESS - Net Carrying Amount of Convertible Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 4,610,630 | $ 4,611,085 |
Unamortized Debt Issuance Costs | (40,445) | (51,422) |
Total funding debt, net of deferred debt issuance costs | 4,570,185 | 4,559,663 |
2031 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 1,000,000 | 1,000,000 |
Unamortized Debt Issuance Costs | (11,829) | (13,226) |
Total funding debt, net of deferred debt issuance costs | 988,171 | 986,774 |
2026 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 1,000,000 | 1,000,000 |
Unamortized Debt Issuance Costs | (9,586) | (12,374) |
Total funding debt, net of deferred debt issuance costs | 990,414 | 987,626 |
2027 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 575,000 | 575,000 |
Unamortized Debt Issuance Costs | (6,465) | (7,792) |
Total funding debt, net of deferred debt issuance costs | 568,535 | 567,208 |
2026 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 575,000 | 575,000 |
Unamortized Debt Issuance Costs | (5,685) | (7,379) |
Total funding debt, net of deferred debt issuance costs | 569,315 | 567,621 |
2025 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 1,000,000 | 1,000,000 |
Unamortized Debt Issuance Costs | (6,606) | (9,639) |
Total funding debt, net of deferred debt issuance costs | 993,394 | 990,361 |
2023 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 460,630 | 460,630 |
Unamortized Debt Issuance Costs | (274) | (1,012) |
Total funding debt, net of deferred debt issuance costs | $ 460,356 | 459,618 |
2022 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 455 | |
Unamortized Debt Issuance Costs | 0 | |
Total funding debt, net of deferred debt issuance costs | $ 455 |
INDEBTEDNESS - Interest Expense
INDEBTEDNESS - Interest Expense on Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Contractual interest expense | $ 66,910 | $ 44,141 | $ 6,078 |
Amortization of debt discount and issuance costs | 10,979 | 9,823 | 67,979 |
Total | $ 77,889 | $ 53,964 | $ 74,057 |
INDEBTEDNESS - Convertible No_2
INDEBTEDNESS - Convertible Note Hedge and Warrant Transactions Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | 55 Months Ended | 70 Months Ended | ||||||
Nov. 13, 2020 | Mar. 05, 2020 | May 25, 2018 | Mar. 06, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||||
Proceeds from issuance of warrants | $ 0 | $ 0 | $ 232,095 | ||||||
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] | |||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 1,900 | ||||||||
Exercise price of warrants (in USD per share) | $ 414.18 | ||||||||
Proceeds from issuance of warrants | $ 68,000 | ||||||||
Common Stock Warrant, 2026 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 1,900 | ||||||||
Exercise price of warrants (in USD per share) | $ 368.16 | ||||||||
Proceeds from issuance of warrants | $ 64,600 | ||||||||
Common Stock Warrant, 2025 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 8,260 | ||||||||
Exercise price of warrants (in USD per share) | $ 161.34 | ||||||||
Proceeds from issuance of warrants | $ 99,500 | ||||||||
Common Stock Warrant, 2023 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 11,100 | ||||||||
Exercise price of warrants (in USD per share) | $ 109.26 | ||||||||
Proceeds from issuance of warrants | $ 112,100 | ||||||||
Shares received upon exercise of convertible notes (in shares) | 1,000 | 3,000 | |||||||
Common Stock Warrant, 2022 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 19,200 | ||||||||
Exercise price of warrants (in USD per share) | $ 31.18 | ||||||||
Proceeds from issuance of warrants | $ 57,200 | ||||||||
Shares received upon exercise of convertible notes (in shares) | 200 | 15,000 | |||||||
Options Held | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding 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 | $ 149,200 | $ 172,600 | $ 92,100 | ||||||
Options Held | 2027 Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Cost of convertible note hedge | $ 104,300 | ||||||||
Options Held | 2026 Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Cost of convertible note hedge | $ 84,600 |
INCOME TAXES - Domestic and For
INCOME TAXES - Domestic and Foreign Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (347,968) | $ 417,356 | $ 369,016 |
Foreign | (217,349) | (259,894) | (153,049) |
Income (loss) before income tax | $ (565,317) | $ 157,462 | $ 215,967 |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 14,352 | $ 201 | $ 0 |
State | 17,504 | 3,186 | 4,016 |
Foreign | 25,425 | 5,684 | 6,862 |
Total current provision for income taxes | 57,281 | 9,071 | 10,878 |
Deferred: | |||
Federal | (59,909) | (1,463) | (970) |
State | (7,677) | (524) | (231) |
Foreign | (2,007) | (8,448) | (6,815) |
Total deferred provision for income taxes | (69,593) | (10,435) | (8,016) |
Total provision (benefit) for income taxes | $ (12,312) | $ (1,364) | $ 2,862 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Statutory Federal Income Tax Rate to Company's Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | 21% | 21% | 21% |
State taxes, net of federal benefit | (1.10%) | 0.60% | 0.30% |
Foreign rate differential | (2.00%) | 10.40% | 4% |
Other non-deductible expenses | (1.40%) | 4.50% | 2.70% |
Credits | 27% | (83.90%) | (34.60%) |
Other items | 0.60% | 1.60% | 2.20% |
Change in valuation allowance | (46.70%) | 290.40% | 153.90% |
Share-based compensation | 7.50% | (275.00%) | (155.40%) |
Change in uncertain tax positions | (1.50%) | 5% | 2.30% |
Loss inclusions of US foreign subsidiaries | 2.10% | 0.90% | 0% |
Non-deductible executive compensation | (0.30%) | 5.90% | 3.60% |
Non-deductible acquisition related costs | (3.00%) | 5.90% | 1.30% |
Intercompany transactions | 0% | 3.80% | 0% |
Cancellation of debt income | 0% | 8% | 0% |
Total | 2.20% | (0.90%) | 1.30% |
INCOME TAXES - Tax Effects of T
INCOME TAXES - Tax Effects of Temporary Differences and Related Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Capitalized costs & research and development capitalization | $ 474,766 | $ 12,409 |
Accrued expenses | 129,695 | 62,707 |
Net operating loss carryforwards | 1,172,880 | 1,276,561 |
Tax credit carryforwards | 501,185 | 378,682 |
Share-based compensation | 72,128 | 50,431 |
Deferred interest | 0 | 34,475 |
Other | (6,199) | (7,740) |
Operating lease liability | 109,176 | 111,099 |
Cryptocurrency investment | 30,273 | 17,600 |
Deferred consideration | 11,665 | 11,266 |
Convertible notes | 52,915 | 70,316 |
Safeguarding liability related to bitcoin held for other parties | 110,150 | 272,287 |
Total deferred tax assets | 2,671,032 | 2,305,573 |
Valuation allowance | (2,100,383) | (1,887,111) |
Total deferred tax assets, net of valuation allowance | 570,649 | 418,462 |
Deferred tax liabilities: | ||
Property, equipment and intangible assets | (451,349) | (31,775) |
Indefinite-lived intangibles | (1,309) | (867) |
Unrealized gain on investments | (29,554) | (4,712) |
Operating lease right-of-use asset | (96,894) | (108,747) |
Safeguarding asset related to bitcoin held for other parties | (110,150) | (272,287) |
Total deferred tax liabilities | (689,256) | (418,388) |
Net deferred tax assets (liabilities) | $ (118,607) | |
Net deferred tax assets (liabilities) | $ 74 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||||
Increase in valuation allowance | $ (213,300) | $ 649,100 | ||
Unrecognized tax benefits | 506,512 | 448,392 | $ 295,182 | $ 217,574 |
Unrecognized tax benefit that would impact annual effective tax rate | 73,500 | |||
Total accrued interest and penalties related to uncertain tax positions | 9,100 | $ 7,800 | $ 1,400 | |
Undistributed earnings of non-U.S. subsidiaries | 110,000 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 2,800,000 | |||
Net operating loss carryforwards recognized | 1,700,000 | |||
Federal | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 402,300 | |||
Tax credit carryforward recognized | 30,600 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 4,200,000 | |||
State | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 250,900 | |||
Foreign | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 1,300,000 | |||
Foreign | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 19,500 | |||
Maximum | Tax examinations or lapse of applicable statute of limitations | ||||
Operating Loss Carryforwards [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits | $ 14,800 |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit, beginning of the period | $ 448,392 | $ 295,182 | $ 217,574 |
Gross increases related to prior period tax positions | 5,431 | 6,552 | |
Gross decrease related to prior period tax positions | (2,615) | ||
Gross increases related to current period tax positions | 30,988 | 124,238 | 77,235 |
Reductions related to lapse of statute of limitations | (2,950) | 0 | (49) |
Gross increases related to acquisitions | 24,651 | 22,420 | 3,037 |
Unrecognized tax benefit, end of the period | $ 506,512 | $ 448,392 | $ 295,182 |
STOCKHOLDER'S EQUITY - Converti
STOCKHOLDER'S EQUITY - Convertible Preferred Stock, Common Stock, Warrants, Indemnification Arrangements, Conversion of Convertible Notes and Exercise of Convertible Note Hedges Narrative (Details) | 12 Months Ended | 43 Months Ended | 55 Months Ended | 70 Months Ended | ||||
Dec. 31, 2022 vote $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2022 $ / 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 | ||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | ||||
Preferred stock, outstanding (in shares) | 0 | 0 | 0 | 0 | ||||
Common Stock Warrant, 2022 Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 19,200,000 | |||||||
Exercise price of warrants (in USD per share) | $ / shares | $ 31.18 | |||||||
Warrants term | 60 days | 60 days | 60 days | |||||
Number of warrants exercised (in shares) | 10,900,000 | 10,900,000 | 10,900,000 | |||||
Shares received upon exercise of convertible notes (in shares) | 200,000 | 15,000,000 | ||||||
Common Stock Warrant, 2023 Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 11,100,000 | |||||||
Exercise price of warrants (in USD per share) | $ / shares | $ 109.26 | |||||||
Warrants term | 60 days | 60 days | 60 days | |||||
Number of warrants exercised (in shares) | 0 | 0 | 0 | |||||
Shares received upon exercise of convertible notes (in shares) | 1,000,000 | 3,000,000 | ||||||
Common Stock Warrant, 2025 Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 8,260,000 | |||||||
Exercise price of warrants (in USD per share) | $ / shares | $ 161.34 | |||||||
Warrants term | 60 days | 60 days | 60 days | |||||
Common Stock Warrant, 2026 Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 1,900,000 | |||||||
Exercise price of warrants (in USD per share) | $ / shares | $ 368.16 | |||||||
Warrants term | 60 days | 60 days | 60 days | |||||
Common Stock Warrant, 2027 Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Outstanding warrants to purchase aggregate shares of capital stock (in shares) | 1,900,000 | |||||||
Exercise price of warrants (in USD per share) | $ / shares | $ 414.18 | |||||||
Warrants term | 60 days | 60 days | 60 days | |||||
Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Number of votes per share | vote | 1 | |||||||
Common stock, authorized (in shares) | 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 | ||||
Common stock, outstanding (in shares) | 539,408,009 | 403,237,209 | 539,408,009 | 539,408,009 | ||||
Class B Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Number of votes per share | vote | 10 | |||||||
Common stock, authorized (in shares) | 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 | ||||
Common stock, outstanding (in shares) | 60,651,533 | 61,706,578 | 60,651,533 | 60,651,533 | ||||
Convertible Debt | 2022 Convertible Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Shares received upon exercise of convertible notes (in shares) | 16,500,000 | |||||||
Convertible Debt | 2023 Convertible Notes | ||||||||
Class of Stock [Line Items] | ||||||||
Shares received upon exercise of convertible notes (in shares) | 5,200,000 |
STOCKHOLDER'S EQUITY - Stock Pl
STOCKHOLDER'S EQUITY - Stock Plans and Share Based Compensation Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | 73 Months Ended | |||||
Feb. 01, 2022 USD ($) | Nov. 02, 2019 | Nov. 17, 2015 payment_plan shares | Dec. 31, 2022 USD ($) plan $ / shares shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2020 USD ($) $ / shares | Dec. 31, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share-based compensation plans | plan | 2 | ||||||
Aggregate intrinsic value for options exercised | $ | $ 200,000 | $ 1,100,000 | $ 1,200,000 | ||||
Weighted average grant-date fair value of options granted (in USD per share) | $ / shares | $ 73.31 | $ 131.57 | $ 27.04 | ||||
Tax benefits related to stock-based compensation expense | $ | $ 218,900 | $ 10,500 | $ 7,800 | ||||
Share-based compensation expense | $ | 1,069,289 | 608,042 | 397,500 | ||||
Share-based compensation expense related to capitalized software | $ | 20,700 | 15,100 | 13,900 | ||||
Unrecognized compensation cost related to outstanding stock options and restricted stock awards | $ | $ 2,700,000 | ||||||
Unrecognized compensation cost related to outstanding stock options and restricted stock awards, recognition period | 2 years 10 months 24 days | ||||||
Afterpay Limited | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Acquisition cost expensed | $ | $ 66,337 | $ 66,300 | 66,300 | ||||
Restricted Stock Awards (RSAs) and Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 4 years | ||||||
Total fair value of shares vested | $ | $ 724,200 | 1,600,000 | 817,500 | ||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ | $ 61,400 | $ 34,900 | $ 18,200 | ||||
2015 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for future issuance (in shares) | 117,238,742 | ||||||
Number of shares reserved (in shares) | 30,000,000 | ||||||
Shares reserved for issuance, percent | 5% | ||||||
2015 Equity Incentive Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase of number of shares reserved (in shares) | 40,000,000 | ||||||
2015 Equity Incentive Plan | Stock options, RSAs, and RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of equity instruments outstanding (in shares) | 31,308,210 | ||||||
2009 Stock Option Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of 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] | |||||||
Number of equity instruments outstanding (in shares) | 3,730,601 | ||||||
2015 Employee Stock Purchase Plan | Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for future issuance (in shares) | 25,703,532 | ||||||
Shares reserved for issuance, percent | 1% | ||||||
Discount through payroll deductions as a percentage of eligible compensation | 25% | ||||||
Offering period | 12 months | ||||||
Number of purchase periods | payment_plan | 2 | ||||||
Purchase price of common stock as a percentage of fair market value | 85% | ||||||
Shares purchased under the plan (in shares) | 7,153,108 | ||||||
2015 Employee Stock Purchase Plan | Employee Stock Purchase Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase of number of shares reserved (in shares) | 8,400,000 |
STOCKHOLDER'S EQUITY - Summary
STOCKHOLDER'S EQUITY - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Stock Options Outstanding | ||
Outstanding, beginning of the period (in shares) | 8,916,100 | |
Granted (in shares) | 796,719 | |
Exercised (in shares) | (2,867,609) | |
Forfeited (in shares) | (93,371) | |
Expired (in shares) | (13,056) | |
Outstanding, end of the period (in shares) | 6,738,783 | 8,916,100 |
Weighted Average Exercise Price | ||
Outstanding, beginning of the period (in USD per share) | $ 26.09 | |
Granted (in USD per share) | 94.61 | |
Exercised (in USD per share) | 8.22 | |
Forfeited (in USD per share) | 105.85 | |
Expired (in USD per share) | 190.75 | |
Outstanding, end of the period (in USD per share) | $ 40.37 | $ 26.09 |
Additional Disclosures | ||
Weighted Average Remaining Contractual Term (in years) | 4 years 7 days | 3 years 10 months 20 days |
Aggregate Intrinsic Value | $ 224,484 | $ 1,226,105 |
Options exercisable, number of stock options outstanding (in shares) | 5,701,097 | |
Options exercisable, weighted average exercise price (in USD per share) | $ 28.32 | |
Options exercisable, weighted average remaining contractual term (in years) | 3 years 3 months 18 days | |
Options exercisable, aggregate intrinsic value | $ 221,311 |
STOCKHOLDER'S EQUITY - Restrict
STOCKHOLDER'S EQUITY - Restricted Stock Awards and Restricted Stock Units Activity (Details) - Restricted Stock Awards (RSAs) and Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting term | 4 years |
Number of Shares | |
Unvested, beginning of the period (in shares) | shares | 13,221,953 |
Granted (in shares) | shares | 26,437,317 |
Vested (in shares) | shares | (8,198,514) |
Forfeited (in shares) | shares | (3,160,728) |
Unvested, end of the period (in shares) | shares | 28,300,028 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of the period (in USD per share) | $ / shares | $ 137.86 |
Granted (in USD per share) | $ / shares | 85.17 |
Vested (in USD per share) | $ / shares | 111.33 |
Forfeited (in USD per share) | $ / shares | 123.83 |
Unvested, end of the period (in USD per share) | $ / shares | $ 97.89 |
STOCKHOLDER'S EQUITY - Stock Op
STOCKHOLDER'S EQUITY - Stock Options Fair Value Assumptions (Details) - Options | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Risk-free interest rate | 3.08% | 1.08% | 0.41% |
Expected volatility | 59.20% | 54.91% | 48.29% |
Expected term (years) | 6 years 7 days | 6 years 7 days | 6 years 7 days |
STOCKHOLDER'S EQUITY - Effects
STOCKHOLDER'S EQUITY - Effects of Share-Based Compensation on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 1,069,289 | $ 608,042 | $ 397,500 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 494 | 410 | 368 |
Product development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 701,715 | 446,596 | 289,553 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 105,231 | 57,070 | 36,627 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 261,849 | $ 103,966 | $ 70,952 |
NET INCOME PER SHARE - Calculat
NET INCOME PER SHARE - Calculation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income (loss) | $ (553,005) | $ 158,826 | $ 213,105 |
Less: Net loss attributable to noncontrolling interests | (12,258) | (7,458) | 0 |
Net income attributable to common stockholders, basic | (540,747) | 166,284 | 213,105 |
Net income attributable to common stockholders, diluted | $ (540,747) | $ 166,284 | $ 213,105 |
Basic shares: | |||
Weighted-average shares used to compute basic net income (loss) per share (in shares) | 578,949 | 458,432 | 443,126 |
Diluted shares: | |||
Stock options, restricted stock, and employee stock purchase plan (in shares) | 0 | 17,849 | 23,628 |
Convertible notes (in shares) | 0 | 408 | 0 |
Common stock warrants (in shares) | 0 | 25,090 | 15,413 |
Weighted-average shares used to compute diluted net income (loss) per share (in shares) | 578,949 | 501,779 | 482,167 |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in USD per share) | $ (0.93) | $ 0.36 | $ 0.48 |
Diluted (in USD per share) | $ (0.93) | $ 0.33 | $ 0.44 |
NET INCOME PER SHARE - Antidilu
NET INCOME PER SHARE - Antidilutive Securities Excluded from Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 83,913 | 48,898 | 59,722 |
Stock options, restricted stock, and employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 32,185 | 7,680 | 12,509 |
Convertible notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 18,029 | 23,947 | 25,073 |
Common stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 33,699 | 17,271 | 22,140 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 1 Months Ended | |||
Dec. 31, 2023 USD ($) | Jul. 31, 2019 renewal_option | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Related Party Transaction [Line Items] | ||||
Operating lease right-of-use assets | $ 373,172 | $ 449,406 | ||
Operating lease liabilities | 424,458 | |||
Scenario, Forecast | ||||
Related Party Transaction [Line Items] | ||||
Operating lease, option to terminate leased space (up to) | 0.48 | |||
Operating lease, option to terminate leased space termination amount | $ 5,200 | |||
Maximum | ||||
Related Party Transaction [Line Items] | ||||
Operating lease, option to terminate leased space (up to) | 0.50 | |||
Affiliated Entity | Operating Lease Agreement | ||||
Related Party Transaction [Line Items] | ||||
Operating lease term | 15 years 6 months | |||
Operating lease renewal term | 5 years | |||
Operating lease, number of renewal options | renewal_option | 2 | |||
Operating lease right-of-use assets | 19,900 | |||
Operating lease liabilities | $ 32,200 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Total lease payments over term | $ 499,473,000 | ||
Finance lease obligation | 0 | ||
Total rental expenses for operating leases | $ 93,600,000 | $ 80,300,000 | $ 75,200,000 |
Building | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease renewal term | 5 years | ||
Building | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term | 1 year | ||
Building | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term | 14 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Lease Expense Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Fixed operating lease costs | $ 93,365 | $ 83,136 |
Variable operating lease costs | 27,065 | 15,568 |
Short-term lease costs | 4,332 | 1,953 |
Sublease income | (15,965) | (12,210) |
Total lease costs | $ 108,797 | $ 88,447 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Other Information Related to Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted-average remaining lease term | 7 years 8 months 12 days | 8 years 3 months 18 days |
Weighted-average discount rate | 3.55% | 3.55% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Cash Flows Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Payments for operating lease liabilities | $ (92,730) | $ (77,201) | |
Supplemental cash flow data: | |||
Right-of-use assets obtained in exchange for operating lease obligations | $ 39,324 | $ 63,290 | $ 342,662 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 81,160 |
2024 | 68,669 |
2025 | 61,301 |
2026 | 52,460 |
2027 | 49,056 |
Thereafter | 186,827 |
Total | 499,473 |
Less: Amount representing interest | 65,639 |
Less: Leases executed but not yet commenced | 8,024 |
Less: Lease incentives and transfer to held for sale | 1,352 |
Total | $ 424,458 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments under the Purchase Commitments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 182,500 |
2024 | 244,700 |
2025 | 273,600 |
2026 | 263,300 |
2027 | 315,100 |
Total | $ 1,279,200 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 17,531,587 | $ 17,661,203 | $ 9,497,578 |
Gross profit | 5,991,892 | 4,419,823 | 2,733,409 |
Amortization of customer and other acquired intangible assets | 138,758 | 15,747 | 3,855 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 17,531,587 | 17,661,203 | 9,497,578 |
Gross profit | 5,991,892 | 4,419,823 | 2,733,409 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 205,646 | 152,356 | 0 |
Gross profit | 39,947 | 32,305 | 0 |
Cash App | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 10,626,111 | 12,315,499 | 5,968,386 |
Gross profit | 2,950,967 | 2,070,847 | 1,225,578 |
Cash App | Operating Segments | Technology assets | |||
Segment Reporting Information [Line Items] | |||
Amortization of customer and other acquired intangible assets | 32,100 | 10,500 | 5,400 |
Cash App | Operating Segments | Afterpay Limited | |||
Segment Reporting Information [Line Items] | |||
Revenue | 405,700 | ||
Gross profit | 294,100 | ||
Square | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 6,699,830 | 5,193,348 | 3,529,192 |
Gross profit | 3,000,978 | 2,316,671 | 1,507,831 |
Square | Operating Segments | Technology assets | |||
Segment Reporting Information [Line Items] | |||
Amortization of customer and other acquired intangible assets | 32,200 | 8,300 | 5,800 |
Square | Operating Segments | Afterpay Limited | |||
Segment Reporting Information [Line Items] | |||
Revenue | 405,700 | ||
Gross profit | 294,100 | ||
Transaction-based revenue | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,701,540 | 4,793,146 | 3,294,978 |
Revenue | 5,701,540 | 4,793,146 | 3,294,978 |
Transaction-based revenue | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,701,540 | 4,793,146 | 3,294,978 |
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 | 466,171 | 409,844 | 233,747 |
Transaction-based revenue | Square | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,235,369 | 4,383,302 | 3,061,231 |
Subscription and services-based revenue | |||
Segment Reporting Information [Line Items] | |||
Revenue | 3,385,784 | 2,445,811 | 1,447,188 |
Revenue | 4,552,773 | 2,709,731 | 1,539,403 |
Subscription and services-based revenue | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 4,552,773 | 2,709,731 | 1,539,403 |
Subscription and services-based revenue | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 205,646 | 152,356 | 0 |
Subscription and services-based revenue | Cash App | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 3,047,084 | 1,893,008 | 1,163,096 |
Subscription and services-based revenue | Square | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,300,043 | 664,367 | 376,307 |
Hardware revenue | |||
Segment Reporting Information [Line Items] | |||
Revenue | 164,418 | 145,679 | 91,654 |
Revenue | 164,418 | 145,679 | 91,654 |
Hardware revenue | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 164,418 | 145,679 | 91,654 |
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 |
Hardware revenue | Square | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 164,418 | 145,679 | 91,654 |
Bitcoin revenue | |||
Segment Reporting Information [Line Items] | |||
Revenue | 7,112,856 | 10,012,647 | 4,571,543 |
Revenue | 7,112,856 | 10,012,647 | 4,571,543 |
Bitcoin revenue | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenue | 7,112,856 | 10,012,647 | 4,571,543 |
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 | 7,112,856 | 10,012,647 | 4,571,543 |
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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Gross profit | $ 5,991,892 | $ 4,419,823 | $ 2,733,409 |
Less: Product development | 2,135,612 | 1,383,841 | 881,826 |
Less: Sales and marketing | 2,057,951 | 1,617,189 | 1,109,670 |
Less: General and administrative | 1,686,849 | 982,817 | 579,203 |
Less: Transaction, loan, and consumer receivable losses | 550,683 | 187,991 | 177,670 |
Less: Bitcoin impairment losses | 46,571 | 71,126 | 0 |
Less: Amortization of customer and other intangible assets | 138,758 | 15,747 | 3,855 |
Less: Interest expense, net | 36,228 | 33,124 | 56,943 |
Other income, net | (95,443) | (29,474) | (291,725) |
Income (loss) before income tax | (565,317) | 157,462 | 215,967 |
Operating Segments | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Gross profit | $ 5,991,892 | $ 4,419,823 | $ 2,733,409 |
SEGMENT AND GEOGRAPHICAL INFO_6
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 17,531,587 | $ 17,661,203 | $ 9,497,578 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 16,314,769 | 17,077,532 | 9,186,440 |
International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 1,216,818 | $ 583,671 | $ 311,138 |
SEGMENT AND GEOGRAPHICAL INFO_7
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 14,683,269 | $ 1,507,871 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 8,023,535 | 1,426,103 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 1,858,300 | 55,088 |
AUSTRALIA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 4,801,434 | $ 26,680 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Data: | |||
Cash paid for interest | $ 84,876 | $ 40,446 | $ 3,857 |
Cash paid for income taxes | 39,045 | 10,041 | 6,001 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Right-of-use assets obtained in exchange for operating lease obligations | 39,324 | 63,290 | 342,662 |
Purchases of property and equipment in accounts payable and accrued expenses | 5,212 | 15,071 | (3,975) |
Deferred purchase consideration related to business combinations | 14,377 | 50,079 | 8,974 |
Fair value of common stock issued related to business combinations | (13,827,929) | (28,735) | (35,318) |
Fair value of common stock issued to settle the conversion of convertible notes | (2,523) | (1,258,562) | (1,398,829) |
Fair value of shares received to settle convertible note hedges | 133,144 | 1,800,933 | 369,015 |
Fair value of common stock issued in connection with the exercise of common stock warrants | (806,446) | 0 | 0 |
Bitcoin lent to third-party borrowers | $ 5,934 | $ (6,084) | $ 0 |